An Economy Developing in Afghanistan

There is a wonderful richness that we miss out on in our large, uniform, country, which has such a large land mass without much diversity. With the growing immigrant community we are developing a new outlook. One of the institutions we have that makes us functional is our exchange system. Today, reading about the ancient trade routes and the ways that letters of credit worked, and work today, in the Afghan area, I was reminded again that there are ways of monetary exchange that we really don't deal with, and many of us don't really know.

...., Afghans developed capacities that enabled them to survive and in some cases prosper under conditions of insecurity and high risk. In order to transfer money from migrant workers to their families, they developed extensions of the longstanding havala system. This system, which long took advantage of the movements of nomads and traders to transfer letters of credit between hinterlands and commercial hubs, has adapted to the age of telecommunications. Money can be transferred electronically from an account in Saudi Arabia to an account in Pakistan. A dealer who has been contacted by either a personal emissary or mobile phone withdraws the cash. A personal emissary, a traveler, nomad, or trader, or a mobile or satellite phone call courtesy of the CIA and other intelligence agencies, who supplied them to commanders, can inform the recipient, who can come to the city or town to collect. Or the agent can use the cash to purchase goods in a market center and then transport them for resale at a profit in the destination area. He transfers the original amount to the recipient and keeps the profit and costs as his fee. All of these transactions rely on networks of social capital underpinned by kinship, religion, fear of retribution, and other forms of reciprocity that operate in the absence of a state or without support from it.

The author goes on to make an excellent description of how the opium trade has been set up and how it sustains an economy that we first supported when it fought against the Russian occupation with us, and now try to end. We have no idea what to substitute for it, and little capacity to set anything up in its place.

The prospects for developing a farming economy are explored, and suggestions for trade development made, as Each trader/lender will have the authority to make loans for a set of defined purposes for which the institution is established, including futures contract purchases of any licit agricultural good. In order to reduce risk, the government with the support of International Financial Institutions should establish some kind of loan guarantee or insurance scheme to encourage a higher volume of credit without exorbitant rates. The subsidy, guarantee, or insurance should assure that the cost of borrowing from this new institution will be significantly less than the cost of contracting debt through the salaam system or with opium as collateral.

This kind of recognition of a working existing system that is not familiar to us is a feature that I look forward to a new, enlightened, executive branch bringing back to the U.S. international affairs. The simplistic concepts involved in our declaring Iraq our democracy-to-be has been so tragically proved hideously inadequate, for us and for our associates, that it begs for the return to high office of nuanced, intelligent, representatives and functionaries. The arrogant ignorance of this administration has done such harm, we need to start working as soon as possible to rescue our nation's reputation. We need to strip the ignorant from offices where they can harm us and the world, and replace them with thinking, sentient, beings.