Who benefits from the Afghan Opium
by Michel Chossudovsky
Global Research, September 21,
The United Nations has announced that
opium poppy cultivation in Afghanistan has soared and is expected
to increase by 59% in 2006. The production of opium is estimated
to have increased by 49% in relation to 2005.
The Western media in chorus blame the
Taliban and the warlords. The Bush administration is said to be
committed to curbing the Afghan drug trade: "The US is the
main backer of a huge drive to rid Afghanistan of opium... "
Yet in a bitter irony, US military presence
has served to restore rather than eradicate the drug trade.
What the reports fail to acknowledge is
that the Taliban government was instrumental in implementing a
successful drug eradication program, with the support and collaboration
of the UN.
Implemented in 2000-2001, the Taliban's
drug eradication program led to a 94 percent decline in opium
cultivation. In 2001, according to UN figures, opium production
had fallen to 185 tons. Immediately following the October 2001
US led invasion, production increased dramatically, regaining
its historical levels.
The Vienna based UN Office on Drugs and
Crime estimates that the 2006 harvest will be of the order of
6,100 tonnes, 33 times its production levels in 2001 under the
Taliban government (3200 % increase in 5 years).
Cultivation in 2006 reached a record 165,000
hectares compared with 104,000 in 2005 and 7,606 in 2001 under
the Taliban (See table below).
Multibillion dollar trade
According to the UN, Afghanistan supplies
in 2006 some 92 percent of the world's supply of opium, which
is used to make heroin.
The UN estimates that for 2006, the contribution
of the drug trade to the Afghan economy is of the order of 2.7
billion. What it fails to mention is the fact that more than 95
percent of the revenues generated by this lucrative contraband
accrues to business syndicates, organized crime and banking and
financial institutions. A very small percentage accrues to farmers
and traders in the producing country.
(See also UNODC, The Opium Economy in
, Vienna, 2003, p. 7-8)
"Afghan heroin sells on the international
narcotics market for 100 times the price farmers get for their
opium right out of the field".(US State Department quoted
by the Voice of America (VOA), 27 February 2004).
Based on wholesale and retail prices in
Western markets, the earnings generated by the Afghan drug trade
are colossal. In July 2006, street prices in Britain for heroin
were of the order of Pound Sterling 54, or $102 a gram.
Narcotics On the Streets of Western Europe
One kilo of opium produces approximately
100 grams of (pure) heroin. 6100 tons of opium allows the production
of 1220 tons of heroin with a 50 percent purity ratio.
The average purity of retailed heroin
can vary. It is on average 36%. In Britain, the purity is rarely
in excess of 50 percent, while in the US it can be of the order
of 50-60 percent.
Based on the structure of British retail
prices for heroin, the total proceeds of the Afghan heroin trade
would be of the order of 124.4 billion dollars, assuming a 50
percent purity ratio. Assuming an average purity ratio of 36 percent
and the average British price, the cash value of Afghan heroin
sales would be of the order of 194.4 billion dollars.
While these figures do not constitute
precise estimates, they nonetheless convey the sheer magnitude
of this multibillion dollar narcotics trade out of Afghanistan.
Based on the first figure which provides a conservative estimate,
the cash value of these sales, once they reach Western retail
markets are in excess of 120 billion dollars a year.
(See also our detailed estimates for 2003
in The Spoils of War: Afghanistan's Multibillion Dollar Heroin
Trade, by Michel Chossudovsky, The UNODC estimates the average
retail price of heroin for 2004 to be of the order of $157 per
gram, based on the average purity ratio).
Narcotics: Second to Oil and the Arms
The foregoing estimates are consistent
with the UN's assessment concerning the size and magnitude of
the global drug trade.
The Afghan trade in opiates (92 percent
of total World production of opiates) constitutes a large share
of the worldwide annual turnover of narcotics, which was estimated
by the United Nations to be of the order of $400-500 billion.
(Douglas Keh, Drug Money in a Changing
World, Technical document No. 4, 1998, Vienna UNDCP, p. 4. See
also United Nations Drug Control Program, Report of the International
Narcotics Control Board for 1999, E/INCB/1999/1 United Nations,
Vienna 1999, p. 49-51, and Richard Lapper, UN Fears Growth of
Heroin Trade, Financial Times, 24 February 2000).
Based on 2003 figures, drug trafficking
constitutes "the third biggest global commodity in cash
terms after oil and the arms trade." (The Independent, 29
Afghanistan and Colombia are the largest
drug producing economies in the world, which feed a flourishing
criminal economy. These countries are heavily militarized. The
drug trade is protected. Amply documented the CIA has played a
central role in the development of both the Latin American and
Asian drug triangles.
The IMF estimated global money laundering
to be between 590 billion and 1.5 trillion dollars a year, representing
2-5 percent of global GDP. (Asian Banker, 15 August 2003). A large
share of global money laundering as estimated by the IMF is linked
to the trade in narcotics.
Legal Business and Illicit Trade are Intertwined
There are powerful business and financial
interests behind narcotics. From this standpoint, geopolitical
and military control over the drug routes is as strategic as oil
and oil pipelines.
Moreover, the above figures including
those on money laundering, confirm that the bulk of the revenues
associated with the global trade in narcotics are not appropriated
by terrorist groups and warlords, as suggested by the UNODC report.
In the case of Afghanistan, the UN Office on Drugs and Crime estimates
that a mere 2.7 billion accrues as revenue within Afghanistan.
According to the US State department "Afghanistan drug profits
support the Taliban and their terrorism efforts against the United
States, its allies and the Afghan government." (statement,
the House Appropriations foreign operations, export financing
and related programs subcommittee. September 12, 2006)
However, what distinguishes narcotics
from legal commodity trade is that narcotics constitutes a major
source of wealth formation not only for organized crime but also
for the US intelligence apparatus, which increasingly constitutes
a powerful actor in the spheres of finance and banking. This relationship
has been documented by several studies including the writings
of Alfred McCoy. (Drug Fallout: the CIA's Forty Year Complicity
in the Narcotics Trade. The Progressive, 1 August 1997).
In other words, intelligence agencies,
powerful business, drug traders and organized crime are competing
for the strategic control over the heroin routes. A large share
of this multi-billion dollar revenues of narcotics are deposited
in the Western banking system. Most of the large international
banks together with their affiliates in the offshore banking havens
launder large amounts of narco-dollars.
This trade can only prosper if the main
actors involved in narcotics have "political friends in high
places." Legal and illegal undertakings are increasingly
intertwined, the dividing line between "businesspeople"
and criminals is blurred. In turn, the relationship among criminals,
politicians and members of the intelligence establishment has
tainted the structures of the state and the role of its institutions
including the Military.
Related Article: The Spoils of War: Afghanistan's
Multibillion Dollar Heroin Trade, by Michel Chossudovsky, July