Economy & Development

Afghanistan’s business elite has its own election


Last month Afghanistan’s Chamber of Commerce, the ACCI, elected its new leadership. The process was not without controversy. A lively pre-election trade in ACCI membership cards allowed large numbers of underage children and people who had nothing to do with running a business to participate in the vote at the provincial level. And at the national level there were allegations of deal-making, money transfers and ethnic politicking. The fact that highly powerful individuals and networks find these positions worth competing over illustrates their importance. The controversies surrounding the vote also underscore how deeply problematic elections – of any kind – have become and how the involvement of the Independent Electoral Commission is no guarantee for a serious vote. AAN’s Martine van Bijlert takes a look at what happened and what this tells us about Afghanistan’s new business elites.

The ACCI’s leadership elections, organised by the Independent Electoral Commission (IEC), took place between 11 September and 14 October 2011 in the 21 provinces that have their own ACCI departments. It was followed by the election of the national Executive Board on 24 October 2011. Most of the provincial-level elections went unreported, with the exception of Kabul and Mazar-e Sharif where there were at least some echoes of the tumult going on behind the scenes.

In Mazar the vote was postponed for weeks due to complaints over the irregular distribution of ACCI cards and the high number of candidates. Local traders hinted that they expected Governor Atta to step in and solve the problem (read: pre-select the members of the provincial ACCI board) and, indeed, by the time the Mazar election took place there were exactly the same number of candidates as there were seats. In Kabul the Chamber’s CEO, Mohammad Qorban Haqju, assured the media that the electoral procedures had been fully transparent and that all allegations of fraud were baseless. A video obtained by AAN however suggests otherwise.

This video is a collection of short recordings, 15 minutes in total, taken in one of Kabul’s polling centres in what appears to be a large tent.** It shows, among other things, considerable chaos with multiple voters behind the cardboard voting booths (which can be partially explained by the complexity of the vote; in Kabul voters could mark up to 19 candidates).

More seriously, the footage also shows a large variety of obviously ineligible voters, who were nevertheless allowed to vote. This included men and women who indicated that they were not involved in any kind of business (in some cases whole groups of what appeared to be family members of candidates were brought to the polling centre, receiving last-minute voting instructions) and large numbers of under-age voters. The video shows groups of students, some of them in identical uniforms, and interviews with boys and girls as young as 14 years old, all of them holding ACCI membership cards. There is a recording of a member of the ACCI leadership, who is shown a very young boy and asked whether the boy should be allowed to vote, telling the staff that it is alright as long as he holds a card.

The footage confirms allegations, including by businessmen who chose to boycott the vote for this reason, that there had been a lively and uncontrolled trade in ACCI cards in the run-up to the election (in an ironic parallel to the country’s presidential and parliamentary elections, which have become increasingly impossible to control due to the massive over-registration of voters). This is also borne out by the figures, as described with an admirable lack of irony by the ACCI in their own report of the election:

‘During this period [i.e. during the weeks of the provincial level elections] membership in the Chamber increased from approximately 35,000 to an estimated 62,000 as individuals and enterprises sought to exercise their right to vote for the future of ACCI.’

A total of around 29,000 members are said to have voted countrywide.

There were also complaints of ethnic campaigning, for instance in Kabul (and during the national level vote), alleging that separate lists with either Pashtun or non-Pashtun (Northern Alliance linked) candidates had been created and distributed and that candidates and their backers were encouraging voters to vote along these lines. The video footage does indeed show voters holding photocopied pieces of paper with selected candidates and using them while filling in the ballot (there were 57 candidates in Kabul and voters were allowed to mark up to 19 candidates, given that there were 19 seats).

The national-level election of the ACCI Board took place during the High Council Congress on 23 and 24 October. It was not plagued by the same level of controversy, if only because the number of voters was fixed and limited to the 319 provincial representatives that had been voted in at the provincial level. There were, however, allegations of behind-the scenes deal-making, money transfers and a similar kind of ethnic politicking as took place on the provincial level (with candidates and their backers seeking to secure bloc votes along ethnic and factional lines).

The ACCI in its current form is a relatively recent institution and was established after the merger of two initially competing bodies. The pre-existing body, the Afghan Chamber of Commerce and Industry (ACCI) was a Soviet-era government institution, whose main function had been the valuing of imported goods against a fee to facilitate the government’s collection of custom taxes. The second, much more recent body – the Afghan International Chamber of Commerce (AICC) – was an independent, market-oriented business association. It was established in 2004 by none other than Sher Khan Farnod and Mahmud Karzai, two protagonists in the Kabul Bank scandal. The two chambers were supported by competing donors with diverging agendas: GTZ, the government-owned German development agency (now renamed GIZ), and USAID.

The new ACCI that was established in 2008 represented a compromise: the old-style chamber was reformed rather than dissolved, but its character is much closer to what the US had in mind than what the Germans and the Afghan government had initially been working towards (a government-led single point of contact for all businesses). When the new ACCI held its first leadership elections in 2009, Sher Khan Farnod and Mahmud Karzai were re-elected as chairman and first vice chairman, as they had been in the US-supported association.

The ACCI’s second leadership election in October resulted in a national board in which half of the members are newcomers. Sher Khan Farnod and Mahmud Karzai, the leaders of the first hour, have both gone (neither of them were candidates) and the new ACCI chairman is Hassin Fahim, another leading protagonist in the Kabul Bank saga and brother of Vice President Qasem Fahim. His main competitor for the seat of chairperson was Dr Faridun Noorzad of the Maiwand Bank, who also has deep roots in the Kabul Bank network (originally a medical doctor, Noorzad started his banking career in the hawala businesses of Shaheen Exchange and Kabul Exchange, after which he became deputy CEO for Kabul Bank and Azizi Bank, before taking over Maiwand Bank. Shaheen Exchange was founded by Sher Khan Farnod and was instrumental to the irregular financial transactions of the Kabul Bank).

The backgrounds and business interests of the ACCI board members provide an overview of where money can currently be made and influence peddled: banking, construction, oil and gas, trade (mainly import of consumer goods, fuel and construction materials). Much of this is related to the international presence, which has allowed newcomers to rise to prominence and in some cases outflank the more established businessmen. A case in point is the election of the head of the Transport Committee, Ajmal Rahmani, a young Bagram contractor and son of Parwan MP Rahman Rahmani.***

Many of Afghanistan’s large businessmen run groups of companies, allowing them to be involved in multiple sectors at the same time, in an effort to maximize influence and profit. This is also the case for several of the ACCI board members, including most prominently the Zahed Walid Group (Hassin Fahim), the Ghazanfar Group (Ismail Ghazanfar), Kamgar Group, which includes Kam Air (Zmaray Kamgar), the Javid Jaihoon Group(headed by ‘Lala Javid’ now also head of the Afghan United Bank), and the Zamindar Group (headed by Latif Khan Zhwanday, son of former Azizi Bank vice chairman, Ali Akbar Zhwanday). Some of these business groups have their roots in generations of cross-border trading, such as for instance Ghazanfar, while others, such as for instance Jaihoon, became well-established in the years of war and resistance. Others are newcomers and rose to prominence through their ties to government and international contracting, like Hassin Fahim or Ajmal Rahmani. Many of them have headquarters abroad.

The new board also has a few remarkable omissions, for instance Abdul Ghaffar Dawi of Dawi Oil, who used to be on the board as previously the Deputy for Services. But also some of the other big name companies are unrepresented, such the Azizi Hotak Group, known for its banks (Azizi and Bakhtar), fuel, import of cars and watches, and real estate investments; Habib Gulzar, known for its Coca Cola plant and cigarette imports; or the Alokozay Group, famous for its tea, but also cooking oil, fuel, cigarette imports, real estate, biscuits and tissues.**** None of them incidentally were candidates, at least not in the national election. There were no women elected to the board this time. Last time there was one: Hossay Andar, known to many as an unsuccessful, but very active and vocal parliamentary candidate. She was one of the three female candidates but failed to secure sufficient votes.

Serving on an ACCI board is clearly not just a matter of prestige. Although the Chamber of Commerce has no direct executive powers, it is an influential body that can help shape policies, legislation and business practices. It also provides its members with important opportunities to raise their profile. Several senior government officials, including former Ministers Rahimi, Qaderi and Eilaghi, are believed to have started their rise to prominence here.

It will be interesting to watch how the new ACCI board uses its influence. There is a great need, not just for an improved investment climate and better legislation, but also for greater self-regulation in the various sectors – as was rather dramatically illustrated by the Kabul Bank crisis (and the fact that many of Afghanistan’s other banks remain shaky in their own ways). The controversies surrounding the ACCI election, however, seem to suggest that we should not be holding our breath just yet.

* Acquiring ACCI membership does not require much more than a copy of a valid business licence and a yearly fee (and even that may have been recently ‘waived’). ‘Ordinary membership’ costs 500 Afghanis (10 USD) per year according to the website – although this may also be an outdated figure, given that the membership form mentions 2000 afs (40 USD) as the yearly ordinary fee. Silver, Gold, Platinum and VIP memberships cost 200, 500, 1000, and 5000 USD per year respectively and provide an increasing scale of privileges, including invitations to conferences and matchmaking events, visa recommendation letters, legal services, access to credit, VIP vehicle passes, and invitations to regular meetings with the President, donors and other high-level officials.

** The quality of the footage strongly suggests that it was recorded by a professional journalist and there is evidence on the video of a considerable and active media presence during the Kabul vote. The lack of media reporting, despite the obvious and on-tape irregularities, can probably be explained by the ongoing parliamentary scuffle and hunger strike of Semin Barakzai at the time, which probably took precedence.

*** The company name given, Ahmad Rashed Rahmani Ltd, does not appear in an internet search, but his other companies do, including Ajmal Rahmani Construction and Road Building and Afghan International Transport and Logistics (the company briefly featured on what appears to be a blacklist – the EPLS; Excluded Parties List System – before it was apparently removed again).

*** The Alokozay Group has also secured the exclusive bottling rights for Pepsi and the acquisition of Brac Bank. The groups is not to be confused with Khan Jan Alkozay Ltd, the company of ACCI First Deputy Khan Jan Alkozay. Alikozai is a wide-spread tribal name (and the variations in spelling here follow the transcriptions used by the companies themselves).

The newly elected ACCI national board (with company names as given by ACCI, and * signifies that the person is a new member):

1. Hassin Fahim (Zahed Walid Construction Company); Chairman (previously ACCI Deputy for Industries and Mines)

2. Khan Jan Alkozay (Khan Jan Alkozay Ltd); First Vice Chairman (previously Deputy for Commerce)

3. Mohammad Ismail Ghazanfar (Ghazanfar Oil and Gas Trade Company); Deputy for Services

4. Mohammad Yunus Momand (Shadab Zafar Construction Company); Deputy for Commerce*

5. Baz Mohammad (Afsar Khan Ltd); Deputy for Industries and Mines*

6. Zamarai Kamgar (Kamgar Trade Company); Adviser International Affairs*

7. Ajmal Rahmani (Ahmad Rashed Rahmani Ltd); Head of the Transport Committee*

8. Mohammad Daud Yusufzai (Afghan Petrol Group Ltd.); Head of the Oil Committee*

9. Azarkhash Hafizi (Afghan-German Company and on the Board of Directors of Azizi Bank); re-elected as Head of the International Relations Committee

10. Sadullah Haqyar (Khalid Jaihoon Construction Company); re-elected as Head of the Secretariat

11. Javid Jaihoon (Afghan United Bank); re-elected as Treasurer

12. Gholam Nabi Eidizadah (Nabi Akbar Ltd); Member

13. Mohammad Ebrahim Zarif (Arif Zarif Ltd); Member

14. Esmatullah Wardak (Kabul Fulad); Member

15. Assadullah Faruqyar (Rahim Farid Ltd.); Member

16. Khairuldin Mayel (Bashir Nawid Group); Member

17. Latif Khan Zhwandai (Zamindar Group); Member*

18. Nezamuldin Tajzadah (Ettehad Aftab); Member*

19. Jamaludin Ishaq (IRAA Ishaq Construction Company); Member*

20. Mohammad Latif Ghanawizian [sic] (Super Cola); Member*

21. Faridun Nurzad (Maiwand Bank); Member*

A total of 46 candidates, including three women, competed for 21 seats. The electoral results can be found here.

 

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Thematic Category: Economy & Development