Opium and Peace in Afghanistan: Transforming a Conflict Economy

Opium and Peace in Afghanistan: Transforming a Conflict Economy

by Dr. Mike Spangler, PKSOI

The old

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Afghanistan is currently the world’s largest producer of poppy, the raw material processed into opium, morphine, and heroin.

Afghanistan, so far, leads Burma and Colombia in illegal poppy cultivation, while Turkey, India, Australia, France, Spain, and Hungary, among others, legally grow it. Many experts believe the poppy problem presents a greater threat to the long-term stability of Afghanistan than its ongoing conflict, while fueling transnational criminal activity and drug addiction on a global scale. The United Nations Opium Surveys cite Afghanistan’s drug statistics from 2009 to 2012:

■ Nearly 900 tons of opium and 375 tons of heroin are trafficked from Afghanistan every year.

■ Opium poppy cultivation rose by 18 percent in 2012 despite eradication efforts led by Afghan governors.

■ On November 13, the United Nations reported that Af-

ghanistan will have a record opium crop in 2013, up almost 50 percent from 2012.

Beginning in 2011, Afghan farmers markedly expanded their opium poppy cultivation. “Poppy cultivation expanded both in areas under previous cultivation and new areas or areas where poppy cultivation was stopped,” the Afghanistan Opium Winter Risk Assessment concluded in April 2013.

the young!

■ Afghan-produced opium has a double impact, creating

health crises in consuming nations and putting large amounts of money in the hands of both criminal and terrorist groups.

■ The number of people dying from heroin overdoses in Russia and NATO countries is higher than the number of their soldiers killed during deployment to Afghanistan.

Western media report that Afghan government corruption plays a role in undercutting efforts to take on the opium trade, while Taliban insurgent groups tax the crop in areas under their control. The United Nations estimates that opium poppies earned Taliban insurgent groups an estimated $155 million in 2009.

What is the major underlying driver spurring opium production by local farmers?

■ Poppy thrives in poor soil and Afghan farmers make up

to $10,000 a year per hectare of raw opium, versus $120 per hectare of wheat.

Counter-Narcotics Fight Faced with the protracted nature of the Afghan conflict, few observers now ask if the NATO-led international coalition could do more to combat narcotics. The counter-insurgency

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Opium and Peace in Afghanistan: Transforming a Conflict Economy reconstruction approaches might address this challenge. The article concludes with key recommendations to policy-makers designed to help chart Afghanistan’s transition from a war to peace economy, contributing to a safer South Central Asia.

Contrary to many common perceptions, opium production -- currently legalized in several countries but otherwise criminalized -- can be harnessed to conflict transformation and reconstruction. Doing so means, at the outset, distinguishing between those actors that pose a threat to peace and those who can contribute to social and economic stability. The latter include (1) gray-area networks capable of being incorporated into the formal economy and (2) small-scale informal economic activities and trade networks that can be weaned from combatant groups. The ultimate policy objective proposed here aims to divorce these farmer-based informal organizations from insurgent and criminal organizations. This gradualist policy approach requires a strong, long-term national commitment to institute the legal sale of opium to international pharmaceutical companies while imposing a ban on the sale of opium to other actors.

The First Task: Basic Security

U.S. Marine Corps Lance Cpl. Joshua Deforrest, an M249 squad automatic weapon gunner, and U.S. Marines with 2nd Platoon, Company I, Battalion Landing Team 3/8, Regimental Combat Team 8, pause at the edge of a poppy field during a security patrol from their patrol base in Helmand province’s Green Zone, west of the Nahr-e Saraj canal, April 5, 2011.

Elements of 26th Marine Expeditionary Unit deployed to Afghanistan to provide regional security in Helmand province in support of the International Security Assistance Force. remains the main task of the Afghan National Security Forces (ANSF) and the international military Coalition, while foreign civilian agencies including the U.S. Drug Enforcement Agency play a counter-narcotics supporting role with the Afghan Ministries of Interior, Counter Narcotics, and Defense. However, transforming Afghanistan’s war economy into a peace economy appears to hinge on a more effective counter-narcotics strategy.

This article explores this challenge and critically examines how

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This “poppy-legalization” strategy is contentious, as law enforcement officials have long argued that paying for poppy will merely encourage greater cultivation. Officials argue that farmers would sell to the state while continuing to expand and sell additional production to criminal groups. Indeed, deteriorating security may well give farmers no other choice, in certain areas, but to continue to grow poppy for insurgent and criminal groups that employ harshly coercive methods. To meet this basic security need, the prime task of specially trained and paid ANSF, comprised of the Army and Police, is thus to devote a sufficient force structure to monitor growing areas to ensure that farmers are not coerced into working for criminal or insurgent groups that dominate the drug trade in Afghanistan.

The inability to task the ANSF with this responsibility and partner it with international counter-narcotics agencies essentially surrenders basic security and illicit finance to criminal and insurgent groups for the foreseeable future.

A new set of enforcement procedures coupled with poppy legalization would be a confidence-building measure in the ANSF’s capability and would strike at the heart of the insurgent and criminal elites that erode Afghanistan’s long-term security and development. This new poppy-legalization plank would require nesting in Afghanistan’s reconstruction strategy and endorse-

Opium and Peace in Afghanistan: Transforming a Conflict Economy As 2014 approaches, Coalition countries still need to prevent an expansion of poppy cultivation and profit-taking by the Taliban and other groups. In southern Afghanistan, not only does poppy remain the most lucrative crop, but the Taliban insurgency is especially influential. In particular, Taliban and other criminal actors have set up a sophisticated business in Helmand province where farmers are paid ahead of time to be poppy sharecroppers and their crop picked up by criminal groups.

Poppy Grown Legally in Britain in 2011

ment by Afghanistan’s neighbors, Western donor states, and international financial institutions.

In 2011, Britain harvested a domestic crop of poppies to meet a then-serious painkiller shortage in that country. Farms in Oxfordshire were under contract to a pharmaceutical company that manufactured the opium into morphine and codeine in order to meet a pharmaceutical shortfall for the National Health Service.

British MP Frank Field and his group Poppy Relief argued that Afghan opium should be legalized instead. It would benefit Afghan farmers, raise much-needed revenue for the Afghan government’s nation-building efforts, and stop the opium from falling into the hands of the drug cartels. Field stated, “In Afghanistan we have chosen bombs, rather than brains. Anybody who would be thinking about how do we get ordinary people, ordinary farmers who see poppies as a cash crop, how do we get them to protect the backs of our troops, we would be thinking about how do we harness this crop, how do we pay them for it and how do we then use that crop to transfer it into medicines to counter pain.”

Not Far-Fetched

Critics Abound Against a Poppy Program

In mid- 2009, the Obama administration was reportedly considering whether to pay Afghan farmers to stop growing opium poppies. Paying farmers not to plant poppy would essentially substitute U.S. funding for the fees paid up front by the Taliban and others to contract farmers. The proposal logically flowed from the U.S. administration’s policy of protecting Afghan civilians and eroding support for the insurgency. Critics argued it would not work because farmers would take the money and plant poppies anyway. By August 2009, the U.S. government apparently rejected the idea, pointing out that U.S. and other government programs would instead provide agricultural input vouchers, loans, and construction jobs to those who agreed not to plant poppy. During this same time, the U.S. halted its support to the Afghan central eradication force, chiefly for “unduly punishing and alienating farmers for making a ‘rational economic decision.’”

Critics abound against the legalized poppy program that MP Frank Field advocated. These critics argue that paying farmers for their opium is likely to increase poppy production since much of the production is coerced by criminal groups. Critics also voiced additional objections to such a poppy-buying scheme:

The Farah Provincial government arranged for numerous tractors to be staged at Gov. Rahool Amin’s compound in Farah City prior to making their way north to Pusht Rod to begin a poppy eradication process, Feb. 21, 2010 Farah province, Afghanistan. Afghan national security forces provided security for the tractors on their way to Pusht Rod and the ANSF also escorted Amin to attend the event. Throughout the day, 12 fields of poppy, covering approximately 4 Hectares of land, were successfully eradicated under the provincial government’s supervision. Photo by Air Force 2nd Lt. Karl Wiest

A. Buy the harvest before the bad guys pick it up. Afghan farmers might deliver their first crop to legal buyers but are likely to produce spring and late season crops in addition to the current winter crop for criminal buyers. Just as importantly, opium production would rise in border states where harvests could be smuggled back into Afghanistan and to other countries.

B. Pay farmers cash for the crop. Cash incentives are inadequate in preventing the Taliban and other groups from using

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Opium and Peace in Afghanistan: Transforming a Conflict Economy coercive methods to restart poppy cultivation. Licensed Indian farmers receive $20-25 per kilogram of raw opium gum. Illegal raw opium in Afghanistan runs around $60 per kilogram in most places. The price in Burma, mostly slated for the American market, can reach as high as $2,400 per kilogram. As soon as the Coalition offers a price, criminal actors will top it. Moreover, Afghanistan alone produces more than the world demand for natural opiates. Processing and selling Afghan opium risks bankrupting licensed poppy farmers in nineteen peaceful countries.

C. Afghan Counter Narcotics Police units are not reliable. In a March 2010 report, the Government Accountability Office noted that Afghan police and prosecutors are easy targets for bribery because they are reportedly not paid sufficiently, according to an Afghan Defense Ministry official; while 12 to 41 percent of Afghan police recruits test positive for drugs, according to U.S. State Department officials. Hence ANSF forces are unlikely to be able to guarantee the security of the purchased product that would find its way into the hands of criminal actors over time. These critics also cite India which cannot control opium leakage from its legalized and monitored production sites.

Given these criticisms, the approach proposed in this paper calls for buying up and processing the poppy into subsidized pain-management medicines for under-served developing countries. This buy-and-process approach would need to be augmented by stronger counter-narcotics efforts with border states to combat transnational criminal networks and prevent their transfer of poppy opium into Afghanistan or abroad.

Just as importantly, Afghan authorities should consider granting authority to the Afghan National Army to conduct counter narcotics monitoring and poppy transfer operations, while the Counter Narcotics Police continues to lead arrest, drug lab destruction, and undercover drug purchase missions. The Army is best able to assume a lead role in the poppy-legalization mission because of its training, reliability, and commitment to combating heavily-armed insurgent and other criminal groups tied into the powerful drug-insurgency-terrorism nexus. In the event that drug money is siphoned off by corrupt ANSF actors, this development should be viewed as the lesser of two evils since this money is unlikely to go into insurgent and terrorist pockets.

Moreover, if the Afghan Government agrees (1) to forge a close monitoring partnership that lashes up its National Army units with international observers and (2) to gather actual poppy plants rather than locally collected opium gum, drug diversions may be minimized.

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Afghan uniform police use sticks to eradicate a poppy field near the city of Qalat, Zabul province, Afghanistan, May 4, 2011 In developing Afghanistan’s strategy to legalize poppy cultivation, Afghan leaders will also need to engage Afghanistan’s neighbors in joint enforcement efforts to foster a self-reinforcing dynamic that supports more licit economic activity through alternative crops over time. Marginalized populations living along Afghan borderlands and neighboring states have long relied on illicit networks and shadow activities for survival. In the absence of formal coping mechanisms, these borderland regions have been controlled by actors who have a stake in perpetuating violence and repelling government writ. Afghanistan’s borders with Pakistan, Iran, Turkmenistan, Uzbekistan, Tajikistan, and China pose a particular challenge to the management of its conflict. Ignoring this regional dimension may simply create a balloon effect, whereby corruption, instability, and poppy production are displaced from one country to its neighbors.

SENLIS and the Buy-and-Process Option In 2007, a now disbanded European think tank, the SENLIS Council, proposed that Afghan farmers be granted licenses to produce opium for the world pharmaceutical market, thereby helping to meet the chronic need for potent analgesics in developing countries. Part of their proposal aimed to overcome the “80–20 rule” requiring the U.S. to purchase 80 percent of its legal opium from India and Turkey by permitting Afghanistan to enter a separate system of supply control designed to produce and distribute opium-based medicines to countries, mainly developing ones, that cannot afford to meet their own demand under the current regulations. International pharmaceutical companies would be able to sell and distribute the badly needed analgesic drugs to developing countries that instituted control programs for their use.

Opium and Peace in Afghanistan: Transforming a Conflict Economy SENLIS organized a conference in Kabul that brought drug policy experts together with Afghan government officials to discuss internal security, corruption, and legal issues surrounding their proposal. In June 2007, the Council launched a “Poppy for Medicines” project that provided a technical blueprint for the implementation of an integrated control system using Afghan village-based poppy for medicine projects. The SENLIS group believed it would help secure a lasting peace in Afghanistan by depriving illicit combatants of funds and by grounding the government in a greater capacity to control its finances and institute social and economic programs. By starting to draw gray-area or illicit economies into the formal economy, Afghanistan would begin to generate a virtuous cycle of security and development rather than a vicious one of criminal activity and greater conflict as armed groups continue to vie for control of the drug trade.

Unfortunately, no follow-up occurred. Western donor countries seemed to believe that such a program cannot be enforced and would have the unintended effect of boosting opium production in Afghanistan. In other words, donors appeared to have decided that the Afghan National Security Forces could not take on this task, despite the dangers of a burgeoning drug trade that fuels the insurgency and undermines global health.

Donors also feared that opium supply would mushroom and quickly become a money-loser for international pharmaceutical companies that are likely to face insufficient global demand for licit opiate drugs over time. In light of these criticisms, Afghan policy makers and international donors should take into account the need to reduce purchase prices for poppy over time to reflect changing market conditions. At present, however, it is important to note that heroin use in the U.S. and other developed countries does not appear to have hit a plateau, since it maintains price competitiveness with synthetic recreational drugs such as crystal meth. Hence both licit and illicit use of heroin may rise over the longer term, calling for new approaches to deal with its availability.

Creating Sustainable Peace through Buy-andProcess Co-opting Economic Networks The buy-and-process proposal outlined here is especially tailored to borderland regions where the influence of the state is weakest. In these areas, entrenched informal networks may provide the ideal conditions for the growth of shadow econo-

Helmand Province, Afghanistan - Trucks carrying tons of wheat seed travel to Garmsir District Center Sept. 19, 2009. The wheat seed distribution program is an initiative by the Helmand Province governor to help reduce production of poppy by providing farmers a lucrative alternative. Photo by CWO2 James A. Burks. mies and the development of criminal groups. Such networks constitute semi-autonomous social groups with a stake in subverting the powers of the state and maintaining the status quo.

To perpetuate their clout, these groups obtain the collusion of governmental officials, particularly those charged with combating narcotics.

In Afghanistan over the past four decades, individuals have relied heavily on informal and traditional family and clan networks for support. These traditional, kin-based networks have grown in importance even as Afghanistan’s urbanization rate swells, one of the highest in Asia. As a result, counter-narcotics efforts must be oriented at drawing up contracts with these family-run farm units much as the Taliban and other groups have done.

Smuggling In addition, cross-border smuggling is a pervasive social and criminal problem along the Afghan-Pakistan and –Iranian borders. The pervasiveness of smuggling is made more acute by corruption among customs officials and police, a phenomenon exacerbated by low salaries and insufficient cross-checks on the validity of customs reporting. Smuggling has the effect of entrenching trans-border criminal gangs and depriving neighboring states of legitimate tax revenue. The finances generated illicitly both weaken Afghanistan’s state capacity and transfer finances to insurgent groups that challenge its authority.

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Opium and Peace in Afghanistan: Transforming a Conflict Economy Western governments need to return to a negotiation effort to equalize the relatively open, low-tariff trade regime of Afghanistan with the more restrictive regime of Pakistan that has created both opportunities and incentives for illicit smuggling and tax evasion. Iran is likely to be a supportive, cooperative partner in counter-smuggling actions because its government is concerned about the growing drug addiction problem there.

Drawing in Neighboring States As noted earlier, the proposal to buy-and-process poppy could create a “balloon effect” in the region, shifting production in Afghanistan to other states, in the absence of regional enforcement efforts. For example, channeling Afghan poppy production into licit uses, absent a larger, region-wide initiative, could result in an upsurge of poppy cultivation in Afghanistan’s northern areas and as far away as Burma. It is difficult to predict how the global illicit drug supply will adapt to an Afghan shortfall.

Global prices may rise for a temporary period, and international enforcement agencies need to remain vigilant to changing heroin supply routes.

Just as importantly, rival factions in the ongoing Afghan conflict have been reportedly aided by neighboring countries such as Pakistan and Uzbekistan, while similar alliances connect Afghanistan’s civil strife with violence in Kashmir, Chechnya, Tajikistan, and Kyrgyzstan. Indeed, Pakistan has supported Taliban groups, in an attempt to redress perceived security threats from its historic antagonist, India, while curbing potential Pashtun nationalism threatening Pakistan’s territorial integrity. A jointly-led counter-narcotics effort with these countries is critical to strengthen law enforcement.

Afghanistan’s neighboring states ensured the continued provision and maintenance of arms supplies in the wake of the withdrawal of superpower support in the 1990’s. Iranian arms supplies were directed to Northern Alliance groups via Turmenistan, Uzbekistan, and Tajikistan, while Pakistan’s strategy of ‘strategic depth’ played out in support for the Taliban, as Pakistani actors supplied ammunition, fuel, and combat assistance. All of these countries should be offered participation in enforcement activities related to the poppy-legalization program introduced in Afghanistan and encouraged to share law enforcement information. In turn, this cooperation could have a demonstrator effect in favor of greater security cooperation in the form of hotlines and de-escalation protocols in the event of flash disputes along Afghanistan’s borders.

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In this photo provided by ISAF Regional Command - South, during Operation Spartan Strike, 2nd Platoon, Company C, 2nd Battalion, 502nd Infantry Regiment, 101st Airborne Division (Air Assault) and service members of the Afghan National Army, Thursday, April 21, 2011, cleared houses and questioned residents about Taliban activities and locations of weapons caches in Zharay District, Afghanistan. Photo by Petty Officer 1st Class Thomas Coffman

Cutting out Warlords and Insurgents: An Unattainable Goal?

Afghanistan’s poppy economy encompasses a wide range of behavior, motivated in large part by economic opportunism fueled by conflict. The seamless integration of conflict, gray-area, and subsistence economies is exemplified by the supply chain that has arisen around the cultivation of poppies in Afghanistan since the 1990s. Much of the poppy production is carried out by poor farmers engaged in sharecropper agriculture as a means of providing basic subsistence; these individuals are part of the subsistence economy. The landowners who provide the land and capital, in return for the lion’s share of the final poppy product, make up the shadow economy. The criminal and insurgent commanders who direct and tax this trade, setting price levels and capping production, are firmly planted in the conflict economy. Thus opium provides basic subsistence, illicit profits, and capital for the waging of conflict.

It is a faulty assumption that once a conflict has halted, criminal activities will also decline. Networks of government corruption and insurgent-based criminal trade rarely dissipate after the cessation of hostilities. On the contrary, these shadow networks tend to gain strength in cases where the state lacks the ability to govern its own resources and confront economic criminality.

Opium and Peace in Afghanistan: Transforming a Conflict Economy Furthermore, conflict-related economic activities continue to fill an important gap in providing economic and social livelihoods to relatively dispossessed groups. When the state is unable to fill major security and regulatory roles, these patterns endure and shape post-conflict development.

To reduce dependence on illicit economic activities, this paper argues for a straightforward strategy: offer alternative incentives to dispossessed populations who are part of the criminalized opium network out of necessity. By buying up the poppy crop, insurgent and other criminal groups will be deprived of narcotics income and weaken over time. By contrast, criminal policing divorced from the broader “buy-and-process” incentive risks further functional neglect with regard to Afghanistan’s fledgling state, unchecked narcotics criminality, and inadequate rule of law. The international community ignores these regional dynamics at the expense of the health and security of its own people.

In sum, failure to adopt a more realistic counter-narcotics strategy threatens to undermine the ANSF’s overall stability mission, while potentially reducing international aid flows to Afghanistan over the long term, as the country continues its trajectory toward becoming the most prominent narco-state in the world.

As Afghanistan charts a way forward in 2014 with reduced international forces, the time has come for Afghan policy-makers to recognize Afghanistan’s poppy economy as a tool that can be turned away from conflict and drug addiction and used to engage new international actors to help apply it to peaceful and constructive uses.

Notes: Rod Nordland and A. Ahmed, “Afghan Opium Cultivation and Production Seen Rising,” New York Times, November 13, 2013. (http://www.nytimes.com/2013/11/13/world/asia/ afghan-opium-cultivation-and-production-seen-rising.html?_ r=0) 2 United Nations Office on Drugs and Crime, Afghanistan – Opium Risk Assessment 2013. April 2013. (http://www. unodc.org/documents/crop-monitoring/Afghanistan/ORAS_ report_2013_phase12.pdf ) 3 United Nations News, “UN Anti-Crime Chief Calls for Scaled-Up Resistance to Afghan Drug Trafficking, October 21, 2009, pp. 13-14. (http://www.un.org/news/dh/pdf/english/2009/21102009.pdf ) 4 United National Office on Drugs and Crime, The Global Afghan Opium Trade – A Threat Assessment. July 2011. (http:// 1

www.unodc.org/documents/data-and-analysis/Studies/Global_Afghan_Opium_Trade_2011-web.pdf ).

5 Alissa J. Rubin, “Afghan Opium Production Rose in 2012, UN says,” New York Times, November 20, 2012. (http://www. nytimes.com/2012/11/21/world/asia/afghan-opium-cultivation-rose-in-2012-un-says.html).

6 Anne Gearon, “U.S. May Pay Afghan Farmers to Stop Growing Heroin Poppies,” Huffington Post, July 21, 2009. (http:// www.huffingtonpost.com/2009/07/21/us-may-pay-afghanfarmers_n_242448.html) 7 Karen DeYoung, “U.S. and Britain Again Target Afghan Poppies,” Washington Post, August 8, 2009. (http://articles. washingtonpost.com/2009-08-08/world/36769748_1_poppy-farmers-afghan-farmers-poor-farmers) 8 Government Accountability Office, Afghanistan Drug Control. March 2010. P. 11. (http://www.gao.gov/new.items/ d10291.pdf ) 9 RT News Network, “UK Poppy Growing Program Kept Hush-Hush,” September 10, 2011. (http://rt.com/news/uk-afghanistan-poppies-shortage-243/) 10 Ibid.

11 Government Accountability Office, Afghanistan Drug Control. March 2010. P. 28.

12 Allison Brown, “Why Buy Something We Hate?,” Small Wars Journal, 2009. (http://smallwarsjournal.com/blog/journal/ docs-temp/325-brown.pdf ) 13 Royal Society of Chemistry, “Could Afghanistan’s Opium Crop be Legalised?” February 8, 2008. (http://www.rsc.org/ chemistryworld/News/2008/February/08020801.asp) 14 Ibid. and Senlis Council, “The Kabul International Symposium on Drug Policy”. September 26, 2005.

15 See Neil Cooper and Michael Pugh, with Jonathan Goodhand, War Economies in a Regional Context: The Challenges of Transformation, Boulder: Lynne Rienner, 2004. P. 68.

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