Most discussion of Afghanistan's mammoth opium trade treats the problem as if it were Afghanistan's alone. Pundits blame corruption in the Karzai government. Aid workers want to help poppy farmers grow alternative crops. The military wants to kill or capture 50 traffickers who collaborate with the Taliban.
But too few take note of the fact that the vast majority of profits are actually earned outside Afghanistan. Addiction, Crime and Insurgency, a new report from the United Nation's Office on Drugs and Crime (UNODC), pulls together some eye-popping statistics in an attempt to refocus attention on the broader consequences -- and reach -- of the trade.
The report notes, for example, that Afghan farmers earn an estimated $1 billion annually off the country's 7,000 metric ton opium crop. Sounds like a lot, right? Not really: By the time they reach their final destinations, global sales of Afghan opiates are now believed to top $58 billion, according to the report. "We take three percent of the revenue," President Karzai is quoted as saying, "and 100 percent of the blame."
I'm not letting the Afghan leader off the hook for his reluctance to investigate corruption claims within his government and his own family. But it's fair to say he's not alone in the region. About 40 percent of the opiates produced in Afghanistan get smuggled out through Pakistan, now designated a major trafficking country by the U.S. government, and about one third passes into Iran, which consumes 42 percent of the world's opium. The rest appears to leave through Central Asian states and possibly India, the report says. But there has been little media attention on drug-related corruption in neighboring states, although it's widely known to be a significant problem across the region. There have been no public inquiries.
There is also widening evidence that extremist groups in the wider region -- some of them linked to al Qaeda -- are protecting drug shipments once they leave Afghanistan, precisely the point when they multiply in value. Recent seizures, like the Aug. 23 operation in Karachi that linked the Pakistani extremist group Lashkar e Jhangvi to smuggling heroin, prove that it's not just the Taliban tied to dope. The U.N. reports the problem is heading north as well: "The perfect storm of drugs, crime and insurgency that has swirled around the Afghanistan/Pakistan border for years, is heading for Central Asia," the report says.
But there's a broader issue that often gets ignored about the narcotics trade: The real money isn't in smuggling drugs, it's in laundering the dirty money. As UNODC Executive Director Antonio Maria Costa puts it: "The Afghan drug economy generates several hundred million dollars per year into evil hands -- some with black turbans, others with white collars."
This is an issue that remains misunderstood in Washington. Recent reports by the Washington Post and the New York Times indicate that the military and intelligence community continue to label the money flowing to insurgents and extremist groups in the AfPak region as "donations." I'm not suggesting the Taliban and al Qaeda get no money from ideological sympathizers, but it's clear from my research that some of these funds represent balance of payments for drugs shipments and other smuggled commodities. As I argued in my book, Seeds of Terror, insurgents (and corrupt officials) don't just protect and profit off illicit drug shipments leaving Afghanistan, they collect money on all sorts of commodities making their way into the country as well.
And if you compare what's happening in AfPak to Latin America, it becomes clear.
Traffickers don't just smuggle drugs out, they also bring legal commodities back in (providing themselves not only a legal "front" but a way to launder cash). Additionally, large sums of money flow through informal money transfer networks (in Southwest Asia and the Middle East it's called Hawala, in Latin America, the Black Market Peso Exchange). This is how dirty money makes its way back to Colombian and Mexican drug cartels as well as the smugglers in Southwest Asia.
Of course it's incredibly complicated to untangle the good money from the bad, and the problem in Southwest Asia is that law enforcement officials only recently started trying. In the eight years since the war began in Afghanistan, there has been far too little effort to regulate commerce and informal money flows in the region. But doing so will be critical, not just to reducing crime, but also to widening the tax base for Afghanistan and Pakistan, in order to make both countries less dependent on aid.
The U.N. report makes the dramatic claim that as much as 75 percent of the heroin sold in the United States and Canada could now be coming from Afghanistan, extrapolating this figure from the amount of heroin consumed in North America, and subtracting the sum of opiates produced in Latin America. This claim is backed up by recent media reports from Canada, where the Mounties say as much as 60 percent of the dope they are seizing is Afghan in origin. But a spokeswoman for the U.S. Drug Enforcement Agency says that less than 5 percent by weight of the heroin found on U.S. streets is of Southwest Asian origin. More investigation is probably needed.
Meanwhile, it's quite clear that European countries and Russia, which have contributed considerably less to the cause of stemming the flow of narcotics from Afghanistan, consume a stunning 47 percent of the heroin produced globally, the report says. The U.N. report puts the toll in perspective: