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Afghanistan economy rides on Drug Trade

World Affairs Talk | Jan 28, 2007

Afghanistan's economy is a weak one with a high unemployment rate. Decades long war and instability has blocked the Afghans from learning other tasks apart than their indigenous knowledge. Opium cultivation and trade therefore dominates the economy with $2.6bn cash generation, which amounts to more than a third of the country's total gross domestic product. Opium is an ideal cash crop which does not require good soil or irrigation and is drought resistant. It is durable and increases in value with age. As a result, in some cases, Afghan farmers are forced to grow opium poppies to feed their families as no other income sources are known to them.

Opium production in Afghanistan soared to a record in 2006, five years after US led foreign forces ousted the Taliban's Islamist government. The Taliban tried to stop the poppy cultivation during the last days of their rule, but now force the farmers to cultivate such to share drug profits. This illegal drugs cultivation and trade flourished in the pandemonium largely due to the war and instability of the country. As the source of three quarters of world’s total heroin production, the drug trade of Afghanistan contributes to drug abuse and the spread of HIV/AIDS. Additionally, opium trade is effectively fueling terrorism, drug trafficking, money laundering, and other unlawful activities of the country and of the region.

Opium trading in Afghanistan and Southwest Asia is well-organized as warlords (also traders in most of the cases) and insurgents are involved in the process. Corrupt local authorities and growing frustration are the major factors behind rising heroin addiction in refugee and indigenous populations.

Helmand and Nangarhar are two provinces with huge poppy cultivation lands. Despite deployment of British security forces in Helmand in 2006, opium production grew by 160 per cent, faster than anywhere else in Afghanistan. Farmers first grow poppy then cut it to ooze gum. The gum is then send to labs in the southeast and eastern region of the country, where it is wrapped tightly in plastic and shipped to Pakistan across Iran or through Turkmenistan to Turkey or north to Tajikistan, from where it finds its next route to Europe and rest of the world.

The Taliban regime largely benefited from opium traffic by taxing on it, and even after banning opium production by dumping stocks at prices higher than before. The Paris-based ‘Observatoire Geopolitique des Drouges’ (Geopolitical Drug Watch) estimated that taxes on opium and on heroin manufacturing labs together earned the Talibans over US$75 million a year.

Afghanistan government which is an active party to the 1988 UN Drug Convention established a National Drugs Control Strategy in 2004 with international community support. This institute through reinforcing approaches of interdiction, eradication, and alternative livelihoods is trying to reduce opium poppy cultivation by 70% in next 5 years and eliminate it in 10 years.

Among Afghanistan’s many development challenges, its large and illicit opium economy is among the most intractable, and poses some of the most difficult challenges. The opium trade has a harmful impact on Afghanistan’s security, its political normalization, the process of governance and state-building, as well as its longer-term economic development.

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