Drugs and Power: Counterinsurgency in Afghanistan

By Gareth Rice

INTRODUCTION

Despite a significant counterinsurgency campaign since 2001, Afghanistan has transformed into a true narco-terror state. Providing the source of close to 90% of the worlds supply of heroin, Afghanistans narcotics trade has become interwoven in all aspects of Afghan society and has further compounded the countrys inability to achieve a peaceful end to hostilities. The Talibans relationship with this trade has slowly transformed from one of economic convenience to a dependency that sees it providing the largest source of their financing and significant political capital over large areas of the country. Moreover, that relationship has helped the group to control more territory than at any time since 2001.

The United Nations Office on Drugs and Crimes (UNODC) annual Opium Surveys have provided a stark depiction of the scale of this problem. In 2018, despite a drought in large areas of the country, Afghanistan cultivated the second largest area of opium on record, continuing the upward trend in cultivation since 2001. Indeed, in the last 30 years of the 20th Century, opium output increased in Afghanistan by 800%. As a global comparison, Columbian drugs at the height of their production never reached more than 5% of Columbias GDP, while Afghanistans drug trade accounted for 50% of its GDP by 2007. This figure declined to between 6-11% by 2018 (due mostly to the growth in the Afghan licit economy), although opium still surpassed the value of the countrys legal exports of goods and services.

There have been several barriers to the International Security Assistance Force (ISAF) and the Government of the Islamic Republic of Afghanistan (GIROA) in addressing this problem. Debate as to the extent of the Talibans relationship with this trade and the best methods to address the problem have contributed to some of the many reasons it has never featured as a key strategic issue. Similarly, the uncertainty of Taliban profit margins from the trade have resulted in a conflicting prioritisation of counter-narcotics efforts across the member nations of ISAF and provincial governors of GIROA. The drug trade in Afghanistan has simply proved to be insurmountable and its relationship to the insurgency too unclear to deserve greater attention.

This study seeks to understand the relationship between the drug trade and the insurgency to provide a better understanding of the interaction between counter-narcotics and counterinsurgency campaigns. Existing research on this topic has often focused on the socio-economic factors of the drug trade, criminal interactions or financing of terror groups; all of which fall short of providing constructive guidance to counterinsurgency campaigns. By exploring the economic, cultural and political dimensions that underpin this trade, this study will provide a greater understanding of not only how the insurgency continues to thrive but additionally, how this trade intersects with the Afghan society. In doing so, the study will demonstrate the economic motivations for entry into the insurgency and the drug trade, the cultural paradigm that ensures trust between actors and ultimately the political power that is derived from controlling an illicit drug trade. The importance of understanding these relationships has far reaching implications for counter-narcotics strategies and contemporary understanding of insurgent groups more broadly.

RESEARCH METHODOLOGY

This research paper provides a literature review with a counterinsurgency focus across the various intersecting fields of study relating to the Afghan drug trade. The counterinsurgency focus is unique because the trade in illicit narcotics are often seen as a policing or socio-economic issue. As such, there are few studies into illicit drug trades that are undertaken with the express purpose of aiding a counterinsurgency campaign. This in part explains the inconsistent approach to counter-narcotic programs that have been undertaken in Afghanistan. Further, when narcotics is discussed in relation to the insurgency, it is more often an analysis of insurgent financing which does not encompass the full impact of these trades on the conflict.

There was a lack of reliable, quantitative data to support an in-depth analysis of insurgent financing. Cultivation data produced by the UNODC was found to be the most reliable data on narcotics cultivation. However, corresponding data on other metrics of violence and insurgent behaviour were far less reliable. Utilising data on opium production and the deaths of western soldiers, Jo Lind, Karl Moene and Fredrik Willumsen provide one example of attempting to demonstrate a causal link between conflict and opium production. While the use of soldiers deaths is a questionable data metric, it was found by the authors to be the only reliable data available. As such, many of the findings of this paper are theoretical in nature and provide a framework from which to understand the insurgency.

There are a number of obstacles to conducting primary research into extremist groups. The ongoing violence in drug-cultivating areas is a significant disincentive for many researchers wishing to conduct field interviews. Similarly, the lack of modern financial infrastructure both within this region and utilised by the insurgency make it almost impossible to accurately track finances that are linked to this trade. As a result, it may well be impossible to accurately determine the level of insurgent finances derived from narcotic-related activities. It is not surprising then to see the significant debate on this topic as highlighted by the Special Inspector General for Afghanistan Reconstruction (SIGAR):

the extent to which the Taliban participate in the trade of narcotics is debated. While the Taliban are believed to collect payments from those involved at each stage of the value chain in Afghanistan, the extent of their control over the processing, sale, and distribution of opiates is less clear.

Rather than contributing to the debate on insurgent finances, the focus of this research will expand on the intrinsic relationship between the insurgency and the drug trade. In doing so, it provides a framework for understanding how insurgent groups within this region operate and the often-convoluted relationship between criminal and extremist elements. More broadly, financing will always be a fundamental requirement for extremist groups to survive. Understanding how to dismantle these funding sources is therefore critical to defeating them. This research will demonstrate that narcotics is a particularly unique source of financing because of its ability to generate political capital for the group that ensures both its ongoing survival and the basis of its power.

Insurgent groups within Afghanistan operate under a number of different affiliations and with varying degrees of cooperation or competition. The most commonly understood insurgent affiliation is the Taliban, and to avoid confusion in this study all insurgent and terrorist groups connected to the drug trade will be referred to under this title. Further complicating this landscape, groups or cells within the Taliban do not always operate within a centralised, hierarchical structure. On the contrary, it is more common to see groups that are interconnected and responsible for their own finances and low-level operations. The same is true of the drug trade. Where some groups have almost no interaction with the drug trade, others have achieved significant control of the trade within their areas of operation. Consequently, the findings of this study may not apply to all insurgent actors in Afghanistan.

HISTORY OF NARCOTICS IN AFGHANISTAN

Narcotics have played a role in Afghanistan since the days of Alexander the Great in the fourth century BCE. Opium is believed to have been imported by Alexanders armies and it thrived in the Afghan climate, producing yields far higher than the global average and often in spite of scarce irrigation infrastructure. It is not surprising then to consider that opium has played a central role in Afghanistan for the past 40 years. Indeed, conflict and drugs have become a fundamental part of the Afghan state as both a crop of convenience for those seeking to survive a war-torn country and a commodity to be exploited for criminal gains.

Given its relationship with conflict, the drug trade has existed in its current form since the 1960s. The only variables that appear to have changed are the volume of drugs being produced and where the money from the trade is flowing. With the Soviet invasion of Afghanistan in 1979, these variables would begin to change rapidly. Afghan farmers increasingly turned to opium as agricultural output declined, due in part to the deliberate destruction of irrigation infrastructure by the Soviets. When the Mujahideen required funding for their war against the Soviets, this crop also provided an easy source of revenue.

While the Mujahideen enjoyed significant foreign sponsorship during the Soviet-Afghan war, narcotics allowed them to gain financial independence and carry out more sophisticated attacks. With the help of the Pakistani Inter-Services Intelligence (ISI), the Mujahideen encouraged opium production and subsequently imposed a tax on its output. In what became a vicious debt cycle, farmers began to plant more poppy to pay for the tax and became victims to credit systems offered by an influx of drug merchants. The combination of (US led) foreign funding and an expanding opium harvest allowed the Mujahideen to sustain their insurgency until the Soviet withdrawal in 1989.

As Afghanistans opium production expanded from 100 tonnes per annum in the 1970s to 2,000 tonnes in 1991, the Central Intelligence Agency (CIA), helping to coordinate the war, chose to ignore the drug trade in order to focus on defeating the Soviets. Indeed, at one point in the war, there were even plans to flood Soviet troops with heroin in an effort to undermine the militarys effectiveness highlighting the often conflicting approach to counter-narcotics. While the CIA appeared to quietly endorse the growth in narcotics, the ISI began to take a more direct role that helped contribute to a near twentyfold increase in output during the war. This period undoubtedly led to a transformation of many warlords into drug lords that would continue well after the war concluded.

Following the Soviet withdrawal, Afghanistan descended into a civil war that corresponded with another doubling in opium output. The opium trade would prove to be a popular market for an influx of returning refugees requiring employment and poor farmers seeking credit to sustain themselves between harvests. Opium would once again play a pivotal role in conflict as warlords sought to maximise their narcotics returns to fund their struggles for power. The political structures that many of these warlords created would eventually establish much of the framework for Afghanistans future. As the concept of a central political power became an increasingly distant reality, these warlords created their own cultural, economic and political structures of which opium would play a central role.

When the Taliban finally seized Kabul in 1996, they continued to encourage opium production and offered protection in exchange for taxes on production and refinement. Opium output increased by 25% in the year following the Talibans rise to power with 97% of this output coming from Helmand and Kandahar province where the Taliban held the most power. Despite earning significant profits, the Taliban had an inconsistent approach to the drug trade based on an ideological belief that it was un-Islamic, as well as a practical acknowledgement that foreign aid and political recognition would often be conditional on not supporting its continued cultivation.

Poppy Cultivation By Province (2018) and Historical Trafficking Routes

Figure 1

Notwithstanding their objections to the drug trade, the Taliban would (for the most part) chose their economic gains over any ideological or religious concerns. This relationship would continue until 2000 when the Taliban made the sudden decision to ban all opium cultivation in an apparent attempt to gain economic aid. Despite reducing opium output by 94%, it is speculated that the Taliban was able to offload significant stockpiles at now inflated prices while simultaneously receiving $US43 million in aid from the US. The Talibans ban on narcotics would, however, have serious ramifications for their political capital with the rural population and would contribute to their rapid removal from power following the US-led intervention. This is likely to be a lesson that the group remembered during the insurgency that would follow.

With the removal of the Taliban from power in 2001 and the exile of their senior leadership to Pakistan, motivations quickly turned to funding the new insurgency. The initial donors for this new movement were often drug smugglers. At the coalface, Taliban fighters quickly began adjusting battlefield tactics to focus primarily on protecting drug shipments of which they would receive a protection fee of as much as 20%. As the insurgency began to develop, the Taliban began to take on a more direct involvement in the drug trade at each stage of the value chain. From the outset of the insurgency it was clear that the drug trade was of vital importance to the Talibans ability to project power.

ECONOMIC POWER

The Afghan drug trade is most commonly understood in terms of the political economy that it generates to perpetuate the war. Loretta Napoleoni notes that war often creates alternative systems of power and profit that can be exploited by combatants and non-combatants alike. David Keen takes this notion further by extending Carl von Clausewitzs famous maxim of war as an extension of politics by other means, by observing that war is also an extension of economics by other means. In other words, it can be observed that war does not destroy an economy but rather transforms it to the benefit of certain groups. Those groups may not have caused the war but may well have strong motivations to keep it going. Therefore, we can see that war can be a rational economic pursuit for some, where ideological reasoning is not the primary motivation for hostilities.

Afghanistan provides an unfortunate example of this economic transformation. Following the Talibans removal from power in 2001, farmers quickly returned to opium production to exploit the lack of governing authority and recover losses from the Talibans year-long opium ban. This lack of governance corresponded with an influx of criminal elements comprised mostly of drug merchants and traffickers to Afghanistans rural areas. Despite commentary often suggesting Taliban coercion of farmers to grow opium, the initial motivations appear to have been almost exclusively for profit. This is significant because it recognises that the Taliban likely had little to do with emergence of the drug trade post 2001, but rather exploited its existence once it was established.

In 2003, a UNODC Survey found one third of the surveyed populace reported poverty as their principle driver for growing poppy. Subsequent Opium Surveys have consistently highlighted the potential profit margin as a central motivating factor for farmers. The UNODC has, however, separately argued the desire to grow poppy is driven more by greed than need. These findings are supported by the work of Lind et al. in their comprehensive study examining the relationship between illicit trades and conflict conditions. In doing so, they conclude that the opportunity to exploit conflict conditions for profit provide the primary motivation for individual farmers. The population engaged in this trade is therefore likely to be drawn to an insurgency that supports their cultivation, as the prospect of government control over the country would threaten the basis of the drug economy and by extension, their livelihoods.

Poppy is simply a low-risk crop in a high-risk environment according to Adam Pain and David Mansfield. The ease with which it is planted, stored and sold make it a highly attractive crop for the rural population. Perhaps the only down sides to this crop are its significant labour requirements at harvest and, of course, its illicit nature. Mansfield has therefore challenged the notion that opium is often a more profitable crop for farmers. On the contrary, he argues that like any elastic commodity it is subject to the law of supply and demand. If farmers are unable to secure sufficient economic return from the crop to feed their household, it becomes more likely that they will switch to a food crop such as wheat. This economic correction can be seen in the 2009/10 crop cycle (see table 1) in which opium production declined due in part to an oversupply of opium and an undersupply of wheat.

Potential Opium Production 1994-2018 ($US/Mt)

Table 1

The elasticity of this commodity would typically provide promise of the growth in opium cultivation declining once economic returns reach equilibrium. Yet while there is little evidence of farmers being coerced into growing opium by force, there is significant evidence to suggest that opium related credit provides this persuasion. Due to the lack of available credit in rural areas, drug traffickers have typically filled this void. The resulting debt traps that many farmers find themselves in has only been further exacerbated by the impact of drought, government eradication and predatory debt lending. This potentially contradicts Mansfields findings as farmers may be unable to grow alternative crops if they have promised to provide an agreed quantity of opium at harvest.

The reluctance of agencies such as the United States Agency for International Development (USAID) to offer alternative seeds and credit has provided little competition to the drug trade. In 2012, Rajiv Chandrasekaran argued that USAID refused to provide support to farmers switching to cotton, in part due to a US law prohibiting aid being used to assist foreign agriculture that might compete with US markets. This was partially addressed by the establishment of the Agricultural Development Fund in 2010, however, SIGAR has criticised the programs effectiveness in reaching rural populations with an ambitious goal of default rates below 5% in one of the worlds most volatile environments. Indeed the bulk of foreign aid to Afghanistan has failed to provide any viable economic alternatives to the drug trade despite 70% of the nation living in rural areas and 61% of households generating income from agriculture.

A significant portion of the Afghan labour market is now dependent on the production of narcotics. In 2009, it was estimated that nearly two million people (or 8.7% of the population) had some involvement in narcotics. By 2017, the market was providing the equivalent of 354,000 full-time jobs. Despite a perception that drug labs are owned and operated by Taliban or criminal enterprises, there are a significant number of small family-run laboratories throughout the country. This adds to the challenge of attempting to distinguish between the civilian, criminal and insurgent sectors of the population. Moreover, any alternative to the drug trade will need to replace the existing labour market or risk further alienating the rural population and creating further poverty. Considering the opium crop requires nine times as many workers to cultivate than wheat, this will not be an easy transition for the local economy.

The economic incentives for the Taliban to become connected with the drug trade are significant. With an annual export value in recent years of between $US1.5 - $US3 billion a year, the potential for the Taliban to secure even a small percentage of this trade would provide an attractive source of financing for their insurgency. Unfortunately, it is impossible to accurately determine the Talibans profits from the drug trade due to distinct differences in how various regional nodes operate. Similarly, the difference in the price of opium as it moves along the value-chain from farmer to market varies greatly with fiat currency not always being the preferred exchange for goods and services.

The Talibans initial profits from this trade appear to have manifested from the imposition of a land tax on farmers and protection fees to drug traffickers. The imposition of a land tax is perhaps the simplest method of securing a profit from the illicit trade. As a global comparison, Yasser Arafat was able to negotiate a 10% tax on the drug trade within the Bekaa Valey of Lebanon, which resulted in an estimated net return of $US150 million per year. This method is also similar to what occurred when the Taliban held power before the war under the guise of a zakat. The question of what is provided in exchange for this tax will be explored in the next section.

US Forces-Afghanistan have estimated that the Taliban receives 20% of the annual narcotics revenue. While it may be impossible to determine the accuracy of this figure, understanding where and how the Taliban establishes their profit along the value-chain is of fundamental importance when attempting to disrupt their finances. To demonstrate this, consider the prevalence of interdictions within counter-narcotics strategies as opposed to eradication schemes (see figure 2). The prevalence of interdictions presumably occurs because traffickers and drug labs are seen as being more affiliated with the insurgency than farmers. Briefly ignoring the accuracy of this perception, it is difficult to see how interdictions would successfully reduce the Talibans finances if their primary source of income is achieved through a tax at the beginning of the value-chain.

US Counter-narcotics funding allocation 2002-2017 ($US Millions)

Figure 2

As a fragmented insurgent group, it is also important to establish that the drug trade does not appear to be controlled by a central element but rather multiple independent groups who coexist in a mutually supportive arrangement. Such arrangements are also by-products of economic power which is inherently decentralised and dispersed. If the trade is in fact controlled by multiple independent elements, that may make the problem more challenging to confront. If there are no large cartels to dismantle and no central drug figures to arrest, it may prove ineffective to target traffickers and labs exclusively in an effort to bankrupt the insurgency. Following the money is also difficult in a country that has no traditional banking system and relies heavily on the hawala financial system which offers little in the way of records.

The ideological motivations of the Taliban appear to have shifted over time, with economic rewards now providing the principle driver, as is often the case when encountering illicit trades. While often appearing as ethnic conflicts on the surface, economic and political motivations have historically always shaped group and individual behaviour in Afghanistan. Gretchen Peters argues that the drug trade has fundamentally transformed the Taliban into a drug enterprise which is devoid of much of its ideological origins. This is a view that is also indirectly supported by the work of Paul Collier and Anke Hoeffler whose greed and grievance theory argues that the profits from illicit trades provide little incentive for insurgencies to seek an end to hostilities.

Regardless of the extent of Taliban involvement in this trade, the existence of an illicit trade of this magnitude significantly increases the potential for widespread corruption. While there have undoubtedly been Western perceptions of corruption as a cultural issue within Afghanistan, such perceptions fail to acknowledge the negative views of Afghan people towards corruption and its propensity to drive support for the Taliban. Indeed, the initial rise of the Taliban movement was due in large part to the corruption of many Mujahideen factions. The paradox here is that despite the Talibans connection to the drug trade, they have been able to escape similar allegations of corruption which have consistently undermined the legitimacy of the Afghan government. Whether the Taliban deliberately facilitate aspects of this corruption (or at least allegations of it) to support their narrative remains to be seen.

The economic interests of both combatants and non-combatants remains a powerful barrier to any peaceful end to hostilities. Further, to accept Peters description of the Taliban as a cartel devoid of its ideological inceptions, it must also be accepted that narcotics plays a central role within the insurgency. Yet, while the value of this commodity to the Taliban explains much of how the group has managed to survive and potentially even recruit, it does not explain how the Taliban has continued to exert such significant resistance against both GIROA and ISAF. An economic analysis on its own simply does not explain how individuals and groups can interact with an illicit trade or, how a source of funding can generate political capital for an extremist group.

POLITICAL POWER

The Political Capital Model is derived from the work of Vanda Felbab-Brown who argues that the true strength of insurgent involvement in drug trades is derived from the political capital that it creates. While the financing of any extremist group is fundamental to its survival, there is no other source of financing which also provides this degree of political capital. Due to the labour-intensive nature of the drug trade and the ease of entry into the market, narcotics involves a larger portion of the population than many other illicit trades. By providing either land, credit or security (or a combination of these factors), the Taliban is able to facilitate the market that is sustaining the rural populations livelihoods and, in the process, ensures their dependence on the existence of the insurgency.

Whether political capital was the initial motivation for the Taliban is uncertain and perhaps irrelevant. It is this influence over the rural population that ultimately allows the Taliban to survive. Notwithstanding the fact that drug revenue allows the Taliban to pay its fighters and carry out attacks against GIROA and ISAF, it is the population from which any insurgency (and indeed any government) draws its strength. Of note, both Australian and US military counterinsurgency doctrine focuses on the ideology of the insurgent which presumably allows it to derive its legitimacy and win the support of the people. While there is undoubtedly an ideological element to the Taliban movement that forms the basis of their recruitment, there is little evidence to suggest that it is widely supported by the Afghan populace.

The Political Capital Model is significant because it contradicts the popular notion that a population will withdraw support for the insurgency once it loses its ties with the ideological basis of its group. A 2018 survey of the Afghan population by the Asia Foundation would certainly support the view that the population has lost support for the Taliban and yet, the group continues to flourish in large parts of the country. While it could be argued that the population supports the Taliban out of fear rather than any other motivation, this does not provide a conclusive explanation for the Talibans continued survival. It is perhaps more likely that the rural population has formed a relationship of convenience with the Taliban born out of the illegality of the drug trade and the protection that it requires from both criminal elements and the government itself.

Dipali Mukhopadyays study of Afghan warlords provides a strong foundation for understanding the relationship between the governed and the governing authority in Afghanistan. Since political power in Afghanistan has rarely been centralised, the power of warlords at the periphery has often been the norm. These warlords have typically derived the origin of their power through an ethnic, religious or tribal affiliation; however, their ongoing legitimacy is projected through the protection that they provide rather than any ideological foundation. The importance of political legitimacy (often featured in counterinsurgency doctrine) is therefore seemingly rejected by Mukhopadhyay. She goes on to state that Predation and protection often go hand in hand, which reflects both the Taliban and many warlords control of rural populations.

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