Rubin (Updated): More on Wheat, Afghanistan, Pakistan, and Global Security

Update: The British government is providing food aid to Afghanistan:

The [UK] government has promised an extra £3m in new funding to help meet growing food shortages in Afghanistan. . . .The International Development Secretary Douglas Alexander said the cash would provide a "safety net" that would will help avoid a humanitarian crisis. UN research suggests that poor Afghans are struggling to buy food because of rising wheat prices. In Kabul it is estimated that people spend up to 60% of their income on bread alone. The UK government says the shortages have been caused by rising global prices made worse by severe cold weather.

Original post:

I previously showed how the rising global wheat shortage and the resultant price increase is feeding conflict (as it were) in both Pakistan and Afghanistan.

The media are starting to catch on to the political implications of the commodity boom. It's not just oil: today's New York Times analyzes A Global Need for Grain That Farms Can’t Fill. Most of the article focuses on how rising prices for grains and other agricultural commodities are reviving the U.S. farm economy. (Of course the article misleadingly uses a few family farmers as examples rather than the multi-national agro-businesses that account for most of the production and market).

An earlier article in the Wall Street Journal (behind subscription firewall, excerpted here) attributed the shortage and price increase to "drought in Australia and poor weather in other grain-producing countries." The Times article attributes it mainly to increasing demand:

Many factors are contributing to the rise, but the biggest is runaway demand. In recent years, the world’s developing countries have been growing about 7 percent a year, an unusually rapid rate by historical standards.

But the Times article also highlights the global implications:

A tailor in Lagos, Nigeria, named Abel Ojuku said recently that he had been forced to cut back on the bread he and his family love.

“If you wanted to buy three loaves, now you buy one,” Mr. Ojuku said.

Everywhere, the cost of food is rising sharply. Whether the world is in for a long period of continued increases has become one of the most urgent issues in economics....

The increases that have already occurred are depriving poor people of food, setting off social unrest and even spurring riots in some countries. . . .

Around the world, wheat is becoming a precious commodity. In Pakistan, thousands of paramilitary troops have been deployed since January to guard trucks carrying wheat and flour. Malaysia, trying to keep its commodities at home, has made it a crime to export flour and other products without a license. Consumer groups in Italy staged a widely publicized (if also widely disregarded) one-day pasta strike last fall.

As I mentioned in the previous post, one of the most common themes in messages from Pakistan since the assassination of Benazir Bhutto has been the wheat flour (atta) shortage, which many people ascribed to the political instability in the country, though it is a global phenomenon. In response, Pakistan has stopped wheat exports to Afghanistan.

As I also reported, rising food prices in Afghanistan are creating a crisis that is so far silent but that could manifest itself in urban riots, increased recruitment to the insurgency, and increased planting of both opium poppy and cannabis to earn cash incomes to buy food at the higher prices.

(On other commodity markets: The latest UNODC assessment of Afghanistan's drug economy notes "the steady rise in cannabis cultivation, giving Afghanistan the dubious distinction of being one of the world’s biggest suppliers of cannabis" (as also reported, left, in the New York Times). With a completely deadpan delivery, the UNODC report praises cannabis growing provinces as "poppy free." Afghan governors who succeed in convincing farmers to grow cannabis, the price of which has jumped, instead of opium poppy, the price of which is falling because of Afghan over-production, are now considered to be counter-narcotics heroes. Anyone who reads this report should carefully parse where it refers to opium and poppy and where it refers to illegal narcotics. Substitution of one illegal drug for another is being sold as counter-narcotics.)

Meanwhile, the Afghan government, which lacks economic expertise and administrative capacity in rural areas (to say the least) has proposed some kind of support for wheat farming to compensate for the food shortages and take advantage of the rising prices, which appear to be a long-term trend. Currently Afghan farmers are poorly positioned to take advantage of the wheat price rises, as traders monopolize most of the profit, as they do with poppy and cannabis. The World Bank vetoed such a program for the usual reasons (distorting markets, etc.) many of which are valid -- in addition to the fact that the Afghan government could not administer a complex and wasteful program like US agricultural price supports, especially since Afghan cultivators have no political influence.

Nonetheless, the rise in price in wheat and other commodities (what is happening to horticultural commodities, flowers, essential oils, and so on?) presents an opportunity for investing in other cash crops and their marketing in Afghanistan. For all the rhetoric about how the drug economy is supporting insurgency and terrorism, where is the program to seize this market opportunity? And for all the talk of the importance of Afghanistan to global security, where is the program to assure Afghans of an affordable supply of basic food? This would do at least as much good as more NATO troops, and with less risk of collateral damage (market distortion versus killing civilians).

Please post policy proposals in the comments. Thanks.

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Rubin: Letter from Field Worker on Counter-Narcotics in Afghanistan

The reviews of our report, Counter-narcotics to Stabilize Afghanistan: The False Promise of Crop Eradication, are starting to come in. First, from Thomas A. Schweich, Special Coordinator for Counter-Narcotics and Rule of Law in Afghanistan, U.S. Department of State, Bureau of International Narcotics and Law Enforcement:

So inaccurate as to border on dishonest.

I got a more detailed comment from Ana Pejcinova, a Macedonian national who used to work for the USAID-funded Alternative Livelihoods Program in Helmand Province. She writes:

Dear Barnett

In reference to the CIC report “Counter-narcotics to Stabilize Afghanistan: the false promise of crop eradication” and from the perspective of recent field experience in Helmand, I'd like to add a few comments in line with and in support of your recommendations:

Firstly, I find my self agreeing with every item of the strategy you outline in the Executive Summary. For my part, I can only emphasize the need for improvement in the developmental model as practiced in Afghanistan, which so far has not been very effective in providing alternative livelihoods. Perhaps you’d agree that effective developmental practice is as important as the removal/blockade of the top of the triple power-marriage between politics, militancy and narcotics, to which you refer.

Much of this is known to you, and I can only add a voice to the choir of engaged professionals who have had the privilege to witness the far reaching effects of strategies designed in remote offices.

1. Insecurity causes movement toward poppy growing. Yes. However, this causation, in my opinion, can be specified as "Economic insecurity primarily, and physical (military) insecurity secondarily, causes movement toward poppy." So many farmers have clearly stated that they'd grow licit crops if they paid better.

Governmental and international organizations refrain from working in areas of physical insecurity. Establishing physical security is, naturally, often beyond their means and scope of work. "We cannot go there" becomes a rationale for "we cannot do anything." This is not true.

To establish economic security is a different matter and is actually doable. Difficult, but achievable. Regional and international market connections, started at grassroots level by Afghan traders and technically supported by international agents, are considerably less vulnerable to physical insecurity. These can be established within physically insecure environments. Imperfect, fluctuating, but real - with actual benefits for Afghans.

That forced eradication fosters local disgruntlement and poverty, and thus motivates insurgency, is an observable phenomenon in Helmand. So is the phenomenon that locally-owned value chains (starting from farmers, moving to traders, and so on) widely increase well being and incentives for security, thus decreasing motivation for insurgency.

It is interesting to note that the Afghan traders' field practices and strategies do not differ much for licit and illicit goods. Trade routes are already established and somehow find ways to function in a middle of a war zone. They can be and are utilized for licit trade as well. Simple and cheap value adding activities can provide incentives for movement toward licit crops trade. (For example, funding drying mats (60c each) for raisins enables producers not to lay them to dry on the dusty ground. This simple value adding activity enables them to realize 20% more on the price for their raisins.)

If traders have incentives to buy/sell licit crops at higher price, farmers will have better incentives to grow them. The whole must be driven for realistic market demand for what is produced. Poppy is grown simply because there is a real market demand for it. Expatriate involvement can drive demand for licit Afghan products on the regional and global market, thus increasing their end value and increasing incentives for growing/trading in licit goods. This is all rather obvious and has been stated in a far better way by more competent authorities.

2. Estimating income per household. This method is indeed appropriate for Afghanistan. Also, the variation between different household incomes is extreme: its range should be regularly added to income or "richness" estimates; one can expect pyramids whose apexes pull the average income to unrealistic levels. Different strategies are necessary for programs targeting the apex and the bottom of the pyramid. As you suggest, forceful eradication/interdiction for the apex, and alternative development programs for the densely populated bottom.

A note: In the South, moreover, where the number of IDPs is already high and likely to increase, squatters and people moving in with relatives cause drastically fluctuating number of households and household members. Migrant labors form a widening category, where migrant workers may follow crops, and even Cash-for-Work activities managed by development agencies.

3. USAID's and other development agencies' measurement of success. This is a troublesome theme. Of course, to measure impact by the indicator "funds assigned to a geopolitical area" requires a very high leap of faith.

It would help independent researchers greatly if they can gain insight into specific operational budgets. Unfortunately, USAID protects this data. I hope you already are in possession of similar estimates: what percentage of budget goes into provision of physical security, what into expatriate staff and support, and what into actual projects. The last item is small.

Development agencies are not keen on measuring their impact, but their input and implementation at the best. Impact indicators are complex, they require professional researchers and more funds. Moreover, they require a great deal of courage and willingness to face the real outcome of lauded operations and budgets. But there are some positive changes here as well: the new impact indicators required by USAID are value of performed sales and number of jobs created. A good start.

4. "The state in Afghanistan can be built only by reserving scarce coercive resources for targeting political opponents at the high end of the value chain" - CIC Report. Yes. In addition, measures do not have to be always coercive: there are individuals in Helmand who allegedly "transport their money by truckloads," at least the portion that is not kept in Dubai or elsewhere abroad. However, some of them are interested in investing their cash in opportune businesses at home - they only need/lack the economic security and the know-how. They want the credibility international agencies can bring. Bringing them into the game of economic development is a classical scenario and, again, it is achievable:

Development agencies can promote public-private partnerships for building large job-generating and income-generating projects, where former drug barons can invest their capital (by which they have incentives to provide physical security of the projects), and can be monitored, checked and balanced within management boards composed of local, national and international stakeholders, representatives of public and private entities.

One such project is in progress in Helmand, the Agroindustrial Park - let's wish them luck (Paul Bell, DCoP and Head of Technical Program at ADP/S, designed this program and is now implementing it. He can say much more on the subject of business development in Afghanistan). Such projects release development budgets and increase local incentives for proactive engagement in building the economy.

5. Coordination:

Greater coordination between military and relief operations is needed: there is no perceivable planning of post-kinetic activities on the part of the Coalition Forces. For example, Musa Qala, on Christmas, was left to ad hoc emergency aid coming from UNHCR and USAID's ADP/S - with no reconstruction plan and certainly no assigned budget.

A part of the emergency aid was seed distribution - at the end of the planting season. It was an ill timed operation, and the seed must have been useless for this 100% agricultural area. If performed a month earlier and if military decision makers were informed about developmental factors, kinetic and post-kinetic activities could have been seamlessly connected into a functional alternative development program including prevention of poppy planting.

Perhaps I've missed it, but I have found no estimate of real cost of damage inflicted by kinetic activities, which goes beyond destroyed houses, roads and irrigation infrastructure - it may turn out that the funds devoted to post-kinetic activities are a tiny fraction of them.

Coordination between development/relief agencies would come as a welcome surprise - so little of it is practiced on the ground. However, many national agencies, as well as several international ones, have incentives to be outside coordination networks, as a number of outsourced development programs happen mostly on paper. Accountability and anti-corruption management models are under-represented or absent.

6. Public Information Campaign: "Launch a public information campaign stating that the purpose of counter-narcotics is to enhance the livelihoods of the people of Afghanistan." Great, but not limited to PI only. The response of Afghans to more governmental and "Western" PI messages is deeply and, to a large degree, justly skeptical: far more promises have been broken than kept. And in Pashtunwali, a person is as good as his/her word.

PI should be preceded with a consistent delivery of earlier promises, and messages should be based on evidence of delivery. Otherwise any PI campaign will be taken as "again, lies."

New promises should be SMART (Specific, Measurable, Actionable, Realistic, Timed) - and kept. And SMART/ER (Equitable, Relevant to the actual lives of Afghans). People who deliver promises should be directly accountable for keeping them. This is rarely the case.

7. Cynics, Planners and Searchers: The problem of delivery and accountability in international settings often goes in favor of William Easterly's White Man's Burden. Too many internationals are interested in keeping their jobs by delivering neat reports and measuring their achievements by input and process, and not by impact. Others are merely Planners, raising hopes and failing to fulfill their word.

However, there is a potential for change in the field practice of development: a visible line of Searchers appears, who utilize the laws of the global market to develop local economies. And these, for now just a few, programs have actually delivered (like the Kandahar Orchards Story - the multimillion export of pomegranates to Dubai, Delhi and Mumbai.

This is being developed in an entirely new paradigm, which turns the post-WWII developmental paradigm upside down. Applied business models in service of development is a strategy that I am hoping USAID and other development agencies will be taking up increasingly.

It is often a sad and frustrating experience to witness intense human processes from close and to be able to merely touch them, but very little to help or alleviate them. It is sad and frustrating to see interventions that do not work, but then, seeing interventions that do, as rarely as it happens, is an exciting privilege. I can only hope that the major actors in Afghanistan would appreciate and appropriate the strategy you suggest.

Ana Pejcinova, PhD
Independent Consultant
Former Communications Specialist for Alternative Development Program – South (ADP/S), Helmand
Email: ana.pejcinova@gmail.com
Website: www.anapejcinova.org
LinkedIn: http://www.linkedin.com/in/anapejcinova
Skype: anapejcinova 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...

Rubin: More on the Dangers of Poppy Eradication in Afghanistan

Under the provocative title Poverty feeds Afghan drugs trade, Alastair Leithead of the BBC reports from Helmand and Balkh in southern and northern Afghanistan. His findings, like my arguments, contradict the claim by the UN Office on Drugs and Crime (echoed of course by the US) that "opium cultivation is no longer linked to poverty." Leithead interviewed some of those farmers whose "greed and corruption" UNODC claims is responsible for poppy cultivation in Helmand:

The farmers are weeding the fields at the moment in Helmand. It is a family business, and they insist there is no alternative.

"I only have a small area of land and 10 people in my family," one farmer says angrily. "I can only grow enough wheat to last two months on this land, so the only way to feed them is growing poppies."

It is very fertile land, but the farmers complain the cost of fuel to pump irrigation water and the lack of markets and infrastructure makes anything else untenable.

Another man had his poppy crop eradicated last year, but it will not stop him trying again. "I lost my poppies, but those grown by the rich and the powerful aren't touched. So why should I stop growing them?" he asks.

Leithead also paid a call to Balkh, part of the "opium-free north":

After meeting and drinking tea with a number of contacts in different homes outside Mazar, a bearded, cheerful drug dealer took us to a place where they displayed plastic bags of liquid opium. He explained how the traffickers would come round to all the villages, buying what they had before taking it out of the country. "Ordinary people like you and I can't take drugs out of the country," he explained. "Only the foreigners and the big men with contacts can do it. They are stopped at police checkpoints, but they call the police chief, or a minister or the governor and they are allowed to pass."

But poppy cultivation has indeed decreased! Instead:

Although they have lost a profitable crop, for now another alternative is bridging the gap. In a mud compound a short walk away another man goes through the process of stripping the buds off giant cannabis stalks. In the autumn vast forests of marijuana plants scatter the landscape. It is something that has always been done here, but the price has gone up by a factor of four in just a year.

Richard Holbrooke, principal foreign affairs adviser to Democratic Presidential candidate Senator Hillary Clinton, slammed the Bush administration's pressure for crop eradication in the Washington Post:

But even without aerial eradication, the [crop eradication] program, which costs around $1 billion a year, may be the single most ineffective program in the history of American foreign policy. It's not just a waste of money. It actually strengthens the Taliban and al-Qaeda, as well as criminal elements within Afghanistan.

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Poverty and Opium Poppy Cultivation in Afghanistan: Open Letter to UNODC and Reply

Barnett R. Rubin

On Sunday, January 13, I sent a letter (via email) to Antonio Maria Costa, the administrator of the UN Office of Drugs and Crime in Vienna. In that letter I challenged several assertions in UNODC's Afghanistan Opium Survey 2007, in particular these:

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 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.

I have appended the full text of the letter to the end of this post and also posted it here. The main point of my letter was:

I believe that the assertions in the two paragraphs are wrong, not supported by evidence, and are being used in support of a policy that will greatly hinder achievement of the over-riding goals of the Afghanistan Compact, “to improve the lives of Afghan people and to contribute to national, regional, and global peace and security.” The statements also contradict other well known policies of the United Nations: the estimated average per capita income of the residents of Hilmand province, the “richest” province in the supposedly richest part of Afghanistan, is estimated to be $1 per person per day. As you know, the first of the United Nations Millennium Development Goals is to “Reduce by half the proportion of people living on less than a dollar a day.” The United Nations thus has defined the average income in “rich” Hilmand as the threshold of absolute destitution.

UNODC replied by raising a straw man and implicitly admitting that the statement in the Opium Survey 2007 was wrong:

Dear Mr. Rubin,

Thank you for letter (via e-mail) to Mr. Costa dated 13 January. We appreciate the fact that you respect and rely on UNODC's research, and the trouble that you have taken to put forward an extensive letter with a number of thought-provoking points.
We are aware of the policy impact of UNODC's work. We also realize the complexities of promoting both security and development, and the need to eradicate poverty and not just opium.

In due course we will post a discussion paper on the UNODC website (www.unodc.org) that will present some evidence to show that poverty is not the single, exclusive driver of poppy cultivation in Afghanistan. When the paper is uploaded, you may wish to make a link from the UNODC website to your blog.
Mr. Costa will also put forward his views on the subject at the Joint Cooperation and Monitoring Board in Tokyo.

Thank you again for raising these important issues.

Sincerely,

Walter Kemp
Office of the Executive Director
UNODC

I replied:

In your response you say that the discussion paper you plan to post will "present some evidence to show that poverty is not the single, exclusive driver of poppy cultivation in Afghanistan." Such a paper would be welcome, but please note that there is not a single person in the world, including me, who has ever claimed that poverty is the "single, exclusive driver of opium cultivation in Afghanistan." David Mansfield, on whose work for UNODC and others I have relied heavily, argues that the main driver is insecurity, and this is the hypothesis borne out by the data presented in the 2007 Opium Survey.

UNODC's 2007 Opium Survey, however, stated, “opium cultivation in Afghanistan is no longer associated with poverty.” To the average reader this would mean that poverty is not a driver of opium cultivation in Afghanistan. Your statement in your reply to me, implying that poverty is one of several drivers of opium poppy cultivation in Afghanistan, directly contradicts the statement in UNODC's 2007 Opium Survey. I hope your paper will include a correction of the serious error.

The text of my letter follows (PDF version here):

13 January 2008
Antonio Maria Costa
Administrator, United Nations Office on Drugs and Crime
Vienna, Austria
Via electronic mail

Dear Mr. Costa:

I regret that we have not met in over a year, since we testified together at the U.S. House of Representatives Committee on International Relations on September 20, 2006. I am writing now to follow up on an informal query I sent to your office that has remained unanswered, probably because of the informal and indirect way that I sent it.

I am now writing formally to request a response. At the hearing I had the pleasure of meeting the head of your office in New York, Simone Monasebian, with whom I have developed very good cooperative relations. After the publication last summer of UNODC’s Afghanistan Opium Poppy Survey 2007, I wrote to Simone informally to ask her to pass on a query to UNODC headquarters. I asked UNODC to provide the empirical basis on which the Survey made the following statements:

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 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.

I have not yet received an answer to this informal query, which, as I noted, could easily have been misplaced. I am therefore writing to explain why I consider this question to be important and to request an answer by January 21, in advance of the February 6, 2008, meeting of the Afghanistan Joint Cooperation and Monitoring Board, which will meet in Tokyo to discuss action on counter-narcotics. I consider this matter important, because these two paragraphs are cited by proponents of expanded forced eradication of the opium poppy crops. I believe that the assertions in the two paragraphs are wrong, not supported by evidence, and are being used in support of a policy that will greatly hinder achievement of the over-riding goals of the Afghanistan Compact, “to improve the lives of Afghan people and to contribute to national, regional, and global peace and security.” The statements also contradict other well known policies of the United Nations: the estimated average per capita income of the residents of Hilmand province, the “richest” province in the supposedly richest part of Afghanistan, is estimated to be $1 per person per day. As you know, the first of the United Nations Millennium Development Goals is to “Reduce by half the proportion of people living on less than a dollar a day.” The United Nations thus has defined the average income in “rich” Hilmand as the threshold of absolute destitution.

In my discussions with policy makers about counter-narcotics in Afghanistan, I have at times encountered a dismissive attitude toward research that does not conform to their policy preferences and “academic” forms of argument in general. But UNODC has an extensive and highly respected research department full of academic experts, for whose work I have enormous respect and on which I have often relied. While policy makers cite this work because it justifies what they want to do rather than because they believe the analysis of United Nations Agencies (you may compare your experience with that of your colleague Mohamed El Baradei of the International Atomic Energy Agency), I believe that I owe your researchers a reasoned response based on data and established principles of analysis. I hope you will bear with me as I proceed through this exercise.

The first paragraph makes two empirical assertions:

1. That “Hilmand, Kandahar and three other opium-producing provinces in the south are the richest and most fertile [provinces in Afghanistan], especially compared to “the much poorer northern region.”
2. That because in the past few years there are trends toward reduction of poppy cultivation in the north and its concentration in southern provinces, “opium cultivation in Afghanistan is no longer associated with poverty.”

Nowhere does the report define what it means by “rich” and “poor” provinces or how this is measured. David Mansfield, a researcher who has worked for UNODC in the past, with his co-author, Adam Pain, believes that the assertion is based on “the finding that households in these provinces reported higher average annual incomes ($3,316 for poppy-growing and $2,480 for others) to UNODC surveyors than those in the north ($2,690 for poppy-growing and $1,851 for others) or centre ($1,897 for poppy-growing and $1,487 for others).” There are many ways in which this data is inadequate as a justification for policies such as requiring forced eradication of poppy crops in insecure areas under Taliban control adjacent to areas of Pakistan where Afghan Taliban, Pakistani Taliban, and al-Qaida are well positioned to exploit discontent in either country. Mansfield and Pain mention some of those technical and academic points such as lack of reporting of sample size and statistical significance. They also note that household income is notoriously difficult to estimate and unreliably reported. I will not repeat their arguments here, though I would appreciate a response to them.

The argument fails primarily because of the ecological fallacy, an error of inference from aggregate statistics that I warned my students against back when I was an assistant professor of political science. The arguments make assertions about the “north” and “south” by aggregating provincial averages for all provinces. Yet is it not true that every province in the south is “richer” even by this flawed measure, than every province in the north. Mansfield and Pain note:

Household data produced by the Central Statistics Office of Afghanistan in 2004 and collected by the 2005 National Risk and Vulnerability Assessment (NRVA) rank the southern provinces relatively low in terms of social and economic well-being. Of the 34 provinces, Helmand ranked 6th, Kandahar 15th, Uruzgan 32nd and Zabul 33rd. The seven northern provinces ranked higher: Jawzjan 1st, Balkh 9th, Baghlan 11th, Samangan 13th, Bamyan 18th, Faryab 25th and Sar-i-Pul 31st. These rankings do not substantiate the argument that farmers in the south are significantly wealthier than those elsewhere in the country. Moreover, in 2005, Helmand reported some of the country’s worst school enrolment rates for children aged between 6 and 13, and one of the highest illiteracy rates. Given the intensity of the conflict in the south, these indicators are likely to have dropped further over the two years since the data were collected.

Let me simplify. Of these eleven provinces, the estimated ranking from most to least well-being is:

1. Jawzjan (N)
2. Hilmand (S)
3. Balkh (N)
4. Baghlan (N)
5. Qandahar (S)
6. Samangan (N)
7. Bamyan (N)
8. Faryab (N)
9. Sar-i Pul (N)
10. Uruzgan (S)
11. Zabul (S)

I am not sure which is the fifth southern province to which UNODC is referring. The inclusion of Farah, Nimruz, or Paktika would not change the overall picture, which is that there is much greater difference in social and economic well-being within both the south and the north than between the two regions considered as a whole.

This fallacy is related to the major conclusion of the paragraph, which is frequently cited by proponents of eradication: that “opium cultivation in Afghanistan is no longer associated with poverty.” UNODC has produced no evidence to support this assertion, and the available evidence contradicts it.

UNODC’s argument is: higher average household incomes across multi-provincial regions are correlated with increased poppy production in those multi-provincial regions. Therefore poppy production is not associated with poverty. Indeed the second paragraph goes even further, stating that poppy cultivation is due to “greed and corruption.” This is a very grave conclusion, with major policy implications, which should not be taken lightly on the basis of flawed data and faulty reasoning, compounded by negative stereotyping. Yet, in my view, this is what UNODC has done.

Decisions about poppy production are not made by regions consisting of several provinces that are closely identified with particular ethnic groups. Nor are they made by provinces. They are made by households. This too is overly simplified, as any piece of farmland may be owned by one family, sharecropped to another, and may employ labor from yet another family. Just as there is greater variation within north and south than between them, so there is greater variation within each province than there is among them. There are many desperately poor households in even the “richest” provinces. Valid inferences about the relationship of poverty to poppy cultivation must be based on household-level data. Research by Mansfield, the World Bank, and others using household level data is quite clear. I am sure that your research department is quite familiar with the research showing that dependence on opium poppy cultivation is highest among the poorest households. To put it statistically, among households, poverty is correlated with dependence on opium poppy cultivation.

Therefore, those dependent on opium poppy cultivation in Hilmand are likely to be the poorer households in that province, those with an income less than one dollar per person per day. Does UNODC consider such households to be rich, greedy, and corrupt because households in Balkh have an average income of only $0.70 per person per day?

The second paragraph is more complex, as it is phrased so that it can be subject to several interpretations. The key sentence is “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.”

This statement is true in the following sense. As research by scholars such as Francisco Thoumi of Colombia has demonstrated, the cultivation of raw materials for illicit narcotics migrates to those naturally suitable areas that are most insecure. Hence opium poppy cultivation has migrated from other countries to Afghanistan. Furthermore, within Afghanistan it has migrated from the more secure areas to those where the insurgency is more concentrated. The one way that north and south are indeed very different is that the insurgency is much more widespread in the south and security is worse. That, as you know, is due to the geographical position of the southern Afghanistan rather than its alleged wealth.

Insecurity leads to poppy cultivation in part because, as UNODC says, national authorities and international agencies cannot work where it is insecure. As a result, the government and international community cannot provide security and all of the other supportive public goods necessary to agriculture and other forms of employment, such as financing, technical assistance, and marketing. Instead all of these are supplied by the drug industry.

I will make one parenthetical remark here. The U.S. government says that this does not apply to Helmand, which, if it were a country, would be the fifth largest recipient of U.S. aid in the world. This is a very deceptive statistic. What the U.S. government measures is the amount that it has spent (or authorized) for projects located in Helmand. The single largest and most expensive project in Afghanistan today is the Kajaki Dam, located in Helmand Province. The bulk of U.S. expenditures in Helmand are for this project. As you know, despite the hundreds of millions of dollars spent on that project, it is not yet operational. As the people of Helmand have yet to receive any benefits from this project, it is deceptive to characterize them as its “recipients.”

I have no quarrel with characterizing drug traffickers and their protectors as greedy and corrupt. While policy should be based on analysis of what actions are effective, rather than value judgments alone, certainly this characterization of drug traffickers and their protectors provides moral support for effective measures of interdiction. In my discussions with policy makers, however, they have applied these terms to cultivators of opium poppy in Helmand and used the UNODC statement as justification for eradication. Does UNODC consider opium poppy cultivators in Helmand to be primarily driven by greed and corruption?

Of course, even if that were true, it would not be a reason to carry out eradication, as policies should only be carried out if they are effective. That is not the subject of this note. But I would like to point out that there is a relationship between what I consider to be UNODC’s erroneous arguments and policy on eradication.

The National Drug Control Strategy of Afghanistan states that the Afghan government will “conduct targeted and verified eradication where there is access to alternative livelihoods.” Proponents of increased forced eradication have taken the two paragraphs from the UNODC Survey above as evidence – indeed proof – that Helmand province is such a place and that eradication should therefore be carried out there. I do not think that the fact that the U.S. has spent hundreds of millions of dollars on an unfinished project in a province where the average income per person is one dollar a day and where insecurity has prevented the delivery of education and healthcare constitutes evidence that in Helmand province “access to alternative livelihoods” is available. Does UNODC consider that access to alternative livelihoods is available in Helmand Province and that it therefore should be subject to increased forced poppy eradication?

Some policy makers are aware of these problems and try to compensate for them by arguing that eradication will be targeted against the truly rich, corrupt, and powerful. They have not explained to me yet how they will target the rich owners of land cultivated with poppy without targeting their poor sharecroppers and laborers, who will bear the brunt of the cost and have no access to alternatives. As UNODC’s own outstanding research has documented over the years, the opium economy creates powerful ties of dependency between those who control the economy and the poor who are dependent on it.

I believe that the misleading presentation of research by UNODC is providing a justification for a very mistaken and dangerous policy in Afghanistan. I would appreciate any explanation you can provide of why the assertions in the UNODC Afghanistan Opium Poppy Survey are correct. If I receive a reply by January 21, I will post both this letter and your reply to my blog and circulate them to my mailing list. If I do not receive a reply by that time, I will circulate this letter while awaiting your reply.

Sincerely yours,

Barnett R. Rubin

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Erroneous Talking Points on Opium Poppy Crop Eradication in Afghanistan

The major donors and troop contributors to Afghanistan will meet in Tokyo on February 6, 2008, to review progress in Afghanistan. One major theme of the meeting will be counter-narcotics, as opium production increased last year. The U.S. position, as stated in its official counter-narcotics strategy for Afghanistan, demands forced eradication of a significantly larger portion of the crop, especially in areas under Taliban control. In the absence of aerial eradication, which the Afghan government has rejected, this requires forced eradication, using troops and police to protect manual eradicators and possibly fighting in order to obtain access to areas for eradication. Though there is agreement on many other areas of counter-narcotics policy, many in Afghanistan believe that such forced eradication is likely to backfire and strengthen the insurgency.

I have concluded from my discussions with US officials that they believe that the expansion of the opium economy in southern Afghanistan, and especially in Helmand province, has strengthened the Taliban and that crop eradication would therefore weaken the Taliban by depriving them of funds. I believe that this argument is wrong and that forced eradication in hostile areas will not defund the Taliban or increase security. It will weaken the government and strengthen the insurgency. Eradication is part of a balanced counter-narcotics policy, but gaining control of territory and providing security and starting development come first.

It is wrong to imply, as some US officials do, that the Taliban have become so powerful in Helmand because the GoA failed to implement its CN policy. The Taliban became powerful in Helmand because until 2006 the US put only 150 Special Forces there to catch terrorists and did little to provide security or development to the population. Consequently the government of Afghanistan and aid organizations could not work there. Furthermore, the U.S. ignored warnings about the development of Taliban leadership and infrastructure in Quetta, Pakistan, right across the border, and took at face value the statements of the Government of Pakistan, which, according to Pakistan's Daily Times, are believed by no one in Pakistan itself.

So when the British arrived to lead the NATO deployment to Helmand in 2006, they found that Taliban controlled most of the province, poppy cultivation was expanding because of the lack of government control, and the Taliban were safely ensconced right across the border in Baluchistan. Meanwhile, the U.S. government was focused on Iraq.

Other erroneous talking points on this subject:

1. The US and UNODC claim that poppy cultivation is not related to poverty because southern provinces where poppy is grown are richer than northern provinces where it has been reduced. Wrong. First they are using average income to measure poverty, which is highly inaccurate and not the preferred measure. Even using this flawed measurement, official statistics show that the northern provinces of Jawzjan, Balkh, Samangan, and Baghlan are all “richer” than the southern province of Qandahar. All seven northern provinces are richer than the southern provinces of Zabul and Uruzgan. The average income in Helmand is indeed estimated to be greater than in Balkh, amounting to $1 per person per day rather than $0.70 per person per day. A dollar a day, the average income in "rich" Helmand, is the internationally accepted definition of destitution. And within each province, the poorest people are the most dependent on poppy cultivation. In any case, the argument against eradication is not bleeding-heart liberal (or Christian) sympathy for the poor. It is analysis that the net result of forced eradication will be greater insecurity and a stronger insurgency with no negative effect on Taliban operations or financing.
2. The US and UNODC claim that the fact that poppy cultivation is concentrated in the south, where the insurgency is, proves that the insurgency grows because of the drug trade. Wrong. Poppy cultivation follows insecurity. Since the Taliban control so much of Helmand,where natural conditions favor poppy cultivation, poppy is grown there. Natural conditions also favor poppy cultivation in Badakhshan and Nangarhar, but because the insurgency is weaker in these provinces, security is better and communities have more alternatives to the drug economy.
   
3. Crop eradication will deprive the Taliban of funds. Wrong. Did the Taliban lack money in 2000-2001, when they decreased opium poppy cultivation by 95%? They continued to tax trafficking of existing stocks. If the government with NATO back-up manages to eradicate in Helmand this year, the first year or two trafficking will continue from stocks. After that, either poppy will be grown elsewhere and trafficked through Helmand, at a higher price, or the government will lose control of Helmand and poppy will come back. Crop eradication does not defund the Taliban.
4. The successful capture of Musa Qala district from the Taliban in northern Helmand shows that eradication will defund the Taliban, because the area had been turned into a heroin production center to fund the Taliban. U.S. Ambassador Wood stated that "in Musa Qala Afghan and international forces found a reported $500 million in street value of drugs warehoused in the district." The use of "street value," (i.e. price to the final consumer in Europe) exaggerates the local value of the drugs by a factor of at least 20. In fact the seized narcotics in Musa Qala show that forced eradication is not necessary for tackling the link between insurgency and narcotics. There was no eradication in Musa Qala. A successful political-military operation (negotiation with Taliban leader Abdul Salaam, who came over to the government side, plus the military operation) enabled the government to get control of the area, seize drugs, and destroy heroin labs. This is interdiction, not eradication. If the government had forcibly eradicated the crop, would Mullah Abdul Salaam have come over to the government side? Would the operation have succeeded? Now the government and international agencies can start programs to help people in Musa Qala and ask them to refrain from planting poppy.
5. Helmand has received so much money in US aid that if it were a country it would be one of the leading aid recipients. This is the kind of argument that sounds good in Washington and rings false in Afghanistan. What is true is that the U.S. has appropriated and partly spent that amount of money for projects in Helmand. The largest project in Helmand is the Kajaki dam hydro-electric project, which I think is the single biggest project in Afghanistan. Much of the money for Helmand has been spent on equipment and operations for the Kajaki Dam, which is not yet operational, largely because the Taliban managed to entrench themselves around it, thanks to the Bush administration's neglect of Afghanistan. No one in Helmand has yet “received” any benefit from these expenditures, so it is deceptive to claim that they are "recipients" of this amount of aid. The implication that Helmandis are greedily enriching themselves off of US aid and then enriching themselves further with poppy (and then asking the Taliban to come and protect them!) is false. It also inflames regional and ethnic conflict in Afghanistan, which is not helpful.

The turning of a major Taliban commander to the government side in Helmand, the successful seizure of large quantities of heroin, and the destruction of about 60 heroin refineries in Musa Qala are successes. Forced crop eradication before the government can provide security and economic opportunity will reverse these successes. Read more on this article...

Economists Weigh in on Counter-Narcotics in Afghanistan

Amid all the ideologically-driven policy proposals about narcotics in Afghanistan, the Financial Times has done reality a favor: it has published a proposal from two real-life economists, about how to use economic policy to help Afghans move out of illicit drug production.

Edmund Phelps, 2006 Nobel laureate in Economics, and Graciana del Castillo (ex-IMF), both now of Columbia University, note the elementary but often ignored point:

Lack of productive alternatives [not GREED! -- BRR] has driven farmers to turn to growing poppies. Drug-traffickers support farmers by advancing credit and sharing some of the risks of production. Some farmers can survive only by selling their crops in advance. If the crops fail, they become in debt to the traffickers, creating a vicious circle.

Phelps and del Castillo repeat just what the Afghan government has been saying about the massive failures of the international aid program:

Since US military intervention and the Bonn agreement of late 2001, government tax revenue has averaged only about 5 per cent of gross domestic product. Warlords have been left to control a large percentage of customs revenues collected at the borders. Furthermore, donors channel a large part of their aid – up to 75 per cent at times – outside the government budget or control. As a result, the Karzai government has been unable to provide basic services and lawful employment. Un­fulfilled expectations of better living conditions and the thriving drug business have put the Taliban back into control of large parts of the territory.

The international community is not helping Afghanistan to stand on its own feet.

Instead of asking the tiresome, patronizing, ignorant and ultimately destructive question, "How do we stop greedy Afghan farmers from growing such a profitable crop," they ask the right question:

Is it possible to turn the entre­preneurial spirit of the Afghans away from producing drugs into lawful production such as cotton and textiles?

After briefly dismissing the pillars of conventional anti-drug policy (as I did at greater length but perhaps not to greater effect in a series of posts here), they propose solutions based on a reformed aid system and creating markets for Afghan products (not just crops):

Both the US and the European Union assist their farmers through loan and price support programmes and other incentives. If donors want to “do good”, they should support a two-pronged economic reconstruction strategy.

First, donors should channel reconstruction aid through the budget to enable the government to provide subsidies or other incentives (such as price support programmes) to replace poppies with lawful crops such as cotton, which was produced in the past. The UK government is at present considering price support for Afghan farmers. Other donors should do the same.

Second, once production of lawful crops increases, donors should provide know-how, technical support and credit for the local industrialisation of such crops. At the same time, donors should open their markets through special preferential tariff treatment to light, labour-intensive manufactures from Afghanistan, including textiles.

On February 6, all the major donors and troop contributors will meet with the Afghan government in Tokyo for the seventh meeting of the Joint Coordination and Monitoring Board of the Afghanistan Compact. The main subject will be counter-narcotics. The Afghan government is likely to present proposals similar to what Phelps and del Castillo suggest.

I'd like to hear from the U.S. presidential candidates on this.

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Fighting Drugs and Building Peace

The Friedrich Ebert Stiftung has published a report I co-authored with Alexandra Guaqueta on a conference on how to implement counter-narcotics policies in a conflict or post-conflict situation. The conference was co-sponsored by FES, the Center on International Cooperation (NYU), the Fundacion Ideas para la Paz (Bogota), and the Open Society Institute. The conference also benefited from support from the UN Office on Drugs and Crime.

FES describes the report as follows:

A frequently overlooked feature of the fight against drugs is the linkages between the production of illegal narcotics and the political dynamics in post-conflict countries. Afghanistan and Colombia are cases in point.Post-conflict situations not only attract the cultivation of crops used for the production of illegal drugs. Events in Guinea-Buissau and Haiti illustrate that the same sad logic applies to the international drug mafia’s selection of trading “hot spots”.It is against this background that a debate has ensued on the policy coherence between the international community’s fight against drugs and its parallel efforts to sustain peace in post-conflict countries.

Download the pdf file here. Read more on this article...

Globalization and Corruption

I've been in Afghanistan and am now in Pakistan, and neither my schedule nor the speed of my internet connections have facilitated blogging. I will offer some updated thoughts on whether I am optimistic or pessimistic about Afghanistan (and Pakistan) -- the answer is still "no" -- as soon as possible.

Meanwhile I received a short article from Yale Global Online that includes a very cogent analysis of the drug problem in Afghanistan by someone who has never concerned himself with Afghanistan, as far as I can see. In an article entitled Globalization and Corrupt States, World Bank economist Branko Milanovic explains that the globalization of trade and transport create the conditions for the corruption of weak states. The prohibition of certain goods and services (e.g. drugs, prostitution) that can be traded or provided globally at relatively low cost creates economic returns for businessmen who can create or exploit conditions of illegality. The market assures that the production of prohibited goods and services become concentrated in places enjoying what I have called a "comparative advantage in the production of illegality and insecurity."

In such countries illegal industries grow and dominate the economy. The political result is predictable:

Once organized crime and its supporters become the largest employers in the country, they play the same role that a more conventional business plays in other countries. They try to influence the political process. Moreover, they need to control the political arena - election of presidents and parliaments - even more tightly than "normal" business people because their very existence depends on having a government willing to tolerate violation of international rules as the country's main activity.

Corruption in such countries is not due to "bad governance" that can be fixed by improving the political structures:

Governance structures respond to underlying incentives, and to expect an honest person to rise to power in a corrupt state is akin to expecting a person with no financial backing from big business to be elected president of the US. In both cases, the outcome of a political process reflects the country's underlying economic conditions.

I was once on a panel on Afghanistan in Washington, where a questioner from the International Crisis Group asked a well-informed question about the presence of known drug traffickers in the Afghan parliament. He wanted to know why such people had not been excluded (using the passive voice of course, enabling him to avoid thinking about who could do the excluding). I replied that it was not possible to hold a free election anywhere while excluding the representatives of the country's largest industry. My co-panelist, the native of a poppy producing village in Badakhshan, smiled sadly.

Milanovic's proposal:

Legalize the currently illegal activities like prostitution and drug use and modify the often draconian US and European immigration laws that stimulate human trafficking.

The key is that meaningful reforms do not begin in the corrupt states themselves, but in the rich world that is the main consumer of illegal goods and services.

Read the article. 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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