Did Afghanistan Elites Use Aid to Buy Lavish Dubai Properties

Did Afghanistan Elites Use Aid to Buy Lavish Dubai Properties

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The Telegraph has unearthed what looks like proof that Hamid Karzai and other senior members of his family, who are also in high ranking positions in the Afghan government or business world have been complicit in the misappropriation of funds given as aid for the impoverished Afghan state.

Afghanistan relies on international aid to pay for more than 50% of public sector wages (including the NATO-backed and trained security forces), yet Karzai and several others have bought properties in Dubai worth millions of pounds.

The impressive portfolio includes 14 villas on Dubai’s premier development; Palm Jumeirah registered in the name of Sher Kahn Farnood, former chairman of Kabul Bank — former because he resigned last week upon orders to hand back the property. Farnood owns and occupies a “Signature” villa valued at £4 million or more.

The Bank — which is heavily implicated in the scandal, as will be explained in more detail — also owns an apartment, two business plots and — loss-making — airline, Pamir Airlines, in Dubai.

Kabul Bank is drenched in the scandal. For instance Mahmoud Karzai, the third largest stakeholder in the bank (and President Karzai’s brother) also owns a Signature Villa, and made £500,000 profit from the sale of a Dubai property which was purchased by a loan from the bank.

According to the Telegraph British ministers are privately furious about the misuse of funds. Well, not all of them are so private:

Adam Holloway, a Conservative member of the Commons defence committee, said: “A lot of people have become very rich on money that was supposed to help Afghanistan.”

On the other hand, another article in the Telegraph blog, by the same author Richard Spencer paints the affair in an entirely different light.

So Kabul Bank invested in foreign property? So did every other bank in the world! Okay, the investments should have gone in the bank’s name not Chairman Farnood, but it’s not like they used their depositors’ money, who have withdrawn 300 million USD in the last 2 weeks without the bank running out.

So those involved are all close to President Karzai, so what? Says Spencer, the links between big business and high government figures is much closer in the US’ allies in the Middle East than in Afghanistan. Look at Dubai where the supreme ruler owns the largest property companies, and has them run by his friends, the same goes for Abu Dhabi, and in Saudi Arabia the distinction between the Royal Family and the biggest corporations is practically none existent.

Those are some good points, but the question remains: where did all this money come from in such an impoverished country?

Mr Spencer closes with this:

“Perhaps if Britain forced Arab royal families to sell their Knightsbridge town houses and country estates, and invest the money in rebuilding Yemen and southern Saudi Arabia and a few other places I could mention, it would have more credibility in telling Mr Farnood he’s not allowed a villa in Dubai. Otherwise, why pick on Afghanistan?”

But Saudi Arabia’s money comes from oil revenues; any fraud involved in where and how that money is spent is Saudi Arabia and its population’s business. Given the impoverished state of Afghanistan and the amount of aid needed just to pay public sector wages, we have every right to demand prove that our aid was not used to fund such a lavish spending spree.