Afghanistan has been the world's leading illicit opium producer since 2001. Afghanistan's opium poppy harvest produces more than 90% of illicit heroin globally, and more than 95% of the European supply. More land is used for opium in Afghanistan than is used for coca cultivation in Latin America. In 2007, 93% of the non-pharmaceutical-grade opiates on the world market originated in Afghanistan. This amounts to an export value of about US$4 billion, with a quarter being earned by opium farmers and the rest going to district officials, insurgents, warlords, and drug traffickers. In the seven years (1994–2000) prior to a Taliban opium ban, the Afghan farmers' share of gross income from opium was divided among 200,000 families. As of 2017, opium production provides about 400,000 jobs in Afghanistan, more than the Afghan National Security Forces. In addition to opium, Afghanistan is also the world's leading producer of hashish..
Afghanistan first began producing opium in significant quantities in the mid-1950s, to supply its neighbour Iran after poppy cultivation was banned there. Afghanistan and Pakistan increased production and became major suppliers of opiates to Western Europe and North America in the mid-1970s, when political instability combined with a prolonged drought disrupted supplies from the Golden Triangle.
After a Soviet-backed left-wing government in Afghanistan failed to gain popular support, the Russians decided to invade. A number of resistance leaders concentrated on increasing opium production in their regions to finance their operations, regardless of its haram Islamic status, in particular Gulbuddin Hekmatyar, Mullah Nasim Akhundzada, and Ismat Muslim. The production was doubled to 575 metric tons between 1982 and 1983. (At this time the United States was pursuing an "arms-length" supporting strategy of the Afghan freedom-fighters or Mujahideen, the main purpose of which was to cripple the Soviet Union slowly into withdrawal through attrition rather than effect a quick and decisive overthrow). Hekmatyar, the leading recipient of aid from the CIA and Pakistan, developed at least six heroin refineries in Koh-i-Sultan in southwestern Pakistan, while other warlords were content to sell raw opium. Nasim Akhundzada, who controlled the traditional poppy growing region of northern Helmand, issued quotas for opium production, which he was even rumoured to enforce with torture and extreme violence. To maximise control of trafficking, Nasim maintained an office in Zahidan, Iran.
As explained by Zbigniew Brzezinski:
The secret operation was an excellent idea. It drew the Russians into the Afghan trap and you want me to regret it? On the day that the Soviets officially crossed the border, I wrote to President Carter, saying, in essence: 'We now have the opportunity of giving to the USSR its Vietnam War.'
It was alleged by the Soviets on multiple occasions that US Central Intelligence Agency (CIA) agents were helping smuggle opium out of Afghanistan, either into the West, in order to raise money for the Afghan resistance, or into the Soviet Union, in order to weaken it through drug addiction. According to Alfred McCoy, the CIA supported various Afghan drug lords, for instance Gulbuddin Hekmatyar and others such as Haji Ayub Afridi.
Another factor was the eradication effort inside Pakistan (whose Inter-Services Intelligence were coincidentally supporters of the Mujahideen). The Pakistani government, US Agency for International Development (USAID) and other groups were involved in attempting to eliminate poppy cultivation from certain areas of the North-West Frontier Province (now Khyber Pakhtunkhwa) bordering Afghanistan. The opium industry shifted from Pakistan into Afghanistan during the 1980s.
When the Soviet Army was forced to withdraw in 1989, a power vacuum was created. Various Mujahideen factions started fighting against each other for power. With the discontinuation of Western support, they resorted ever more to poppy cultivation to finance their military existence.
In July 2000, Taliban leader Mullah Mohammed Omar, collaborating with the UN to eradicate heroin production in Afghanistan, declared that growing poppies was un-Islamic, resulting in one of the world's most successful anti-drug campaigns. The Taliban enforced a ban on poppy farming via threats, forced eradication, and public punishment of transgressors. The result was a 99% reduction in the area of opium poppy farming in Taliban-controlled areas, roughly three quarters of the world's supply of heroin at the time. The ban was effective only briefly due to the deposition of the Taliban in 2002.
However, some people (Martin, An Intimate War, 2014), suggest that certain parties benefited from the price increase during the ban. Some[who?], even believe it was a form of market manipulation on the part of certain drug lords. Dried opium, unlike most agricultural products, can easily be stored for long periods without refrigeration or other expensive equipment. With huge stashes of opium stored in secret hideaways, the Taliban and other groups that were involved in the drug trade were in theory able to make huge personal profits during the price spikes after the 2000 ban and the chaos following the September 11 attacks.
By November 2001, and with the start of the Afghan War, the collapse of the economy and the scarcity of other sources of revenue forced many of the country's farmers to resort to growing opium for export (1,300 km2 or 500 sq mi in 2004 according to the UN Office on Drugs and Crime).
In December 2001, a number of prominent Afghans met in Bonn, Germany, under UN auspices to develop a plan to reestablish the State of Afghanistan, including provisions for a new constitution and national elections. As part of that agreement, the United Kingdom (UK) was designated the lead country in addressing counter-narcotics issues in Afghanistan. Afghanistan subsequently implemented its new constitution and held national elections. On December 7, 2004, Hamid Karzai was formally sworn in as president of a democratic Afghanistan."
Two of the following three growing seasons saw record levels of opium poppy cultivation. Corrupt officials may have undermined the government's enforcement efforts. Afghan farmers claimed that "government officials take bribes for turning a blind eye to the drug trade while punishing poor opium growers."
Another obstacle to getting rid of poppy cultivation in Afghanistan is the reluctant collaboration between US forces and Afghan warlords in hunting drug traffickers. In the absence of the Taliban, the warlords largely control the opium trade but are also highly useful to US forces in scouting, providing local intelligence, keeping their own territories clean from Al-Qaeda and Taliban insurgents, and even taking part in military operations.
While US and allied efforts to combat the drug trade have been stepped up, the effort is hampered by the fact that many suspected drug traffickers then became top officials in the Karzai government. Estimates made in 2006 by the UN Office on Drugs and Crime (UNODC) estimate that 52% of the nation's GDP, amounting to US$2.7 billion annually, is generated by the drug trade. The rise in production has been linked to the deteriorating security situation, as production is markedly lower in areas with stable security. By some, the extermination of the poppy crops is not seen as a viable option because the sale of poppies constitutes the livelihood of Afghanistan's rural farmers. Some 3.3 million Afghans are involved in producing opium. Opium is more profitable than wheat and destroying opium fields could possibly lead to discontent or unrest among the indigent population. Some poppy eradication programs have, however, proven effective, especially in the north of Afghanistan. The opium poppy eradication program of Balkh Governor Ustad Atta Mohammad Noor between 2005 and 2007 successfully reduced poppy cultivation in Balkh Province from 7,200 hectares (18,000 acres) in 2005 to zero by 2007.
The Afghanistan Opium Risk Assessment 2013, issued by UNODC, suggests that the Taliban has, since 2008, been supporting farmers growing poppy, as a source of income for the insurgency.
Former US State Department Principal Deputy Assistant Secretary for the Bureau of International Narcotics and Law Enforcement Affairs Thomas Schweich, in a New York Times article dated July 27, 2007, asserts that opium production is protected by the government of Hamid Karzai as well as by the Taliban, as all parties to political conflict in Afghanistan, as well as criminals, benefit from opium production, and, in Schweich's opinion, the US military turns a blind eye to opium production as not being central to its anti-terrorism mission. In March 2010, NATO rejected Russian proposals for Afghan poppy spraying, citing concerns over income of Afghan people. There have also been allegations of US and European involvement in Afghanistan's drug trafficking with links to Taliban.
On October 28, 2010, agents of Russia's Federal Service for the Control of Narcotics joined Afghan and US anti-drug forces in an operation to destroy a major drug production site near Jalalabad. In the operation, 932 kg (2,055 lb) of high quality heroin and 156 kg (344 lb) of opium, with a street value of US$250 million, and a large amount of technical equipment was destroyed. This was the first anti-drug operation to include Russian agents. According to Viktor Ivanov, Director of Russia's Federal Service for the Control of Narcotics, this marks an advance in relations between Moscow and Washington. Hamid Karzai called the operation a violation of Afghan sovereignty and international law.
As had been the case in Indochina during the Vietnam War, the US invasion has in fact been causal in a massive increase in opium production, the aforementioned eradication efforts being largely window dressing. A SIGAR report showed a threefold increase in area under cultivation between 2002 and 2014. A December 2014 UNAIDS study showed an increase of 7% in one year alone.
Nine years of intense fighting by international troops did nothing to stop the production. In fact it only became worse. The only difference was that it has been pushed out beyond the central populated zone to less governed badlands beyond the Helmand canal.
Approximately 40,000 foreign troops attempted to manage "security" in Afghanistan, principally of 32,000 regular soldiers from 37 NATO forces: the International Security Assistance Force. 8,000 US and other special operations forces, mainly privately contracted soldiers of fortune, make up the balance. There is significant resistance, both from the ideological and theocratic Taliban, especially in southern Afghanistan, and independent local warlords and drug organizations. Antonio Maria Costa, Executive Director of UNODC, described the situation: "There is no rule of law in most of the southern parts of Afghanistan—the bullets rule."
The following areas of Afghanistan play a role in the drug trafficking:
According to the US Department of Labor's 2014 List of Goods Produced by Child Labor or Forced Labor, opium production is one of the sectors that rely on child labor in Afghanistan. Poppies being the source of the crude drug, children are still recruited to harvest these flowers in the country's farming fields.
According to European Union (EU) agencies, Afghanistan has been Europe's main heroin supplier for more than 10 years (through 2008). Heroin enters Europe primarily by two major land routes: the long-standing 'Balkan route' through Turkey; and, since the mid-1990s, the 'northern route', which leaves northern Afghanistan through Central Asia and on to Russia (and is sometimes colloquially referred to as the 'silk route'). There is an estimated 1.5 million (1.3–1.7 million) opioid users in the EU, with an average prevalence of 4 to 5 per 1,000. In 2005, there were around 7,000 acute drug deaths, with opioids being present in the blood of 70% of the deceased. There was a minimum of 49,000 seizures resulting in the interception of an estimated 19.4 metric tons (19.1 long tons; 21.4 short tons) of heroin. Countries reporting the largest number of seizures (in descending order): UK (2005), Spain, Germany, Greece, and France. Countries reporting the largest quantities of heroin seized in 2005 (in descending order): Turkey, UK, Italy, France, the Netherlands.
Presently with the resurgence of high output production of opium and heroin in post-Taliban Afghanistan, there is an ongoing heroin addiction epidemic in Russia which is claiming 30,000 lives each year, mostly among young people. There were two and half million heroin addicts in Russia by 2009.
The International Council on Security and Development (ICOS) has proposed legalizing opium production for medical purposes. Opium can be manufactured into codeine and morphine, which are both legal pain-killers. The Governor of Afghanistan's Helmand Province, Hayatullah Hayat is a proponent of eventually legalizing opium production to create morphine.
Others have argued that legalizing opium production would neither solve the problem nor would it be workable in practice. They argue that illegal diversion of the crop could only be minimized if the Afghans had the necessary resources, institutional capacity and control mechanisms in place to ensure that they were the sole purchaser of opiate raw materials. For them, there is currently no infrastructure in place to set up and administer such a scheme. They reason that in the absence of an effective control system, traffickers would be free to continue to exploit the market and there would be a high risk that licit cultivation would be used for illegal purposes and that the Afghan government would be in direct competition with the traffickers, thereby driving up the price of opium, and attracting more farmers to cultivate. The Afghan government has ruled out licit cultivation as a means of tackling the illegal drug trade: however in Turkey in the 1970s, legalizing opium production, with US support brought illicit trafficking under control within four years. Afghan villages have strong local control systems based around the village shura, which with the support of the Afghan government and its international allies, could provide the basis for an effective control system. This idea is developed in the recent Senlis Council report "Poppy for Medicine" which proposes a technical model for the implementation of poppy licensing and the legal control of cultivation and production of Afghan morphine.
Some believe that there is also little evidence to show that Afghan opium would be economically competitive in a global market place. Australia, France, India, Spain, and Turkey currently dominate the export market for licit opiates. Due to the high cost of production in countries where cultivation is undertaken on small landholdings, such as India and Turkey, licit production requires market support (the production costs for the equivalent of 1 kg of morphine in 1999 was US$56 in Australia, US$159.77 in India and US$250 in Turkey). The current cost of production of one kilogram of morphine equivalent in Afghanistan is approximately US$450. However, a poppy for medicine project in Afghanistan could provide a cheap pain relief option for pain sufferers who find morphine prices extremely elevated.
The price of illicit opium far exceeds that of licit, (in India, in 2000, the price for licit opium was US$13–29 per kilo, but for illicit US$155–206). Although there are many complex reasons behind the decision to grow poppy, one of them is the current economic dependence of poppy farmers on the illicit trade. Whilst traffickers continue to be free to exploit the illicit market, legalization would not change this. Demand for illicit opiates would not disappear even if Afghan opium were used for licit purposes and a vacuum would open that traffickers could exploit. However, currently 100% of Afghan opium is diverted to the illegal opium trade and funds in some cases terrorist activities. Despite eradication efforts since the international intervention in 2001, poppy cultivation and illicit opium production has increased, as UNODC figures show. A licensing system would bring farmers and villages into a supportive relationship with the Afghan government, instead of alienating the population by destroying their livelihood, and provide the economic diversification that could help cultivators break ties with the illicit opium trade.
The International Narcotics Control Board states that an over production in licit opiates since 2000 has led to stockpiles in producing countries 'that could cover demand for two years'. Thus, some say Afghan opium would contribute to an already oversupplied market and would potentially cause the supply and demand imbalance that the UN control system was designed to prevent. However, the World Health Organization points out that there is an acute global shortage of poppy-based medicines such as morphine and codeine. This is largely due to chronic underprescription (especially in countries where morphine is extremely highly priced). The International Narcotics Control Board which regulates opium supply throughout the world enforces the 1961 Single Convention on Narcotic Drugs: this law provides that countries can only demand the raw poppy materials corresponding to the use of opium-based medicines over the last two years and thus limits countries who have low levels of prescription in terms of the amounts they can demand. As such, 77% of the world's opium supplies are being used by only six countries, leaving the rest of the world lacking in essential medicines such as morphine and codeine. A second-tier supply system, that complements the current UN control system by supplying opium-based medicines to countries currently not receiving the poppy-based pain relief medicines needed, would maintain the balance established by the UN system and provide a market to Afghan-made poppy-based medicines.
Afghanistan has seen a high rate of opium addiction among refugees returning from Iran and Pakistan. Zalmai Afzali, spokesman for the Ministry of Counter-Narcotics in Afghanistan reports an increase in the total number of drug users by over half a million, to 1.5 million, between 2005 and 2010.
The 2004 United Nations Development Programme ranked Afghanistan number 173 of 177 countries, using a human development index, with Afghanistan near or at the bottom of virtually every development indicator including nutrition, infant mortality, life expectancy, and literacy. Several factors encourage opium production, the greatest being economic: the high rate of return on investment from opium poppy cultivation has driven an agricultural shift in Afghanistan from growing traditional crops to growing opium poppy.
"Despite the fact that only 12 percent of its land is arable, agriculture is a way of life for 70 percent of Afghans and is the country's primary source of income. During good years, Afghanistan produced enough food to feed its people as well as supply a surplus for export. Its traditional agricultural products include wheat, corn, barley, rice, cotton, fruit, nuts, and grapes. However, its agricultural economy has suffered considerably [...] Afghanistan's largest and fastest cash crop is opium."
Poppy Cultivation and the Opium Trade have been said to have had a more significant impact on the civilians in Afghanistan than the impact of wheat farming and livestock trading. As farmers in Afghanistan were once heavily reliant on wheat farming to make sufficient income, the development of poppy cultivation has given many of these farmers a boost in capital, even though opium may be a more dangerous product to distribute. In addition, as the demand for Opium has elevated, women have more opportunity to work in the same setting as their male counterpart.
Afghanistan's rugged terrain encourages local autonomy, which, in some cases, means local leadership committed to an opium economy. The terrain makes surveillance and enforcement difficult.
Afghanistan's economy has thus evolved to the point where it is now highly dependent on opium. Although less than 4 percent of arable land in Afghanistan was used for opium poppy cultivation in 2006, revenue from the harvest brought in over $3 billion—more than 35 percent of the country's total gross national product (GNP). According to Antonio Costa, "Opium poppy cultivation, processing, and transport have become Afghanistan's top employers, its main source of capital, and the principal base of its economy." Today, a record 2.9 million Afghanis from 28 of 34 provinces are involved in opium cultivation in some way, which represents nearly 10 percent of the population. Although Afghanistan's overall economy is being boosted by opium profits, less than 20 percent of the $3 billion in opium profits actually goes to impoverished farmers, while more than 80 percent goes into the pockets of Afghan's opium traffickers and kingpins and their political connections. Even heftier profits are generated outside of Afghanistan by international drug traffickers and dealers.
Traditionally, processing of Afghan's opium into heroin has taken place outside of Afghanistan; however, in an effort to reap more profits internally, Afghan drug kingpins have stepped up heroin processing within their borders. Heroin processing labs have proliferated in Afghanistan since the late 1990s, particularly in the unstable southern region, further complicating stabilization efforts. With the reemergence of the Taliban and the virtual absence of the rule of law in the countryside, opium production and heroin processing have dramatically increased, especially in the southern province of Helmand.
According to the United Nations Office on Drugs and Crime (UNODC) 2007 Afghanistan Opium Survey, Afghanistan produced approximately 8,200 metric tonnes of opium – nearly double the estimate of global annual consumption. In an April 25, 2007 op-ed in the Washington Post, Antonio Maria Costa, Executive Director of UNODC, asked "Does opium defy the laws of economics? Historically, no. In 2001, prices surged tenfold from 2000, to a record high, after the Taliban all but eliminated opium poppy cultivation across the Afghan territory under its control. So why, with last year's bumper crop, is the opposite not occurring? Early estimates suggest that opium cultivation is likely to increase again this year. That should be an added incentive to sell.
He speculated, "So where is it? I fear there may be a more sinister explanation for why the bottom has not fallen out of the opium market: major traffickers are withholding significant amounts.
"Drug traffickers have a symbiotic relationship with insurgents and terrorist groups such as the Taliban and al-Qaeda. Instability makes opium cultivation possible; opium buys protection and pays for weapons and foot soldiers, and these in turn create an environment in which drug lords, insurgents and terrorists can operate with impunity.
"Opium is the glue that holds this murky relationship together. If profits fall, these sinister forces have the most to lose. I suspect that the big traffickers are hoarding surplus opium as a hedge against future price shocks and as a source of funding for future terrorist attacks, in Afghanistan or elsewhere."
Due to globalization and the development of trade, traditional ways of sustaining life for villagers has been forced to change. Before, people relied on wheat farming and livestock, whereas today, poppy cultivation is the most prominent economic activity. This can be attributed to higher profits from poppy cultivation and lack of opportunity for other farming practices due to land scarcity and more accessible loans from money providers for this activity.
War, economic instability, and poverty caused changes in the way villagers maintained their villages. Competition for scarce land and resources resulted in unsustainable practices, causing soil erosion and therefore making the land less productive. The cultivation of poppy, however, generated greater profits than wheat farming for the farming villagers due to the higher yielding possibilities with less land (poppies require less irrigation than wheat), and greater demand for the profitable drug trade of the highly valued opium, prepared from poppies. Many emigrants to places such as Pakistan and Iran witnessed the profitability of poppy cultivation in land development, through association with local landowners and businessmen, and were inspired to bring about the same economic improvement in their own lives and villages. Also, opium trade proved to be more cost-efficient than livestock trade, since large amounts of opium are easier to transport than livestock. Local shopkeepers used capital, which was acquired from buying opium resins from farmers and selling them to dealers at the Tajikistan-Afghanistan border, to invest in their own small shops, generating more income. Poor villagers saw this as a good investment opportunity, as it meant more efficient farming of one product with the possibility of creating economic stability in their villages.
Aside from the obvious threat of addiction, opium production is changing the dynamic of many Afghan villages. Wealth distribution, for example, has changed significantly as the opium economy has created a "new rich" in which young men have control. This newfound wealth for the young men of Afghanistan is troubling to many of the village leaders as before they were revered for their wisdom, and now are given little if any respect. It has also been noted that relationships among fathers and sons, neighbours, and family in general, are drastically changing as leadership roles in the economy continue to shift. As the young men have increased contact with the outer world, they have become aware of different methods of performing traditional tasks, which have created tensions between the young men and the white beards. Also, there has been a shift from the level of co-operation, trust, and reciprocity within villages to a move of self-interest, all of which have been adversely affected by the war.
While the Taliban were considered a threat both to the human rights of Afghans, and to other areas of the world by providing a sanctuary for transnational terrorists, they also demonstrated an ability to strictly enforce a moratorium on opium production. Since their overthrow in 2001, stopping their enforcement with methods including beheading, opium poppy cultivation has been steadily increasing over the past two decades. There is evidence that the Taliban ban carried the seeds of its own lack of sustainability, due to a many-fold increase in the burden of opium-related debt (locking many households into dependence on future opium poppy cultivation), forcing asset sales to make ends meet, etc. It also appears that the opium ban weakened the Taliban politically. Thus the sustainability of the ban beyond the first year was highly doubtful, even if the Taliban had not been overthrown in late 2001.
"Even though the Karzai government made opium poppy cultivation and trafficking illegal in 2002, many farmers, driven by poverty, continue to cultivate opium poppy to provide for their families. Indeed, poverty is the primary reason given by Afghan farmers for choosing to cultivate opium poppy." With a farm gate price of approximately $125 per kilogram for dry opium, an Afghan farmer can make 17 times more profit growing opium poppy ($4,622 per hectare), than by growing wheat ($266 per hectare). "Opium poppy is also drought resistant, easy to transport and store, and, unlike many crops, requires no refrigeration and does not spoil." With Afghanistan's limited irrigation, in which qanats (karez) still play a big role, transportation and other agricultural infrastructure, growing alternative crops is not only less profitable, but more difficult.
In 2006, opium production in the province increased over 162 percent and now accounts for 42 percent of Afghan's total opium output. According to the UNODC, the opium situation in the southern provinces is "out of control."
Corruption associated with the opium economy has spread to all levels of the Afghan government from the police to the parliament, and is eroding the rule of law. Farmers routinely bribe police and counternarcotics eradication personnel to turn a blind eye. Law enforcement personnel are also paid off by drug traffickers to ignore or, in some cases, protect their movements. Afghan government officials are now believed to be involved in at least 70 percent of opium trafficking, and experts estimate that at least 13 former or present provincial governors are directly involved in the drug trade...In some cases...[local leaders] are the same individuals who cooperated with the United States in ousting the Taliban in 2001.
Working with the UK and the Afghan government, the United States developed its own strategy to counter the opium problem in Afghanistan, which has the following five pillars:
- alternative livelihoods
- elimination and eradication
- law enforcement and justice reform
- public information
The Department of State (DoS), the U.S. Agency for International Development (USAID), the Department of Defense (DoD), and the Department of Justice (DoJ) are the primary organizations involved in carrying out this counternarcotics strategy for the US. The role of the CIA has not been mentioned. UNODC's executive director believes these measures are insufficient: "What can be done? Since NATO forces are wary of making enemies out of opium farmers by being associated with eradication, and since the Afghan government is opposed to spraying poppy fields, rounding up the major traffickers may be the best available option for disrupting Afghanistan's lucrative opium market."
Both demand and supply reduction are important. "the consuming countries need to get serious about curbing drug addiction. If there was less demand for heroin, the bottom really would fall out of the opium market." Farmers economically dependent on opium must have viable alternatives that give sustainable income. On the supply side, identifying the most-wanted traffickers and subjecting them to international arrest warrants with extradition, asset seizure, and travel bans could help. While it is not easy to destroy opium storage and heroin production laboratories, it is far easier to destroy drugs at the source than in transit.
Afghanistan's neighbors are either accomplices or victims in the opium trade, so they need to be part of the solution. They could, for example, improve intelligence-sharing and border security to ensure that more opium is seized. At the moment, less than a quarter of the world's opium is intercepted, compared with around half of global cocaine output.
This complicates, of course, the complex US relations with Pakistan and Iran.
There is an important nexus between drugs and hawala (informal money transfer system) in Afghanistan. The UN analysis is based on interviews with a sample of 54 hawala dealers in the main centers of hawala activity of Afghanistan as well as during a visit to Peshawar, Pakistan. In addition, interviews were conducted with users of the hawala system (drug dealers, businessmen, traders, international aid workers), regulators (government officials, central bank personnel), and formal service providers (bankers, accountants). In addition to hawala, they found protection payments and connections, by which the drug industry has major linkages with local administration as well as high levels of the national government.
See informal money transfer systems to support clandestine activity, including terrorism, drug trade, and intelligence collection.
Different localities studied by the UNODC give different views of the laundering of drug funds. It is difficult to get a solid sense of the overall economy. In Faizabad, for example, it has been indicated that during certain times of the year close to 100% of the liquidity of the hawala system in the province is derived from drugs, whereas in Herat, the Northern Alliance stronghold, it was estimated that only 30% of the hawala market's overall transaction volume is directly linked to drugs. Analysis of data gathered in places like Herat was complicated by confirmed links between drug money and legitimate imports. The southern region (Helmand and Kandahar provinces) is also a key centre for money laundering in Afghanistan (about 60% of the funds are drug related and 80–90% of the hawala dealers in Kandahar [the former Taliban stronghold] and Helmand are involved in money transfers related to narcotics).
Helmand has emerged as a key facilitator of the opium trade, both between provinces and exports, while overall estimates of the local hawala markets' drug-related component are of a similar order of magnitude to those in Kandahar. This finding adds weight to the notion that the major trading centers in these two neighboring provinces should be treated as essentially one market. Bearing this in mind, the study calculated that Helmand could account for roughly US$800 million of Afghanistan's drug-related hawala business and that Herat is the second largest contributor, with in the range of US$ 300–500 million of drug money laundered annually.
Furthermore, Dubai appears to be a central clearing house for international hawala activities. In addition, various cities in Pakistan, notably Peshawar, Quetta, and Karachi, are major transaction centers. It appears that even in the case of drug shipments to Iran, payments for them come into Afghanistan from Pakistan ... the hawala system has been key to the deepening and widening of the "informal economy" in Afghanistan, where there is anonymity and the opportunity to launder money.
Hawala, however, also contributes positively to the regional economy. It has been central to the survival of Afghanistan's financial system through war. According to Maimbo (2003), "integral to processes of early development and vital for the continued delivery of funds to the provinces." "The hawala system also plays an important role in currency exchange. It participates in the Central Bank's regular foreign currency auctions, and was instrumental in the successful introduction of a new currency for Afghanistan in 2002–2003."
While Herat is not the highest-volume area of opium trade, Herat, and the other Iranian border areas of Farah, and Nimroz, have some of the highest prices, presumably due to demand from the Iranian market. "Opium prices are especially high in Iran, where law enforcement is strict and where a large share of the opiate consumption market is still for opium rather than heroin. Not surprisingly, it appears that very significant profits can be made by crossing the Iranian border or by entering Central Asian countries like Tajikistan." According to UNODC estimates bulk of Afghanistan's opium production goes to Iran either for consumption or for on-ward export to other countries in the region and Europe. Iran currently has the largest prevalence of opiate consumption in its population globally. Iran also accounts for 84% of total opiate seizures by law enforcement agencies in the world, interdicting tens of thousands of tons of opiates annually. The Iranian government has gone through several phases in dealing with its drug problem.
First, during the 1880s, its approach was supply-sided: "Law-and-order policies with zero tolerance led to the arrest of tens of thousands of addicts and the execution of thousands of narcotics traffickers." "There are an estimated 68,000 Iranians imprisoned for drug trafficking and another 32,000 for drug addiction (out of a total prison population of 170,000, based on 2001 statistics)"
Beehner said "Tehran also has spent millions of dollars and deployed thousands of troops to secure its porous 1,000-mile border with Afghanistan and Pakistan... a few hundred Iranian drug police die each year in battles with smugglers. Referring to the head of the UNODC office in Iran, Roberto Arbitrio, Beehner quoted Arbitrio in an interview with The Times. "You have drug groups like guerrilla forces, [who] ... shoot with rocket launchers, heavy machine guns, and Kalashnikovs."
A second-phase strategy came under then-President Mohammad Khatami, focused more on prevention and treatment. Drug traffic is considered a security problem, and much of it is associated with Baluchi tribesmen, who recognize traditional tribal rather than national borders. Current (2007) reports cite Iranian concern with ethnic guerillas on the borders, possibly supported by the CIA.
Iranian drug strategy changed again under President Mahmoud Ahmadinejad, who took office in 2005. Iran's drug policy has been reconsidered and shifted back toward supply interdiction and boosting border security. It is unclear if this is connected to more wide-ranging concerns with border security, perhaps in relation to Baluchi guerillas in Iran.
Iran has alleged that certain drugs are manufactured in Afghanistan under guidance of western powers and solely sent to Iran for consumption such as certain compounds of heroin, Crack cocaine and CNS stimulants. Iran has also alleged that large quantities of Acetic anhydride and Hydrochloric acid are brought to Afghanistan from Europe to be used in manufacturing of drugs as Afghanistan does not have the chemical industry to produce the compounds locally.
Samii's 2003 paper described Iran's "primary approach to the narcotics threat [as] interdiction. Iran shares a 936 kilometer border with Afghanistan and a 909 kilometer border with Pakistan, and the terrain in the two eastern provinces—Sistan va Baluchistan and Khorasan—is very rough. The Iranian government has set up static defenses along this border. This includes concrete dams, berms, trenches, and minefields".
As per UN drug report of 2011, Iran accounts for highest rate of opium and heroin seizure rates in the world, intercepting 89% of all seized opium in the world. Within a span of thirty years, 3700 Iranian police officers have been killed and tens of thousands more injured in counter narcotics operations mostly on Afghan and Pakistan borders.
Given the fact that a third of the combined legal and illegal Afghan economy is based on the illegal opium industry, counter-narcotics policy is currently one of the most important elements of domestic politics. Despite law enforcement measures with a dominant focus on crop eradication programs, Afghan opium production has doubled in just two years. This has shown that currently there is no correlation between poppy crop eradication and the level of poppy cultivation or opium production. The reason for this is the underlying economic nature of the opium problem. Poverty and structural unemployment are the main reason for 3.3 million Afghans' full dependence on poppies.
the poppy eradication campaign has been ineffective, counterproductive and could well give the Taliban the decisive advantage in their struggle for the hearts and minds of the Afghan people.
He is referring to US-inspired aerial fumigation campaigns, planned for spring 2008 but never initiated. So far, crop eradication is done manually or mechanically from the ground. Chemical spraying could further destabilize rural areas and risk losing support for NATO's stabilization mission.
Since the Taliban allegedly makes Afghanistan's opium business easy, offering credit, seeds and fertilizer to farmers to grow the drugs that fuel the Taliban insurgency, the US authorities are determined to change that momentum by offering similar incentives to steer farmers away from the drug trade and toward alternative, legitimate crops, like grapes, wheat and saffron.
The United States Department of State issued a press release that stated the arrest of Baz Mohammed "demonstrated a strengthening collaboration between the United States and the newly democratic Afghanistan."
Afghanistan's poppy production… accounts for more than 91 percent of the world's heroin.
Now the new governor of the top poppy growing area has a new idea: have the Afghan government control the poppy harvest by licensing farmers and processing the poppies for medical morphine to be used in hospitals. Governor Hayatullah Hayat of Helmand Province told NPR this could relieve a worldwide demand for morphine. Proponents believe legalization could help solve the problem of illicit opium production in Afghanistan and lower the price of prescription drugs worldwide, thus making healthcare more affordable for those requiring those drugs.
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