TEXT OF INTERVIEW
STEVE CHIOTAKIS: Right now we’re going to ask the big question. We know Afghanistan’s democracy is very, very fragile. But what about the banks there? The country’s biggest private bank, Kabul Bank, says it could lose more money this year than it has in total deposits. American and Afghan officials say the losses threaten the country’s fledgling financial system, which has only been in place since 2001. Mark Dummett is the BBC reporter in Afghanistan. He’s with us live this morning from Kabul. Hello Mark.
MARK DUMMETT: Good morning, Steve.
CHIOTAKIS: So how much money did the bank say it lost?
DUMMETT: Well, they are being pretty quiet about all of this because there are serious worries about its financial health. Several reports in the newspapers that it could have lost about $300 million, which is more than it can afford to lose really. The central bank has moved in a few hours ago to say that it will survive, that it’s not going to go bust — to reassure Afghans, the many thousands of people who deposit their savings in this bank, that it’s not going to crash because if it did, as you said, it could have a pretty serious impact on the country’s economy.
CHIOTAKIS: Where did this money go?
DUMMETT: Well there are these allegations — at the moment they’re just newspaper allegations, the government hasn’t come out and confirmed any of these — that the bank was involved in corruption and various property deals in the Gulf. But as I say, none of those yet have been confirmed by the bank itself or by the government. But, as you know, here in Afghanistan there are all sorts of concerns about the levels of corruption and particularly what happens to the huge profits that are earned by the illegal opium trade. So there is this whole doubt over a lot of businesses here that there is a lot of money splashing around the country and lots of concerns over whether it was honestly earned or not.
CHIOTAKIS: How healthy is the financial system in Afghanistan? Rate it on a level of 1-10.
DUMMETT: Well, I’d say it’s probably one. I mean, of course, this country’s facing an enormous war with the Taliban. And banks, such as the Kabul Bank, only came into existence in the last decade really after the U.S.-led invasion of the country. It’s a very fragile situation.
CHIOTAKIS: We’re going to have to wrap it up there. Mark Dummett from the BBC reporting live in Kabul. Mark, thank you.
DUMMETT: OK. Thanks.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?