LAHORE, Pakistan, August 5, 1999 — Two decades of fighting have destroyed Afghanistan's normal economy. In its place has grown a criminal economy based on drugs and smuggling, which has proven so lucrative for Afghanistan's warlords that they have little incentive to try to restore legitimate agriculture or industry.
The ethnic-Tajik soldier sits on his haunches and reflects on his 32-year lifespan. He’s been fighting since age 17 and has taken part in 20 major battles. Now he’s in Faizabad with the anti-Taliban Northern Alliance, preparing to face yet another offensive. “The war has destroyed the country, the people and our traditions,” he says. “We just want peace, even the fighters.”
The soldier is taking part in an extraordinary in-depth survey on war being conducted in Afghanistan and 12 other war zones by the International Committee of the Red Cross or ICRC. The project marks the 50th anniversary of the signing of the Geneva Conventions in 1949, which attempted to set limits to war.
But in Afghanistan there have been no limits to the suffering and the main casualties have been civilians. In the ICRC’s interviews with combatants and civilians, men and women, the verdict is unanimous. Two decades of fighting have left the population with an overwhelming war weariness.
Much of the despair relates to the total destruction of a normal economy. In its place has grown up a criminal economy based on drugs and smuggling, which have proven so lucrative for Afghanistan’s warlords that they have little incentive to try to restore the country’s shattered agriculture or industry. Afghanistan’s illegal exports are slowing undermining legitimate economic activity in neighbouring Pakistan and Central Asia.
“Afghanistan has become the world’s largest opium producer and a centre of arms dealing, and supports a multibillion- dollar trade in smuggled goods,” says Barnett Rubin, a leading American scholar on Afghanistan who is based at the Council on Foreign Relations in New York. “This criminalised economy funds both the Taliban and their adversaries, and has transformed social relations and weakened states and legal economies throughout the region,” he says.
Taliban ministers say Afghanistan has just six working factories – all owned by the Taliban – compared to 220 before the Soviet Union invaded in 1979. A seventh, also Taliban-owned, shut down recently. Its 200 workers made soap and rubber shoes for sale to Western aid agencies in Kabul. But now most agencies have pulled out because of terrorist threats and because donor countries have reduced funding.
In place of industry, the twin pillars of Afghanistan’s economy are drugs and smuggling. In the Helmand River valley south of Kandahar, poppy fields that produce opium stretch as far as the horizon. The Taliban encourage farmers to import fertiliser from Pakistan and rebuild irrigation networks for better yields. In western Afghanistan at Herat, the Taliban have set up model poppy farms where farmers can learn the best methods of cultivation. Wheat, formerly Afghanistan’s staple crop, no longer holds any appeal: Foodstuffs can be imported more cheaply from Pakistan.
Drug traffickers also operate Afghanistan’s only banking system, offering farmers credit in advance for their poppy crop to see them through the long winter months.
The United Nations Drug Control Programme says that 96% of the 2,100 metric tonnes of opium produced in Afghanistan last year was grown in Taliban-controlled areas. The Taliban say they will end poppy cultivation if UN agencies provide seed and other support for alternative crops.
Meanwhile the Taliban impose a 20% tax on dealers, which goes straight to their war chest. Opium and its end product, heroin, are a major source of income for all the Afghan warlords. The Northern Alliance, which controls the northeast region, taxes opium shipments crossing into Uzbekistan and Tajikistan.
Officials in China and Uzbekistan say that drugs from Afghanistan also help fund Islamic insurgencies within their borders. Uzbekistan says one trafficking route passes through its Ferghana Valley – where the rebel Islamic Movement of Uzbekistan is based – and on to Moscow and the West.
Drug addiction has increased along the transit routes. UN officials say Pakistan now has 5 million heroin addicts, against virtually none in 1980; Iran has 3 million and China has 1 million, many in the western region of Xinjiang which abuts Afghanistan.
Drugs are far from Afghanistan’s only contraband. From ancient times Afghanistan has been a hub for cross-Asian trade; portions of the old silk route traversed its valleys. Now thousands of brightly painted Pakistan-made trucks grind daily over potholed roads and badly mended bridges, carrying cheap refrigerators and tires from Russia, petroleum from Iran and foodstuffs from Pakistan. Virtually everything is smuggled. Except for fuel and foodstuffs, little stays within Afghanistan.
Under international law, Pakistan is obliged to grant landlocked Afghanistan the right to import and export goods duty-free through Karachi. The goods should only transit Pakistan. In practice, however, many are resold in Pakistani bazaars for less than locally made goods, crippling local industry. A senior official of Pakistan’s Central Board of Revenue estimates that nearly $2 billion is lost each year in unpaid import and sales taxes.
A recent World Bank study estimates that $2.5 billion worth of goods are smuggled between Pakistan and Afghanistan each year, equal to half of Afghanistan’s estimated gross domestic product. Official trade between the two countries was just $48 million in 1997, the latest year a figure was available. Pakistani officials wink at the smuggling, in part because everyone from border guards to ministers takes a cut.
The Afghan smuggling routes reach across the former Soviet republics, Russia, Iran and the Caucasus. Recently, the Taliban and other warlords have begun flying in consumer items from the Persian Gulf free port of Dubai and sending opium out on the return flights, UN officials say. The Taliban have just contracted to buy a used Boeing 747 from Kuwait Airlines for $26 million dollars to expand operations.
The warlords have made little effort to invest in agriculture, industry, education or health. The only development work the Taliban have undertaken is repairing roads and setting up petrol pumps so smuggling can flourish. They have tried to attract foreign investment for oil and gas exploration, road repair and even a cell-phone system, but the ongoing fighting – and now U.S. economic sanctions – has squelched investor interest.
“There is no civil administration and social issues are not being addressed except by the Western relief agencies, but we can’t solve the problems of the whole country,” says Marcus Dolder, head of the ICRC delegation in Kabul.
In Kabul’s main bazaar, the poorest of the poor who have sold all their other household goods are hawking their mattresses and bedding. They have made the choice to eat now and freeze in the winter. For ordinary civilians, these are the only kind of choices available.