Is the Kabul Bank "too big to fail?" Worried depositors have
withdrawn several hundred million dollars over the past few days, raising
serious doubts about the bank's solvency. Its CEO, Khalilullah Frozi, reportedly
said that "If this goes on, we won't survive," adding that
"if people lose trust in the banks, there will be a revolution in the
financial system."
Afghan President Hamid Karzai says that his government will guarantee the
security of all deposits, and a White House spokesman said the U.S. government
"are taking no steps" to prop up the bank. But this is kind of a
meaningless distinction, however, insofar as the entire Afghan government is
being propped up by outside aid, much of it coming from the American taxpayer. And
could the United States simply stand by and let the Afghan financial system
collapse completely? Need I mention that trying to create a modern financial
system was yet another task that the United States took on when it decided to
try to build a modern state in Afghanistan?
Juan Cole is pretty angry about the whole situation, and it's easy to understand
why. I'd put it this way. According to most experts on counterinsurgency --
including commanding Gen. David Petraeus -- winning this sort of war requires a
reliable and legitimate local partner. If Juan is right, then this is just more
evidence that the U.S. doesn't have such a partner in Afghanistan and isn't likely
to get one anytime soon. And if that's the case, and if we really believe what
we claim to about the nature of COIN warfare -- then what the heck do we think
we are doing trying to "nation-build" there?
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