Where the Central Bank Is a Red Ledger and a Pen

In a filthy room thick with the soot from a wood stove, the money men have just finished counting and sorting a merchant’s gift to the government of about 1 billion afghanis. The cash arrived stuffed in the trunk and back seats of two passenger cars.

The task has taken 18 men three days. The total street value in Kabul: about $35,000. On a note, Afghanistan’s interim prime minister, Hamid Karzai, has scrawled that the money should be allocated to the Health Ministry.

Now the stacks of money--the largest bill in circulation is worth about 35 cents--are carried across a lobby getting its first fresh coat of paint in decades, to Afghanistan’s national treasury.

The treasury itself consists of about a dozen 60-year-old man-sized vaults that open with long silver latchkeys. Sayed Del Aqayee, deputy treasury chief, marks with a pen in a big red ledger the cash received and the cash withdrawn. The most sophisticated device around is a calculator.

This is Afghanistan’s central bank, the would-be heart of a chaotic monetary system based entirely on cash. Much of the $4.5 billion the world has pledged to help rebuild the country should, in theory, go through here. How the bank will cope is anyone’s guess, but teams from the International Monetary Fund and World Bank have arrived in Kabul, the capital, to help.

There are no computers in any of the main offices, no desks, no money-counting machines.

“My banking system is still in the 1940s,” says Abdul Q. Fitrat, the interim central bank governor--in effect, the Alan Greenspan of Afghanistan. He is an optimist: The 19th century might be more accurate.

There are no commercial banks in the country. Money is exchanged in the bazaar, where hundreds of men in turbans and caps stand with huge stacks of cash, ready to change afghanis for Pakistani rupees or U.S. dollars.

The Taliban outlawed the paying of interest when it took control of Kabul in 1996, ending any incentive to put money in a savings account. When the Taliban fled the city in November, it looted millions of dollars in U.S., Pakistani and Afghan currency, said Aqayee.

For now, there’s little connection between the central bank and the regional banks in the provinces.

On a recent day, Dor Mohammed, manager of the main bank in Khowst near the Pakistani border, and his accountant, Mohammed Isehaq, waited outside Fitrat’s office after having driven north for a day on terrible roads.

They described to a visitor how each province had been self-sufficient, receiving money from checkpoints and taxes, which it used to pay provincial civil servants’ salaries and other expenses.

“I know she wants to know how aid money comes here,” said Isehaq. “A journalist will scratch where it does not itch.”

“We don’t know how it will come, how it will go, how it will be spent,” he said.

It doesn’t take much scratching to determine how chaotic Afghanistan’s financial system is. People hide cash in their houses. Credit cards, debit cards and checking accounts don’t exist. The equivalent of $100 in afghanis is at minimum a brick-size wad of cash, and that’s if it’s changed into the biggest bills, 10,000-afghani notes.

Afghans can count money faster than any American, holding the wad in one hand and rapidly shuffling the index finger of the other through the stack.

Different parts of the country don’t even use the same currency. Gen. Abdul Rashid Dostum, the governor of Mazar-i-Sharif in the north, has produced a close replica of the national currency, but it is accepted only in the region and has only half the value of the regular afghani.

Even after the Taliban ousted the opposition Northern Alliance from Kabul and hemmed it into the northeastern corner of the country, the alliance continued having afghanis printed in Russia.

Consequently, controlling the money supply is a challenge, and Fitrat said Karzai has declared that no more money should be printed.

“The U.N. will supply some money and the IMF will help us until we build an adequate revenue and budgetary system,” Fitrat said.

Meanwhile, the value of the afghani has soared lately.

Dollars are accepted in most places, and Fitrat said the country may do away with the afghani and start using greenbacks or euros.

“In every corner of this country, people know the dollar,” he said. IMF and World Bank experts recommended Tuesday that the dollar be used as an interim currency until a new afghani can be introduced.

Fitrat is returning to his post after five years in the Washington area, where he had been attending a World Bank meeting in 1996 when the Taliban seized control of Kabul.

As Fitrat chatted recently with a reporter in English, Deputy Finance Minister Abdul Sami Wali and Deputy Foreign Minister Rahim Sherzoy dropped by for tea. They slipped into the Dari language, but by and by the English words “deficit financing” popped up.

“How can we pay this much to the minister of planning?” Wali said. “Karzai is giving every ministry more than they’ve been allocated and more than we have in the bank.”

Though the international community has promised billions of dollars in aid, little of it has arrived yet.

For now, much of the money that is coming into the country is being delivered through men such as Mohammed Musa, who was on a house call to deliver $80,000 in greenbacks to the finance director of the U.N. refugee agency here.

Musa is a sarif, or money changer, and it is he who produces cash for several other U.N. agencies and aid groups. He charges those large customers a commission of about 1%.

Musa’s office is the size of a one-car garage. A single lightbulb hangs from the ceiling, and a kerosene lamp stands on the counter to serve during the nearly continual power failures. It is located in the shahzadah, a warren at the heart of the central bazaar.

Just outside his door is a throng of private money changers, whose deals determine the exchange rate.

“This is the commercial bank,” said Pierre Njouyep, the refugee agency’s finance director, gesturing toward Musa, who wore a wool shawl draped around his shoulders and a small cap on his head as he made his delivery. “There’s no other way.”