MAZAR-E-SHARIF, Afghanistan – Abdul Qadir waits for business in his spartan subterranean office, illuminated by a paraffin lantern.
Outside, hundreds of men crowd basement passages, selling bundles of Afghanis – currency here – on upside-down crates.
Anywhere else, Mr. Qadir would probably work behind a computer in an anonymous office cubicle. But here, Qadir buys and sells his dollars with a handshake and a smile.
After more than 20 years of war, the Afghan economy is in shambles, with at least three parallel currencies. Communications have been cut or are in poor repair, banks are virtually nonexistent, and most manufactured products come from abroad. Afghan businessmen now are pinning their hopes on the new interim government in Kabul to reform the currency and lure an influx of dollars from abroad.
“Currency reform is the most difficult job for the new government,” says Ghulam Mohammed Yailaqi, an economist and former governor of Afghanistan’s central bank. Dr. Yailaqi says he declined the same post in the new interim government because the conditions for a reform are lacking.
That didn’t deter Hedayat Amin-Arsala, the current interim finance minister, nor interim leader Hamid Karzai. Mr. Karzai has said the government would stop printing unsupported Afghani banknotes. And while Mr. Amin-Arsala has offered few clues about how he will stabilize currency, one possibility being raised is to adopt a new one. But that could take years.
In the past decade, the national treasury was plundered of its gold and foreign reserves, and the departing Taliban reportedly drained Afghanistan’s central bank of millions of dollars.
Moreover, three rival factions in Afghanistan’s civil war began printing tons of paper money to finance their armies and fiefdoms. Burhanuddin Rabbani, the former president, printed four times as much money as there was before, says Mr. Yailaqi, the economist, and not even 1 percent of currency in circulation is backed up by foreign reserves.
Warlords Abdul Rashid Dostum and Gulbuddin Hekmatyar likewise churned out their own Afghanis. To confuse matters more, the ousted Taliban regime attempted to introduce Pakistani rupees as legal tender.
In Mazar-e-Sharif, the commercial hub of northern Afghanistan, business is done in two currencies, the so-called Rabbani “government” money and “Jumbishi” money, named after Mr. Dostum’s National Islamic Movement. To Westerners, it’s difficult to distinguish the difference in the two currencies, but it is significant, as the government money is twice as valuable.
“Even we sometimes can’t tell the difference,” says Qadir, the money changer, because of the sheer quantity of money. “But we have a lot of helpers here.”
Poring over two bills, Qadir explains how to recognize government money. For one, it is a shade darker than Jumbishi money. Also, the red serial numbers, printed in Persian, not Arabic numerals, begin with 1 through 34. Any serial number higher than 35 denotes Jumbishi money.
Shopkeepers say they would prefer a single currency.
“It’s a big problem,” says Waiseddin Khojandi, sitting in his stationery shop. “In one day, we can turn over 10 million Afghanis (US$170), and we have to look at each banknote, one by one.” Shopkeepers take the government Afghani or the Jumbishi, but prefer the government bills.
The exchange rate does follow a certain logic. During Taliban rule, the dollar was in short supply and commanded three times the value it does today. After Sept. 11, war caused the dollar to rise even higher. But since the liberation of Mazar-e-Sharif in November, the dollar has plunged.
Curiously, however, the recent drop in the dollar is not immediately reflected in the fall of prices for basic consumer items.
“There is not enough supply,” says Yailaqi. “The shopkeepers are supplied by importers, and they’re not sure if they’ll get their deliveries. People are afraid to sell their goods cheaply, because nobody knows if there will be goods tomorrow.