Edmund Phelps, 2006 Nobel laureate in Economics, and Graciana del Castillo (ex-IMF), both now of Columbia University, note the elementary but often ignored point:
Lack of productive alternatives [not GREED! -- BRR] has driven farmers to turn to growing poppies. Drug-traffickers support farmers by advancing credit and sharing some of the risks of production. Some farmers can survive only by selling their crops in advance. If the crops fail, they become in debt to the traffickers, creating a vicious circle.
Phelps and del Castillo repeat just what the Afghan government has been saying about the massive failures of the international aid program:
Instead of asking the tiresome, patronizing, ignorant and ultimately destructive question, "How do we stop greedy Afghan farmers from growing such a profitable crop," they ask the right question:
Since US military intervention and the Bonn agreement of late 2001, government tax revenue has averaged only about 5 per cent of gross domestic product. Warlords have been left to control a large percentage of customs revenues collected at the borders. Furthermore, donors channel a large part of their aid – up to 75 per cent at times – outside the government budget or control. As a result, the Karzai government has been unable to provide basic services and lawful employment. Unfulfilled expectations of better living conditions and the thriving drug business have put the Taliban back into control of large parts of the territory.
The international community is not helping Afghanistan to stand on its own feet.
Is it possible to turn the entrepreneurial spirit of the Afghans away from producing drugs into lawful production such as cotton and textiles?After briefly dismissing the pillars of conventional anti-drug policy (as I did at greater length but perhaps not to greater effect in a series of posts here), they propose solutions based on a reformed aid system and creating markets for Afghan products (not just crops):
Both the US and the European Union assist their farmers through loan and price support programmes and other incentives. If donors want to “do good”, they should support a two-pronged economic reconstruction strategy.
First, donors should channel reconstruction aid through the budget to enable the government to provide subsidies or other incentives (such as price support programmes) to replace poppies with lawful crops such as cotton, which was produced in the past. The UK government is at present considering price support for Afghan farmers. Other donors should do the same.
Second, once production of lawful crops increases, donors should provide know-how, technical support and credit for the local industrialisation of such crops. At the same time, donors should open their markets through special preferential tariff treatment to light, labour-intensive manufactures from Afghanistan, including textiles.
On February 6, all the major donors and troop contributors will meet with the Afghan government in Tokyo for the seventh meeting of the Joint Coordination and Monitoring Board of the Afghanistan Compact. The main subject will be counter-narcotics. The Afghan government is likely to present proposals similar to what Phelps and del Castillo suggest.
I'd like to hear from the U.S. presidential candidates on this.