Capital Flight From Afghanistan

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"Capital Flight From Afghanistan"

One of the critiques I hear from people most often is that I’m too much of a generalist. Which is a fair point to an extent. But one thing you notice as a generalist is that sometimes people in one field manage to re-discover the mistakes that people in other fields made decades ago. And I think a lot of what’s wrong with counterinsurgency practice in the contemporary U.S. military can be understood as a massive exercise in repeating decades-old mistakes in development economics. For example, what happens when you flood a very poor country with money? If you think the answer is “it becomes rich” you ought to think harder:

Brigadier General Mohammed Asif Jabarkhel sits with folded arms in his office, just a few steps away from the security checkpoint at Kabul International Airport. “Of course I know what’s going on here,” the 59-year-old head of the airport’s customs police grumbles from beneath his thick moustache as a fan whirs in the background. “But, in this country, who’s allowed to speak the truth?”

Jabarkhel is referring to the huge amounts of money regularly being secreted out of Afghanistan by plane in boxes and suitcases. According to some estimates, since 2007, at least $3 billion (2.4 billion) in cash has left the country in this way. The preferred destination for these funds is Dubai, the tax haven in the Persian Gulf. And, given the fact that Afghanistan’s total GDP amounts to the equivalent of $13.5 billion, there is no way that the funds involved in this exodus are merely the proceeds of legal business transactions.

The simplistic account of the problem here is that there’s “too much corruption” in Afghanistan. The more sophisticated account is that the prevailing economic logic of contemporary Afghanistan drives this behavior.

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