Nurturing democratic capitalism in Afghanistan

Posted: Feb 13, 2002 12:00 AM
By "abandoning" Afghanistan after the Soviet defeat there, the West permitted the infestation of the country by al-Qaeda terrorists and the rise of Osama bin Laden's puppet government, the Taliban. The lesson we learned from that unhappy episode is, don't make the same mistake twice. That said, exactly what were our mistakes, and what precisely will it mean for the West to "stand by" a post-Taliban Afghanistan? One mistake is clear: We pulled out of Afghanistan without imposing civil order and disabling the criminal elements that kept the country in violent turmoil. We failed to break the back of the criminal gangs led by thuggish warlords who are temporarily for sale to the highest bidder, whose sole objective was, and remains, to plunder the country and grow, harvest and sell poppies, Afghanistan's only real cash crop. By failing to restore order, we left post-Soviet Afghanistan a land without hope, a people without vision. As the famous African-American leader Marcus Garvey observed, "Without commerce and industry a people perish economically." Afghanistan was left with neither hope nor commerce. It perished spiritually and was devoured by a wicked gang of theocrats calling itself the Taliban who hijacked Islam and sold Afghanistan to terrorists. The war against terrorism in Afghanistan will not end until the warlords are broken and their gangs dispersed, disarmed and sent home or put in jail. The peace will not be won until the interim government under the very able leadership of Interim Chairman Hamid Karzai can operate on its own. We should give the warlords a choice: Break connections with Iran and other foreign powers, disband your armies and cooperate with the new government at the regional level, or you and your foreign sponsors will face the same fate as the Taliban. What to do beyond restoring order? At one end of the spectrum, Doug Bandow of the libertarian Cato Institute contends our only vital stake in Afghanistan is to end the Taliban's support of the al-Qaeda terrorist network. Beyond that, he says, America has "no stake in attempting to construct a new regime in Kabul," which he labels a "fool's errand." Sen. Joe Biden, on the other hand, argues for ambitious "nation building," and financial aid sufficient to change the economic and social climate in the region and establish democratic and capitalist institutions. The term "nation building" has been tossed around a lot recently, and when it is thrown around at international confabs, it usually means lots of Western financial aid to pay Afghani civil servants in a strong new central government and to pay foreign companies to build "infrastructure." The World Bank, for example, estimates costs of $10 billion over the next five years to build schools, hospitals, sewers and roads. Karzai has requested $15 billion over 10 years. During a conference held in Tokyo recently, countries pledged a total of $4.5 billion in assistance over the next five years. USAID Director Andrew Natsios is keenly aware of his responsibility to make sure the approximately $300 million approved by the Bush administration for Afghan aid is wisely spent on "quick-impact" health, education and agricultural projects. If nation building is the snare and delusion of social engineers as Bandow suggests -- and up to a point, I think he has a point -- and if we can't afford to walk away from Afghanistan again -- which we can't -- what is to be done? Here is a list of things we can do more in the line of "democracy nurturing" that we know work. Establish a free-trade zone among the United States, the European Union and Afghanistan with zero tariffs or at least low tariffs on agricultural products and textiles, which currently average 17 percent or three times the tariff on manufactured products. Assist Afghanistan, as we did Japan and Germany, to create a functioning administration and to create incentives for economic growth. Help Afghanistan's modern founding fathers create a "federalist" system of government that will accommodate the country's great diversity within a coherent structural framework. Help Afghanistan design a pro-growth tax system as President Vladimir Putin did in Russia with rates no greater than 10 percent. Assist Afghanistan to create a sound and stable currency the way Alexander Hamilton did at our founding. Working with western banks, we should help capitalize a private national bank of Afghanistan that would either dollarize the economy or back a new Afghan currency with dollars or euros. Opium is not only the sole cash crop of Afghanistan, it is also a currency the way tobacco was in Colonial America. According to Maureen Orth of Vanity Fair, purchasing the poppy crop to be harvested this March would cost $100 million. We should do it and also provide the farmers who sell it the seeds to plant food next year, with the proviso that another poppy crop will not be tolerated. Assist Afghanistan to create private property rights by distributing parcels of land as Abraham Lincoln did with homesteading to people who agree to settle and farm the land, and give the new landowners the mineral rights as well as the surface rights.