Afghans fall prey to pyramid scheme
Crippled by decades of war, the government of Afghanistan has little or no power to stop illegal or questionable enterprises. Now a classic investment swindle has entagled thousands of Afghans hoping for a brighter future. Gregory Warner reports.
Photo of some of the coins offered for sale at the Quest.net Web site. (Quest.net)
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KAI RYSSDAL: The U.S. State Department said today record poppy harvests in southern Afghanistan are giving the Taliban more money to work with. The crop translated into $4 billion worth of opium, the raw ingredient for heroin.
The Afghan government officially opposes the opium trade. But illegal or otherwise, it's nearly impossible for the government there to shut down a questionable enterprise.
The World Bank says Afghanistan has fewer protections for business investors than any other country in the world -- which has made the country a magnet for scammers large and small. Gregory Warner reports.
Gregory Warner: It seemed too good to be true: Mahbub was 28, with his third baby, and a dead end-job in Kabul. And then he got a phone call from a trusted friend, with a job offer.
The deal was this: If Mahbub would agree to buy a gold coin off a Web site, sold for about five times its value, then, they told him, he could make money if he got his friends to buy the coin.
Warner: You mean, your best friend?
Mahbub: Yes! Just bring your best friend!
And again when his friends signed up their friends. It's the definition of a pyramid scheme when your business income depends only on signing up new employees.
Such schemes always run out of joiners. But Mahbub saw his big chance. So he borrowed $1,800 -- 15 months' worth of salary -- and he bought the coin. Then he called up his best friend and his favorite cousin.
In this way, a shady Internet outfit known as Quest Net, based in Hong Kong and illegal in many countries, has wooed 28,000 Afghans in two years.
The appeal might be more than quick cash. Quest Net is not just not only about money in Afghanistan.
Wesal Zaman used to be a translator for the L.A. Times -- one of the best paid jobs a young Afghan can have. He quit to devote himself to Quest Net.
Wesal Zaman: Because people do make money. But besides money, they learn how to talk, how to speak, how to love.
Warner: How to love?
Zaman: How to love -- not love girls! I mean love each other!
Zaman is full of slogans about positive thinking and teamwork -- techniques the company uses to obscure the fact that you're taking money from your friends and redistributing it upwards.
Zaman: They all believe that Afghanistan can be built, and they're the ones who are doing it.
Quest Net scammed thousands in Sri Lanka and Iran before the governments there stopped it. But when, earlier this month, Afghan President Hamid Karzai announced he was banning the business, Kabul exploded.
Kabul crowd: Qwest Qwest Qwest Woo woo woo!
It's a chilly Sunday morning, and over a thousand young men are rallying in front of the presidential palace. The crowd is Western dressed, clean shaven. More Yankees hats than turbans here.
Jami: We have vision! Our vision is a bright Afghanistan!
All the guys here bought the coin. If Quest stops now, they lose. So they wave signs that say: Fight corruption, not internet technology. They shout: Quest zindagee!
Jami: Quest is life.
Warner: Quest zindagee?
Jami: Yes. Quest is life.
Quest, the Hong Kong-based company, is dignity, they shout. Quest is freedom. Qwest is service. Quest gives us hope for the future, says one boy, that our government doesn't.
The rally didn't work -- the government stuck to the ban. But the mood at Quest headquarters was victorious. In a room with fake flowers and commemorative coin posters, I watched young men in shiny suits nail up a big Quest Net banner for the local media.
Then they assembled on the couch in front of the microphones, like some new political party. Wesal Zaman is here. He says he's not going to stop the work.
Zaman: The government say what they say. We do what we do. We believe in what we do.
Though there is one group that seems able to stop Quest. When Zaman's friends came south to recruit in Kandahar, the Taliban left a letter on their door. It said: Get out, or we'll kill you. And the "businessmen" quickly retreated.
In Kabul, I'm Gregory Warner for Marketplace.
