Overall Classification is UNCLASSIFIED

1. The Mafia and the Mullah:Counternarcotics, Counterinsurgency, and Realpolitik in Afghanistan University of Oxford Changing Character of Warfare Program Oxford Institute for Ethics, Law and Armed Conflict04 May 2010 Overall Classification is UNCLASSIFIED

2. Thesis / Takeaways Opium economy overview Counternarcotics myths Recommendations Conclusion Overview UNCLASSIFIED

3. Bankrupt the Insurgency Taliban Opium Profits Taliban / Trafficker Strategic Alliance Al Qa’eda Afghan Opium Trafficking Eradication Interdiction Opium Purchasing / Licensing Alternative Development Counternarcotics Myths UNCLASSIFIED

4. But first, a story…. • February 2009 • Helmand Province • Royal Marine JTAC support • Opium Lab & IED facility INSERT AIRCRAFT SLIDE PHOTO HERE UNCLASSIFIED

5. INSERT Wing_WSV_Opium_Lab_IEDs.wmv FILE HERE UNCLASSIFIED

6. INSERT Lead_WSV_Opium_Lab_IEDs.wmv FILE HERE UNCLASSIFIED

7. INSERT OPIUM LAB SLIDE PHOTO HERE UNCLASSIFIED

8. INSERT AFGHAN MAP SLIDE PHOTO HERE UNCLASSIFIED United Nations, Department of Field Support, Cartographic Section. Map No. 3958, Rev 6. July 2009

9. Afghan Box Score • Size of France / Texas – only 12% of land arable. • 181st of 182 on 2009 UN Human Development Report. • $800 per capita annual income (219th of 227 countries). • 20% literacy rate. • Largest export: opium – accounts for 60% of GDP. • $23.4B GDP (113th of 227 countries; 150th w/o opium). • 15 million person labor force (40th of 200 countries). • 35% unemployment rate (182nd of 200 countries). • Agriculture utilizes 79% of the labor force. UNCLASSIFIED

10. Takeaways • Security is paramount – without it, all else will fail. • There is not a “one size fits all” approach. • With security, a blended strategy works best. • Counternarcotics efforts can both help and hinder counterinsurgency objectives. UNCLASSIFIED

11. Myth baseline: Crime / Conflict Nexus • Commonly held beliefs of nearly all congressional, military, and public policy professionals regarding Afghanistan, that: • Narcotics fund and fuel the Taliban. • Narcotics undermine the rule of law. • Narcotics corrupt the government. • Eliminating the opium economy is a panacea for solving Afghanistan’s myriad problems. UNCLASSIFIED

12. Myth baseline: Crime / Conflict Nexus • These beliefs are simply not true, since: • Narcotics are a catalyst for, but not the engine of, the insurgency. • Crime – notably narcotics, providing the highest return – thrives in poor regions of weak states, dominated by labor-intensive economies and insecurity. • Narcotics are not a cause, but a symptom of, weak government. UNCLASSIFIED

13. The Result • Ineffective policy choices, and inefficient military and political execution that has protracted the Afghan War. • Global opium production leader based upon an advantage of favorable physical, political and economic conditions: • Cultivation environment that produces opium with the world’s highest morphine content opium. • Chronic insecurity and institutional weakness. • Poor infrastructure and rural poverty that prevents licit, alternative livelihood development. UNCLASSIFIED

14. The Plan • Security. • No eradication; no interdiction without proper targeting analysis. • Counternarcotics (CN), like counterinsurgency (COIN) is counterintuitive. • Concurrent, comprehensive approach: aggressive security and counter-corruption program coupled with laissez-faire, precise interdiction and alternative development. • Then – sequential approach: further alternative development, licensing and targeted eradication. UNCLASSIFIED

15. Negative Consequences of Opium Economy • Chronic insecurity: Taliban, traffickers, warlords. • Drug profits finance insurgency – but less than you think • Purchases Taliban military capability (weapons, manpower, logistics); increases freedom of action. • Finances warlord militias. • Purchases warlord political capital by developing schools, clinics, roads. • Corrupts law enforcement and justice officials, undermining their effectiveness and reducing legitimacy. • Increases bribery and lubrication of market economies. UNCLASSIFIED

16. Negative Consequences of Opium Economy • Subverts the political process by purchasing influential positions from which officials can control CN efforts. • Drug-linked political actors can eliminate trafficker competition, creating vertical integration and increasing illicit and political power. • Causes inflation in real estate and consumer goods (especially in the south and east). • Undermines currency stability. • Suppresses production and development of licit crops and industrial sectors (roads, processing plants, transportation). UNCLASSIFIED

17. Negative Consequences of Opium Economy • Reduces competent bureaucrats capable of running an expanding, legitimate government and economy. • Suppresses import / export industry while creating polar wealth distribution. • Increases both regional and worldwide illicit drug use while undermining Western efforts to curb narcotics consumption. UNCLASSIFIED

18. Opium Economy: Physical • 12% of Afghan land is arable – opium production uses only 2-3%. • Opium is drought, pest and disease-resistant and thrives in the hot, arid Afghan climate. • Unlike licit crops, opium does not require large-scale irrigation, fertilizers, specialized transportation, industrialized processing plants or large storage facilities. • Opium is light, compact, transports easily and possesses a two year shelf-life. Same for heroin if vacuum packed. UNCLASSIFIED

19. INSERT OPIUM POPPY PICTURE SLIDE PHOTO HERE UNCLASSIFIED

20. Opium Economy: Political • Since 2001, Afghan opium cultivation has averaged a 34% growth rate annually • 2002: Karzai outlaws poppy cultivation and opium trafficking without an implementation strategy • Farmers and traffickers resume operations • US military / CIA execute laissez-faire attitude – stimulates intel gathering • Opium fetches 17 times more per hectare than wheat • Balloon-effect: Afghanistan opium supplants the “Golden Triangle” (Myanmar, Vietnam, Thailand, Laos) UNCLASSIFIED

21. Opium Poppy Cultivation 1990 – 2009 U.N. Office on Drugs and Crime (UNODC) 2009 Annual Report UNCLASSIFIED

22. Opium Poppy Production 1990 – 2009 Annual worldwide illicit opium demand: 4000-5000 MT U.N. Office on Drugs and Crime (UNODC) 2009 Annual Report UNCLASSIFIED

23. Opium Economy: Political • 2004: Under mounting international pressure, Karzai declares a “jihad against poppy” • Zero tolerance cultivation and trafficking law • Orders governors to eradicate their provinces • Steps up interdiction in 2005 as insurgency ignites • Assigns CN responsibilities under MOC and MOI • Ministry of Counternarcotics: UK lead; policy • Ministry of Interior: US lead; implementation • CNPA and ASNF execution; US / UK funded UNCLASSIFIED

24. Opium Economy: Political • 2004 – 2005: Under-resourced coalition forces unable to deliver security. • Security and alternative development unsynchronized from eradication and interdiction efforts. • Taliban insurgency ignites. • “Accidental Guerilla”: eradication inadvertently recruits farmers to Taliban. • Farmers looking for vindication against Karzai government for destroying their livelihood. UNCLASSIFIED

25. Farmer’s Responses: Reasons for Cultivating Opium in 2009 “Illicit Drug Trends in Afghanistan.” UNODC Country Office for Afghanistan (June 2009) UNCLASSIFIED

26. Opium Economy: Political • Locals refuse to help coalition. • Dries up intel resources. • Hinders COIN and CT efforts. • Intel paucity hampers interdiction efforts by eliminating small traffickers. • Increases vertical integration and government corruption. • Further paralyzes Afghan government while aiding the insurgency. UNCLASSIFIED

27. Opium Seizures 2002 – 2007 UNCLASSIFIED

28. Opium Economy: Political • Confluence of fertile conditions for both opium cultivation and Taliban insurgency: • 75% of poppy cultivation occur in the six environmentally best provinces. • These provinces are also areas of strongest Taliban influence. • Helmand, Kandahar, Nimroz, Zabul, Uruzgan, Day Kundi. • Highlighting the precarious link between opium production and a lack of security and governance, 99% of all opium cultivation occurs in Taliban controlled areas across Afghanistan. UNCLASSIFIED

29. INSERT AFGHAN OPIUM MAP (WITH RED OVAL) SLIDE PHOTO HERE UNCLASSIFIED

30. “The Afghan War at End 2009: A Crisis and New Realism.” CSIS: Center for Strategic and International Studies. (January 4, 2010). Pp24. UNCLASSIFIED

31. Opium Economy: Economic • While wheat, saffron, and pomegranates canfetch higher prices than opium, microcredit is solely based on opium. • Creditors advance money to farmers to buy opium seed, as well as clothes for the winter, for an agreement to grow a predetermined amount of opium. • Traffickers agree to buy the crop and pick it up. UNCLASSIFIED

32. Opium Economy: Economic • Labor-intensive opium supports up to 25% of the Afghan populace with four harvests annually. Afghan daily wages: • Construction: $3.60. • Wheat harvesting: $4.40. • Opium lancing: $9.50 to $15. • Average poppy farmers cultivate a half-acre, with a gross income of $2000 and netting $900. • 53% higher than non-opium growing households. • This nets the farmer twice as much income than wheat at current prices. UNCLASSIFIED

33. …And Don’t Forget About Cannabis • Afghanistan now the world’s biggest producer of cannabis • Net income from harvesting and processing a hectare of cannabis is 50% higher than opium: • Cannabis: US$ 3,341; opium: US$2,005. • Summer crop provides summer employment. • However, cannabis has a short shelf-life, long vegetation cycle and fetches only 10-20% of farm-gate (wholesale) value versus opium. • Primarily grown in same southern provinces as opium. • Solution is still the same: security UNCLASSIFIED

34. Bankrupt the Insurgency Myth • Myth: Eliminate the opium economy and the Taliban insurgency will crumble and implode. • Fact: • No insurgency has ever been defeated by eliminating their primary income source (balloon-effect). • Nearly all insurgencies have been defeated through a confluence of military, economic and political factors, but primarily force-on-force military defeat. • Most insurgencies deal in illicit economies (narcotics) for both high monetary as well as political capital return. UNCLASSIFIED

35. Bankrupt the Insurgency Myth • Fact: • An insurgency builds their political capital against the HN government by protecting the populace dependent upon an illicit economy for survival. • Increased political capital legitimizes the insurgency and undermines the government. • Destroying the illicit economy to bankrupt the insurgency often has the unintended consequence of increasing insecurity by destabilizing livelihoods without addressing the underlying economic drivers. UNCLASSIFIED

36. Taliban Opium Profit Myth • Myth: The Afghan opium economy makes over $4 billion annually and the Taliban profit in excess of $1 billion. • Fact: • The Taliban “only” garner ~$70 million annually from the opium trade. • This is captured by running “protection rackets” for both the farmers and the drug traffickers. • 10% zakat (tax) is imposed on the farmers and 20% on traffickers. UNCLASSIFIED

37. Taliban Opium Profit Myth (Part Deux) • Myth: Massive opium profits fuel and sustain the Taliban. • Fact: • Opium profits account for only 40% of Taliban income. • The remaining 60% (~$106 million) comes from smuggling and robust donations from Gulf State donors (but not donor nations). • Between 2002 and 2004, the Taliban regrouped unchecked in Pakistan without access to drug profits. • GEN McChrystal: “Eliminating insurgent access to narco-profits – even if possible, and while disruptive – would not destroy their ability to operate so long as other funding sources remained intact.” UNCLASSIFIED

38. Taliban / Trafficker Strategic Alliance Myth • Myth: Taliban / opium traffickers share a strategic alliance with shared interests of profit and state destabilization. • Fact: • Both covet profit and insecurity – for different reasons. • Trafficker’s objective is greed: wealth accumulation; buying political influence to expand their enterprise. • Traffickers need insecurity to occupy police and security forces, furthering their moneymaking goals. • Taliban require money for weapons and operations. UNCLASSIFIED

39. Taliban / Trafficker Strategic Alliance Myth • Fact: • Insecurity undermines the host government; builds political capital and legitimizes Taliban. • Relationship is a marriage of convenience and most often fractious and hostile. • Fundamental differences are objectives, driven by fiscal disagreements, between aggressive and violent elements with competing interests. • These fissures are ripe for exploitation by government and coalition forces. UNCLASSIFIED

40. Al Qa’eda (AQ) Afghan Opium Trafficking Myth • Myth: AQ benefits financially from the Afghan opium trade. • Fact: • AQ (and the Taliban) benefit indirectly from insecurity, lack of intel and drain on coalition forces that hinders CT operations. • AQ does not protect drug labs / convoys, nor tax these movements – AQ lacks sufficient numbers for this. • Taliban have sufficient personnel for protection rackets willing to make a profit. • Taxation requires knowledge of territory, language and security forces, plus freedom of movement – all which AQ does not possess. UNCLASSIFIED

41. Al Qa’eda (AQ) Afghan Opium Trafficking Myth • Fact: • Risk from Afghan law enforcement and security forces highest in narcotics trafficking; AQ will not unnecessarily highlight themselves. • AQ instead traffics narcotics upstream in Albania. • Balkan / Chechen regions supply requisite insecurity and scarce law enforcement personnel. • Permissive environment for money laundering while providing numerous sea-based smuggling routes. • Quickest and easiest cash infusion route to AQ European theater – where majority of operations recruited and planned. UNCLASSIFIED

42. Eradication Myth • Myth: Eradication will radically reduce the supply of narcotics to the international market while eliminating Taliban financial resources. • Fact: • Eradication economic failures: • Farmers will replant (usually more) to replace lost income. • Eradication boosts opium prices, making it more economically attractive to grow opium. • Eradication political failures: • Alienates rural population dependent on opium livelihood. UNCLASSIFIED

43. Eradication Myth • Fact: • Eradication political failures: • Absent alternative livelihoods, eradication antagonizes the population against the government, thus increasing Taliban legitimacy. • Eradication military failures: • Decreases intel gathering from populace. • Runs counter to COIN and CT objectives. • Eradication only effective once security and alternative development is established. UNCLASSIFIED

44. Interdiction Myth • Myth: Interdiction reduces the opium economy by targeting traffickers and not alienating farmers, thus aiding COIN objectives. • Fact: • Interdiction aligns better militarily with COIN objectives by not targeting poor, rural farmers and harming the local populace. • Increases intel gathering on Talban and traffickers. • However, intel can be suppressed by local warlords when faced with declining opium profits. • Can significantly reduce Taliban financial resources and political capital with populace. UNCLASSIFIED

45. Interdiction Myth • Fact: • However, interdiction very susceptible to corruption and can hinder COIN objectives through incorrect targeting. • Results in eliminating competition, consolidating power and vertical integration of opium economy (usually in government officials). • Decrease of Taliban political capital offset by public frustration with corrupt narco-government. • Interdiction justice arm subverted by corruption. • Interdiction requires significant coalition intel and security forces to execute correctly – both of which are currently too scarce. UNCLASSIFIED

46. Opium Purchasing Myth • Myth: All Afghan opium could be purchased or licensed, denying the Taliban and traffickers income (Napster myth). • Fact: • Licensing can potentially deny the Taliban lucrative income and political capital, while legitimizing the government and adding licit income to their GDP. • However, without security, this plan will also fail. • The Afghan government cannot enforce legalized opium production in areas they do not control. • Further, opium transport routes would have to go through the same areas currently controlled by the Taliban. UNCLASSIFIED

47. Opium Purchasing Myth • Fact: • If unable to transport, legalized opium would be destroyed or priced off the market from air transport. • Significant political ramifications from drug-linked officials unless coordinated with purging and prosecuting of these government officials. • Requires renegotiating the US “80-20” agreement, but face a worldwide opiate-based drug shortage. • Unable to institute as long as there is global heroin demand. • Beware the “balloon-effect” into ungoverned areas of Pakistan. UNCLASSIFIED

48. Europe Russia China CARs Turkey Iran Pakistan UAE & Africa Opium Economy: Economic Opiate trafficking routes Afghanistan

49. INSERT OPIUM TRAFFICING AND HEROIN LAB SLIDE PHOTO HERE • Opportunistic traffickers and Taliban: heroin processing moves upstream into Afghanistan. Size reduction: 10:1; Value increase: 1:10. UNCLASSIFIED “Illicit Drug Trends in Afghanistan.” UNODC Country Office for Afghanistan (June 2008). Pp 30.

50. Alternative Development Myth • Myth: “Just have them grow wheat – wheat fetches more than opium…” • Fact: • Until 2008, opium gathered 10 – 17 times more per hectare than wheat. • Unusually high price of wheat versus opium in 2008 was driven by opium overproduction and a global shortage of wheat. • Wheat production will result in massive unemployment by employing 88% less labor, and requiring all the arable land to provide subsistence, while still not returning sufficient profit to supplant opium on 2 – 3% of land. UNCLASSIFIED