Counter-Narcotics in Afghanistan (First Installment): Defining the Problem

The U.S. Department of State Bureau of International Narcotics and Law Enforcement released a new “U.S. Counternarcotics Strategy for Afghanistan” this month. The strategy calls for added efforts in all pillars of the Counter-Narcotics effort in Afghanistan, but its most salient change from the past is its proposal for more forceful and extensive eradication of opium poppy crops. The Strategy calls for “non-negotiated” eradication, ostensibly in order to avoid the manipulation of eradication by local elites to exempt their own crops and focus eradication on their rivals or the powerless. While the Strategy states that no means of eradication will be used without the approval of the Government of Afghanistan, it contains many examples of thinly veiled pressure on the Government of Afghanistan to authorize the spraying of herbicides both from the ground and from the air.

Implementation of this strategy will lead to a rapid deterioration of security at least in the south of the country and the further weakening of the Afghan government. Afghans will conclude (if they have not so concluded already) that the U.S. does not consider Afghanistan to be sovereign and that the foreigners are in Afghanistan to pursue their own agenda, not to help Afghanistan. Significant portions of the countryside that have been neutral or pro-government will move toward the Taliban. The farmers will respond to the greater risk imposed by eradication not by stopping poppy cultivation but by preventing the government and international community from entering their areas. By and large, they will succeed, especially as US resources, credibility, and alliances continue to be drained by the disastrous war in Iraq.

Currently, the Taliban-led insurgency does not have stable and exclusive control of any significant territory and population in Afghanistan, as does the FARC in Colombia. Areas subject to aerial spraying for crop eradication, however, are likely to come under much more stable Taliban control. The government and its international supporters will be unable to enter such areas to provide development assistance or to engage in interdiction. Hence the more that aggressive eradication and aerial spraying are introduced before Afghans believe they have secure alternative livelihoods, the more the counter-narcotics policy will be reduced to eradication by military means, amounting to a war on the livelihood of the part of the Afghan rural population most vulnerable to Taliban influence.

Implementation of this strategy will also undermine attempts to stabilize the tribal areas of Pakistan and Baluchistan, by providing incentives for drug traffickers to move their operations into those areas just as Pakistan is undergoing a political crisis with unpredictable results.

The continuing escalation of tension between the U.S. and Iran will also promote the success of drug trafficking, as does the lack of U.S.-Iranian cooperation on counter-narcotics, the policy area where they have the clearest common interest. If the administration attacks Iran, as many observers are predicting, Iran will respond in such a way as to make much of Afghanistan ungovernable, including regions that the US government seems to think are under the stable control of the government. Counter-narcotics and many other policies will become impossible to implement. Iran's current activities in Afghanistan are both preparing for such an eventuality and signaling what it can do. As I will discuss in subsequent posts, the administration can have a confrontation with Iran or some success in Afghanistan, but not both.

I have read only the unclassified version of the Strategy. I am told that the classified version includes some of the elements that are missing in the open version, in particular on money laundering and high-level corruption. Those with the needed access can decide whether those sections meet some of the objections in my critique.

In a short series of posts, I will suggest why I find the proposed strategy so dangerous to international strategic goals in Afghanistan. In these posts I will confine myself to considering strategies within the framework of the current prohibitionist international regime for narcotics, including opium and its derivatives. I have argued elsewhere (including in front of the Senate Foreign Relations Committee), that

The international drug control regime, which criminalizes narcotics, does not reduce drug use, but it does produce huge profits for criminals and the armed groups and corrupt officials who protect them. Our drug policy grants huge subsidies to our enemies.

Over the next few years, at least, we will be working within that regime, which I take as a given here.

This first post deals with defining the problem and understanding the situation.

Overall goals:

The overriding goal of the U.S. and allies in Afghanistan is stabilizing the government and the region to (1) assure that al-Qaida cannot re-establish its bases in Afghanistan and (2) destroy al-Qaida’s current sanctuary in some of Pakistan’s tribal agencies. There are (and were long before 9/11) moral, humanitarian, and altruistic reasons to try to heal the wounds of Afghanistan and provide its people with a better life, but those reasons did not inspire the intervention that has been taking place since October 2001. The strategic goal is related to the ethical ones, however: the only long-term way to secure the region is to strengthen the state institutions and economies of both Afghanistan and Pakistan to the point that they can enforce norms of the international system with the consent of the people throughout their territories.

Among the many reasons that the US, UN, NATO, and dozens of donors and troop contributors are NOT in Afghanistan is to stop drug addiction in Europe or the U.S. Mounting a major state building effort in Afghanistan would hardly be the appropriate means to attain that goal. This does not mean that Donald Rumsfeld’s original policy of turning a blind eye to drug trafficking by counter-terrorism allies was right. That view of counter-narcotics was based on the same myopic vision that saw counter-terrorism solely as a "kill and capture" mission, whereas it can succeed only if it establishes the basis for effective security and policing. Policing and law enforcement, unlike military action, require the consent of the bulk of the population. That is why efforts to eliminate narcotics in a badly governed or ungoverned state tend to drift into a military mode (war on drugs). I will explain that when I discuss interdiction.

So what is the problem posed by the narcotics economy? The narcotics sector consists of economic activities whose profit (or rent) derives from illegality. The final price of narcotics is determined mainly by the cost of smuggling and distributing an illegal product rather than by conventional costs of production. Afghanistan’s principal comparative advantage is not in poppy cultivation but in the production of illegality. It is cheaper to engage in illegal activity in Afghanistan than almost anywhere else in the world. Iraq is catching up, however. Having first followed Afghanistan's lead in becoming a major haven for transnational terrorism, Iraq is now starting to produce opium poppies.

Thus Afghanistan's drug economy expanded when the state broke down after 1992. It consolidated itself and expanded further under the Taliban, because the Islamic Emirate was a peculiar type of state: internally it strictly enforced its own laws and brought security to trade routes and rural areas, at least in the Pashtun zones. But the government was not recognized internationally and did not recognize international law. Narcotics was profitable because it was illegal beyond the borders of Afghanistan, but it could expand securely within Afghanistan because of the security and administrative control of their regime. It consequently produced only modest revenues inside Afghanistan, compared to today.

Since the Taliban never treated drug trafficking as a crime, and forbade poppy cultivation for only one year, the drug trade provided little or no opportunities for corruption within Afghanistan. This changed only during the year that the Taliban banned poppy cultivation (2000-2001), though they never banned trafficking. The Taliban ban, by criminalizing part of the opium economy, made the narcotics economy far more profitable –prices rose ten-fold. Though prices have declined since then, they have never returned to the competitive levels of the period when the entire drug economy was de facto legal inside Afghanistan.

The current government, however, is committed to (in the words of the preamble to the Constitution of 2004/1382) “restoring Afghanistan to its rightful place in the international community.” Hence, unlike the Taliban Emirate, the government cannot tax, regulate, or settle disputes arising from the main economic activity in the country. Instead the constitution provides:

The state shall prevent all types of terrorist activities, the production and consumption of intoxicants (musakkirat), and the production and smuggling of narcotics.

While I cannot prove it with survey data, my informal observations lead me to conclude that the social consensus in Afghanistan is that poppy cultivation and drug trafficking are wrong, but that they are inevitable and excusable (at least cultivation and small trading are) until economic alternatives develop. (I will discuss the view of the ulama in a subsequent post on interdiction and law enforcement.)

Narco-economy: the tax base for insecurity

The participants in the narcotics economy must govern this economic sector (about a third of the economy, at least half of the cash economy) through activities that are “illegal,” but that are hidden mainly from foreigners rather than other Afghans. The Afghan police and administration, political leaders, and the anti-government insurgents all offer protection services to poppy growers and drug traffickers. Competition for this lucrative role motivates much of the violence in the country. The U.S. Strategy probably overstates the relative importance of the Taliban and al-Qaida in protecting the trade and understates the degree to which the narco-economy is controlled by officials and political leaders in the Afghan government. Portraying the drug economy as primarily supporting terrorism, however, does make militaristic approaches to it seem more acceptable.

Hence the narcotics economy corrupts and weakens the government, undermines stable economic development, and funds terrorism and insurgency. It also promotes dishonesty between Afghans and foreign officials, since the former cannot tell the latter what they really think. Political insurgents, whether national or transnational, predatory officials, and illegal businessmen have a common interest in preventing consolidation of the government or rule of law. The rents from illegality provide them with the resources to undermine security, though, like the Taliban, they also use these resources to provide the local security that the drug economy needs. From the point of view of Afghan poppy cultivators, eradicators provide insecurity, and leaders (whether in the government or Taliban) who can keep eradicators out provide security. Hence poorly designed and implemented counter-narcotics policies drive many disparate forces together, though most are not ideologically committed to transnational terrorism.

On pages 13-14, the US Strategy (“Defining the Problem”) correctly diagnoses the problem as “drug money,” which “weakens key institutions and strengthens the Taliban.” But this diagnosis has consequences that the Strategy does not draw. A strategy to lessen the flow of drug money into corruption and insurgency is not identical to a strategy to reduce the quantity of addictive substances produced and exported. Once the US Strategy accurately diagnoses the problem as “drug money,” it then reverts to a nearly exclusive focus on drugs themselves, and not even on heroin, which produces much more drug money, but on poppy cultivation, which accounts for at most 20 percent of the drug economy in Afghanistan but has become the photogenic Paris Hilton of Afghan narcotics policy. This analytical flaw is the root cause of most of what I believe is wrong with this strategy.

The focus on flowers rather than drug money has led to a false comparison between northern and southern Afghanistan. U.S. officials now imply that political elites in northern Afghanistan are engaging in successful counter-narcotics, while the southern drug economy expands. This depiction has obvious ethnic implications, to the point that one government (not the U.S.) asked me to comment on whether different ethnic groups have different cultural attitudes toward opium.
The basis for these generalizations is that poppy cultivation spread into Afghanistan mainly through the Pashtun areas and that in the last year poppy cultivation has decreased in the mainly northern provinces (see the UNODC Rapid Assessment Survey map). The main reason that the drug economy expanded the most in the Pashtun areas is that traffickers shifted the cultivation to Afghanistan from Pakistan when Islamabad started to suppress it in the 1980s, and the government collapsed in Afghanistan. As a trans-border people, Pashtuns are well-organized for smuggling, whether of opium, weapons, or spare parts for trucks.

But most importantly, the map shows only the flowers. The U.S. Strategy nowhere claims, discusses, or even mentions whether “drug money” has decreased in northern Afghanistan. It has not. Balkh may be poppy-free, but its center, Mazar-i Sharif, is awash in drug money. The commanders who control Northern Afghanistan today are playing the same shell game that the Taliban did in 2000-2001. Some have suppressed cultivation (in Ghor and Bamiyan cultivation is hardly worthwhile anyway, the yields are so poor) but none have moved against trafficking. Most of them continue to profit from it, if only through what in the U.S. we would call "political contributions."

Some of the same officials who today get credit for counter-narcotics efforts are generally believed to have become millionaires directly or indirectly from drug trafficking. Recently the nephew and right-hand man of the chief of the border police in a province colored a hopeful green in the map above was caught driving a car full of heroin north through Kabul. Why? Because there is still plenty of trafficking going through the North, and trafficking, not cultivation, is where the money is. An Afghan friend (and official of the Afghan government) told me that when he was in Bamyan recently, the north-south road by the lake at Band-i Amir was crowded like a highway with trucks taking the opium and heroin of Helmand northwards. (This is the same road that the mujahidin used to transport arms from Pakistan to northern Afghanistan in the 1980s.) The same traffic goes through Ghor, to the west. The arms traffic goes in the other direction, as northern commanders sell their Iranian weapons to dealers who re-sell them to the Taliban.

The commanders have learned that we pay no attention to the money but only to bright colored flowers. And what both government officials and politically connected people tell me is, the pressure for photogenic progress comes from Congress. Every year it wants easily depicted metrics, and flowers provide it. Perhaps someone from the legislative branch would like to comment on this.

In the next installment, we will look beyond the flowers to analyze the implications of the neglected opiate value chain for counter-narcotics policy. Read more on this article...

Counter-Narcotics in Afghanistan IV: Beyond Interdiction

This is the fourth of a series of posts in which I present analyses of the main aspects of counter-narcotics policy in Afghanistan, in response to the recently published U.S. Counter-Narcotics Strategy for Afghanistan and the UNODC Afghanistan Opium Survey 2007.

The previous installments were: Counter-Narcotics in Afghanistan (First Installment): Defining the Problem; Counter-Narcotics in Afghanistan II: The Value Chain, The Corruption Chain; and Counter-Narcotics in Afghanistan III: The False Promise of Crop Eradication. I also presented a general memorandum on counter-narcotics strategy: Points on Counter-Narcotics in Afghanistan: A Critique and a Proposal.

As argued in the previous installments, the U.S. (which funds most counter-narcotics activity in Afghanistan) has invested a disproportionate amount of resources in the eradication of the opium poppy crop, which contributes only 20 percent of the value of the opiate industry in Afghanistan. The result has been the migration of cultivation, its concentration in insecure areas, an increase in the value of the opium economy, and closer links among farmers, traffickers, corrupt officials, and the Taliban. In the new U.S. Counter Narcotics Strategy, of the five immediate priorities, three are for eradication: make eradication a counter narcotics priority; encourage (i.e. pressure) the Afghan government to set eradication goals, and; encourage (i.e. pressure) the government of Afghanistan to use non–negotiated eradication (mechanical eradication and spraying). The two other goals are improving the fund for rewarding provinces that are “good performers” (with cultivation being the only measure of performance) and an improved public information strategy, an area where this administration has proved itself uniquely inept. While the report contains sections on alternative livelihoods and interdiction, neither is listed among the immediate priorities.

The following policy instruments address higher parts of the value chain:

• Interdiction of the trade, mainly destruction of the product, including raids on opium bazaars, police seizures of drugs found in vehicles or in storage, and destruction of heroin or morphine laboratories. While these actions are carried out by law enforcement institutions, they require more enforcement than law. Once a banned substance is seized, the government can destroy it without additional legal procedure or referral to a court. Needless to say, this is not what always happens. There is a system, varying by region, for how much traffickers must pay the police to recover a portion of their wares. Instead of destroying the captured substance, police sometimes claim they have to transport it to their superiors for “evidence.” What happens to it afterwards is not always well documented. In part because of such problems, NATO is now considering an enhanced role for ISAF in interdiction.
• Arrest of traffickers. The number of such cases is on the rise according to the US report, but such arrests mainly target small traffickers or smugglers. The incapacity and corruption of the Afghan justice system is such that cases rarely lead to fair trial and conviction. Instead arrests lead to detention and bribery for release. Hence the U.S. Drug Enforcement Agency (DEA) is working to compile cases against major traffickers that can be presented for extradition to the U.S. The total number of such cases is 2 or 3 so far and cannot increase quickly enough to make any appreciable impact on the largest sector of the Afghan economy.
• Arrests of corrupt officials: such arrests are rare in the extreme, since the police and courts that are the main object of corruption. I have been told of, without being able to verify, arrests of officials of the National Directorate of Security, the intelligence agency, for accepting bribes from traffickers. Those arrested were reportedly tried through NDS’s internal courts and punished severely. I am not aware of any such prosecutions in the Ministry of the Interior.
• Building institutions for interdiction and law enforcement. Just as foreign donors have supported the formation of the Central Poppy Eradication Force, they have also supported the formation of the Counter-Narcotics Police Force (CNPF) for interdiction and law enforcement, part of the pattern of forming special elite units for tasks of particular importance to foreigners. The US is also supporting the creation of special prosecutors, courts, and prisons for drug offenses. These institutions will be resourced and trained better than the rest of the Afghan justice system.
• Measures against money laundering. These are not mentioned in the public version of the U.S. Counter-Narcotics Strategy, but they are reportedly part of the classified version. A World Bank-UNODC study of money laundering for drug trafficking in Afghanistan estimated (very approximately to say the least) that in 2004-2005 actors in the opium economy imported $1.7 billion into Afghanistan using the informal hawala system of money transfer. The author could not estimate the amount of drug profits transferred out of Afghanistan in the same way, but it is certainly of the same order of magnitude.
• Removal from or prevention of the appointment to senior positions of officials suspected of drug-related corruption. All ministers and senior officials of the government serve at the pleasure of the President and may (in principle if not in practice) be removed from office at his discretion. Hence counter-narcotics policy is closely related to the benchmark in the Afghanistan Compact requiring that “A clear and transparent national appointments mechanism will be established . . . for all senior level appointments to the central government and the judiciary, as well as for provincial governors, chiefs of police, district administrators and provincial heads of security.”

The Strategy proposes programs to meet all of these objectives. It is based on a model of law enforcement, with military backup where necessary, plus development (“alternative livelihoods,” which will be the subject of a subsequent post). It also contains measures for strengthening institutions through funding, equipment, and training. Properly designed, implemented, and sequenced, these are needed components of a counter-narcotics policy. But they cannot succeed without building a state to implement the policies and exercise command and control over the strengthened institutions. Recommending law enforcement where the state is so weak is reminiscent of the economist who offered an elegant solution to the problem of being stranded on a desert island with only canned food: assume the existence of a can opener.

At a meeting on counter-narcotics that I helped to organize, the Deputy Minister of defense of Colombia, Sergio Jaramillo, emphasized that aligning policies to strengthen the credibility of the government was essential to counter-narcotics. The state is a political organization enjoying a degree of legitimacy and sovereignty, not just a set of technical bodies, however well trained, equipped, and funded. The state is but one of several contending authorities in most of Afghanistan, and its reach is particularly weak in areas where opium production is concentrated. The state’s weakness does not result solely or even primarily from a lack of technical capacities, but from a lack of resources and consent to a common institutional framework on the part of the country’s key power holders. The divergent views and interests of these power holders regarding the drug economy and their relative strength compared to the state are the main reasons that the drug economy has continued to grow. Given that the yearly export value of opiates produced in Afghanistan equals a quarter to a third of the country’s estimated licit GDP, participation in the drug economy is not a “deviant” activity that can be suppressed with law enforcement and some incentives to cooperate. It will require either the military defeat of or a political agreement with key power holders. Ending or reducing both the insurgency and the drug economy (which are linked, though not exclusively) requires a political settlement on how Afghanistan is to be ruled and developed, not just the implementation of policies by a state that still barely exists.

Training people in the technical skills required for counter-narcotics (interdiction, prosecution, law enforcement, and development) is necessary, but it is not a substitute for a state whose power holders and decision makers exercise a degree of autonomy from the socially powerful, who in Afghanistan include drug traffickers. As a result, frustrated foreign advisors increasingly press for more control over operations and autonomy from the governmental apparatus, which leaves power-holders the choice of being seen as foreign puppets or of engaging in some form of resistance, whether covert (corruption) or overt (insurgency). Jon Lee Anderson of the New Yorker observed this first-hand while reporting on a U.S.-supported eradication effort in Uruzgan province. When the Afghan force refused to eradicate a field belonging to a local power holder, the DEA agent accompanying them (Douglas Wankel, a determined and dedicated professional) tried to make counter-narcotics more equitable by forcing the reluctant Afghans to eradicate the field. But even if the field is eradicated, such an operation does not strengthen the authority of the state or prevent future poppy cultivation in any sustainable way.

Hence the problem confronted by the policies labeled as interdiction, law enforcement, or anti-corruption are pieces of the same daunting task: consolidating at least a minimal state structure in the face of enormous resources in the hands of unofficial (and sometimes, but not always, criminal) power holders.

For the foreseeable future, the government and its international supporters will be able to accomplish little in Afghanistan without the support of the de facto power holders. These are local leaders who combine functions as politicians, tribal or ethnic leaders, businessmen, landowners, commanders of armed groups of varying degrees of legality, parliamentarians, and government officials. Many were marginalized under the Taliban regime but returned as the allies of the U.S.-led Coalition and the new government.

The mixture of functions varies among members of this group, as does their political orientation. Most have mastered several rhetorical repertoires for different audiences, and they manifest considerable pragmatism in their actions. These leaders have a healthy respect for the effective use of force, money, and rhetoric. Conversely, nothing more incites their contempt than wasteful and ineffective use of force, money, and rhetoric, which, rightly or wrongly, is what most of them see in the actions of the international community in Afghanistan, especially in counter-narcotics.

Many of them derive much of their resources directly or indirectly from the opiate industry, sometimes without ever actually seeing, handling, or even mentioning the substance in question. An Afghan official once pointed out to me that all Afghan politicians had brothers who were businessmen. Afghan leaders also have half-brothers, stepbrothers, cousins, uncles, and nephews, and so do their (possibly several) wives. During the Taliban period one Afghan leader asked for political asylum for himself and his “family.” When asked how large his family was, he said, “About fifty households.” An average Afghan household has about six members, and those of the wealthy and powerful have more. These extensive, dense, and opaque family networks enable some of the powerful to denounce or oppose the drug economy while simultaneously (and invisibly) benefiting from it.

These leaders, however, are even less committed to narcotics than they are to other allegiances they have made from time to time. They often agree that drugs are harmful and that profiting from the trafficking is not praiseworthy, but they see no alternative way to raise the funds they need to keep up their social and political standing. In several cases, however, members of this group have decided that their interests are served best by banning or preventing poppy growing, and virtually all “successes” in counter-narcotics have been due to their efforts, rather than to the international community’s counter-narcotics programs, which often failed to provide the support that success would have required.

The Taliban’s Emirate in 2001, Nangarhar in 2005, and Balkh in 2006 provide examples of authorities with significant ties to drug traffickers or their protectors who succeeded in suppressing poppy growing for a period of time. These cases illustrate these leaders’ potential and flexibility, but also the limits to their authority. I discussed the case of the Taliban in a previous post. In Nangarhar, the tribal leadership of the Jabbarkhel clan, under heavy pressure from the US, decided to forbid poppy cultivation in 2005. Governor Hajji Din Muhammad promised major development projects, which he was unable to deliver. Instead USAID paid rural Nangarharis $3 a day to dig ditches they did not need. Hence poppy production has rebounded in Nangarhar, especially in remote areas without access to assets or markets and where security is poor.

In 2006 Governor Atta of Balkh, a former regional commander of Jamiat-i Islami, whom other officials had previously accused of involvement in narcotics trafficking, decided to eliminate poppy cultivation. He succeeded (though one of the principal alternative livelihoods turned out to be cannabis sativa). In none of these cases did the authorities touch the traffickers, whose incomes remained stable or rose. In 2005, in fact, Nangarhar traffickers responded to the ban on cultivation by sending their extension and lending agents to other provinces, so that the reduction in Nangarhar was accompanied by the spread of cultivation to new areas. A close relative of Hajji Din Muhammad was recently arrested driving northward through Kabul with a load of heroin.

These powerholders felt insecure in the new power they enjoyed at the start of 2002, as they did not know if the Americans would tolerate their usual mode of operation. The anxiety created by the US intervention manifested itself in a rapid fall of opium prices after the Coalition operation started, as dealers sold off inventories they feared would be destroyed or confiscated. In any case, they hoped to benefit from the promised aid bonanza. As it turned out, there was no aid bonanza, but at least the Americans did not interfere with the drug trade, and prices soon stabilized. Even when some commanders were captured by US troops with vehicles full of heroin, they were let go with a remonstrance.

So far it has worked well for them. The fact that people Afghans believe to be major protectors of and participants in the drug trade still enjoy the apparent respect and support of the international community has undermined the credibility of counter-narcotics policy, which thus far has appeared to punish poor farmers and reward rich traffickers and their political patrons.

State building requires a combination of co-opting or defeating this elite. Some targeted sanctions (removal from office, arrest, exile) against the most recalcitrant of this group are necessary if the effort is to succeed, but such efforts can at most provide pressure for the core task: co-opting as many as possible of this group into the state building and development process. In the long term, social and political change will create different elites as well as the instruments they need to exercise authority.

Whatever scarce enforcement means can be mustered should be concentrated against narcotics trafficking and protection. Intelligence collection should focus on understanding the power relations among drug traffickers and specific power holders. The international community should use this intelligence (which its representatives now often claim to lack) to press for the exclusion of the patrons of traffickers from high office. They need not be arrested or tried; even removing some from office and sending them far from the country would send a clear message.

NATO troops should be authorized to provide needed support to Afghan operations to interdict convoys carrying drugs across the borders and destroy heroin laboratories, while minimizing loss of civilian life. International narcotics police should be embedded with Afghans at border posts and airports. Major traffickers and their protectors, once identified by reliable intelligence, should be subject to travel bans and seizure of assets under sanctions approved by the Security Council, which in December 2006 voted to extend the anti-terrorist sanctions of Resolution 1376 to drug traffickers as well.

But law enforcement cannot defeat an elite consensus. And the elite consensus in Afghanistan right now is that foreigners have offered no credible alternative to the opium economy. Law enforcement works to suppress and control deviant behavior with the consent of the society as a whole, which is expected to cooperate with the law enforcement apparatus by supplying information, testimony, and funding. An activity that constitutes a quarter to a third of the economy, however, is not socially deviant behavior, whatever international agreements may say. While drug trafficking is not honored, people see it as a result of the demand for narcotics from foreign markets, which the developed countries with all their resources are unable to suppress, and an effect of the annihilation of Afghanistan’s former state and economy by decades of war. Counter-narcotics policy has become another risk to be managed by pseudo-compliance and covert (or overt) resistance, above all by maintaining asymmetries in information, which the Afghan elite finds relatively easy to do. The only way to defeat a society’s consensus by force is to wage war against it. But the US and the international community is not in Afghanistan to wage war against the Afghan people. The moment the Afghan people believe that is their goal, we all lose.

One of the leading patrons of trafficking reportedly suggested a way out of this situation. According to one minister, this man, who was at that time governor of a major opium-producing province, suggested that President Karzai negotiate with the major traffickers. He reportedly told the president that he knew who the major traffickers in his province were – not surprising, as they were his business partners. The government could not touch them, as they were too powerful, but these people were not against the government on principle. They might well be interested in discussing a transition to a different economy. Such a transition might provide amnesty for past trafficking while allowing traffickers to invest their money in legal enterprises plus forfeiting some assets to public purposes. The ulama (learned clergy) could be consulted about appropriate forms of restitution.

At present, there is no structure set up to help the major entrepreneurs and power holders in the opiate business in Afghanistan to transition out of the trade. On the contrary, when entrepreneurs grown rich from the trade seek help from aid organizations in creating licit enterprises, they are turned away, told that national laws forbid cooperation or negotiation with drug traffickers. In Helmand, the provincial director of one ministry walked into the USAID-funded Alternative Livelihoods Program compound with $800,000 in cash, offering to share the costs for setting up a wheat mill. USAID overruled local program staff who wanted to accept the offer, on the grounds that it would have constituted negotiation with a trafficker or money laundering. USAID contracts prohibit working with anyone with narcotics history or connections, but the house rented by its major Alternative Livelihoods contractor in Lashkargah was owned by a major drug trafficker, which ensured the staff’s security. Rules could be bent to solve the problems of U.S. contractors, but not those of Afghanistan.

The international community recognizes that after decades of armed conflict in one of the poorest countries of the world, it is not possible to administer justice for all the wrongs that were committed in the past. The process of establishing peace and stability foregoes such justice and seeks, at best, “transitional justice.” Transitional justice may enable a society to confront its past truthfully, perhaps punish a few and make amends with most, while laying the foundation for a system of government and justice that will prevent reversion to armed conflict. Such transitional justice, which has hardly even started in Afghanistan, is difficult enough to administer.

It is no less unrealistic to expect that Afghanistan, whose economy and polity depend more on narcotics than any other state, can move from an illicit to a licit economy without an acknowledged transition, not only for farmers, but also for elites that have sustained their power through the profits of trafficking. Every foreign diplomat in Afghanistan regularly meets people associated with both war crimes and drug trafficking. Those few who have tried to avoid doing so have found it more or less impossible. The only guarantees of clean hands in the past several decades are absence from the country or powerlessness.

A condition for successful negotiations is some leverage. Interdiction aimed at the high end of the value chain plus political measures against traffickers well connected to the state are essential. The government and international community should seek to avoid perverse outcomes by seeking some measure of reparations from those who have accumulated wealth in the trade, such making contributions to the capitalization of rural development banks or micro-credit institutions. Enabling them to bring their funds into the open by investing in financial institutions as well as other programs that produce social good would offer some degree of compensation to those in the society who did not benefit from the drug trade.

There is no more a law enforcement solution to Afghanistan’s narco-polity than there is a military solution to the insurgency. Well-targeted sanctions and enforcement are needed as part of counter-narcotics, just as well targeted military actions are needed as part of counter-insurgency. But a counter-insurgency strategy that targets uncontrolled areas where insurgents hide among the population while providing safe haven to the insurgents’ leaders and financiers would be similar to . . . Pakistan’s policy toward the Taliban. A counter-narcotics policy that replicates that model will achieve similar results.

Read more on this article...

Counter-Narcotics in Afghanistan V: Is Opium Poppy Cultivation Related to Poverty?

This is the fifth of a series of posts in which I analyze the main aspects of counter-narcotics policy in Afghanistan, in response to the recently published U.S. Counter-Narcotics Strategy for Afghanistan and the UNODC Afghanistan Opium Survey 2007.

The previous installments were: Counter-Narcotics in Afghanistan (First Installment): Defining the Problem; Counter-Narcotics in Afghanistan II: The Value Chain, The Corruption Chain; Counter-Narcotics in Afghanistan III: The False Promise of Crop Eradication; and Counter-Narcotics in Afghanistan IV: Beyond Interdiction. I also presented a general memorandum on counter-narcotics strategy: Points on Counter-Narcotics in Afghanistan: A Critique and a Proposal.

As argued in the previous installments, the U.S. (which funds most counter-narcotics activity in Afghanistan) has invested a disproportionate amount of resources in eradication of the opium poppy crop, which contributes only about 20 percent of the value of the opiate industry in Afghanistan. Antonio Maria Costa, executive director of the United Nations Office on Drugs and Crime, characterized last year's eradication effort as "a farce." The result of failed eradication programs has been the migration of cultivation, its concentration in insecure areas, an increase in the value of the opium economy, and closer links among farmers, traffickers, corrupt officials, and the Taliban. The opium economy in Afghanistan has spread and become more integrated not in spite of, but because of counter-narcotics efforts.

In the new U.S. Counter Narcotics Strategy, of the five immediate priorities, three are for eradication: make eradication a counter narcotics priority; encourage (i.e. pressure) the Afghan government to set eradication goals, and; encourage (i.e. pressure) the government of Afghanistan to use non–negotiated eradication (mechanical eradication and spraying). The two other goals are improving the fund for rewarding provinces that are “good performers” (with lower cultivation being the only measure of performance) and an improved public information strategy, an area where this administration has proved itself uniquely inept. While the report contains sections on alternative livelihoods and interdiction, neither is listed among the immediate priorities.

Fallacies for Failure

Most people assume that Afghan farmers turn to poppy cultivation because of poverty. And they are right. Of course it is not just the poverty and insecurity of individuals that lead to cultivation: it is the poverty and insecurity of the entire country, which have destroyed infrastructure, gutted the state and justice system, ruined the security institutions, and isolated both each village and the entire country from licit markets. The country is tied for last place in the world in all indicators of human development, such as infant mortality, child mortality, maternal mortality, literacy, and life expectancy.

Poverty and insecurity are not the same, but poor people are more vulnerable to insecurity, which restricts their opportunities and helps keep them poor. Research by scholars such as Colombia's Francisco Thoumi shows that the production of agricultural raw materials for illegal narcotics tends to be concentrated in countries that have a comparative advantage in the production of illegality and insecurity and, within those countries, in communities that are the most isolated and marginalized within the state.

The predominant role of poverty, insecurity, and marginality in poppy cultivation argues strongly for making development, security, and political and social integration the top priorities in countering the narcotics economy in Afghanistan. Perhaps that is why the U.S. government and UNODC, both of which have strong commitments to an enforcement rather than developmental approach to narcotics production and use, have tried to deny the obvious link of poverty to narcotics production through elementary statistical errors and a false distinction between poverty and insecurity.

The UNODC Opium Poppy Survey 2007 asserts:

First, opium cultivation in Afghanistan is no longer associated with poverty – quite the opposite. Hilmand, Kandahar and three other opium-producing provinces in the south are the richest and most fertile, in the past the breadbasket of the nation and a main source of earnings. They have now opted for illicit opium on an unprecedented scale (5,744 tons), while the much poorer northern region is abandoning the poppy crops.

Second, opium cultivation in Afghanistan is now closely linked to insurgency. The Taliban today control vast swathes of land in Hilmand, Kandahar and along [and across, though UNODC does not say so] the Pakistani border. By preventing national authorities and international agencies from working, insurgents have allowed greed and corruption to turn orchards, wheat and vegetable fields into poppy fields.

In both public and private discussions, U.S. counter-narcotics officials unfailingly refer to these statements as evidence that narcotics production is due to the greed of rich farmers working with terrorists to produce poison for profit, rather than the vulnerability of the poor. This is a principal justification for the priority they give to eradication.

The statement that "opium cultivation is no longer associated with poverty -- quite the opposite" is an attempt to use a statistical fallacy to promote a failed policy. This statement is an example of the ecological fallacy, defined by Wikipedia as:

A widely recognized error in the interpretation of statistical data, whereby inferences about the nature of individuals are based solely upon aggregate statistics collected for the group to which those individuals belong. This fallacy assumes that all members of a group exhibit characteristics of the group at large.

Wikipedia provides an example that perfectly duplicates the fallacy committed by UNODC:

Imagine two communities, Chiptown and Pittsville. Within each community there is a divide between the rich and poor, the rich living in gated communities on the hills and the poor living adjacent to the industrial districts that pump carcinogens into their backyards. In both communities, the poor people have a cancer incidence that is many times that of the wealthy people. In Chiptown, where the dominant industry is high-tech computer manufacturing, the overall salaries are higher for both rich and poor people, but the carcinogens spewed into the environment are particularly nasty, giving cancer to nearly all those exposed (almost entirely poor people). Prof. Newbie comes along and decides to examine the risk factors for cancer. He looks up the cancer rates and median incomes of these two towns on the CDC and U.S. Census webpages. He finds, to everyone's surprise, that the cancer incidence is higher in the wealthier community, Chiptown. He concludes that higher income is a risk factor for cancer. In fact, we know that exactly the opposite is true: In the wealthier community of Chiptown, being poor is especially dangerous to one's health.

Substitute insecurity for carcinogens, poppy cultivation for cancer, and Helmand for Chiptown, and you have the UNODC argument, described by the most commonly used source on the intenet as a "widely recognized error." I taught it to first-year graduate students at Yale in 1982.

Are Helmand Farmers Rich and Greedy?

Besides the gross methodological error, UNODC's assertion is based on a definition of poverty as household income alone, a notoriously inadequate measure, especially in rural areas. David Mansfield, probably the world's leading field researcher on narcotics in Afghanistan, comments in a private communication previewing a report he is co-authoring with Adam Pain for the Afghanistan Research and Evaluation Unit:

The claims of the relative wealth of farmers in the south is not supported by the available data. In fact statistics produced by the Central Statistics Office of Afghanistan in 2004 summarising household data and collected in the National Risk Vulnerability Assessment ranks Helmand 6^th, Kandahar 15^th, Uruzgan 32^nd and Zabul 33^rd of the 34 provinces in terms of social and economic well being. This compares to rankings for the seven northern provinces of Jawjan, Balkh, Samangan, Baghlan, Bamian, Frayab and Sari Pul of 1^st, 9^th, 13^th, 11^th, 18^th, 25th and 31^st, respectively.

Moreover, in 2005, Helmand province reported some of the worst school enrollment rates for 6-13 year olds and one of the highest illiteracy rates of any other province other than Zabul and Paktya. Given the intensity of the conflict in the south it seems rather unlikely that these indicators have significantly changed over the last two years -- quite the contrary. The assertion that the population of the southern provinces are not poor seems to be derived from the fact that households in the southern provincesreported average higher annual incomes (US$ 3,316 for poppy growing and US$ 2,480 for non poppy growing) to UNODC surveyors than those in the north (US$ 2,690 for poppy growing and US$ 1,851 for non poppy growing) or centre (US$ 1,897 for poppy growing and US$1,487 for non poppy growing. To put these figures in perspective a "greedy" opium-producing household in the south would have a daily income of $9 per day in contrast to a poor but virtuous household in the north with a daily income of $5 per day. Given the difference in the average number of household members per household, with an average of 9 persons per household in Helmand and 7 persons in Balkh,this would represent a per capita income of $1 and $0.70 per capita respectively. Leaving aside the issues of income inequalities within provinces and the well known methodological difficulties associated with collecting data on household income and its reliability in developing countries,the focus on income as a measure of poverty represents a severely limited understanding of the nature and measurement of poverty, particularly under conditions of chronic insecurity.

Mansfield observes that development experts define poverty multidimensionally, not solely in terms of income, which is why they favor indicators such as the Human Development Index. He concludes:

Given the prevailing levels of insecurity, and other poor health and welfare indicators, some opium poppy growing households may indeed be relatively income wealthy but most will experience the wider dimensions of poverty. These may be even greater in the south where the intensity of the conflict will disrupt labour and agricultural markets, preclude access to health and, education; and where the threat of physical violence from both state and non-state actors is at its most overt.

In a much needed corrective to the false impression conveyed by the UNODC report, World Bank Afghanistan economist William Byrd also stated:

Dependence on opium cultivation is very much associated with poverty.

Those who are actually cultivating opium on a sharecropping basis or who have very small plots of land tend not to be very rich. We have to be careful to distinguish who is cultivating the land and who owns it. Not surprisingly, it is the landowners who get most of the returns on opium at the farm level, while drug traders and their sponsors reap the lion’s share overall.

Current reporting from Helmand by RFE/RL confirms the link of poverty (including insecurity) to narcotics production. One farmer in Helmand, repeating what so many have told interviewers, told RFE/RL:

"I am 20,000 rupees [$350] in debt and I cannot earn even 50 rupees [$1] a day, so I have to plant poppies -- because I am anxious," he explains. "I know that it is a bad thing and the Holy Prophet Muhammad says that 'all intoxicants are forbidden.' But we need it [to survive] and so it is fine to plant it in a situation like ours."

RFE/RL reports what I have found to be the predominant Afghan view:

Tribal leader Ali Shah Mazlumyar argues that there is a simple way to rid Helmand of poppy cultivation. "If 1/100th of the antidrug aid dollars were spent on helping poor farmers [through alternative-crops schemes], the situation would be much different -- if the government could buy their crops en masse and then sell them cheaply [on the open market]," he says. "This would be an enormous help and might solve the problem [of poppy cultivation] without the use of guns, artillery, and tanks."

World Bank economist Byrd agees with Mazlumyar (whose name means "friend of the oppressed"). In the interview cited above, Byrd said that rural development programs will be critical to create alternative livelihoods for poor farmers. “The country also needs to develop labor intensive agriculture exports of high-value added which really will be the alternative to opium. But it has to be recognized that this will take time.”

To recognize that "this will take time" would mean planning for a transition from the drug economy to a fully licit economy. This is a massive macro-economic development task, not a law enforcement task to be supplemented with some economic incentives and sanctions. The next post, a critique of "alternative livelihoods," will outline the components of that task. Read more on this article...

Rubin: Report Says US Counter-Narcotics Policy in Afghanistan Fuels Insurgency

This is the press release for our new report on counter-narcotics in Afghanistan, based on the posts that appeared here months ago.

New Report: International counter-narcotics policy in Afghanistan victimizes the poorest and fuels armed resistance

Opium poppy eradication is fueling the Taliban; the U.S., NATO, and Afghan Government should focus on delivering increased livelihoods programs and enhancing interdiction of traffickers.

Report released prior to major international meeting on Afghan policy in Tokyo on Wednesday 6 February; embargo ends at noon EST on Monday 4 February.

New York (3 February 2008) - A report by the Center on International Cooperation of New York University – Counter-narcotics to Stabilize Afghanistan: the false promise of crop eradication - released in the run-up to a major international meeting on Afghan policy in Tokyo, warns that U.S.-driven efforts to eradicate the country's opium crop, rather than deprive the Taliban of funding, will instead make more drug money available to fund insurgency, terrorism, and corruption.

The report, co-authored by Barnett R. Rubin with Jake Sherman, argues that the international community's priority of eradicating opium production disproportionately harms impoverished farmers, who lack legal livelihoods. Depriving these rural communities of their livelihoods before secure alternatives are available drives them to align with the Taliban. The eradication policy also fails to target traffickers and processors at the high end of the value chain, whose gross profits make up 70-80 percent of the drug economy. It is their profits, not those of farmers, that are passed on Taliban, other illegal armed groups, and Afghan government officials who protect the drug trade.

“Proponents of ‘forced eradication’ believe they are integrating counter-narcotics with counter-insurgency, but instead are making badly conceived counter-narcotics a recruiter for the insurgency,” according to Rubin. “If ‘forced eradication’ is implemented where economic alternatives are not available, Afghans will conclude that foreigners are in Afghanistan only to pursue their own interests, not to help Afghanistan.”

The Joint Coordination and Management Board responsible for implementing the Afghanistan Compact (involving the U.S., financial donors, NATO troop contributors, the UN and the Afghan government) will meet in Tokyo on 6 February, and Professor Rubin argues that its substantive focus should be on overhauling counter-narcotics policy, promoting an alternative strategy involving:

• Increased targeting of major drugs traffickers and interdiction of drug convoys by NATO and Afghan forces;
• Ending forced opium eradication where Afghans lack confidence in economic alternatives;
• Gradual measures for the reconciliation and reintegration of cultivators and traffickers who are willing to support the government to move out of their illicit occupations;
• "Top to bottom" reform of the Afghan Ministry of the Interior, with a primary focus on rooting out corrupt senior officials.

The report concludes that if the international community and Afghan government do not develop a new counter-narcotics strategy involving these elements, the continued impact of eradication on poor communities may provoke resistance to the current Afghan government on a level comparable to that against the misguided land reforms of the Communist authorities and Soviets in 1978-79, presenting the government’s international supporters with a choice of military escalation or defeat.

Counter-narcotics done properly is exactly what Afghans have been asking for: removing criminal power holders and bringing security and development.

Notes for editors

1. Counter-narcotics to Stabilize Afghanistan: the false promise of crop eradication will be published online Tuesday 5 February (web-link: www.cic.nyu.edu) prior to hard-copy publication later this month. The report is under embargo until noon EST on Monday 4 February.

2. Barnett R. Rubin is Director of Studies and Senior Fellow at the Center on International Cooperation of New York University, where he directs the program on the Reconstruction of Afghanistan. Before joining CIC in 2000, he was Director of the Center for Preventive Action, and Director, Peace and Conflict Studies, at the Council on Foreign Relations in New York. In November-December 2001 he served as special advisor to the UN Special Representative of the Secretary General for Afghanistan, Lakhdar Brahimi, during the negotiations that produced the Bonn Agreement. He advised the United Nations on the drafting of the constitution of Afghanistan, the Afghanistan Compact, and the Afghanistan National Development Strategy.

3. Jake Sherman is the Project Coordinator for CIC's Building International Capacity for Security Sector Reform project. Previously, he has worked for the United Nations Assistance Mission in Afghanistan and the International Peace Academy, and as a consultant in Cambodia.

4. Professor Rubin and Mr. Sherman are available to comment on the report. Press inquiries should be sent to Richard Gowan at richard.gowan@nyu.edu / (+1) 212 998 3686. Read more on this article...

Points on Counter-Narcotics in Afghanistan: A Critique and a Proposal (Updated)

In the first and second installments of this series (August 24 and 25), I took the release of the new “U.S. Counternarcotics Strategy for Afghanistan” as the occasion to analyze the US approach. On August 27, the United NationsOffice on Drugs and Crime (UNODC) released its Afghan Opium Survey 2007 at a press conference in Kabul. The press release sounded the alarm at the record production this year. The report led with two major findings:

UNODC's 2007 Annual Opium Survey showed the area under opium cultivation rose to 193,000 hectares from 165,000 in 2006. The total opium harvest will be 8,200 tonnes, up from 6,100 tonnes last year. The amount of Afghan land used for growing opium is now larger than the combined total under coca cultivation in Latin America - Colombia, Peru and Bolivia. No other country has produced narcotics on such a deadly scale since China in the 19 ^th century.

In the centre and north of Afghanistan, where the government has increased its authority and presence, opium cultivation is diminishing. The number of opium-free provinces more than doubled from six to thirteen, while in the province of Balkh opium cultivation collapsed from 7,200 hectares last year to zero. However, the opposite trend was seen in southern Afghanistan. Some 80 percent of opium poppies were grown in a handful of provinces along the border with Pakistan, where instability is greatest. In the volatile province of Helmand, where the Taliban insurgency is concentrated, opium cultivation rose 48 percent to 102,770 hectares.

The report and press release repeat the misconception in the U.S. Strategy that provinces with little or no poppy cultivation are "opium-free." Elites in "opium-free" provinces continue to profit handsomely from drug trafficking. The UNODC report is a welcome complement to the U.S. Strategy in that it speaks frankly though mildly of the inadequacy of alternative livelihood programs and of development for those who do not grow poppy. The report accurately links poppy cultivation (though not drug trafficking) to insecurity. Like the U.S. Strategy, it calls for the full integration of counter-insurgency and counter-narcotics measures, especially in Helmand province, which has become "the world's biggest source of illicit drugs, surpassing the output of entire countries."

Some colleagues asked for my ideas on how to respond to what UNODC Executive Director Antonio Maria Costa called a "grim" but "not yet hopeless" situation. I drafted a brief (though probably not brief enough) memo giving my critique of current policy and making some prescriptions. This memo is not part of the series of four installments I am posting on Counter-Narcotics in Afghanistan. The first was entitled "Defining the Problem" and the second analyzed "The Value Chain, the Corruption Chain." A third essay will discuss sanctions against narcotics production and trafficking (eradication and interdiction), and the final will discuss incentives (alternative livelihoods) and strategic sequencing. This post is a summary of the overall policy conclusions I have reached. The four longer installments will provide the analysis on which I base the conclusions below.

The Situation, the Problem, the Tools, the Goal

• •As stated in the U.S. Counternarcotics Strategy for Afghanistan, p. 13, the drug problem in Afghanistan is “drug money,” which “weakens key institutions and strengthens the Taliban.”

• According to UNODC estimates, cultivators receive only about 20% of the revenue from narcotics, and the drug money that really harms Afghanistan is the money that passes between trafficker/processors on the one side, and power holders on the other, including Taliban, Afghan government officials, and local/tribal leaders.

• These links are just as strong in northern Afghanistan as in southern Afghanistan. Drug trafficking moves north across so-called opium-free provinces as well as south. Afghanistan has an integrated drug market. Security provided by the Afghan government and international forces makes cultivation more difficult in some areas and enables farmers to earn a living through other activities, but it does not restrict drug trafficking, which flourishes equally everywhere. Helmand province (which produces nearly half the opium in the world) and its neighbors are not a drug-producing enclave unconnected to opium-free provinces. They are now the main source of raw material for the country’s largest industry, which is national in scope. Enhanced eradication of the poppy crop in Helmand without adequate other measures will raise the farm-gate price of opium and create incentives for cultivation to migrate. Suppression of cultivation in Nangarhar in the East in 2004-2005 led to the increase of cultivation in northern Afghanistan.

• Both globally and within Afghanistan, narcotics cultivation is the result of, not the cause, of insecurity. Costa emphasized the link between insecurity and narcotics production in releasing the Afghanistan Opium Assessment. The essential need for counter-narcotics policy is “a state that works” according to Colombian Deputy Minister of Defense Sergio Jaramillo. Therefore, as always, the core problem is security.

• The core tools of counter-narcotics policy are crop eradication, interdiction (which is much more complex than arresting traffickers), and development (alternative livelihoods). All are necessary in a coordinated counter-narcotics policy, but they need not be simultaneous. A list of tools is not a strategy. They have to be sequenced to achieve the right outcome. It is not true, as U.S. government spokesmen routinely state, that all counter-narcotics successes combined all three simultaneously. In Thailand the government invested in development for ten years before introducing eradication. Since the people had confidence in the alternatives by then, they accepted eradication of what little cultivation was left.

Strategy

• The correct strategy for Afghanistan is to invest in development (not only rural) in all provinces, especially in the first instance in those areas that are not cultivating. Both US and UNODC spokesmen cite the figure that “only” 14 percent of the Afghan population is directly involved with poppy cultivation, but this grossly underestimates the economic dependence of the population on the drug economy, as most of the revenue comes from trafficking, processing, and protecting, not cultivation.

• Simultaneously there must be a greatly enhanced interdiction effort. Interdiction does not mean only or even primarily seizing containers of narcotics from traffickers. It is above all political and must start at the top, with the removal of high officials benefiting from the trade. This means high officials and political leaders who receive contributions or bribes from traffickers even if they have no direct contact with trafficking. This problem has to be handled politically, as it is not possible to cope with a problem of this dimension mainly through law enforcement. The key is removing people from positions or sending them out of the country, not getting legal cases strong enough to try them in the US, which, though useful as a complement to the political effort, will take far too long.

• The concept of integrating counter-narcotics and counter-insurgency by using some international military forces to assist in interdiction, including the destruction of heroin labs, is welcome and overdue. But the international forces must take extreme care during such actions not to cause civilian casualties, which have already become a serious issue in the country.

• The proposal to enhance eradication immediately, especially in Helmand, is extremely dangerous for Afghanistan. It is likely to have the following results:

1. The cultivators of Helmand, who do not believe that they currently have secure access to alternative livelihoods (no matter how much money has left Washington, D.C. with that alleged purpose), will resist the eradication by mobilizing their tribes and calling for help from anti-government elements. The fact that the average cultivator in Helmand may be somewhat better off than the average cultivator in some provinces without opium cultivation is irrelevant. The security situation in Helmand has prevented effective delivery of development aid, no matter how much money has been spent.
2. The Taliban will be able to consolidate their hold on districts where enhanced eradication takes place, as the government and international forces will not be able to drive them out by military means against the opposition of the population without extensive civilian casualties.
3. As a result, the government and international aid will not be able to enter those areas to engage in development programs or to collect intelligence for interdiction, and counter-narcotics will be reduced to eradication, i.e. an attack on the rural population. Security will deteriorate. The Taliban will gain much more stable control of base areas that are also narcotics producing areas, similar to what the FARC has in Colombia. As in Colombia, some of these base areas may cross borders, but with far worse effects in this case.
   
4. As security deteriorates, NATO casualties will increase, especially British and Canadian casualties in Helmand and Qandahar. The U.K. has already stated its unwillingness to sacrifice its soldiers for a U.S. policy it believes is unwise. Both the NATO commitment to Afghanistan and NATO itself as an alliance would come under severe stress.
   
5. If the eradication effort is successful in its own terms, then the farm-gate price of opium will rise throughout the country and beyond. The market is integrated,not segmented. Since people in Balkh and elsewhere in Northern Afghanistan also do not feel secure in their alternative livelihoods, and since, as UNODC noted, the delivery of aid to these areas has been insufficient and very slow, cultivation will return to Balkh, Ghor, and other areas where it has declined. Cultivation and trafficking will also move into the tribal areas of Pakistan and Baluchistan, where the money from these activities will strengthen the Pakistani Taliban and provide resources to thwart the democratization and stabilization of the country. Opium poppy cultivation, which has already started in Diwaniya province south of Baghdad, will spread to other areas of Iraq, and trafficking and processing will start to take off.
6. As the government and NATO are distracted by a strengthened Taliban in both Afghanistan and Pakistan,, they will have fewer resources for interdiction and will be less willing to take the political risk of confronting corrupt power holders in the government. Hence eradication will displace other counter-narcotics tools and the government will lose control of more territory.

• An alternative is as follows:

1. Launch a public information campaign stating that the purpose of counter-narcotics is not to attack but to enhance the livelihoods of the people of Afghanistan. Afghans cannot build a stable future on the basis of a criminal enterprise that is against Islam. But they also cannot build a stable future on empty stomachs. Therefore we must work together with the 98 percent of Afghan poppy cultivators (see UNODC report) who say that they are willing to abandon poppy cultivation if they can count on earning at least half as much from legal crops. Eradication is for the other 2 percent. But first the rural population has to have confidence in the alternative.
2. Ask for voluntary restraint in planting while actually delivering (not just announcing or funding or launching) much larger alternative livelihood programs. These programs must go first of all to provinces that are not planting poppy or that are reducing it. Otherwise there will be perverse incentives. Second, they should go to poppy producing provinces.
3. Alternative livelihood programs must provide all the services currently provided to farmers by drug traffickers: futures contracts, guaranteed marketing, financing, and technical assistance (extension services). Micro-finance must be made easily available so that poor farmers and regions can avail themselves of new opportunities. In the last year or two such programs have finally started, but it will take several years before they start to yield returns and people have confidence in them. Fruit trees, for instance, have to mature for several years before they give a yield. People will not stop planting poppy when they have planted fruit seedlings but have as yet no fruits or market access. Alternative livelihoods are available when Afghans believe they can rely on them, not when U.S. officials assert that money intended for alternative livelihood programs has left the U.S. Treasury.
4. Delivering alternative livelihood programs without forcible eradication will make it easier for the government and international forces to gain access to areas from which the population has thus far excluded them.
5. Simultaneously, the government, NATO, and Coalition should undertake enhanced interdiction efforts, as envisaged in the U.S. strategy. These should start with political measures at the top, consisting of removing high officials who receive narcotics money, even if their operational involvement with narcotics is distant. Intelligence assets should be directed to obtain this information. NATO and the Coalition should provide military support to attacks on smuggling convoys and heroin laboratories, with due regard for avoiding civilian casualties. The Ministry of the Interior must be reorganized (not just reformed) from top to bottom (in that order). As currently envisaged, precursor interdiction must be enhanced.
6. According to analyses by both the World Bank and UNODC, interdiction efforts will lower the farm-gate price of opium, sending the right price signals to farmers and making alternatives more viable. It will reinforce containment of cultivation.
7. There will be a period of transition for both farmers and traffickers. Just as we do not arrest everyone who committed a human rights violation in the past 30 years, we need measures for reconciliation and reintegration of both cultivators and traffickers who are willing to support the government, move out of their illicit occupations, and join the development process. Alternative livelihoods are not just for cultivators. Traders and traffickers have valuable experience in marketing cash crops and providing services to farmers. Those not affiliated ideologically or organizationally to the armed opposition should be retrained to link other agro-based export industries to the countryside.
8. The major traffickers have residences outside of Afghanistan and should be arrested or made extremely unwelcome in those countries where they reside. As recommended by UNODC, UN Member States should "take full advantage of Security Council resolution 1735 by adding the names of a dozen drug traffickers to the United Nations Al Qaida/Taliban list in order to seize their assets, ban their travel and facilitate their extradition."
   
9. We need a program to manage the transition. There is no comprehensive solution through legalizing the crop or buying back all of it. There may be a possibility to use a limited and strictly controlled buy back in areas that reduce production sustainably for 2-3 years as a transitional measure. Any buy-back must be accompanied by compensatory rewards for non-poppy growing areas. Anyone benefiting from a buy-back who then engages in cultivation should be subject to eradication.

Summary

• Introducing enhanced eradication simultaneously with interdiction and alternative livelihood efforts will lead to a decrease in security and strengthen anti-government forces, while rendering interdiction and alternative livelihoods more difficult. The political purpose of counter-narcotics is to win the support of most of those involved with the drug economy by providing them with better security and links to markets than have drug traffickers, corrupt officials, and the Taliban. This does not require replacing every dollar, as the quality of licit income is much better. But it cannot mean trying to push Afghan farmers who are now used to commercial agriculture back to subsistence farming. It requires linking farmers to licit markets and agro-based industries.

• The state in Afghanistan can be built only by using the limited force available in a highly targeted and economical way against hard core opponents, while greatly expanding the incentives (where international actors should have a decisive advantage) to win people over to the side of the government and its international supporters. Done the wrong way, counter-narcotics could do to this effort what land reform did to the communists; a good idea gone bad destroyed any hope of popular support. Counter-narcotics done properly is exactly what Afghans have been asking for: removing criminal power holders and bringing security and development.

Read more on this article...

Counter-Narcotics in Afghanistan VI: Alternative Livelihoods or Development?

This is the sixth of a series of posts in which I analyze the main aspects of counter-narcotics policy in Afghanistan, in response to the recently published U.S. Counter-Narcotics Strategy for Afghanistan and the UNODC Afghanistan Opium Survey 2007.

The previous installments were: Counter-Narcotics in Afghanistan (First Installment): Defining the Problem; Counter-Narcotics in Afghanistan II: The Value Chain, The Corruption Chain; Counter-Narcotics in Afghanistan III: The False Promise of Crop Eradication; Counter-Narcotics in Afghanistan IV: Beyond Interdiction; and Counter-Narcotics in Afghanistan V: Is Opium Poppy Cultivation Related to Poverty? I also presented a general memorandum on counter-narcotics strategy: Points on Counter-Narcotics in Afghanistan: A Critique and a Proposal

As argued in the previous installments, the U.S. (which funds most counter-narcotics activity in Afghanistan) has invested a disproportionate amount of resources in eradication of the opium poppy crop, which contributes only about 20 percent of the value of the opiate industry in Afghanistan. Antonio Maria Costa, executive director of the United Nations Office on Drugs and Crime, characterized last year's eradication effort as "a farce." The result of failed eradication programs has been the migration of cultivation, its concentration in insecure areas, an increase in the value of the opium economy, and closer links among farmers, traffickers, corrupt officials, and the Taliban. The opium economy in Afghanistan has spread and become more integrated not in spite of, but because of counter-narcotics efforts.

In the new U.S. Counter Narcotics Strategy, of the five immediate priorities, three are for eradication: make eradication a counter narcotics priority; encourage (i.e. pressure) the Afghan government to set eradication goals, and; encourage (i.e. pressure) the government of Afghanistan to use non–negotiated eradication (mechanical eradication and spraying). The two other goals are improving the fund for rewarding provinces (more precisely, governors of provinces) that are “good performers,” with lower cultivation being the only measure of performance, and an improved public information strategy, an area where this administration has proved itself uniquely inept. While the report contains sections on alternative livelihoods and interdiction, neither is listed among the immediate priorities.

The U.S. justifies the emphasis on eradication by citing a UNODC finding that “poppy cultivation is no longer linked to poverty.” The previous post shows that this conclusion is based on fallacious analysis of flawed data. Dependence on poppy cultivation remains linked to poverty according to the World Bank and independent analysts. Hence World Bank economist William Byrd argues that rural development programs will be critical to create alternative livelihoods for poor farmers: “The country also needs to develop labor intensive agriculture exports of high-value added which really will be the alternative to opium. But it has to be recognized that this will take time.”

Recognizing that "this will take time" would mean planning for a transition from the drug economy to a fully licit economy. This is a massive macro-economic development task, not a law enforcement task to be supplemented with some economic incentives and sanctions. I will now outline the components of that task. To recognize that "this will take time" means planning for a transition from the drug economy to a largely licit economy.

Alternative to What?

The basic idea of "alternative livelihoods" is sound: participation in the narcotics industry fulfills economic and social needs whose satisfaction is otherwise difficult under current circumstances; those engaging in these activities need legitimate alternatives. Designers of "alternative livelihood" programs, however, often misunderstand and underestimate the functions of the narcotics industry. The U.S. Counternarcotics Strategy is the first document from Washington that shows significant undertanding of the functions of the drug economy, but in its rush to produce instant results it ignores the implications of the facts it recognizes.

The Strategy avoids the most elemental error: confusing alternative livelihoods with "crop substitution," as expressed in the common question, "what other crop can they grow?" Consistent with the flawed oversimplifed view of "poverty" in the UNODC report, this question assumes that the sole non-criminal beneficiaries of the opium economy are "farmers" (presumably cultivating their own land with mostly family labor); that the main reason "farmers" grow poppy is to increase their income; and that there are no economic functions of the drug economy outside of cultivation.

All of these assumptions are wrong. Opium is not a crop but an industry. The ludicrous statement made by UNODC and echoed by the U.S. that "only" 14 percent (a mere one seventh!) of the Afghan population is directly involved in opium cultivation, ignores the facts, also documented by UNODC and the World Bank, that "cultivation" generates only 20% of the value of the opiates produced in Afghanistan; that a very large number of people are directly involved in the sectors of the opium economy other than cultivation; and that many people gain their livelihoods from activities generated indirectly by demand created by the opium economy in, for instance, construction and trade.

The reduction in poppy cultivation in Nangarhar province in 2004-2005 provided a test of the macro-economic impact of the drug economy. David Mansfield's research revealed that it is substantial:

[T]he ban imposed by the provincial authorities had a wide-reaching impact extending well beyond opium poppy farmers, affecting a variety of different socio-economic groups. Estimates suggest that rural labourers who had no land of their own but who had previously been employed during the weeding and harvesting seasons for opium poppy lost as much as US$ 1,000 in off-farm income due to the ban. Businessmen and shopkeepers in the provincial and district bazaars saw their turnover halve due to the significant shortfall in purchasing power that the ban imposed on the rural population. And unskilled daily wage labourers in Jalalabad city experienced a reduction in the number of days they were hired as well as in daily wage rates.

The most significant impact was borne by opium poppy cultivating households themselves. However, even for them the impact of the ban was less punitive in areas with better access to resources. For instance, while households with access to larger and well-irrigated landholdings experienced more substantial falls in on-farm income due to the ban, their proximity to the agricultural commodity markets of Jalalabad allowed them to offset some of these losses by increasing cultivation of other high-value crops. Those with a stock of assets also drew on the different sources of legal income that they had access to in the provincial centre and, where possible, increased the number of household members allocated to daily wage labour opportunities. While even in this relatively resource-wealthy group losses were significant — expenditure on basic food items were curbed to make ends meet — neither longer-term productive assets, such as livestock and land, nor investments in licit income streams were sold off in response to the imposition of the 2005 opium ban in Nangarhar.

In contrast, those households most dependent on opium poppy and who typically cultivated it most intensively were found to adopt coping strategies in response to the ban that not only highlighted their growing vulnerability but threatened their long-term capacity to move out of illicit drug crop cultivation. The loss in on-farm income that this group experienced was not offset even in part by an increase in cultivation of high-value licit crops. This was due to constraints on irrigated land, the distance to markets, and the increasing control “local officials” had gained over the trade in licit goods. Instead, these households replaced opium poppy with wheat. However, due to land shortages and the density of population wheat production was typically insufficient even to meet the household’s basic food requirements. The loss in off-farm income during the opium poppy weeding and harvesting seasons (up to five months’ employment) could not be replaced by intermittent wage labour opportunities paid at less than half the daily rate offered during the opium poppy harvest the previous year.

For this group, problems in accessing new loans were compounded by inability to pay accumulated debts. As a result, expenditures on basic food items were reduced; children were withdrawn from higher education; and livestock, household items, and prior investments in licit income streams were sold. The resource-poor were more likely than the resource-wealthy to send members of their family to find employment in Pakistan, and were typically the most vociferous in their opposition to the government for its imposition of the ban and to the foreign countries they believed to be behind it. The impact of the ban on opium poppy cultivation on some households was so substantial that even in households that included only one male of working age, he would travel in search of wage labour opportunities, leaving the women and children without an adult male relative present in the household compound.

This real-life experiment (performed on human subjects who were not informed of the risk or offered the option of not participating) shows what was lost when cultivation was suppressed.

There are several conclusions:

• Poppy cultivation is not a choice of crop that requires another crop to substitute for lost income; it is a component of complex livelihood strategies of extended families. These strategies include labor migration, education, seeking wage labor, and serving in armed groups (not mentioned in the text). This multi-dimensional function of poppy cultivation is the reason for the use of the term alternative "livelihood" rather than "crop." Advocates of eradication claim that since no other crop produces the same gross income, eradication is necessary to force farmers to adopt other crops. Mansfield shows that eliminating cultivation before investing in assets needed for production actually deprives poor farmers of the capacity to adopt other crops and economic activities. Rural families do not need just another "crop"; they need access to opportunities and assets that enable them to support themselves without poppy cultivation. These opportunities can come in forms other than "crops." Secure employment is the most reliable "alternative livelihood."
  

• Poppy does not give access only to income, but to credit, land, water, food security, extension service, and insurance. As the Afghan public sector, both national and local ,was destroyed in war over the past decades, private and sometimes criminal groups undertook the provision of public goods, including collective violence for "security," in order to create conditions for their activities. Of course when public goods are provided by private for-profit organizations without legal oversight, the provision is flawed (as the example of private security contractors in Iraq and Afghanistan shows). The opium industry privatized the provision of essential support services to the agricultural sector, as its rate of profit and global size made it the only industry with the resources and incentives to supply such public goods.

• The fact that one seventh of the population of Afghanistan is directly involved in opium poppy cultivation does not show that it is a marginal activity. On the contrary, it signals a social revolution. For the first time in history, a substantial portion of the Afghan rural population is involved in the production of a cash crop for the global market. Never having come under direct colonial rule, and being distant and isolated from global markets over the past several centuries (as sea trade dominated long-distance land trade), Afghanistan's people never experienced the commercial penetration of their society as did those of colonized countries. The country never produced tea, coffee, sugar, indigo, rubber, copper, diamonds, gold, oil, jute, or any of the other commodities whose cultivation on plantations or extraction from mines led to new forms of labor control and migration, followed by social and political upheavals. Only Afghanistan's recent comparative advantage in the production of illegality and insecurity enabled it to join the global market by producing illicit crops. Nowhere in history have rural people abandoned commercial farming to return to subsistence agriculture without being subjected to massive violence. Regardless of the ethical implications, the degree of violence required to drive the Afghan peasantry back to subsistence farming is consistent with no known political objective of the international community or even the Bush administration (though such an attempt by the international backers of the Afghan government would help the Taliban and al-Qaida). Hence the economic alternatives to the opium economy must include, as the World Bank's William Byrd stated, the creation of "labor intensive agriculture exports of high-value added," not a return to subsistence farming. This was the purpose of the creation of projects such as Gulestan and Arghand. It is also what the Interim Afghanistan National Development Strategy (chapter 5) calls for:

  The ideal type of agricultural activity for Afghanistan is labor-intensive production of high-value horticultural crops that can be processed and packaged into durable high-value, low volume commodities whose quality and cost would be adequate for sale in Afghan cities or export to regional or world markets.

  When USAID started ALP in 2004, however, their initial package consisted of donations of wheat seed and fertilizer, much of which the farmers immediately sold to pay off their opium debts.

• The public goods and effective demand created by the opium industry in this predominantly rural and agricultural country have become central to macroeconomic stability. This is not the case in drug producing countries where cultivation involves a negligible part of the economy and a marginalized part of the population. Even in Colombia, the value of narcotics production is estimated at only 3 percent of the GDP. In Afghanistan around a third of the economy and probably around a third of the population depends economically to a significant degree on the opium economy. Drug production affects the balance of payments, tax revenues (through imports), the rate of exchange, employment, retail turnover, and construction, not just farm income. The broad scope of the effects of the drug economy in Afghanistan led the current U.S. Strategy to refer to "alternative development," rather than "alternative livelihoods." As with other improvements in analysis and terminology in this report, however, the Strategy fails to draw the logical conclusions: that counter-narcotics in Afghanistan requires a macroeconomic and political strategy over a period of decades, not a quick-fix based on accelerated eradication before that development policy is even formulated.
  

• Because drugs are not marginal, and changes in production and trafficking have significant macro-economic impact, counter-narcotics policy has national political impact. Production and trafficking of narcotics constitutes a response to insecurity and marginalization, which are national, not regional or local phenomena. There is virtually no area of Afghanistan except some urban areas where law enforcement can prevent growing opium poppy. It is an option for anyone. The investment by the Thai government in the economic and social integration of opium-producing hill tribes in remote areas on the Burmese border had no effect on the national political arena, as it was insignificant compared to the government budget or GDP, and the rest of Thailand was under effective government control. According to U.S. claims, however, the yearly amount of aid now aimed at Helmand province (even if much of it never arrives in any perceptible form) is equal to over half the domestic revenue of the Afghan government, or 3 percent of GDP. Therefore alternative livelihood programs directed to regions in proportion to their volume of opium production produce perverse results: they become incentives to production of opium elsewhere. In the fall of 2004, a Momand elder from Nangarhar told me that his tribe had concluded that the only way to get foreign assistance was to grow opium poppy. Just as eradication spreads poppy cultivation to new insecure areas with lower yields or a higher cost of eradication by raising the price, alternative livelihoods directed at opium cultivating areas spread cultivation by acting as an incentive, raising the expected returns to poppy cultivation. The current strategy responds to this with a program of incentives for "good performers." Recognizing the problem is a positive step. (When I argued in December 2004 that "alternative livelihood" aid should also be given to provinces that did not grow opium, one of the highest officials in charge of U.S. Afghanistan policy told me I was not living in the "real world." By 2006 opium poppy was grown in every province of Afghanistan for the first time.) Those on the ground are skeptical (to say the least) that rewarding governors will have any sustainable effect on the economic decisions in the drug economy.
  

Therefore alternative development for counter-narcotics must start from macro-economic plans to create employment by linking Afghanistan to the licit international market, especially through rural industries based on agricultural products. Since elimination of the narcotics sector risks causing a significant economic contraction of one of the poorest and best armed countries in the world (situated in proximity to al-Qaida's new base area, Pakistan's nuclear weapons, and Iran's nuclear program), planning for elimination of narcotics must start from a macro-economic plan to assure stability and overall growth.

The 2004 study Securing Afghanistan's Future, prepared under the direction of then Finance Ashraf Ghani proposed such a basic framework, though much more work was required. SAF estimated that the elimination of the narcotics economy in fifteen years without compromising a modest rise in standards of living would require a minimum real growth rate of 9% per year in the licit economy. The growth rate alone would not cushion the shock sufficiently, as the losses from eliminating narcotics might not occur in the same locations and social groups as the new growth; therefore sectoral anbd redistributive policies would also be needed. The I-ANDS also referred to this target, but there has been no further work on the integration of counter-narcotics into macroeconomic planning. Instead the development component has been limited to small-scale rural development, often delivered in strikingly wasteful and ineffective ways.

Sectoral policies might have to address particular commodities. As Ashraf Ghani has noted, cotton (the original cash crop produced in the irrigated areas of Helmand) is not competitive with opium poppy as long as U.S. and EU producers drive down the price by dumping subsidized cotton on the international market. Estimates of the price impact of these subsidies vary. Total U.S. cotton subsidies total over $3 billion yearly, more than total U.S. development aid to Afghanistan.

If the U.S. and EU subsidies cannot be eliminated, because the political support of cotton farmers is more important than winning the struggle with the Taliban and al-Qaida, subsidies could be provided in Afghanistan. In meetings with counter-narcotics officials, Helmand farmers have asked for government cotton subsidies as an incentive to shift from poppy to cotton, but unlike U.S. farmers, whose political contributions count, Helmand farmers do not qualify for exemptions from the discipline of the "free" market. Even if cotton alone is not competitive, Ghani has suggested that t-shirts would be competitive. Establishing textile quotas for Afghanistan and investing in simple garment factories in Afghan cotton-producing areas could increase employment. The appeal of a certified "Made in Afghanistan" (or "Made in Afghanistan by Afghan women") label could offset the increased costs of production and transport. This is just one example: creating markets for products Afghanistan can produce and providing marketing assistance is key to alternative development.

The U.S. has made some efforts in this direction. In early 2007, the U.S. Department of the Treasury sponsored a visit to Afghanistan by the president of the Dole Fruit Company. After a brief look around, he asked for 10,000 ha of land with no one on it so that he could start a plantation that would be cultivated according to international standards. If he got the land, he would probably end up hiring migrant laborers from Pakistan, as they would be cheaper and more docile than Afghan workers. Afghanistan could then look forward to additional ethnic conflict on the Sri Lankan model, as Afghan farmers claimed that their land had been illegally expropriated for a foreign company employing foreign workers....

Still as a producer in Afghanistan myself, I understand Dole's point of view. In Gulestan we do not have the luxury of running our own plantations. To make néroli (essential oil of bitter orange blossoms, known as naranj in Afghanistan) we have to harvest the flowers from existing orange groves, enabling the growers to profit from blossoms they had previously only enjoyed for their fragrance. It turned to be not quite as easy as it sounds.

We registered the company in December 2004 and ordered a steam distiller from Turkey in order to distill the orange blossoms of Jalalabad into néroli. Based on our survey of the orange trees of Jalalabad, we estimated that the first year we might be able to produce up to 40 kg of néroli, which sold for a bulk price of about $3,000/kg. The income of $120,000 would have covered our entire initial investment and set us on the road to profitability. Unfortunately due to misunderstandings about payment, snow in Iran, a huge traffic backup at the customs post, the requirement that trucks be offloaded and then reloaded when entering Afghanistan, and poor roads, the still arrived in Jalalabad only after the orange blossoms had all fallen.

The next year, we set out to distill néroli again and found, to our surprise, that orange growers were extremely reluctant to allow us to harvest the orange blossoms, though we offered to pay in cash. They were unfamiliar with the process and feared either that harvesting the flowers would harm their fruit or that we would take advantage of them in some way. Many growers had already sold their fruit to traders on futures contracts and feared that harvesting the flowers might prevent them from delivering the amounts they had promised, landing them in debt. Some demanded that, in return for harvesting the orange blossoms, we purchase a futures contract on their entire fruit production ourselves. When we agreed to one such contract with a grower, the other growers raised their price by a factor of 10. In addition, early rain cut the season short. We produced barely one liter of néroli.

Later in 2005, when we were processing other materials, we lost access to our equipment for several months while the olive oil factory where we had installed it was used as headquarters for the parliamentary and provincial elections in Nangarhar.

The next year, 2007, we prepared a little better with the farmers, but most of them were still reluctant. When we went to recondition our equipment, which was installed in the state olive oil factory in Hadda, we were denied access. The former director of the Nangarhar Valley Development Authority, who had given us permission to use the premises, had been arrested on corruption charges, and after the elections his clan had been removed from control of the provincial administration. The new management was unwilling to risk letting us work. Due to delays in payment from an international donor (such delays are the rule with donors, regardless of the progress of agricultural seasons), we had kept a smaller still we had made that was due to be turned over to a group of farmers, and we used that equipment to produce a smaller amount, nearly 2 liters of néroli. We have now made additional contacts in the area, including with the U.S.-sponsored Alternative Livelihood Program/East. ALP/E has established a fruit producers association with whom we can negotiate the purchase of flowers in advance. We had approached ALP earlier and gotten no response, for reasons that remain opaque but that may have to do with some disbursement problems of USAID resulting from a decision by the director to review its implementation mechanisms. (I know it's confusing and complicated and not too bloggy -- think how it sounds to Afghan farmers.) Therefore in 2008, we may be able to approach perhaps half of the production level we had hoped for in 2005.

This brief description can only summarize a few of the obstacles risks inherent in introducing a new source of livelihood to Afghanistan. (I do not mention the arrest of some of our employees for possession of legal industrial alcohol or our inability to pay required taxes since officials will not allow us to pay without bribes -- recently they have added late charges to our taxes since they would not accept payment without bribes). It suffices to illustrate the high risk of economic activity, especially of agro-based manufacturing, in Afghanistan. Generally, it is safer to stick to illegal activities, since everyone understands the rules. Drug traffickers offer a full package of finance, extension services, insurance, and marketing, backed up by threats of force. Alternative livelihood programs have had none of these.

What all this shows is that moving rural Afghanistan into the licit economy requires investment in many kinds of public goods -- roads, security, credit, marketing, storage, extension service -- and the creation of rural industries as well. All of this depends in turn on linking Afghanistan to regional and global markets and assuring access to those markets -- which requires political and business initiatives at the policy level, not a beltway consulting firm sitting in a pink palace in Lashkargah ("pink palace" is the nickname for the residence used by Chemonics in Helmand -- it is owned by one of the local drug barons).

While ALP started out with make work projects (ditch digging for $3/day, compared to $25/day for working the popy harvest) and giving away wheat seeds. An Afghan colleague (a government official) came across one such project in Nangarhar in 2005 and found the workers laughing at the pointlessness of their activity. Those foolish foreigners again! Well, we all know that foreigners lack capacity....

The current strategy pays repeated homage to the need for a more comprehensive alternative livelihood project, though a careful grammatical analysis of verb tenses used reveals that these "alternative livelihoods" thus far exist only in a higher realm than mere reality. The strategy also fails to address the wasteful and ineffective delivery methods that make farmers unwilling to trust their livelihoods to such programs.

The problem is time and risk. Officials claim that they will engage in eradication only where there are alternative livelihoods. Of course this is not exactly true, since the rich and politically connected will be in a much better position to take advantage of any alternatives available, but that is not the main problem with this argument. The main problem is that alternatives do not simply exist or not. They take time to develop, and the farmers are unable to estimate how risky they are. As David Mansfield has repeatedly argued, poppy cultivation is mainly motivated not by profit seeking but by risk management. Few farmers grow only poppy, however lucrative it may appear to be (and the gross prices per kg that are always quoted do not take into accounts the cost of labor and, especially, of credit). Poppy growing is part of a strategy of livelihood diversification in extended families designed to hedge against the exceedingly high level of risk. Gulestan's experience shows that farmers are wise to take out such insurance.

What this means for alternative livelihoods is that farmers cannot reasonably be expected to abandon a pivotal part of their livelihood strategy as soon as a U.S. government official decides that he has an alternative livelihood. The risk-averse Afghan peasant and the foreign official under pressure from a capital to show quick results have different definitions of when alternatives to poppy cultivation are available.

One example courtesy of David Mansfield (personal communication): In Qandahar an aid organization involved in alternative livelihoods provided funding to enable farmers in Qandahar to plant fruit trees.The farmers planted the trees in their poppy fields and continued to grow poppy among the saplings. As the trees matured over several years, their shade would prevent the poppy from growing, while their increasing yield of fruit would provide cash income. If the fruit did not work out, the farmers still had their poppy. To Mansfield this appeared to be a clever way to manage the transition from opium to another crop. The aid donor, however, terminated the project. Since alternative livelihoods were now “available,” the farmers should not have grown any poppy. The aid organization was not prepared to tolerate a gradual transition as farmers learned how and to what extent they could rely on fruit production for livelihoods and credit. Farmers will initially diversify into other activities and only gradually abandon poppy as they develop greater confidence in other economic activities.

But the current counter-narcotics strategy has no plan for managing the transition and sequencing the different policy tools. How to turn a list of activities into a counter-narcotics strategy that serves Afghan and international overall objectives will be the subject of the last and final post.

Note: I am traveling in Afghanistan and Pakistan for the next couple of weeks. This may limit my ability to post and respond to comments and queries. But I'll be back....

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