In 1996, the Northern Alliance lost control of Kabul and most of the rest of Afghanistan. One thing it never lost was access to the Moscow printing press that produced the country's money.
The Alliance kept printing banknotes that circulated throughout the country. As a result, there are now twin versions of Afghanistan's currency, the afghani. The Alliance's new notes, still being printed as recently as October, are identical to pre-1996 ones: same blue-tinted design and same serial numbers. There is no reliable way to tell them apart.
PHOTO: AFP
Creating a credible currency will be a test for the interim government that takes power Saturday. No one knows how much money Afghanistan has. Its value fluctuates. This week, it was trading at 10,000 to the dollar; earlier this month, the rate was 67,000 to the dollar. Afghanistan's economic revival demands a sound currency, observers agree.
"This currency, in my view and anybody's view, should not remain for a long time," said Abdul Qadeer Fitrat, a leading candidate to become central-bank governor, a post he held for about two years before the Taliban took power. Fitrat, who now lives in the US, said he will visit Kabul next week to discuss resuming his old job.
The Alliance printed about 5 trillion afghanis while it was in opposition, roughly half of all the currency now in circulation, according to Wahidullah Sabawoon, the group's finance minister.
"We knew that printing so much money would not benefit the nation, that it would create inflation," Sabawoon said in an interview. "But we had no choice. We were facing an imposed war, and all sources of income were in the Taliban's hands."
The Alliance retained access to the Moscow printer, a holdover from the Soviet occupation in the 1980s, partly because the UN continued to recognize the group as Afghanistan's lawful government.
It used the new notes to pay salaries to its soldiers and administrative staff and, Sabawoon said, to raise hard currency to buy weapons. "We were sending currency dealers to Taliban-held areas with bags full of `afs,' asking them to purchase dollars," he said.
Eventually, the Taliban realized what was happening because the new Alliance banknotes were printed with serial numbers -- starting with 35, 36 and so on -- that were higher than existing notes. The Taliban outlawed bills numbered above 34. So, "we reprinted notes starting from 1 up to 34, making them impossible to detect," Sabawoon said.
While Afghans in former Alliance strongholds continue to use the higher-numbered notes, they pay roughly twice as much if they use them to buy dollars. In the Kabul alleyways where money exchangers work, many traders are reluctant to accept the higher-numbered notes. As for those with duplicate numbers, the only way to distinguish the new ones from the old ones is by an educated guess about the note's age.
About 4 trillion to 5 trillion afghanis existed before 1996, according to both the Alliance and staffers at the central bank, which the Taliban looted before they fled Kabul last month. The Alliance doubled that amount and was still printing notes in October, according to Sabawoon, who won't be part of the new government.
Setting a value for any version of the currency will be difficult. In September 1996, when the Taliban took Kabul, the exchange rate was about 16,000 afghanis to the dollar, central banker Faiz said. By the time the regime collapsed last month, the currency's value had collapsed too, to 80,000.
Since then, it has strengthened again -- a possible sign that Afghans are optimistic their country is on the path to a durable peace.
PREPAREDNESS: Given the difficulty of importing ammunition during wartime, the Ministry of National Defense said it would prioritize ‘coproduction’ partnerships A newly formed unit of the Marine Corps tasked with land-based security operations has recently replaced its aging, domestically produced rifles with more advanced, US-made M4A1 rifles, a source said yesterday. The unnamed source familiar with the matter said the First Security Battalion of the Marine Corps’ Air Defense and Base Guard Group has replaced its older T65K2 rifles, which have been in service since the late 1980s, with the newly received M4A1s. The source did not say exactly when the upgrade took place or how many M4A1s were issued to the battalion. The confirmation came after Chinese-language media reported
The Taiwanese passport ranked 33rd in a global listing of passports by convenience this month, rising three places from last month’s ranking, but matching its position in January last year. The Henley Passport Index, an international ranking of passports by the number of designations its holder can travel to without a visa, showed that the Taiwan passport enables holders to travel to 139 countries and territories without a visa. Singapore’s passport was ranked the most powerful with visa-free access to 192 destinations out of 227, according to the index published on Tuesday by UK-based migration investment consultancy firm Henley and Partners. Japan’s and
A Ministry of Foreign Affairs official yesterday said that a delegation that visited China for an APEC meeting did not receive any kind of treatment that downgraded Taiwan’s sovereignty. Department of International Organizations Director-General Jonathan Sun (孫儉元) said that he and a group of ministry officials visited Shenzhen, China, to attend the APEC Informal Senior Officials’ Meeting last month. The trip went “smoothly and safely” for all Taiwanese delegates, as the Chinese side arranged the trip in accordance with long-standing practices, Sun said at the ministry’s weekly briefing. The Taiwanese group did not encounter any political suppression, he said. Sun made the remarks when
BROAD AGREEMENT: The two are nearing a trade deal to reduce Taiwan’s tariff to 15% and a commitment for TSMC to build five more fabs, a ‘New York Times’ report said Taiwan and the US have reached a broad consensus on a trade deal, the Executive Yuan’s Office of Trade Negotiations said yesterday, after a report said that Washington is set to reduce Taiwan’s tariff rate to 15 percent. The New York Times on Monday reported that the two nations are nearing a trade deal to reduce Taiwan’s tariff rate to 15 percent and commit Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to building at least five more facilities in the US. “The agreement, which has been under negotiation for months, is being legally scrubbed and could be announced this month,” the paper said,
RSS