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Mainstream, Vol XLVIII, No 8, February 13, 2010

Opium Trade and Corruption: Manifestations of Afghanistan’s Multidimensional Crisis

Thursday 18 February 2010, by Bashir Mohammad

All efforts to build a sustainable economic infrastructure and functional democracy in Afghanistan are currently under threat from widespread corruption and the sway of illegal drugs in the country. Unless drug-related corruption—which happens to be one of the most intractable problems in the state—is tackled in right earnest in a concerted manner at the levels of both the provincial and district governments, it cannot be rooted out; and the failure to do so would spell disaster as the very survival of the Afghan nation is at stake.

For over two hundred years the international geopolitical situation has prevented the consoli-dation of an effective Central Government in Kabul primarily because it is this situation which has exacerbated Afghanistan’s regional warlor-dism and particularistic nationalism, the twin menaces working against Afghan unity. And the failure of the state in the past quarter century has, on its part, helped in the rise of a burgeoning opium economy.

In fact illicit opium trade is one economic activity that has not only survived but actually flourished in all these 30 years of conflict and hostilities the country has passed through. It now accounts for more than half of Afghanistan’s GDP and corrupt government officials at every level wallow in it. Tribal warlords control the poppy-growing areas and use the proceeds from it to fund their militias and arms purchases. Through the poppy/opium value chain these warlords control access to land and credit for much of the rural landless populace. Thus share-croppers eking out their existence under severe adversities are compelled to grow poppy to gain access to the land and credit they desperately need to support their families; a part of the land they utilise to grow other crops as well for their own use.

Since the end of 1979 when the erstwhile Soviet Union intervened in Afghanistan, the opium production in the South-West Asian state has increased more than 15-fold. By 2000 Afghanistan was the source of 70 per cent of all illicit opium produced across the world. There was a decline in opium production in 2001 but it rose to high levels the following year making Afghanistan the world’s largest producer (followed by Myanmar and Laos), accounting for almost three-quarters of global opium production.

Traditionally, the bulk of opium/poppy cultivation was in the south (Helmand province, 50 per cent of the total cultivation in 2000) and the east (Nangarhar, 24 per cent). In 2001 the Taliban ban pushed the output to the north (Badakshan, 83 per cent, though of a far lower total). In 2002 the largest areas under cultivation were again Helmand (40 per cent), Nangarhar (27 per cent) and Badakshan (11 per cent), followed by Uruzgan (seven per cent), Kandahar (five per cent) and Ghor (three per cent). Thus, 93 per cent of the area under poppy cultivation is restricted to six provinces that have not yet complied with the ban issued by the government in January 2002.

The area under poppy cultivation is a tiny fraction of the arable land in Afghanistan (0.9 per cent in 2002). Even in the poppy growing villages, only eight per cent of the arable land was used for opium cultivation in 2000, though in Helmand and Nangarhar the figures were significantly higher (about one-third of the arable land). The bulk of poppy cultivation took place on irrigated land in the south, where productivity can be three-to-four times higher than in the rain-fed provinces of the north.

Most ethnic groups are involved in opium production, though there seems to be a concentration among Pashtun and Tajik villages located in the main opium producing regions of southern, eastern and northern Afghanistan. Opium cultivation spread throughout the country in the 1990s, following the ethnic distribution of itinerant workers who disseminated the know-how for opium production. Trafficking then spread to neighbouring countries, facilitated
by ethnic links across borders: Pashtuns in Pakistan; Baluchis in Pakistan and Iran; Tajiks in Tajikistan; Uzbeks in Uzbekistan; and Turkmens in Turkmenistan.

Under the leadership of President Karzai, by mid-2008 the Government of Afghanistan had made some progress in combating narcotics. However, drug trafficking remains a serious threat to the future of Afghanistan, contributing to widespread public corruption, damaging legitimate economic growth, and fuelling violence and insurgency. A successful counternarcotics strategy in Afghanistan hinges on maintaining security, building public capacity, attaining local support, and actively pursuing the joint counter-narcotics strategy. Poppy cultivation in 2008 continued to be marked by the divide between the increasingly poppy-free northern provinces and the insurgency-dominated regions in the south. Through political will, and by using a mixture of incentives and disincentives, Governors in key northern provinces like Badakshan and Nangarhar have significantly reduced poppy cultivation.

Inspired by the Nangarhar model, the newly appointed Governor of the southern province of Helmand took steps to implement the first truly serious counternarcotics campaign in the province. However, drug control efforts in this area of pro-nounced poppy cultivation have been thwarted by the heavily entrenched Taliban centres of power. In 2007 more than half of Afghanistan’s illegal poppy crop was cultivated in Helmand province. Difficult security conditions greatly impede counternarcotics operations, in the south and south-west provinces in particular, areas dominated by the insurgency and organised crime groups and where 85 per cent Afghan poppy is under cultivation.

Corruption

Several factors do not bide well for the Karzai Government’s tenuous hold on power. The government is increasingly unpopular throughout the country, despite its attempts to build support with various giveaway programmes, such as free seed distribution. It is widely seen as corrupt and having embraced the very warlords who pillaged the country in the lawless years preceding the Taliban and impotent in the face of rising terrorist violence.

Corruption and collusion between government and business is believed to be commonplace. Business is conducted on the basis of personal, familial, ethnic and historical relationships, and businesses must negotiate a maze of bribes, taxes and murky government requirements that raise the risks and costs of doing business. Those businesses with the right connections are able to sidestep many of these costs and risks. They are also more successful in getting access to land and capital, two critical constraints in the business enabling environment of Afghanistan. However, for small businesses and potential new investors or entrepreneurs without political influence, there are huge and sometimes insurmountable barriers to entry.

Rural Afghans are extremely conservative and generally resistant to new ideas from the outside. The resistance seems to come from a combination of limited education, decades of isolation from modern advances, the necessity for extreme self-reliance to survive protracted periods of conflict, and the distrust, suspicion and presumption of corruption that permeates society after so many years of conflict.

Some experts assert that the Afghan market and economy are actually highly regulated by informal social norms which restrict competition and participation and ultimately result in a consolidation of market benefits in the hands of the already wealthy and powerful. According to these experts, the major traders in today’s market are the same ones who emerged in the 1970s and operated subsequently under the mujahideen and the Taliban, often from Pakistan. They are a relatively small group of businessmen who dominate the sectors in which they are involved, having access to capital and political influence that small and medium-sized businesses do not. Most deal in many commodities within their region of operation, for example, carpets, dried fruits and nuts, televisions and fertilisers—depending on price and demand—allowing an exporter of carpets to import televisions to get his money back into the country.

It has been observed by these same experts that many of the traders operating today origi-nally obtained their capital base through illicit activities, even though they may now be dealing mainly in licit commodities. Whatever they are involved with now, they must maintain good relationships with those involved in the illicit economy because they are often the ones who control the supply routes and transport systems.

The judicial branch is quite weak and regarded as corrupt. Property rights are a major constraint on business expansion. Land ownership is required as collateral for bank loans, and many people do not have title to the land they have occupied for generations. Other land has been appropriated by the military, police or govern-ment. The popular perception is that property rights are for sale by the government to insiders with influence. Thus acquiring land or the rights to use land for business purposes is regarded as a bureaucratic ordeal fraught with many risks, including the possibility that the government might grant title to land but then re-appropriate it after invest-ments have been made. Whether this is actually a prevalent practice or not, the perception in this regard seems to be a strong hindrance to new investments.

The war criminals of the post-Soviet period have gone unpunished; indeed, many of the worst offenders are now members of the current local, provincial or national administrations. This has angered the population, sowing mistrust and bitter disillusionment that yet another corrupt, predatory regime has replaced the last. The Afghan National Police is part of the problem; ill-trained and badly paid, they are notorious for preying on the citizens they are supposed to protect. Security is a problem throughout the country, and getting worse in the east and south-east. Insurgents attack the population, govern-ment and international peacekeeping forces. The police are widely seen as incompetent and corrupt, allowing criminal behaviour to increase and perpetraing a fair amount of it themselves. Police, like bandits, are said to stop trucks hauling produce to market and order them to pay “taxes” and bribes before they can proceed further.

Hence the country is experiencing a serious situation on several fronts and the ongoing hostilities that began since the launching of the US and its allies’ War on Terror after the 9/11 terror strikes in the heart of America have, instead of helping Afghanistan stand on its own feet, pulled it more into the vortex of crisis. The mounting opium trade and all-pervasive corrup-tion are manifestations of the multidimensional Afghan crisis whose intensity does not appear to get reduced with the passage of time; rather it is regrettably on the rise.

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