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CNN Live At Daybreak

Afghanistan's Central Bank is Rebuilding

Aired January 22, 2002 - 06:25   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: We've been talking about it a lot this morning, a massive infusion of international cash is certainly needed in Afghanistan, but Central Bank in Kabul doesn't have enough money to pay civil servants or even provide basic services.

More on this from CNN's Michael Holmes who is in Kabul this morning.

Michael, tell us.

MICHAEL HOLMES, CNN CORRESPONDENT: Hi, Carol. Well good afternoon from Kabul.

I can tell you some very happy civil servants here in the city today. For some of them, the first pay day in six months; for some of them, even longer. In a couple of cases, years when it comes to women who were forced to stay at home under the Taliban.

Now this is significant in that the Karzai administration, the interim administration, feared losing credibility with these people if they didn't come through on some promises.

Well today the administration got confirmation that $8 million in emergency cash from the United Nations would arrive within days. Now that's separate to the Tokyo pledges on reconstruction. And so it started paying some of the salaries of its 219,000 civil servants. About 10 percent of them were paid today, you can see some smiles there, others in the days ahead.

Well the focus of the activity that you're seeing there is the country's Central Bank. Until now, a bank in name only, but now there is some optimism in Kabul that that bank will soon begin to operate as it used to.

(BEGIN VIDEOTAPE)

HOLMES (voice-over): Abdul Qadeer Fitrat is back behind the desk that used to be his. He was the governor of the Central Bank of Afghanistan in 1996, flying to Washington when the Taliban took over Kabul. He couldn't come home for six years.

ABDUL QADEER FITRAT, ACTING GOVERNOR, CENTRAL BANK: Many of the employees fled the country. Senior employees all fled the country. Employees told me that they -- it was a black day. It was a black day in the history of Afghanistan.

HOLMES: Today his job as acting governor is far more challenging than his previous time at the desk. He's presiding over a banking system in shambles.

FITRAT: I found an empty vault, a dirty building and deeply affected employees.

HOLMES: At long dormant counters, businessmen putting their faith in a broken system under repair, and there is much to repair. There's roughly $150,000 in foreign currency in the Central Bank's hands, not enough to pay the salaries of civil servants, let alone run a country.

Much is riding on the Tokyo conference of donor nations. Also, the U.N. promised to release nearly $250 million of Afghan assets frozen since 1999. This country desperately wants and needs to refill its vaults.

(on camera): Vaults like this one. In November last year, with the Northern Alliance on the outskirts of the city, the Taliban's banking chief walked into this vault, smashed open those safes behind me and walked out with more than $6 million, and then with the rest of the Taliban, he left town.

(voice-over): After being cleaned out, the Central Bank is being cleaned up from the inside out. Soon there will be fully functioning bank accounts. They want foreign banks to set up shop. Mr. Fitrat hoping his computer screen saver is a snapshot of the future.

FITRAT: We welcome foreigners and foreigners, of course, are our friends.

HOLMES (on camera): So your message to the world is we're open for business.

FITRAT: You are -- we are open for business. Please come and feel at home.

(END VIDEOTAPE)

HOLMES: So some optimism at least for Kabul when it comes to the banking system. And indeed in the days ahead those vaults hopefully will be filling up with some of that $8 million. As far as the banking system is concerned, Carol, at least today when it comes to paying a few salaries, it worked.

Back to you.

COSTELLO: That's such good news. But as more money starts to flow in to Afghanistan, aren't they having a problem in where exactly it's going to go and how it's to be shared within the country?

HOLMES: Yes, that is a problem. And Hamid Karzai made it clear in Tokyo that they're going to set up all kinds of committees and bureaucracies to make sure that the money that comes in here, that reconstruction money from Tokyo, is well spent, well managed and that corruption doesn't play a role.

You know one of the problems they've got here with those salaries is getting the money to those civil servants who aren't in Kabul, and they say that they're going to do it. And they hope to do it this week by road or in the less secure areas, and there are plenty of them, they'll try to get that money in by air so no one gets left out. We'll see how that works out, Carol.

COSTELLO: Yes, sounds like a tough job. Thank you.

Michael Holmes reporting live from Kabul this morning.

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