In the first installment of this series, I took the release of the new “U.S. Counternarcotics Strategy for Afghanistan” as the occasion to analyze some flaws in the US approach.
As I noted there, in these posts I will confine myself to considering strategies within the framework of the current international prohibitionist regime for narcotics, including opium and its derivatives. In a recent Washington Post article, Misha Glenny shows how the "War on Drugs" is damaging our security. The next few years of drug policy in Afghanistan, however, will conform to that regime, which I take as a given here.
In the first installment, "Defining the Problem," I argued that the U.S. Strategy defined the problem posed by drugs in Afghanistan correctly, as "drug money" that “weakens key institutions and strengthens the Taliban.” Furthermore, the drug money that harms our goals in Afghanistan comes from the 80 percent of the value of opiates in Afghanistan that, according to UNODC estimates, goes to traffickers and protectors (left -- opium bazaar in Qandahar), not the 20 percent or less that goes to farmers, whose support the government needs. A counter-narcotics strategy that serves our security goals would win over the farmers and many others involved in the industry, while we and the Afghan government help them adjust to the shock of being subject to international rules, while isolating the few who wish to use illicit revenue to fund insurgency and terrorism. Instead, the administration has adopted the Afghan equivalent of "shock treatment" in the former USSR: a "War on Drugs" approach, as if it is trying to end drug addiction in the West by attacking Afghan farmers.
The comparison to post-Communist shock treatment may seem strange. But what has happened to Afghanistan is not just drugs and terrorism: for the first time in history, the Afghan peasantry has started producing a cash crop for the international market. The peasantries of other countries faced this challenge under colonialism, when they produced (or lost their land to plantations that produced) rubber, tea, coffee, indigo, sugar, cotton, tobacco, and many other products. Caffeine, nicotine, and alcohol (in the form of rum) all came to the consumers of the developed world through the same kind of transformation that is now bringing them cannabis, opiates, and cocaine, except that the latter are now considered to be illegal. Just as sudden integration with the international finance and product markets required a shocking readjustment in the former Communist countries, the move from an illicit form of export mono-culture to a licit economy requires an immense upheaval in Afghanistan. Both transitions can destroy the economic security of millions and provoke the type of backlash we now see in Russia, but with even more dangerous consequences in Afghanistan, given the presence of al-Qaida. Avoiding this backlash should dictate the pace that crop eradication plays in counter-narcotics strategy.
In no case have countries undergone a transition from an economy based on cash crop exports back to subsistence farming. Alternative livelihood programs have to follow in the footsteps of the drug traffickers, linking Afghan farmers to the market, but with licit crops that, alas, cannot profit from Afghanistan's comparative advantage in producing illegality, but that might be able to profits from international interest through a "Made in Afghanistan" brand. This is what Gulestan is trying to do. Given the significant capacity for production, marketing, and finance that the opiate economy has developed in Afghanistan, we need to transform rather than destroy much of this capacity, a goal that should inform our approach to the 80 percent of the value of opiates produced by processing and trading.
Designing a strategy that focuses on the part of the opiate economy that destabilizes the region and undermines the rule of law requires an analysis of the value chain in the opiate industry through which the raw material is produced, refined (below) , and marketed, adding illicit value at each step. This analysis both suggests how to intervene (through eradication and interdiction) in a way that does the most to stop the flow of illicit drug money; it also suggests how alternative livelihood programs can create value chains for licit products.
I am told that the classified version of the U.S. Strategy includes a discussion of money laundering and high-level corruption. No doubt some of the information, especially about specific individuals, is very sensitive. But there is nothing secret or sensitive about the general process of heroin refining,financing, trafficking, and protection. We have already seen the result of focusing efforts at the bottom of the value chain: when the Taliban suppressed cultivation while permitting trafficking in 2000-2001, the returns shifted upward in the value chain, as farmers lost their crop while traffickers profited from a ten-fold price increase, while lowered the unit cost of smuggling. Except for an increase in expected bribes, the cost of smuggling a kilogram of opium that costs $600 is the same as the cost of smuggling a kilogram of opium that costs $60.
Defenders of the policy make the seemingly obvious (but completely wrong) point that eradication of poppy decreases the quantity of drugs and therefore the money from drugs. They seem unaware of something that intervenes as drugs are converted into money: PRICES. And when an intervention (crop eradication, bad weather) lowers the quantity supplied, prices go up (see chart above to see the price effect of the Taliban ban).
The value chain includes many different prices: raw opium at the farm gate; raw opium at the bazaar; processed morphine or heroin leaving the laboratory (which requires the import of precursor chemicals not made in Afghanistan; heroin and raw opium at the border and across the border, as they are transferred to international traffickers. Prices increases geometrically as one ascends the value chain, accounting in part for the increasing share of opiate profits going to traffickers (see below, based on UNODC data).
At each stage of the value chain, different power-holders take shares of the profit to provide various services, including the service of not killing you (the well-known "make him an offer he can't refuse," which in Afghanistan, I am told, can take the form of "take this $1,000 or I'll kill you in a particularly painful way.") In villages the farmers contribute a share to the mosque (sometimes conceptualized as the Islamic tax, ushr), which is used to pay the mullah and for local public expenditures such as teachers' salaries, medical care, or irrigation. The small traders who come to the village have to pay the police (or Taliban) whom they pass on the road, who pass a share up to their superiors. The police chief of the district may have paid a large bribe to the Ministry of the Interior in Kabul to be appointed to a poppy producing district; he may have also paid a member of parliament or an influential person to introduce him to the right official in Kabul. These officials may also have paid bribes (or, at this level, "political contributions" that are no longer recognizable as deriving from narcotics) to obtain a position where they can make so much money.
Running a heroin laboratory requires payments to whoever controls the territory -- in most cases a local strongman plus the government or the Taliban. Importing precursors requires bribing border guards (perhaps on both sides of the border) or paying an armed group for a covert escort. Smuggling the opium, morphine, or heroin out of Afghanistan requires access to an airfield (heroin seized at Kabul International Airport, right) or border crossing (controlled by the border police and Ariana Airlines, both of whose employees are reported to make significant income from drug trafficking), the escort of armed groups (Taliban, tribes, commanders), or expensive specialists in packaging such as those who seal heroin inside empty almond shells or condoms. The bureaucratic, military, political, or social superiors of those directly involved in facilitating trafficking claim a right to shares of the resulting tribute, though the higher the money moves, the less evident is its connection to the flowers that the foreigners like to photograph.
Different counter-narcotics tools intervene at different points of the value chain and thus affect prices, quantity, and the distribution of profits differently. The strategy that lowers the physical supply of drugs the most is not the strategy that most effectively stops drug money from funding corruption and insurgency. Nor is it the strategy that improves security or creates stabilizing political alliances. In the next installment, I will discuss eradication and interdiction in the light of this analysis.