How Opium Is Crashing Afghanistan’s Economy

by Joshua Foust on 11/28/2006

The World Bank has issued a new report that details how opium eradication efforts in Afghanistan are failing, and how these are contributing to the continued unwinding of the country. It’s all fairly standard stuff—corruption, buy-offs, drug lords and crime, local warlords, and so on.

The good news is that, though opium production has risen nearly 50% over the past year, it makes up only about 33% of the economy. This is down from 2004, when the opium trade was pushing 60% of Afghanistan’s total (not just informal) economy. Similarly, though 90% of global opium still comes from Afghanistan, this is down from the 95% quoted in many studies two years ago. Though moving in the right direction, these numbers are still deeply discouraging.

The key findings are important:

  • Eradication efforts should be concentrated in areas where alternative livelihoods are available
  • Focus interdiction efforts against drug traffickers and their sponsor, as well as opium-refining facilities
  • Interdiction efforts need to target high-level profiteers whose wealth magnifies their potential for corrupting the state

Seriously, they’re just repeating themselves at this point, which means its kind of depressing to see they haven’t yet stepped out of the “interdiction and eradication” mindset. I noted before the problems with the current opium policy, and the World Bank’s report here seems to be different ways of achieving the same old failed policy (just like Colombia!).

A real solution to opium has to involve some form of partial legitimation—as in India and Turkey, which resulted in a dramatic reduction in drug cultivation. Similarly, a commercial aspect must be present, such as introducing pharmaceutical farms or buyers. But in the final solution, there is so much opium being grown and sold that alternatives must be found—orchards of apricots and pomegranates, for example, can, with comparatively little subsidization, bring farmers equivalent dollars per hectare—at least, at 2004 opium prices. The very interdiction and eradication efforts the World Bank is pushing (especially in areas where subsidized alternatives might have an impact) have served only drive up the price of opium, so that even while Afghanistan’s economy struggles to grow half a percentage point, opium farmers make four to five times more per kilogram than they did in 2003.

To summarize: the World Bank’s policy hasn’t worked. It won’t work. Doing something new, even if it involves eating heavy dollar losses (in buy out programs) must be tried if there is to be any realistic chance of progress.

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This post was written by...

– author of 1848 posts on 17_PersonNotFound.

Joshua Foust is a Fellow at the American Security Project and the author of Afghanistan Journal: Selections from His research focuses primarily on Central and South Asia. Joshua is a correspondent for The Atlantic and a columnist for PBS Need to Know. Joshua appears regularly on the BBC World News, Aljazeera, and international public radio. Joshua's writing has appeared in the Columbia Journalism Review, Foreign Policy’s AfPak Channel, the New York Times, Reuters, and the Christian Science Monitor. Follow him on twitter: @joshuafoust

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