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From Kabul’s wallet to Dubai’s pockets

March 8, 2010

The Washington Post has reviewed records of cash declared by outbound travelers from Kabul.  They found that a over a billion dollars a year is flowing out of Afghanistan—mostly into Dubai.  That’s a lot of paper bills.  And much of it is actually in Saudi riyals.  Here’s the first few paragraphs of the article “Afghan cash inundating Dubai confounds watchdogs” as reprinted in the Pittsburgh Post-Gazette on Feb. 26:

KABUL — A blizzard of bank notes is flying out of Afghanistan — often in full view of customs officers at the Kabul airport — as part of a cash exodus that is confounding U.S. officials and raising concerns about the money’s origin.

The cash, estimated to total well over $1 billion a year, flows mostly to the Persian Gulf emirate of Dubai, where many wealthy Afghans now park their families and funds, according to U.S. and Afghan officials. So long as departing cash is declared at the airport here, its transfer is legal.

But at a time when the United States and its allies are spending billions of dollars to prop up the fragile government of President Hamid Karzai, the volume of the outflow has stirred concerns that funds have been diverted from aid. The U.S. Drug Enforcement Administration, for its part, is trying to figure out whether some of the money comes from Afghanistan’s thriving opium trade. And officials in neighboring Pakistan think that at least some of the cash leaving Kabul has been smuggled overland from Pakistan.

“All this money magically appears from nowhere,” said a U.S. official who monitors Afghanistan’s growing role as a hub for cash transfers to Dubai, which has six flights a day to and from Kabul.

Meanwhile, the United States is stepping up efforts to stop money flow in the other direction — into Afghanistan and Pakistan in support of al-Qaida and the Taliban…

Read the full article here.

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