Friday, August 31, 2007

Counter-Narcotics in Afghanistan III: The False Promise of Crop Eradication

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 Nations Office on Drugs and Crime (UNODC) released its Afghan Opium Survey 2007 at a press conference in Kabul. On that occasion I posted a summary of my overall conclusions: Points on Counter-Narcotics in Afghanistan: A Critique and a Proposal.

In the first installment, "Defining the Problem," I argued that the U.S. Strategy defined the problem posed by drugs in Afghanistan correctly, as "drug money" that “weakens key institutions and strengthens the Taliban.” This drug money comes mainly from the 80 percent of the value of opiates in Afghanistan that, according to UNODC estimates, goes to traffickers and their protectors, not the 20 percent that goes to farmers. The second installment, "The Value Chain, the Corruption Chain," analyzed how Afghan farmers have for the first time marketed a cash crop (other than dried fruit and karakul lamb) to global markets through the creation of a value chain inside the country. Since the value chain depends on illegality, it requires a complementary chain of corruption to protect each link. The drug economy most threatens international and Afghan national goals where the value chain is linked to the corruption chain at the highest levels. Therefore breaking that link and reducing the value going into corruption and insurgency is the strategic goal of counter-narcotics in Afghanistan or any other conflict-torn narcotics-exporting country.

In this and the following post I analyze sanctions against different parts of the value chain: eradication, an intervention at the start of the value chain, which eliminates some raw material produced by cultivators, and interdiction, a term referring to all interventions higher up in the value chain such as arrests of traffickers, confiscation and destruction of drug contraband, interdiction of imports of precursor chemicals, destruction of heroin/morphine laboratories, removal from office or prosecution of officials corrupted by the trade, Security Council sanctions against travel and assets of traffickers under resolution 1735, and measures to detect, prevent, and punish money laundering.

Production and regulation of opiates

Opium is a gum harvested from the mature flower of the opium poppy or Papaver somniferum, by scraping the bulb with a specially designed knife. Opium has medicinal uses against pain and diarrhea, among other ailments, but it can also be ingested orally or smoked as an addictive narcotic.

Relatively simple chemical reactions can transform the active ingredient in opium gum into stronger narcotics such as morphine, codeine, or heroin. These reactions require precursor chemicals that act as reagents in the manufacture of organic compounds. The principal precursor for opium processing is acetic anhydride, which is also used in the manufacture of aspirin and photographic film.

Opium and its derivatives are controlled substances under the Single Convention on Narcotic Drugs, 1961, an international agreement administered by the International Narcotics Control Board in Vienna. This Convention was later supplemented by the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. The INCB delegates its day-to-day work of monitoring and supporting compliance to UNODC. The Convention supports controlled use of narcotics for scientific and medical purposes. Each state party to the convention is obligated to enact national legislation to outlaw:

Cultivation, production, manufacture, extraction, preparation, possession, offering, offering for sale, distribution, purchase, sale, delivery on any terms whatsoever, brokerage, dispatch, dispatch in transit, transport, importation and exportation of drugs contrary to the provisions of this Convention.
Conspiracy, preparation, or financial operations in connection with these acts must also be made criminal offenses. There is no provision in the Convention for derogation from any of its provisions in times of armed conflict or emergency, as there is, for instance, in many international human rights covenants. In a recent Washington Post article, Misha Glenny argues that this prohibitionist regime and the "War on Drugs" approach to enforcing it are damaging our security. In these posts, however, I consider strategies only within the framework of this regime, to which drug policy in Afghanistan will have to conform for the foreseeable future.


The eradication of poppy crops is by far the most photogenic tool of counter-narcotics. Press coverage and political rhetoric feature this tactic so often, that I have developed a repertoire of one-liners to encourage journalists and others question their assumptions, such as "Counter-narcotics does not equal crop eradication," or "The international drug trade is not caused by Afghan farmers."

Eradication is the destruction of the poppy crop in the field before harvest. It can be carried out manually, by knocking over the poppy stalks; mechanically, by crushing the crop under machinery; or with herbicides sprayed from either the ground or the air. Research on eradication by genetic modification has not yet created usable technologies. Nearly all eradication in Afghanistan is done manually by Afghans, often supervised by U.S. private contractors. The Afghan government has rejected proposals by the U.S. to use herbicides, including aerial spraying, as has been done in Colombia, partly on the grounds that it will recall the alleged use of aerially delivered chemical weapons by the USSR in the early 1980s. Nonetheless, the U.S. Congress has for several years appropriated funds for the aerial eradication of opium poppy in Afghanistan. The U.S. Counternarcotics Strategy revives that proposal in careful language that nonetheless pressures the Afghan government to agree.

Superficial (i.e. nearly all) accounts of counter-narcotics policy assume that the purpose of counter-narcotics is to eliminate drugs, and that destroying crops that provide the raw materials for drugs is therefore essential to counter-narcotics. To foreigners it seems that Afghanistan is flooding the world with heroin, which has to be stopped. To Afghans it seems that the world is flooding a much weakened Afghanistan with demand for an illegal product, as well as weapons and political agendas over which Afghans have no control. Fairness requires that I mention that consuming countries are much better equipped to reduce demand and interdict trafficking than Afghanistan is to control supply. But the world is unfair, so back we go to counter-narcotics policy in Afghanistan.

Recall the point I made in the first installment, "Defining the Problem": counter-narcotics policy in Afghanistan should mainly be aimed at drug money, not drugs, and at the drug money that funds insurgency and corruption. In addition, it has to be integrated into the overall goals of the operation, of consolidating internationally recognized legitimate government with popular support. What effect does eradication have on those goals?

Eradication of the crop has "forward" effects on the opiate value chain and "backward" effects on the rural population. The aim of the policy is to have the forward effect of reducing drug money by reducing the amount of drugs, and the backward effect of introducing more risk into the lives of the excessively secure Afghan cultivators so that they will hesitate before planting opium poppy again. Alternative livelihoods, to be discussed in the last and final installment, are supposed to reinforce the message of eradication by providing incentives to grow other crops.

Trick question: In order to stop growing opium poppy, do Afghan farmers need to be: (a) less secure; or (b) more secure? Answer in the final installment of the series! Now back to the analysis.

Does crop eradication reduce the amount of drug revenue produced by the illicit value chain? I seem to recall from my introductory economics class 40 years ago that revenue is not just a function of the quantity produced: it is the product of price and quantity. Eradication, if successful, decreases the quantity supplied by farmers to traffickers. I have a dim memory of my freshman economics teacher (the late James Tobin, chairman of President Kennedy’s Council of Economic Advisers), saying that a decrease in supply leads to an increase in the price, though I don't think that is why he got the Nobel Memorial Prize in Economic Sciences in 1981. Eradication would, if successful, decrease the amount supplied by farmers to traffickers. Since the decrease in quantity would lead to an increase in price, the effect on total revenue depends on how elastically price changes in response to changes in quantity supplied. Does the price change so slowly that revenue decreases, or does the relatively inelastic demand for an addictive substance and the high risk premium that makes the cost of production irrelevant to the prices higher in the value chain mean that incremental eradication actually raises traders’ revenues?

Both theoretical reasoning and empirical evidence indicate that any attainable amount of eradication (the current goal is 25 percent of the crop) would increase drug revenue. Perhaps some economist can provide the diagram and mathematical demonstration. On a supply and demand chart, eradication shifts the supply curve to the left; less is supplied to the market at the given price at time of planting. The post-eradication supply curve crosses the demand curve at a higher price, raising the post-harvest farm-gate price. Given the elasticities (for the reasons given above), the total revenue is likely to be greater, and therefore the benefit from corruption greater, than it would have been without eradication. Other things being equal, we would therefore expect to see an increase in drug money, a rise in the cost of bribing eradicators, and a shift of income against those who cannot afford to bribe. In other words, we would expect to see what we are actually seeing in Afghanistan today. This effect could be offset by a sufficient increase in interdiction, which lowers the amount demanded at a given price. (In terms of the diagram, interdiction moves the demand curve to the left, lowering the market clearing price.)

Evidence from both the Taliban ban on cultivation in 2000-2001 and from some localized decreases since then (especially Nangarhar in 2004-2005) is consistent with this model. I reproduce here the chart from the previous installment, showing the tenfold increase in opium prices due to the Taliban ban. In 2001, when traders had little new product to resell or refine, their existing stocks increased in value, and sales continued. According to Omar Zakhilwal, President of the Afghanistan Investment Support Agency (who is both a Canadian trained economist and a native of the poppy producing Momand area of Nangarhar province), opium traffickers were the main lobbyists for the ban with the Taliban leadership, as they wanted to increase the value of their inventories. Seizures of trafficked opiates across the border from Afghanistan in 2001 dropped by only 40 percent compared to the previous year, implying that trafficking continued from stocks at 60 percent of the previous volume but at a price several multiples larger, so that the higher prices led to an increase in revenue to the traders. There was no sign that the cultivation ban hurt the finances of the Taliban, who, like other power holders, benefited from the opium economy mainly by taxing traders, not farmers. This example shows the effect of suppression of cultivation without interdiction of trafficking. I know of no analysis giving quantitative estimates of the effect of both eradication and interdiction on prices. Such an analysis would indicate what level of interdiction is necessary to assure that eradication does not increase the overall value of the opium economy.

Does eradication reduce cultivation sustainably? In the year following eradication (without sufficient interdiction or alternative livelihoods), poppy cultivation is likely to rebound and migrate in response to the higher prices. According to David Mansfield, the leading researcher on Afghanistan's opium economy, farmers in the remote province of Ghor for the first time found poppy farming profitable after the Taliban ban raised the price. More remote areas away from the traditional areas of production also incur a lower risk of eradication. The fall of 2001 and subsequent seasons saw not just a quantitative expansion of land planted in poppy, but a diversification of location, to the point that all provinces produced at least some opium in 2005. The near elimination of poppy cultivation in Nangarhar in 2004-5 led traffickers from Eastern Afghanistan to finance cultivation in other regions of the country, which helped spread production to non-traditional areas in the north. (Left -- what I was told was the last poppy in Nangarhar, April 2005. The government is now seeking the man who told me so as a trafficking suspect.) The failure to deliver alternative livelihoods in most of Nangarhar led to the current rebound in cultivation.
Another reason that eradication does not reduce cultivation sustainably is the role of credit in the opium market. Mansfield has demonstrated convincingly through his field research that farmers, especially those with fewer assets, include poppy cultivation in their livelihood strategies in order to manage risk, largely through futures contracts. Many farmers finance cultivation (with its high labor and other costs) and food consumption during the winter by selling opium to traders before planting on futures contracts called salaam. For most of the past decade traders advanced to farmers about half of the price at harvest time of the amount contracted. For example, a farmer who made a salaam contract for 10 kg in the fall planting season of 2000, when opium was selling at about $40/kg, would have been paid $200. If he produced more than 10 kg, he could sell the rest at the harvest price or keep it as inventory. If he produced less, he would owe the balance in cash at the harvest price, which he might pay, if he could, or roll over as debt to be paid off with opium from the next growing season.

Thus in the spring of 2001, the farmer who had contracted for 10 kg that he had not be able to produce because of the Taliban ban, would still owe the 10 kg of opium, but now at the new price of about $400/kg. So the farmer would owe $4,000 to pay back a $200 loan. It is no surprise that these heavily indebted farmers rushed to plant opium during the U.S. invasion in 2001, especially as the money lenders were flush with $100 bills that the CIA had supplied to commanders. Traders holding dollars needed to exchange them as fast as possible, since the dollar lost over half its value against the afghani in four months due to the rapid inflow of cash (IMF data on exchange rate above).

The salaam system shifts the risk of eradication to the farmers, especially the poor, and makes it more difficult for them to adjust to eradication by planting crops with which they cannot pay off their opium debt. According to Mansfield, in response to the risk of eradication traders and money-lenders are now advancing only about 30 rather than 50 percent of the market value at planting time for salaam contracts, shifting risk to the cultivator. Even when poppy is eradicated on land belonging to a large landowner, it is likely that the landowner has rented the land to sharecroppers to whom he has advanced salaam contracts. The sharecroppers’ debts stand even if the crop is eradicated, and they stand to lose more than the landowner, who retains his claim on their assets. U.S. officials who claim that aerial spraying would enable them to be more even-handed by eradicating crops of large landowners are ignoring how Afghan rural society actually works.

Does eradication encourage peasants to reduce risk by shifting to alternative crops? U.S. officials constantly return to the theme that it is necessary to increase the risk to the greedy, secure Afghan farmers by eradicating their crop, so that they will adopt the alternatives that U.S. assistance has made available to them. I am not sure if this argument is more despicable or ridiculous; it's a tough call. (Did I forget to mention that Afghanistan is the poorest country in the world except for a handful of sub-Saharan African states, and that surveys show that 40 percent of the rural population lacks sufficient food? As they used to say in Vietnam, sorry about that.)

Afghan poppy-farming communities do try to manage or reduce the risk posed to their livelihood by crop eradication. Thus far they have done so by adoption of alternative crops only in those few areas, such as the districts around Jalalabad, where the market is developed enough that they can sell other products, mainly fruits and vegetables, to traders on futures contracts. (More on how alternative livelihoods work when we come to that subject.) Since these conditions obtain in only a few areas, the main tools used to manage the risk are bribery or political influence to halt eradication or divert it elsewhere, emigration to Pakistan (the only available tactic during the Taliban ban until September 11), and armed resistance to prevent the government from establishing its authority or presence. Which tactic is more effective depends on the local situation.

The outcome of the Taliban’s ban on poppy cultivation illustrates the political danger of eradication. When the US attacked the Taliban after 9/11, throughout the Taliban’s former heartland, no one rose to defend them, and their regime collapsed rapidly. This was not due solely to the power of B-52s, big bags of C-notes, and the charisma of Hamid Karzai. The implementation of a harsh policy that attacked people’s livelihoods during a severe drought was another reason.

Afghan farmers in most areas will choose alternative livelihoods without eradication, when they are confident the alternatives will work. When they lack that confidence, they will choose evasion or resistance, and the more forcible the eradication, the more likely they are to turn to resistance. The risk-averse Afghan peasant and the foreign official under pressure from Congress or a parliament to show quick results have different definitions of when alternatives to poppy cultivation are available. Introducing eradication when foreigners believe alternatives are available, but when Afghans still perceive them as untried and risky, has already sparked armed resistance in some areas. Introducing eradication before farmers feel secure in the alternatives has led farmers in some areas to call upon the Taliban to protect them and take up arms to prevent eradication teams from entering their areas. Teams from the US-funded Alternative Livelihood Program, seen (rightly) as part of the same counter-narcotics package, also cannot obtain access to many communities. Road building teams are also attacked, for fear that they will improve access for crop eradication.

Since collective actions, including production, trade, politics, and war, are largely based on the mobilization of group identities (tribe, clan, family), those groups that are disadvantaged politically face a greater risk of eradication, which they counter by obtaining arms from the Taliban or other sources. This in turn enables the leaders of the groups in power to tell their Western interlocutors that their political competitors are terrorists.

More forcible eradication at this time, when both interdiction and alternative livelihoods are barely beginning, will increase the economic value of the opium economy, spread cultivation back to areas of the country that have eliminated or reduced it, and drive more communities into the arms of the Taliban.

Harjit Sajjan, a Vancouver police detective who served as an army major (reservist) in Canada's NATO contingent in the Panjwai district of Qandahar, has written me to recount his experience:

The current eradication program is pushing the farmers to the Taliban because there is no alternative livelihoods program [That is, despite the establishment of offices with signs saying, "Alternative Livelihood Program," the people do not believe that they actually have alternative ways to earn their livelihood.]. Then there is the corrupt ripple effect to the poppy eradication program where the Afghan National Police take bribes for not eradicating certain poppy fields. There were also unofficial Provincial Government poppy eradication programs that eradicate poppy fields of tribes that are part of the competition. The latter two examples pushed the local population faster towards the Taliban and helped increase the interdependency between the Drug Lords and Taliban.
Sajjan concludes:
Eradication impacts the farmers who are trying to feed their families but interdiction impacts the drug lords, or what the local Afghan’s call “Dhakoos” (Bandits). The emphasis should be against the drug labs and transportation routes. This interdiction method is more efficient and has greater impact on the drug lords. Plus, it does not disrupt the farmers. This will allow the International agencies, NGOs, and military time to work on alternative programs.
In the next posts, I will discuss interdiction and alternative livelihoods.

Read more on this article...

Taliban Tactical Success in Hostage Negotiations

I have been getting a lot of press calls asking me to evaluate the outcome of the South Korean hostage crisis in Afghanistan. A Radio Liberty article, "Negotiations Questioned After Taliban Releases Hostages," accurately summarizes my views (though it gets my title wrong):
Barnett Rubin, an expert on Afghanistan and director [of studies] of the Center on International Cooperation at New York University, told RFE/RL that the deal was a "tactical success" for the Taliban, but said its significance should not be overstated.

"It is not a turning point in the history of Afghanistan or the history of NATO or the Western world. It just means [the Taliban] had a tactical success in gaining some political recognition by capturing some hostages -- in the course of which they also committed a war crime by executing two of those hostages," Rubin said. "They succeeded in being interviewed by the press and being treated as a negotiation partner by a sovereign government -- though not a major one. It doesn't signal anything about the political policy of anybody."

Rubin also said it is wrong to suggest that the Taliban achieved everything that it had hoped for when militants seized the South Korean aid workers from a bus in Ghazni Province.

"All their demands weren't met, because they were demanding the release of Taliban prisoners. But I think from the Taliban's point of view, the most important thing was that they demonstrated that they can play a role on the international stage," Rubin said. [Photo from Taliban representative Qari Bashir (L) speaks to the media as Mullah Nasrullah looks on outside the Afghan Red Crescent Society in Ghazni.]

"The Taliban did behave as a coherent negotiating partner. They formulated a position. They negotiated. They reached an agreement. And they have implemented that agreement. They have succeeded in legitimizing themselves somewhat more as a political organization," Rubin continued. "But there is a tendency on the part of the media and politicians, when something gets in the headlines, to overinterpret it and [to] think that because they are paying attention to this event, it is a big turning point. It is not."
But I have another question: why does the Afghan government give visas to Christian missionary organizations? There is an internationally recognized right to freedom of religious belief and expression, but there is no internationally recognized right to enter a foreign country to propagate religion. Especially in view of the social tensions that the presence of a large number of foreigners is causing in Afghanistan right now, it would be appropriate for the Afghan government to restrict entry into the country by foreign missionary organizations. Read more on this article...

Wednesday, August 29, 2007

Post Labor Day Product Rollout: War with Iran (Cross-posted at DailyKos)!

On September 7, 2002, The New York Times White House correspondent Elizabeth Bushmiller treated readers to an explanation of how the Bush administration planned to sell the invasion of Iraq:
White House officials said today that the administration was following a meticulously planned strategy to persuade the public, the Congress and the allies of the need to confront the threat from Saddam Hussein.

The rollout of the strategy this week, they said, was planned long before President Bush's vacation in Texas last month. It was not hastily concocted, they insisted, after some prominent Republicans began to raise doubts about moving against Mr. Hussein and administration officials made contradictory statements about the need for weapons inspectors in Iraq.

The White House decided, they said, that even with the appearance of disarray it was still more advantageous to wait until after Labor Day to kick off their plan.

''From a marketing point of view,'' said Andrew H. Card Jr., the White House chief of staff who is coordinating the effort, ''you don't introduce new products in August.''

A centerpiece of the strategy, White House officials said, is to use Mr. Bush's speech on Sept. 11 to help move Americans toward support of action against Iraq, which could come early next year.
This September 11, we will have the reports from General David Petraeus and Ambassador Ryan Crocker, filtered through a White House drafted report.

I watched Vice-President Cheney's speech to the Veterans of Foreign Wars on August 26, 2002, in the residence where I was staying in Kabul, Afghanistan. I heard Cheney deliver his famous falsehood:
The Iraqi regime has in fact been very busy enhancing its capabilities in the field of chemical and biological agents. And they continue to pursue the nuclear program they began so many years ago. These are not weapons for the purpose of defending Iraq; these are offensive weapons for the purpose of inflicting death on a massive scale, developed so that Saddam can hold the threat over the head of anyone he chooses, in his own region or beyond.
We know the results.

This year, on August 28, President Bush spoke to another veterans' group, the American Legion. He called Iran "the world's leading state sponsor of terrorism," whose "active pursuit of technology that could lead to nuclear weapons threatens to put a region already known for instability and violence under the shadow of a nuclear holocaust." He concluded:
Iran's actions threaten the security of nations everywhere. And that is why the United States is rallying friends and allies around the world to isolate the regime, to impose economic sanctions. We will confront this danger before it is too late.
But this apparently is just test marketing, like Cheney's 2002 speech. After all "from a marketing point of view, you don't introduce new products in August." Today I received a message from a friend who has excellent connections in Washington and whose information has often been prescient. According to this report, as in 2002, the rollout will start after Labor Day, with a big kickoff on September 11. My friend had spoken to someone in one of the leading neo-conservative institutions. He summarized what he was told this way:
They [the source's institution] have "instructions" (yes, that was the word used) from the Office of the Vice-President to roll out a campaign for war with Iran in the week after Labor Day; it will be coordinated with the American Enterprise Institute, the Wall Street Journal, the Weekly Standard, Commentary, Fox, and the usual suspects. It will be heavy sustained assault on the airwaves, designed to knock public sentiment into a position from which a war can be maintained. Evidently they don't think they'll ever get majority support for this--they want something like 35-40 percent support, which in their book is "plenty."
Of course I cannot verify this report. But besides all the other pieces of information about this circulating, I heard last week from a former U.S. government contractor. According to this friend, someone in the Department of Defense called, asking for cost estimates for a model for reconstruction in Asia. The former contractor finally concluded that the model was intended for Iran. This anecdote is also inconclusive, but it is consistent with the depth of planning that went into the reconstruction effort in Iraq and Afghanistan.

I hesitated before posting this. I don't want to spread alarmist rumors. I don't want to lessen the pressure on the Ahmadinejad government in Tehran. But there are too many signs of another irresponsible military adventure from the Cheney-Bush administration for me just to dismiss these reports. I am putting them into the public sphere in the hope of helping to mobilize opposition to a policy that would further doom the efforts in Afghanistan and Iraq and burden our country and the people of the Middle East with yet another unstoppable fountain of bloodshed. Read more on this article...

Tuesday, August 28, 2007

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
  • 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.
  • 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.
  • 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.
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Monday, August 27, 2007

Potential Designation of Sepah-e Pasdaran as a Terrorist Organization: Reactions from Tehran

I did not comment earlier about the reported designation of Sepah-e Pasdaran-e Enqelab-e Eslami (translated as the Islamic Revolution’s Guard Corps or sometimes even more carelessly as Revolutionary Guard Corps while the word sepah means army and the correct translation is the Army of the Guardians of the Islamic Revolution) mostly because over the past five years of closely monitoring the fate of Iran’s nuclear dossier, I have become skeptical of newspaper leaks, plants or commentary that hint at the possibility of eventual military action (either by the United States or Israel) against Iran right around the time or in the midst of negotiations among permanent Security Council members and Germany (P5+1) about the extension of sanctions against Iran.

This time around the story made headlines in both the New York Times and Washington Post as Iran was about to begin the third round of negotiations with the International Atomic Energy Agency (IAEA) over an “action plan” and timetable for Iran to address the remaining “unresolved questions” over its nuclear program (that agreement, the text of which was revealed today and can be found here, has already been announced as inadequate by the US even before its content was known).

The United States is also pushing for a third set of economic sanctions through the UN Security Council and as far as I can tell even the smallest hint of US military action (and the potential terrorist designation of the national army of another country is certainly a hint) has become a very useful tool not only in the process of persuading countries freaked out about yet another Middle East war that sanctions are the way to go but also in framing the Iran policy discussions domestically in the US.

Once military action becomes a possibility, then most of the energy is spent discussing why this is a terrible option while the issue at hand, which is really whether or not sanctions are good policy options, are not adequately reflected upon. In an either/or frame, sanctions or what is sometimes, I guess, euphemistically called “coercive diplomacy” in fact become the “good option” upon which a consensus can be reached. Ultimately the fundamental premise of the Bush Administration that Tehran needs to be dealt with through coercion, unless Iran agrees to US pre-conditions, and the implications of the sanctions policy for Iranian politics and Iranian people and whether sanctions will fulfill the stated objectives are rarely discussed.

The US has been sanctioning Iran in significant ways since the first term of the Clinton Administration and hopefully in a later post I will talk about how sanctions have strengthened non-transparent networks of economic middlemen in Iran whose lucrative activities during the Saddam era sanctions against Iraq (yes Iraq) as well as close ties to various state institutions have enriched them enough to influence Iranian politics in significant ways, particularly since Iran’s borders with neighboring countries (now all American allies) are so porous.

But here I want to talk specifically about the impact of the recent news about the placing of Sepah on the terrorist list on Iranian politics. In the words of David Ignatius of Washington Post, through this designation, which he suggests is part of a new post-Iraq strategy, the Bush administration hopes to “squeeze the guard and all of the businesses it owns -- banks, trading companies, tech companies that are part of the nuclear program -- and seek to divide President Mahmoud Ahmadinejad, himself a product of the guard, from Iran's less fanatical majority."

A close look at the reaction from Tehran, however, clearly encapsulates how such moves push the whole array of political forces to the right of the political spectrum and in fact strengthen precisely the same forces that the publicized policy presumably intends to weaken. This, I think, is the story of American foreign policy vis-à-vis Tehran; a story that very few people in the Bush Administration or the US Congress (which since 1990s has done everything possible to outdo the executive branch in this sanctions game) are willing to confront.

Now let’s see what happened in Tehran once the news hit the headlines. The government did not respond officially. In fact, only a Foreign Ministry official who wished to remain anonymous (yes the Iran has them too!), characterized the publicity as part and parcel of the “psychological war” in which the US has engaged in the past couple of years in order to intimidate Iran.

The conservative organizations and newspapers did respond but they did so with either a yawn or their usual bombast and ridicule about American failures in Iraq and how these failures leave the US no other options but to find scapegoats. In an August 23rd editorial entitled “Paper Presence,” this is how Kayhan, Tehran’s most important hard-line daily reacted to the news:

If the news is correct, it is another sign that the Americans neither have sufficient intelligence for the correct understanding of their problems in the Middle East nor do they have much wisdom for addressing them. The excuse, they say, is that Sepah is helping Hezbollah, Hamas and [Islamic] Jihad and other similar groups…. The US imagines that these groups have modeled their fighting after Sepah and further claims that Sepah trains or arms them; claims that are repeated for years without an ounce of evidence ever presented to support them…. It is understandable that it is difficult for Israel and the United States – and the shame associate with it even harder – to accept and for the world to believe that with all their claims and pride they have been humiliated in front a few hundred Kalashnikov carrying youth. This is why in their own minds they have found a solution … by enlarging their adversary they want to belittle their own defeat or at least find an excuse for it. But let us say that the Jihadi groups in the Middle East region were created by Sepah and are now under its protection – which they are not and America knows this truth better than anyone else, is the solution to take a torn piece of paper and write on it that Sepah is terrorist? Will this solve the American problem?... The Americans imagine that the solution to the strategic defeat that has beleaguered them in the Middle East is paper play and issuing of declarations and resolutions. Sepah, if we accept America’s ridiculous claims, has taken America to the point of desperation on the boiling sands of Iraq, expansive plains of Lebanon, and swarming cities of Palestine. If there is a response to Sepah, then it must be given there. Apparently, however, there is no response and members of Sepah, by traversing time and place, are in a position that the US must await a new wonder from them at any given moment…

But ridiculing the significance of the US decision, if it happens, does not prevent hard-line or conservative forces from using the proposed terrorist designation in their attacks against domestic opponents. Suggesting that the idea of placing Sepah on the terrorist list can be associated with a few members of the Iranian exile community in the United States with past links to the reformists, Baztab, a website associated with Mohsen Rezaie, the former commander of Sepah, in an August 21st piece subtitled “A Test for the Patriotism of the Reformists” demands:

Now that the hard-line American circles are pretending that in confronting Sepah-e Pasdaran they have the reformists on their side, time has arrived for well-known leaders of that array of groups to defeat this plan through a clear statement of their position… Time has arrived for organizations such as Association of Combatant Clerics, The National Confidence Party, Servants of Construction, Mojahedin of Islamic Revolution and Participation Front and figures such as Khatami, Karrubi, Mir Hossein Mussavi, Mohtashamipour, Karbashchi and others, who despite critical positions regarding certain issues have also shown their support for their territorial integrity of the country to enter the fray and prevent any kind of western pretensions on behalf of the reformists.

And the call has not gone unheeded. Almost every reformist organization has since come out with a written statement in support of Sepah, echoing what Mohammad Khatami, Iran’s former reformist president, said in an interview with ISNA (Iranian Students News Agency) against the potential move:

If the hard-line war mongers in the United States do not know, I am sure the wise and just of that country know that Sepah has risen from the main beliefs and longings of a nation, is one of the main pillars of national authority and security, is the protector of the nation’s rights, values of the revolution, and territorial integrity, and form the spiritual point of view has a special place among the people of Iran. No nation can accept being subjected to aggression or even insult against the backbone of its authority and security and guardian of its territorial integrity, honor, and independence.

Khatami goes to hope that “illogical extremists” will be prevented from steering American foreign policy and calls on the “wise” in both countries to prevent another crisis, while posing a question about which people will benefit from the leakage of such a news in the midst of US-Iran discussions of and Iran’s attempts to respond to the unresolved technical questions regarding its nuclear program.

To be sure, Khatami’s interview along with written statements issued by political groups such as the National Confidence Party, Mojahedin of Islamic Revolution and Participation Front all include an implicit and at times even explicit criticism of hard-line posturing against the United States and lack of prudence on the part of the Iranian government in its dealings with the United States. But make no mistake, the mere reporting on the possibility of terrorism designation of Sepah has had a rallying effect on the significant players of the Islamic republic and once again has made it easier for had-line forces in Iran to make the case that conciliatory moves towards the United States (either in relation to Iraq or more significantly in relation to Iran’s nuclear file) are of no use since US policy objectives in Iran are not behavior change but regime change. Read more on this article...

Saturday, August 25, 2007

Counter-Narcotics in Afghanistan II: The Value Chain, The Corruption Chain

In the first installment of this series, I took the release of the new “U.S. Counternarcotics Strategy for Afghanistan” as the occasion to analyze some flaws in the US approach.

As I noted there, in these posts I will confine myself to considering strategies within the framework of the current international prohibitionist regime for narcotics, including opium and its derivatives. In a recent Washington Post article, Misha Glenny shows how the "War on Drugs" is damaging our security. The next few years of drug policy in Afghanistan, however, will conform to that regime, which I take as a given here.

In the first installment, "Defining the Problem," I argued that the U.S. Strategy defined the problem posed by drugs in Afghanistan correctly, as "drug money" that “weakens key institutions and strengthens the Taliban.” Furthermore, the drug money that harms our goals in Afghanistan comes from the 80 percent of the value of opiates in Afghanistan that, according to UNODC estimates, goes to traffickers and protectors (left -- opium bazaar in Qandahar), not the 20 percent or less that goes to farmers, whose support the government needs. A counter-narcotics strategy that serves our security goals would win over the farmers and many others involved in the industry, while we and the Afghan government help them adjust to the shock of being subject to international rules, while isolating the few who wish to use illicit revenue to fund insurgency and terrorism. Instead, the administration has adopted the Afghan equivalent of "shock treatment" in the former USSR: a "War on Drugs" approach, as if it is trying to end drug addiction in the West by attacking Afghan farmers.

The comparison to post-Communist shock treatment may seem strange. But what has happened to Afghanistan is not just drugs and terrorism: for the first time in history, the Afghan peasantry has started producing a cash crop for the international market. The peasantries of other countries faced this challenge under colonialism, when they produced (or lost their land to plantations that produced) rubber, tea, coffee, indigo, sugar, cotton, tobacco, and many other products. Caffeine, nicotine, and alcohol (in the form of rum) all came to the consumers of the developed world through the same kind of transformation that is now bringing them cannabis, opiates, and cocaine, except that the latter are now considered to be illegal. Just as sudden integration with the international finance and product markets required a shocking readjustment in the former Communist countries, the move from an illicit form of export mono-culture to a licit economy requires an immense upheaval in Afghanistan. Both transitions can destroy the economic security of millions and provoke the type of backlash we now see in Russia, but with even more dangerous consequences in Afghanistan, given the presence of al-Qaida. Avoiding this backlash should dictate the pace that crop eradication plays in counter-narcotics strategy.

In no case have countries undergone a transition from an economy based on cash crop exports back to subsistence farming. Alternative livelihood programs have to follow in the footsteps of the drug traffickers, linking Afghan farmers to the market, but with licit crops that, alas, cannot profit from Afghanistan's comparative advantage in producing illegality, but that might be able to profits from international interest through a "Made in Afghanistan" brand. This is what Gulestan is trying to do. Given the significant capacity for production, marketing, and finance that the opiate economy has developed in Afghanistan, we need to transform rather than destroy much of this capacity, a goal that should inform our approach to the 80 percent of the value of opiates produced by processing and trading.

Designing a strategy that focuses on the part of the opiate economy that destabilizes the region and undermines the rule of law requires an analysis of the value chain in the opiate industry through which the raw material is produced, refined (below) , and marketed, adding illicit value at each step. This analysis both suggests how to intervene (through eradication and interdiction) in a way that does the most to stop the flow of illicit drug money; it also suggests how alternative livelihood programs can create value chains for licit products.

I am told that the classified version of the U.S. Strategy includes a discussion of money laundering and high-level corruption. No doubt some of the information, especially about specific individuals, is very sensitive. But there is nothing secret or sensitive about the general process of heroin refining,financing, trafficking, and protection. We have already seen the result of focusing efforts at the bottom of the value chain: when the Taliban suppressed cultivation while permitting trafficking in 2000-2001, the returns shifted upward in the value chain, as farmers lost their crop while traffickers profited from a ten-fold price increase, while lowered the unit cost of smuggling. Except for an increase in expected bribes, the cost of smuggling a kilogram of opium that costs $600 is the same as the cost of smuggling a kilogram of opium that costs $60.

Defenders of the policy make the seemingly obvious (but completely wrong) point that eradication of poppy decreases the quantity of drugs and therefore the money from drugs. They seem unaware of something that intervenes as drugs are converted into money: PRICES. And when an intervention (crop eradication, bad weather) lowers the quantity supplied, prices go up (see chart above to see the price effect of the Taliban ban).

The value chain includes many different prices: raw opium at the farm gate; raw opium at the bazaar; processed morphine or heroin leaving the laboratory (which requires the import of precursor chemicals not made in Afghanistan; heroin and raw opium at the border and across the border, as they are transferred to international traffickers. Prices increases geometrically as one ascends the value chain, accounting in part for the increasing share of opiate profits going to traffickers (see below, based on UNODC data).

At each stage of the value chain, different power-holders take shares of the profit to provide various services, including the service of not killing you (the well-known "make him an offer he can't refuse," which in Afghanistan, I am told, can take the form of "take this $1,000 or I'll kill you in a particularly painful way.") In villages the farmers contribute a share to the mosque (sometimes conceptualized as the Islamic tax, ushr), which is used to pay the mullah and for local public expenditures such as teachers' salaries, medical care, or irrigation. The small traders who come to the village have to pay the police (or Taliban) whom they pass on the road, who pass a share up to their superiors. The police chief of the district may have paid a large bribe to the Ministry of the Interior in Kabul to be appointed to a poppy producing district; he may have also paid a member of parliament or an influential person to introduce him to the right official in Kabul. These officials may also have paid bribes (or, at this level, "political contributions" that are no longer recognizable as deriving from narcotics) to obtain a position where they can make so much money.

Running a heroin laboratory requires payments to whoever controls the territory -- in most cases a local strongman plus the government or the Taliban. Importing precursors requires bribing border guards (perhaps on both sides of the border) or paying an armed group for a covert escort. Smuggling the opium, morphine, or heroin out of Afghanistan requires access to an airfield (heroin seized at Kabul International Airport, right) or border crossing (controlled by the border police and Ariana Airlines, both of whose employees are reported to make significant income from drug trafficking), the escort of armed groups (Taliban, tribes, commanders), or expensive specialists in packaging such as those who seal heroin inside empty almond shells or condoms. The bureaucratic, military, political, or social superiors of those directly involved in facilitating trafficking claim a right to shares of the resulting tribute, though the higher the money moves, the less evident is its connection to the flowers that the foreigners like to photograph.

Different counter-narcotics tools intervene at different points of the value chain and thus affect prices, quantity, and the distribution of profits differently. The strategy that lowers the physical supply of drugs the most is not the strategy that most effectively stops drug money from funding corruption and insurgency. Nor is it the strategy that improves security or creates stabilizing political alliances. In the next installment, I will discuss eradication and interdiction in the light of this analysis.

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Friday, August 24, 2007

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...