Tuesday, 28 November 2006

AFGHANISTAN\'S \"OPIUM ECONOMY\" UNPRECEDENTED: UN, WORLD BANK

Published in News Digest

By empty (11/28/2006 issue of the CACI Analyst)

The scale of Afghanistan\'s \"opium economy\" is virtually unprecedented, a UN and World Bank report said Tuesday, warning it threatens to ruin the country\'s attempts to rebuild after years of war. Efforts to cut back Afghan opium production -- which makes up more than 90 percent of the world total -- were being hampered by corruption, with wealthy opium producers paying bribes to stop eradication, it said. The \"tightening environment\" against the trade was seeing it consolidate around \"fewer, more powerful, and politically connected actors\", with a popular Islamic money transfer system used to launder drug funds.
The scale of Afghanistan\'s \"opium economy\" is virtually unprecedented, a UN and World Bank report said Tuesday, warning it threatens to ruin the country\'s attempts to rebuild after years of war. Efforts to cut back Afghan opium production -- which makes up more than 90 percent of the world total -- were being hampered by corruption, with wealthy opium producers paying bribes to stop eradication, it said. The \"tightening environment\" against the trade was seeing it consolidate around \"fewer, more powerful, and politically connected actors\", with a popular Islamic money transfer system used to launder drug funds. Afghanistan\'s opium production jumped by 50 percent this year to a record 6,100 tonnes, the UN Office on Drugs and Crime said in September, even after internationally-backed counter-narcotics efforts costing billions of dollars. The opium makes most of the heroin used in some neighbouring countries and in Europe, where 7,000-8,000 deaths from the drug are registered every year. \"The magnitude and importance of Afghanistan\'s opium economy are virtually unprecedented and unique in global experience,\" the report said. Opium takes up less than four percent of the total cultivated area in Afghanistan, with only 13 percent of the population involved in cultivation, it said. But the opium economy still accounts for around one-third of total economic activity, with opium gross domestic product estimated at between 2.6-2.7 billion dollars in the past two years. It is the country\'s largest source of export earnings and a major source of income and employment in rural areas, also supporting the balance of payments and indirectly -- through customs duties on drug-financed imports -- government revenues. \"The sheer size and illicit nature of the opium economy mean that not surprisingly, it infiltrates and seriously affects Afghanistan\'s economy, state, society, and politics.\" It was also a \"massive source of corruption\" that undermined public institutions, especially in the security and justice sectors. \"There are worrying signs of infiltration by the drug industry into higher levels of government and into the emergent politics of the country. \"Thus it is widely considered to be one of the greatest threats to state-building, reconstruction, and development in Afghanistan,\" the report said. (AFP)
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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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