Posted on: Monday, March 11, 2002
Banking begins re-emergence in Afghanistan
By Steven Komarow
USA Today
KABUL, Afghanistan — Afghanistan's only private bank is a shade different from what Americans are accustomed to.
The front entrance, beneath the lighted sign and through a mud-brick wall, is paved with Afghan dirt. An unkempt man in plastic sandals serves as security guard and greeter.
Inside, there are no tellers or pamphlets or even broken pens at the end of chains. Heck, there aren't even bank accounts, at least not as Americans would recognize them.
Instead, what the Islamic Private Bank Gullabudin Sherzaye offers is service. For Americans and other Westerners, the bank and its owner, Gullabudin Sherzaye, are a ready and willing window into doing business in Afghanistan.
"American merchants had business transactions here for hundreds of years," he says. "There used to be a link, even when there wasn't anything from here besides camels and sheep."
Now, the former Afghan commerce minister wants to rebuild that link and readily agrees to meet with an American reporter.
Sherzaye is busy this day with a delegation from Herat, a city in far western Afghanistan. But waiting is hardly an ordeal.
Tea is poured, and a half-dozen bank employees provide company. One cracks nuts with his teeth and hands the meat to the guest. There also are raisins and tiny dried chickpeas for snacks.
The floors and walls are lined with rugs, providing that comforting, bank-like hush. Finally, the boss' upholstered door pops open and Sherzaye escorts out a half-dozen chattering men. All smiles, resplendent in an un-Afghan-like black suit, cuff-link shirt and tie, he leads the way into his inner sanctum.
It's immediately clear that this bank president has not been wasting his money on perks. It's a small room crowded with certificates of appreciation and collections of doodads. On the shelves behind his well-worn desk, Sherzaye has a collection of old telephones. Beneath glass is a collection of Afghan currency through the years. On the side is a tall, gray safe.
"We were the first company to open a private bank, in 1993," he says. That was during the government of the mujahedeen, the "holy warriors" who took over after the Soviets and a pro-Soviet Afghan regime were ousted.
Sherzaye also served then as Afghanistan's commerce minister and as head of the chamber of commerce. Such an arrangement might be suspect in America, where conflicts-of-interest are considered bad business, but Afghans consider it common sense.
He created the bank, Sherzaye says, to complement his import-export business and provide a means for foreign investors to enter the Afghan marketplace.
"Our bank is not a bankrupt one. We have not borrowed any money from the people or from overseas. Our bank is according to Islamic principles," he says. "We do not have interest. We do not take or give interest here."
So where does the money go if someone makes a deposit? "It goes into my business," he says. At the end of the year, the profits are estimated. "Fifty percent goes to the bank, 50 percent to the investor."
Right now, business is slow, just restarting like the rest of Kabul. Not only is Afghanistan recovering from years of war, but Sherzaye was jailed by the just-ousted Taliban. The Taliban disliked all business and businessmen, he says.
"We reopened as soon as Kabul fell in November. I was in prison in the central jail, but the personnel of the bank and the business still were here," he says.
Now, he is optimistic about growth. "We have already started having contact with the merchants," he says.
Sherzaye says Afghanistan's best export used to be the special wool for cashmere sweaters. Today, it's dried fruits and carpets. Meanwhile, his imports include staple foods, tractors, cars and machinery.
"I am really grateful for the U.N. and the West," he says.
"We need more ISAF forces (international peacekeepers) here on behalf of all the other merchants," says Sherzaye, who has been appointed by other merchants to head a trade council.
As Afghanistan tries to recover, one of its problems is a weak currency. The afghani is trading now at about 35,000 to the dollar and fluctuating wildly.
Meanwhile, Afghanistan's central banking system is so decrepit that the national government opened an account in the United Arab Emirates as a temporary repository for international aid money.
The promised boost of foreign aid money will bring much needed stability to the financial sector, Sherzaye says. "When all the dollars flow through the central bank here, the Afghan currency will be stabilized."
Beyond that, Sherzaye says, Afghanistan is in no hurry to offer all the modern trappings of Western banks. As he shows the visitor out, he shrugs off ideas such as credit cards, ATMs and electronic bill-paying systems.
"The only thing we are aspiring for here," he says, "is peace and security."
