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Exploring Credit Systems ! and Power at the Village Level: ! Northern Afghanistan Farshad Tami Master Thesis 60 credits 2010 Thesis Master Department of Noragric Department ! Exploring C redit Systems and Power at the Village Level: Northern Afghanistan Spring 2010 By: Farshad Tami Advisor: Dr. Ingrid Nyborg Master's Degree in International Development, Noragric Universitetet for miljø- og biovitenskap ± University of Life Sciences 1 To my mother and father for never stopping their prayers 2 Acknowledgment This paper would not have seen light if it was not for the kindness and generosity of the Afghans. I am grateful for the efforts and patience of Head of Shuras of Turkmaniyeh DQG6DPD¶LYLOODJHV0U*KXODP6LNKL3DKODYDQDQG0U4DUL2EHLG¶X¶OODKDQGWKH many households interviewed there and at the villages of Kawlian, Toghlamast, Charamghar and Takht Balouch. I am grateful to the unlimited cooperation of local NGOs staff from Norwegian Project Office / Rural Rehabilitation Association for Afghanistan (NPO/RRAA) and Co-ordination of Humanitarian Assistance (CHA). My special thanks goes for Mr. Mohammed Assif (CHA Belcheragh District Director), Mr. Eshqi (CHA Project Manager in Meymaneh), Engineer Akhtar Mohammed Hakimi 13255$$%HOFKHUDJK3URMHFW0DQDJHU DQG(QJLQHHU1DTLE¶X¶OODK$KPDGL (NPO/RRAA Agronomist). I am in great debt to the material and moral support of the Norwegian Church Aid ± Kirkens Nødhjelp (NCA) for linking me with their partner NGOs, and for providing me ZLWKIDFLOLWLHVWUDQVSRUWDWLRQDQGDFFRPPRGDWLRQGXULQJP\VWD\LQ$IJKDQLVWDQ1&$¶V cooperation made it possible for me to finish my fieldwork during the short seven weeks I spent in Faryab Province. Special thanks to Dr. Gry Synnevåg, Mr. Faridoon Daudzai, Mr. Ahmad Hassan Hassan, Dr. Jalaluddin Akrami and Mr. Mohammed Sharif from NCA Kabul office. I would like to thank all the NCA staff at Meymaneh office for hosting me as they would to a family member. The hand of friendship they gave, as well as that from CHA and NPO/RRAA staff, will always bring me warm and joyful memories. From NCA Meymaneh office, Mr=LD¶X¶OODK6LGLTL,WKDQN\RXPRVWRIDOO I am grateful for the material and moral assistance provided by the Department of International Environment and Development Studies (Noragric) at the University of life Sciences ± Universitetet for miljø- og biovitenskap (UMB). My special thanks goes to Dr. Ingrid L. P. Nyborg, for her zest, encouragement and patience. Finally, I would like to thank Dr. Mark Perry and Sarah Anderson for editing this paper. 3 Content Chapter Page Acronyms 6 Terminologies 7 Abstract 8 Preamble 9 1. Introduction 12 1.1 Formal and informal credit in Afghanistan 12 1.2 Power relations linked to credit 15 1.3 Knowledge gaps in research on credit systems in 17 Afghanistan 1.4 Theoretical framework 19 1.5 Research aim, objectives and research questions 21 1.6 Outline of the thesis 21 2. Methodology 23 2.1 Consent 25 2.2 Research objectives and questions 27 2.3 Asking the questions 28 2.4 Ethical considerations 30 2.5 Decoding the findings 31 2.6 Challenges 32 3. Context and Study 35 A rea 3.1 A peek at Afghanistan 35 3.2 Culture, traditions and tribal affiliations 38 3.3 Development aid in the country 40 3.4 Faryab Province and Belcheragh District 44 3.5 TurkmaQL\HKDQG6DPD¶,YLOODJHV 46 3.6 A brief history of the study area 49 3.7 Wealth groups 51 3.8 Actors at the village and district levels 57 4. Livelihoods and 61 Informal C redit 4.1 Types of informal credit 62 4.2 Remittances 66 4.3 Agricultural land and mortgage 68 4.4 Agriculture 71 4.5 Banning of opium poppy cultivation 74 4.6 Effects of opium on credit 77 4.7 Drought 78 4 4.8 Sharecropping and leasing land 80 4.9 Farm and off-farm labor 81 4.10 Shops and other businesses 82 4.11Carpet weaving 85 4.12 Livelihood development aid projects 87 5. Social Institutions and 90 Informal C redit 5.1 Marriage dower and dowry: Mahr and Jahez 91 5.2 Burial ceremony 98 5.3 Charity: Zakat and Khairat 99 6. Insights into Formal 102 C redit 6.1 The two micro-credit scheme projects 102 6.2 Micro-credit scheme: targeting male farmers 103 6.3 Micro-credit scheme: targeting household women 106 7. C redit & Power 114 Relations 7.1 Effect of credit on power at the household level 116 7.2 Effect of credit on power at village level 118 7.3 Impact of local development aid actors on power 120 relations 7.4 Impact of international development aid actors on power 123 relations 8. Conclusions 126 References 132 Appendixes 136 Map 1 136 Tables 1 to 9 137 Figures 1 to 3 147 Pictures 1 to 12 149 5 Acronyms ACBAR Agency Coordinating Body for Afghan Relief ACTED Agency for Technical Cooperation and Development ANP Afghan National Police ARCS Afghan Red Crescent Society AREU Afghanistan Research and Evaluation Unit ARTF Afghanistan Reconstruction Trust Fund CDC Community Development Council CHA Coordination of Humanitarian Assistance DACAAR Danish Committee for Aid to Afghan Refugees DDA District Development Assembly DDP District Development Plan GT Grounded Theory EU European Union FAO Food and Agriculture Organization ICRC International Committee of the Red Cross IOM International Organisation for Migration MC Micro-credit MISFA Microfinance Investment Support Facility for Afghanistan MoEc Ministry of Economics MRRD Ministry of Rural Rehabilitation and Development, Afghanistan NABDP National Area-Based Development Programme NCA Norwegian Church Aid ±Kirkens Nødhjelp NGO Non-governmental Organization NRC Norwegian Refugee Council NPO/RRAA Norwegian Project Office / Rural Rehabilitation Association for Afghanistan NSP National Solidarity Programme PC Provincial Council PDC Provincial Development Committees PRT Provincial Reconstruction Teams UIF United Islamic Front for the Salvation of Afghanistan UMB Universitetet for miljø- og biovitenskap UNAMA United Nations Assistance Mission in Afghanistan UNDP United Nations Development Programme UNHCR United Nations High Commissioner for Refugees USAID United States Agency for International Development USD United States Dollar WFP World Food Programme WB World Bank 6 Terminologies Abi Irrigated land Arbab Elected chairman of the village councils Burka An outer garment worn by women and covers the whole body Chador An outer garment worn by women Doktorhayeh Traditional healers Younani Forokhtan Act of selling Gheraw Mortgage Jahez Dowry Jehrib Two-thousand meter squares of land Khairat Voluntary act of charity Khod Kafa Self-sufficient Lalmi Rain-fed land Madrassa School Mahr Dower Mo Sfedha White haired men or women, indicating their age Moharem Chaperon Mujahideen Islamic militias/insurgency fighting the Soviet Army in Afghanistan. Mullah Islamic clergymen Nasiya A form of informal credit Nerkh Yarn Pashtunwali Pashtun codes of honor Peshaki A form of informal credit Qaleen-e-Qaychi Untrimmed carpet Nashodeh Qarz-e-Hassaneh Loans without usury Qarz-e-Sood Loans with usury Qommandan Military commander Reesh Sefidha White bearded men, indicating their age Riba Usury Salam A form of informal credit Sharia Islamic Jurisprudence Shura A council of men and/or women Sood Khorha Lenders of credit with usury Sood Usury Zakat Islamic duty of charity 7 Abstract In the absence of a strong state in Afghanistan it is very challenging to provide rural households with better food security and access to sustainable, well-established and regulated financial institutions. This paper researched livelihood strategies, credit systems and power relations in two villages from Belcheragh District, in Faryab Province, during summer 2008. Through the use of qualitative methods the study explored in-depth strategies such as remittances, agriculture and carpet weaving incomes, life-cycle activities, credit systems, including micro-credit schemes and the common local credit transactions, and finally, power networks. The study also explored how these strategies are changing in Afghanistan in the face of changes in the political, social and economic conditions. The study found that social networks, through which less privileged households gain access to credit, are exploitative in nature. Access to land and credit for the more privileged households allows them to also have a say in who gets what in the village, mainly micro-credit schemes, the local credit transactions and other livelihood incomes. Finally, the study provided detailed information on the situation in Belcheragh District for development actors such that they can improve their own micro- credit schemes and other activities related to food security. Keywords: Afghanistan, Belcheragh, Faryab, livelihoods, credit systems, power, social networks, micro-credit, development 8 Preamble Hooves of donkeys, car wheels and tank tracks have carved the roads outside of Meymaneh and these roads came with their own heat and dust. On the early hours of June 10th 2008, we drove southeast. The road we were on had graveyards covering the hills on the left and ploughed flat land on the right. After a few kilometers, there was nothing but hills and mountains. As we crossed the highlands at the edge of the Pamir Mountains, Shahvali, our designated driver played on the tape recorder songs by Jawad Qaziyar. Traveling that path towards the sunrise ±and accompanied by a traditional $IJKDQPHORG\DQG-DZDG¶VPHODQFKROLFYRLFH±I was introduced to Belcheragh. The district of Belcheragh is located in a northern province, called Faryab. The surroundings are bare but for some trees along a nearly dried up river. Belcheragh River floods during winter and isolates villages from each other for up to several days. During the summer, the river dwindles down to a stream in some parts, and a shallow river in others. Most of the land, apart from the banks, is mountainous, where marks of determination of the Afghans can be seen. The almost impossible to be plowed slopes have been plowed and the yellow wheat patches are an astonishing marvel to look at. It was pointed out for me that this season the plowed landscape yielded short stocks of wheat; on some mountains, it yielded nothing at all.