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Hamid Karzai


Update No: 055 - (19/06/06)

A turning point?
The June riots in Kabul are seen by some observers as a turning point in Afghanistan, leading the expatriate community to begin wondering whether they are still welcome in the country. The expanding military presence in the country certainly shows signs of irritating an ever larger section of Afghan society, but cultural friction is more likely to be the cause of the declining popularity of foreigners in the country. In the short term, the most immediate worry became the gross inefficiency of the police, which was unable to contain a rioting crowd as little as a few hundreds strong. The riots, however, can also be seen as a warning sign that the build up in tension with some groups which have increasingly being excluded from the ruling coalition might be starting to push them towards more radical opposition. In general, the circles gathered around Jamiat-i Islami had been already manifesting growing opposition to President Karzai since the parliamentary elections of 2005, but keeping it within the boundaries of the law. However, at the grassroots level demand for action seems to be putting the leadership under pressure. In a matter of days after the riots, attention was already re-focusing on the bloodiest fighting since the fall of the Taleban regime, with hundreds killed throughout the south and south-east. Coalition sources claim to be pounding the Taleban insurgents very hard, but reports from Pakistan suggest that there is no shortage of fresh volunteers to join the jihad. The growing number of civilian casualties is increasingly becoming a political problem and is forcing President Karzai to distance himself from the Americans. His recent proposal of creating counter-insurgent militias in the south stirred a debate in Kabul, raising the prospect of the complete collapse of the efforts to disarm illegal armed groups.

Not a rubber stamp parliament
In the meanwhile, the new parliament has been giving a hard time to President Karzai and the government. The most resounding defeat of the Karzai camp was the rejection of his candidate to the position of President of the Supreme Court. Karzai wanted to reconfirm Fazel Haq Shinwari, who was voted down despite his ultra-conservative Islamic background, which should have endeared him to the majority of the parliamentarians. This rejection, officially motivated with Shinwari's lack of proper qualifications, might be a sign that opposition to Karzai is beginning to override ideological sympathies, although a cynical reading of the rejection might also be that Karzai wanted to get rid of the embarrassing Shinwari but did not dare to do it himself, opting instead to leave the job to the Parliament. 
The Parliament, however, dealt another blow to the Karzai camp by rejecting the proposed annual budget, on the ground that their request for an increase in salary for government employees had not been accepted. The Finance Minister's argument that donors were refusing to pay for the increase was overwhelmingly rejected and only 6 MPs voted in favour of the proposed budget, that is not even the members of the finance Minister's own party. 

Reining in the traders
The financial institutions of Afghanistan are having a hard time trying to establish a degree of control over the country's economy. Despite repeated warnings and threats of fines, the National Bank has not been able yet to convince traders to give up using foreign currencies. While the US dollar is widely used everywhere, the Pakistani Rupee is commonly used in southern parts of the country. Traders are responding to rising government pressure by becoming increasingly vociferous about the extent of administrative corruption in the country. A survey published by the Afghan International Chambers of Commerce showed that businessmen consider corruption the greatest challenge they face. It is estimated that corruption accounts for 8% of production costs. 

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