Central Asia

The curse of the poppy
The Opium Economy in Afghanistan. An International Problem by the United Nations Office on Drugs and Crime

Reviewed by Sreeram Chaulia

It is no cliche that opium has ruined many an individual, family, society and nation. The history of modern China bears graphic testimony. More recently, Myanmar and Colombia have suffered profusely from the proliferation of opium cultivation and trafficking that fills the pockets of military factions. But the most definitive test case of our times for proof of narco-terrorism and its power of destroying a country is Afghanistan, producer of 75 percent of global opium stocks and not coincidentally the victim of the worst kind of warlordism, religious fundamentalism and civil society devastation.

This comprehensive new book by the UN Office on Drugs and Crime (UNODC) methodically delves into the various components of Afghanistan's opium economy - cultivation, production, finance, trade and consumption - and explains its obnoxious impact both at home and in neighboring countries. It argues that dismantling the opium economy must be done with the instruments of democracy, rule of law and development. "National efforts will not be enough. The problem is international." (p 1) Severe negative externalities of Afghan opium have converted it into a world problem soluble only through concerted international action to stem both supply and demand sides.

Afghanistan never had an "opium culture" per se before 1980 (although Badakshan province is known in legend for tipsy spirits). Lack of effective central government, widespread loss of life, infrastructure decimation and forced displacement of people in the last 22 years created conditions in which the only crop that promises a decent income is opium. "The more the overall economic situation deteriorated, the more farmers opted as a strategy for survival for growing opium poppy." (p 90) Opium is weather-resistant, reliable, easy to transport and sell compared to other crops. Involvement of cheap family labor (women and girls are expected to work free without wages or in-kind compensation) saves on costs of production and boosts profitability. In 1999, the average income per opium producing farmer was $1,075, which went up to $7,400 in 2001. These are extraordinary revenues in a country where the average wage does not exceed $2 per day. "Opium is an insurance against poverty and hunger." (p 10)

The mujahideen use the production and sale of opium to finance weapons needs. Islam prohibits intoxicating drugs, but weakening social and legal constraints increase tolerance for opium as one of the few commodities that can generate enough income for buying sophisticated Western arms. Opium and arms are often smuggled along the same routes - "arms into Afghanistan and opium out of Afghanistan". (p 127) Since 1996, warlords already involved in opium trade surrendered to the Taliban in exchange for the permit to continue their lucrative contraband trade. The Taliban, who did not disturb the opium economy as long as taxes could be levied on production, transit and trade, reaped the largest profits out of opium. Strong criticism from the international community and the threat of even stronger UN sanctions forced the Taliban to decree a temporary ban on opium production in July 2000, but massive re-planting of the poppy began as soon as the Taliban were deposed in late 2001.

Lack of a functioning financial system in Afghanistan has raised the importance of opium in the informal capital markets. Opium is "the only form of credit available", especially as the Taliban implemented a narrow interpretation of interest-free Islamic banking. Advance sales to "narco-usurers" based on collateral of the future poppy crop (salaam payments) comprise 60 percent of all loans taken out in Nangarhar and Kandahar provinces. So deep is indebtedness in rural Afghanistan that "the frequent solution to a household's debt problem is to expand opium poppy cultivation". (p 123)

Like the military entrepreneurs, greed and desire for social status motivate opium traders. UN interviews reveal that 85 percent of southern Afghan opium traders perform the expensive hajj pilgrimage and enjoy access to power, reputation and respect in their localities. Fifty percent of the traders have two to three wives, the number of wives a man can afford is a status symbol in Afghanistan. Hundred percent of the traders own at least a car, a motorcycle or a tractor and have larger than average land holdings. In eastern Afghanistan, an average opium trader involved in rapid turnover trade (purchase from farmers and immediate sale in nearby markets) can make an annual profit of $1,000 per year, a figure much smaller than the profits from smuggling opium to border regions or across into Pakistan, Iran and Central Asia.

From the mid-1990s, massive heroin manufacture (obtained by purifying morphine, an opium extract) has taken off in Afghanistan, with the prospect of even greater profits than opium. The high morphine content of Afghan opium gives it a comparative advantage in illicit heroin trade. Pure heroin prices rise sevenfold once smugglers get it across Afghanistan into Iran. "Smuggling of one kilogram of opium to Tehran is equivalent to two years of income in Afghanistan while smuggling one kilogram of heroin is equivalent to four years of income." (p 141) The magnitude of profits in the opium economy means that legitimate income alternatives can never replace the windfalls associated with drugs.

Drug consumption in Afghanistan has increased strongly in recent years owing to cheap and universal availability of illicit opium, the mass return of refugees who developed addiction in Pakistan and Iran, and the use of opiates as painkillers in the absence of basic medication and health care facilities. Opium is abused by 0.5 percent and heroin by 0.1 percent of the adult population, proportionately lower than in Pakistan (0.9 percent), Central Asia (0.9 percent) or Iran (1.7 to 2.8 percent). Abuse of hashish (9.1 percent) and pyschotropic substances (1.8 percent) is also rising in Afghanistan.

Various studies show that countries around Afghanistan that are the primary recipients of illegal opium exports have paid a heavy toll in economic development. Neighboring countries are responsible for 61 percent of global seizures of opiates, but taken together with Europe, Near and Middle East and Central Asia, they contribute just 1 percent of the aggregated GDP of these three regions, clearly indicating the economic burden imposed by drug trafficking.

Iran, which spends the most against drug trafficking, has the highest per capita income growth rate among Afghanistan's neighbors. It has paid a big price for drug interdiction in human and monetary terms, losing 3,000 law enforcement personnel in two decades and $250-$300 million in the year 2000 alone as direct costs of drug control. Total profits made by Iranian trafficking gangs in 2001 may have amounted to $1.3 billion, equivalent to 1.3 percent of the national income. Criminal Pakistani groups earn roughly $400 million per annum from opium trafficking, equivalent to 0.7 percent of GDP. Their Central Asian counterparts earn in excess of $2 billion a year, a gross trafficking sum equivalent to 7 percent of the region's aggregate GDP.

Black money from drug trafficking has an inherent potential to destabilize the state and socio-economic paraphernalia. Corruption, violence and slush money have negative repercussions on legitimate investment and thus compromise economic growth in the long run. Full-scale electoral frauds perpetrated to install administrations that are acceptable to major trafficking networks (a la Russia today) are possibilities. Acquisitive crime, gang warfare, extortion and kidnapping, already features of Afghanistan and its neighboring parts, can become institutionalized if the opium economy is not tamed. Capital formation (domestic investment) in the region averages 15 percent of GDP, ie lower than that for low and middle-income countries. Economic growth rates of Afghanistan's neighbors declined by 4 percent per annum between 1990 and 2000, drug trafficking undoubtedly acting as a contributing factor.

The human losses in Afghanistan's neighborhood have also been acute. Iran has 1.2 million chronic opiate abusers (2.8 percent of adult population), with Central Asia and Pakistan having addiction prevalence rates of 0.9 percent of respective populations above the age of 15. Overall health budgets in these countries are hardly sufficient to deal with ordinary ailments, let alone provide the additional expenses for dealing with opiate abuse. The opium-generated health crisis is particularly acute in an undeveloped country like Tajikistan, which has undergone a seven-fold increase in drug abuse in the decade of the 1990s (annual addiction growth rate of 17 percent).

Heroin abuse is now more common than opium consumption across Pakistan and as many as 15 percent of heroin users report using injecting needles as administration routes. UNAIDS finds "no data to indicate that, aside from injecting drug use (IDU) transmission, there is any other significant transmission of HIV occurring in Pakistan at present". (p195) Central Asian Republics are witnessing increasing rates of IDU, carrying high risks of blood-borne diseases. Eight-eight percent of newly recorded HIV cases in Central Asia are related to IDU. Iran's HIV/AIDS epidemic is "driven by its drug problem". (p196) Afghanistan's surroundings face significant risks of sexual transmission of HIV from IDU to the general population. IDU-related HIV rates in the Russian Federation and other parts of the former USSR that import Afghan opiates are the highest in the world.

As long as opium production exists in Afghanistan, the threat to security of neighboring countries will remain. Afghanistan's large poppy harvest in 2002 implies that they "will suffer some time to come from the consequences". (p 192)

What is the way out of this web of debauchery, decline and criminalization? UNODC has several recommendations. Supporting central institutions of the state within Afghanistan to establish effective government control over poppy cultivating areas is a pre-requisite. Non-extension of the International Security Assistance Force (ISAF) beyond Kabul, tortoise-paced headway on a new national army, and parceling of authority to regional warlords are not helping to acheive this objective. A sustainable rural economy has to be developed, encompassing credit schemes for farmers, sources of income for the landless, commodity markets free of the perverse incentives of opium, functioning banking systems, stable currency and firm enforcement of bans on opium markets.

The image of opium traders needs transmuting from Robin Hood heroes to criminals who bring misery to many people across the world. Labor-intensive public work programs and school exams should be timed in the April-May period to correspond with the opium harvesting season. Costing the labor of girls and women is essential to disrupt the structural advantages of opium production. The principal lesson is that "an integrated drug control approach will have to be linked to the mainstream of all other development efforts to rebuild Afghanistan". (p 210)

The book concludes by noting that interventions to reduce the supply-push of opiates depend on measures to reduce the demand-pull, especially in European markets. This is akin to the well-documented need to attenuate demand of "conflict diamonds" from Angola, Sierra Leone and the Congo in European and North American markets if African civil wars are to be suffocated.

The UNODC should be praised for this encyclopedic reference report loaded with empirical tables, graphs and maps. It serves to remind policy makers and researchers that the Afghan tragedy will never be over unless the sinister nexus of drugs and thugs is busted.

The Opium Economy in Afghanistan. An International Problem by the United Nations Office on Drugs and Crime, Vienna. 2003. ISBN: 92-1-148157-0. Price: US $25, 226 pages.

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Apr 26, 2003

Opium economy thrives in democratic Afghanistan (Feb 5, '03)

Afghanistan: Back to bad opium habits (Dec 25, '03)


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