The Paper Money War

That, briefly, is Ahmad Shah Masood. A man who dropped out in the second year of an engineering course (from a Kabul polytechnic) to join the Mujahideen. When Soviet tanks rolled into the picture-postcard Panjshir valley in the early 1980s, the wily Masood asked his soldiers to retreat to the mountains. The Soviets were euphoric at the thought of "conquering" the impenetrable Panjshir without a shot. But Masood was waiting with his rag-tag army. And when the Soviets were deep inside the 180 km-long valley, he ordered a counter-attack, whose ferocity can be gauged by the twisted armoured carriers, burnt-out tanks and military trucks littered around even today.

Now, this man, the frontline of the Northern Alliance fighting the Taliban regime, wants to break the Taliban’s back "not only militarily, but through other means." And one of them, which involves crippling the Taliban economy, seems to be working. For, as of now, the entire economy of Afghanistan runs on fake currency. The creation of a fake economy out of counterfeit currency is as legendary as Masood’s battles. It takes less than US $100 to print around 5 billion Afghanis. The reason: $1 is equal to 55,000 Afghani. "Fake Afghan currency notes are printed in Russia," says Nasser Khalid, Toronto-based producer, Voice of Afghanistan radio. The fake notes, usually in the denomination of 10,000 Afghani, are then brought into Afghanistan through Afghans settled abroad and circulated in the country. And a web of currency dealers in Northern Afghanistan decide the exchange rate.

All this is the result of a complex operation staged by the Northern Alliance. A typical operation would go like this - an Afghan with a foreign passport, usually one who’s settled abroad, will land in a friendly country like Iran and make his way to Mashad which is close to Pakistan. Here he’ll pick up these currency notes from a contact. A part of that currency will then be sent to Peshawar while the rest is carried to Dushanbe, capital of Tajikistan. Here, operatives of the Alliance will put them on the first available chopper flight to the Panjshir Valley or to Takhar where the money is distributed to people. It then simply goes into circulation.

Meanwhile, the money sent to Peshawar is pumped into Taliban-held areas by agents of the Northern Alliance who are mostly traders. Helping this influx is the thriving border trade between Pakistan and Afghanistan and the even more lucrative smuggling of goods. Since the fake currency is in circulation, what happens in effect is that the Alliance pumps in billions of fake Afghan currency and buys out all the dollars that accrue as a result of trade and smuggling between Pakistan and Afghanistan. "To counter this the Taliban tried to get new currency notes printed in Sweden," says Nasser Khalid. Khalid and this correspondent flew to the Panjshir Valley together. He was carrying 5 billion Afghanis which were distributed in refugees camps on the eve of Id.

Though painfully aware of this fake economy, there is not much the Taliban can do about it. The tremendously high inflation and the enormous cost of buying out all the Afghanis in circulation is too daunting a task. Besides, the currency printed by the Northern Alliance is used extensively even in Taliban-controlled areas. Thus, it’s virtually impossible for Pakistan to counter this financially. That’s why the Taliban relies so heavily on narcotics trafficking as a source of revenue generation that is independent of the fake Afghani money supply.

Despite not holding much territory, it’s this sort of innovation that’s enabled the Alliance forces to pressurise the Taliban. The latter claims control over 90 per cent of Afghanistan. But, as Masood told Outlook, "If they had 90 per cent, the other 10 per cent couldn’t have resisted all these years all by itself." Adds Gen Bismillah Khan, "The Taliban doesn’t control that much. In Baghman, Samangan, Laghman and Parvan provinces they control just the towns and not the provincial areas." Also, as Ustad Dawood Panshiri, chief administrator of Masood’s Supervisory Council in the North, points out, "the Alliance has more popular support as people prefer to live as refugees in areas held by us rather than under the Taliban’s oppressive Islamic rules."

While the Alliance’s operational headquarters are in the Panjshir Valley, the administrative functions of the quasi-government of the Islamic state of Afghanistan are carried out from Taloquan, the main town of Takhar province. Taloquan is perhaps the only town with a semblance of normalcy in a war-ravaged country. It’s also close to Tajikistan and is a one-hour chopper flight away from Dushanbe. Masood is the de facto "supreme" leader. Diplomatic relations with 40 countries and representations in international organisations are all conducted under his supervision. He has a 40-member council, 10 of whom are part of a core executive committee. These two loosely structured bodies run the government.

While the Northern Alliance is an umbrella body, its membership keeps changing in accordance with the flux of Afghan politics. But these groups are all anti-Taliban and fall under the nominal alliance called the National Islamic United Front for the Salvation of Afghanistan. In fact, Masood is careful to stress the pan-Afghan identity of the Alliance. "The Taliban is primarily an ethno-specific militia comprised of Pashtuns, but the Alliance has more widespread participation of Pashtuns, Tajiks, Uzbeks and Hazaras," he says. The most important group in the Alliance is the Jamiat-e-Islami. Mostly composed of Tajiks, it’s led by Professor Burhanuddin Rabbani, the Afghan president who was deposed by the Taliban when they entered Kabul in September 1996. But clearly, power rests with Rabbani’s deputy and minister of defence - Masood.

Masood and Rabbani are Sunni, Farsi-speaking Tajiks with different power bases. There have been rumours of a split between the two, and Masood’s close associates acknowledge their relationship is "strained." Rabbani leads a secluded life in Badakshan and is a spent force. Despite that, Masood is careful to stress that Rabbani heads the government. But he also sees a larger role for himself. "My vision is that of a democratic Islamic Afghanistan," he says. There’s a very important connotation behind this seemingly innocuous modesty. Central to Masood’s vision is the concept of a Greater Afghanistan, and he reiterates that Pakhtunistan shall be the priority of a strong, independent government in Kabul - an idea the Pakistanis are very aware and wary of. The Alliance considers Pakistan’s Baluchistan and nwfp provinces legitimate parts of Greater Afghanistan, and as Masood articulates it, "the resolution of the Durand Line has been a long-standing issue." Apart from his ‘vision’, this demand is perhaps a ploy to up the ante on Pakistani intervention in Afghanistan.

They may be outnumbered and outgunned, but Alliance Afghans are reconciled to fighting. "There’s no other way," says a Jabalsaraj commander. As to what makes these men tick, the answer, of all places, lies in a cap.

"It’s all because of the Pakhul (cap)," they say. Masood wears his Pakhul tilted to the left and has promised to wear it straight the day they win. That cap is a symbol of courage and hope for his men, and their banner as well: "We are fighting for the Pakhul..."

(The writer, a special correspondent with Worldview India, led a team to north Afghanistan)