Afghanistan’s losing its gold. It appears that rough-cut bars of gold are being spirited away from Afghanistan by single couriers on commercial flights to Dubai, the UAE, and other places. Back in October, one such courier was carrying some 60 pounds of gold bars—or more than $1.5 million in gold.
The interesting part? It’s all above-board and clearly declared. Most of it seems to be sent by gold dealers who wish to have old or damaged jewelry remade into new pieces by Persian Gulf goldsmiths and jewelers.
But the sheer increase in volume has raised eyebrows—especially when the volumes are so high that the Afghan mining industry couldn’t possible support them.
So, where is the gold coming from, and why does Dubai seem to be on the receiving end for most of it?
From the Denver Post:
“We are investigating it, and if we find this is a way of laundering money, we will intervene,” said Noorullah Delawari, governor of Afghanistan’s central bank.
“I don’t know where so much gold would come from, unless you can tell me something about it,” he said in an interview. Or, as a European official who tracks the Afghan economy put it, “new mysteries abound” as the war appears to be drawing to a close.
It’s not at all an easy matter to figure such a mystery out. Most of Afghanistan’s banking activity takes place outside of any formal system. Money laundering is fairly common.
And there are few formalized systems for receipts and written contracts. Last year, it seems some $4.5 billion in cash was smuggled out of Afghanistan—through the airport.
Gold is a major focus for investors globally, particularly in volatile economic conditions. As spot prices tick up, investors are holding it.
But Afghanistan is far from owning most of the world’s gold. Gold could be a new way of laundering money out of the country.
