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UNITED NATIONS j. JL f H. \ ^ ..£... t • •' I Office on Drugs andf l Crim^^ v e - M if) |H«i( J.JN I 62004 3M. _ I LJtj| Antonio Maria Costa Executive Director

16 June 2004

Dear Mr. Riza, I bring to your attention a note on the Afghan drug problem prepared following my^-3-rd-ajL-Visit_Jo__Centfal Asia and Afghanistan. After spending 4 days touring Uzbekistan, Kyrgyzstan and Tajikistan, I arrived via the Amu Darya river border crossing point into Afghanistan and travelled through Konduz, MazaM-Sharif, Herat and onto Kabul. In each provincial capital, I met with Governors, military commanders, police chiefs, mullahs and maliks, exchanged views with heads of UN agencies, visited the PRT, the prison and the treatment centre.

Especially significant were the very long exchanges with individual warlords (among them Generals Daud, Atta, Dosdom and Khan). It also prepared me well to conduct in-depth discussions with the President, all relevant cabinet members of the government and international officials in Kabul (civilian and military).

With best personal regards.

Mr. S. Iqbal Riza Chef de Cabinet Executive Office of the Secretary-General New York

Vienna International Centra, P.O. Box 500, A-1400 , , Telephone: (+43-1) 26060-5001 Fax; (+43-1) 26060-5866 16/06 '04 WED 13:51 FAX +431 26060 5819 ED/UNODC DG/UNOV 121002

UNITED NATIONS Office on Drugs and Crime

Antonio Maria Costa Executive Director

The Afghan drug problem as of mtd-2004

Brief Mission Report

14 June 2004

Vienna International CentrevP.O. Box 500, A-1400 Vienna, Austria, Telephone: (+43-1) 26060-5001 Fax: (+43-1) 26060-5866 16/06 '04 WED 15:52 FAX +431 26060 5819 ED/UNODC DG/UNOV

The Afghan drug problem as of mid-2004

With the assistance of the lead nation (UK) and of UNODC, counter-narcotics policy in Afghanistan was established in the early period of President Karzai's administration- The policy remains valid. This notwithstanding, the drug problem is becoming ever more complex with few results in sight. There is much confusion within the Afghan Government about who does what, and about the role of the many institutions charged to carry out the policy. The resulting fragmentation of responsibility (in Kabul and in the provinces) has created a climate whereby everybody gives advice to everybody else, yet no one seems to listen to no one.

Below is an assessment of the situation, focussed on how to render counter- narcotics policy more successful and the risks of not doing so.

1. Purpose of the mission (29 May - 6 June)

• To gain first-hand understanding of the drug problem, which is spreading in terms of hectares and becoming more intractable;

• To take stock of the situation (especially drug trafficking) in the northern and western provinces (Konduz, Mazar-e-Sharif and Herat);

• To appreciate the views of the governors of these provinces, together with police chiefs, religious and community leaders (mullahs and maliks) and the main military commanders (Atta, Dostum, Doud and Ismail Khan); and

• To discuss with President Karzai, key cabinet members and international officials (civilian and military) in Kabul how to render the counter-narcotics strategy more successful.

2. Background

(1) The government's counter-narcotics strategy is articulated in:

a. Assistance to farmers to stop cultivation b. Law enforcement against traffickers c. Effective criminal justice system reform d. Awareness campaign e. Prevention and treatment of addicts

This five-prong approach maintains its validity. The government (assisted by UNODC and a number of countries, the UK and the US in the first place) has also adopted a counter-narcotics law and set up a Counter-Narcotics Directorate (CND). Progress in the establishment of a police force and of a modern justice system (respectively funded by Germany and ), merit-worthy in itself, has also 16/06 '04 WED 15:52 FAX +431 26060 5819 ED/UNODC DG/UNOV @1 004

had a positive impact on the drug situation. However, the time lags in making the overall counter-narcotics system work and in turning policy into operations have been very long. Results are not yet visible. As a consequence, the drug problem is progressively becoming a true national security threat, with a potential to undo many accomplishments in other fields.

(2) The government's drive toward more centralized decision-making has been pursued with the frequent rotation of provincial officials and of former commanders. While this has helped decapitate previous power structures, it has weakened officials' credibility. Most of the recently appointed governors were moved from the environment they could control into places where they cannot exert influence. On the other hand, commanders (even when moved to Kabul) maintain troops' loyalty through the sharing of funds (of dubious origin).

(3) Over time, the government has engaged in bouts of opium poppy eradication—a measure needed to signal the importance of the rule of law. In 2002 and 2003, the impact was mixed because the amount of land eradicated (3-4%) did not reach the threshold needed to trigger fear among farmers. So far this year, the eradication in the South and the East was also limited. At the moment of this writing, a more robust exercise is being undertaken in the north-eastern provinces (taking advantage of the late harvest). This could have a positive effect, signalling opium farmers that they cannot operate freely outside the law. However, by curbing tons of output (a positive impact in consuming countries), eradication increases opium prices in Afghanistan and thus renders other crops less competitive. Furthermore, eradication conducted without a proper context of alternative livelihood in the countryside may not be sustainable.

3. The need to strengthen policy

(1) The drug control strategy timeframe (10 years to eliminate the problem) seems appropriate. It may even take a generation as it did in Pakistan and Turkey (it took even longer in Thailand).

Some observers appreciate this long-term focus, in the belief that Afghanistan should concentrate on other priorities. They note that the income generated by opium is helping fund Afghanistan's reconstruction. Indeed, the $2.0-2.5 billion per year generated domestically (by farmers and traffickers) could be seen as a home-made Marshall Plan. This line of argument is dangerous: opium money flows in the hands of very few individuals, thus causing a splintered society. More importantly, opium money funds the legal economy (now booming), demolishing the separation between lawful and unlawful activities. Terrorism financing is an additional problem.

(2) Post-conflict situations in the Balkans, the Caucasus, Central America, and African countries show that, with governments weakened or failed, crime and illegality tend to thrive (including drug cultivation and trafficking). In principle, therefore, what we see in Afghanistan is not new. Yet, the Afghan situation is rendered more complex, because of the unusually long (one quarter century) period of violence and the risk of its perpetuation fomented by religious 16/06 '04 WED 15:52 FAX +431 26060 5819 ED/UNODC DG/UNOV i|005

fundamentalism. Continuing insurgency and thus disrespect for the authorities make the centra! government ever weaker and ineffective.

The perceived ineffectiveness of the central authority keeps the risk/reward equation in the opium market unbalanced: the risk (of retribution) is low, while the reward (of illegality) is high. Efforts to improve law enforcement (so as to increase risks) need to be complemented by efforts to increase revenue in legitimate activities (to increase their attractiveness). In other words, both the stick of law enforcement and the carrot of alternative livelihood are needed, especially in the countryside. Neither is in place.

(3) Counter narcotics in Afghanistan (like everywhere else) cannot operate in a vacuum: in this reconstruction period, every measure meant to strengthen the government and to improve the working of civil society should be supportive of the goal to control the drug problem (and vice-versa). But this is not happening.

Alternative development is obviously failing, both in terms of resources and of inadequate institutional commitment by mandated institutions. Yet, there is no better instrument to convince (and not only force) farmers to comply with the law, making sure that they stay out of debt and can feed their family.

Take another example, the demilitarization of armed forces. Disarmament. Demobilization and Reintegration (DDR, funded by Japan) is proving difficult, as the field commanders know that this is not a simple repurchase of weapons: it is decapitation of their power structure. Yet, DDR is a strong complementary measure to counter narcotics, if it succeeds in removing the (idle) mujahedins from the potential army of the drugs traffickers.

(4) A major lubricant to trafficking is corruption. Because of it, drug dealers escape arrest (by inept and corrupt police), avoid prosecution and sentencing (by corrupt courts), and freely export drugs and import needed chemicals (through corrupt border officials). Over half of the current police force is deemed to be corrupt, with an even greater percentage of illiterates among rank and file. More complex is the question of military commanders. Some of them are corrupt and personally involved. Many others are only implicated indirectly, the dirty business being done by family members and (especially) field lieutenants. The vast majority of former mujahedin commanders are thus unreliable.

(5) Finally, there is the funding of terrorism, as insurgents benefit from the resources generated by the drug economy, on both the export (drugs) and import (precursors) sides. Terrorists offer protection (against a fee) to farmers and traffickers, who have increasingly moved cultivations and trafficking routes towards areas beyond the central government's reach — like in central Afghanistan, and along the eastern borders with Pakistan. 16/06 '04 WED 15:53 FAX +431 26060 5S19 ED/UNODC DG/LINOV

4. The way forward

Opium cultivation may be higher this year than in 2003 (a double-digit increase in both hectares and tons is likely to be certified by UNODC in September). However, this, by far, is not the most dangerous development.

Most serious is the fact that Afghanistan today no longer exports raw material (opium), it sells (80%) a high value added commodity (heroin) that requires about 10.000 tons of chemjcal precursors not produced locally. (In order to refine 80% of 3600 tons of opium (the estimated 2003 crop) into 300 tons of heroin, up to 30 times of companion chemicals are needed, in addition to several tens of thousand tons of fuel — mostly, but not only, wood). The logistics of this huge import/export is quite impressive (and so is the related environmental disaster), especially given the country's primitive infrastructure that renders even legitimate trading very difficult.

Powerful crime organisations provide these enormous amounts of chemicals from neighbouring countries (like Pakistan and Iran), and as well from thousands of miles away (India, Kazakhstan and China). Other members of these organized crime networks protect warehouses, patrol transport routes, and invest (in and outside Afghanistan) the enormous resources thus derived. In brief, narco-cartels are being born. Eradicating these cartels (from the minds, the wallets and the networks of organized criminals) is going to be much more costly, complicated and time consuming than eradicating farmers' fields.

Therefore, the government's implementation of the drug control strategy has to be re-examined carefully with the view to rendering it more effective in terms of delivery. The following measures could lead to better results:

(1) Appointment of a Cabinet Member (at ministerial level) as a centre of gravity for all activities related to illicit drugs. Such a counter-narcotics strongman will need to be honest (above suspicion), committed (full time) and effective (i.e. able to deliver). This position's required gravitas needs to be: (i) endowed with own resources (i.e., specialized counter-narcotics operatives); (ii) empowered to mobilize support from other ministries (Interior and Defence); (iii) carry weight with provincial administrations (governors, local law enforcement, mullahs, maliks).

Such a Minister in charge with counter-narcotics affairs should become the natural counterpart to international institutions (United Nations) and bilateral assistance providers (the lead nations), as well as to the Coalition Forces and NATO/ISAF. President Karzai is looking at this proposal sympathetically.

(2) Assistance to rural areas. When CND was established and the Strategy was prepared, drug stocks were being replenished with opium prices rising rapidly (up to $ 400-500/kg). Currently, opium farmers face a period of deflation, with prices rapidly declining (they are now approaching, even dipping below $100/kg). Price deflation has serious implications for farmers who face high borrowing rates (salaam charges can be as high as $110 per kilo of opium). Facing growing losses, farmers will be forced to borrow more money and cultivate more opium (a situation reminiscent of what happened in 2001, following the Taliban ban). 16/06 '04 WED 15:53 FAX +431 26060 5819 ED/UNODC DG/UNOV g]007

The vicious circle of farmers' indebtedness, growing opium poppy cultivation and further indebtedness has to be broken by: (i) replacing money lent by traffickers with legitimate micro-credits (with negative opium pledge) and by: (ii) promoting alternative incomes (infrastructures are badly needed in a country thirsty for water and hungry for services). While lower opium prices make the legal commodities more competitive and improve their terms of trade, measures to free farmers from indebtedness also need to be considered - including protecting them from traffickers' retaliation in case of default on opium loans.

(3) A strong counter-narcotics enforcement is needed, by applying maximum rigor against traffickers and distillers (who are the moneylenders). Since much time is required before domestic institutions can impose the rule of law throughout the country, Coalition Forces and NATO face the challenge to help Afghanistan buy time, by assisting the national army and the specialized police in the demolition of illegal labs and the interception of the traffickers' convoys (at times consisting of dozens of vehicles with heavy paramilitary cover). The demolition of labs and of convoys leaves farmers with unsold output, thus reducing opium prices in Afghanistan even further, enhancing the competitivity of other crops.

(4) More effective public awareness campaigns are needed, including the mobilization of mullahs and maliks. Religious and community leaders are playing an ambiguous role. While at the highest level the ban against narcotics was reiterated more than once by the civilian and the religious establishments, local mullahs (whose welfare depends on community donations, from licit as well as illicit sources) need to remind the population that not just the consumption of opium but also its cultivation and trafficking go against the principles of Islam.

Postscript

Counter-narcotics is coujiter-terrorism conducted by other means: an out-bound truck loaded with heroin inevitably matches an in-bound truck loaded with arms. Intercepting convoys and destroying labs is an important way of denying financial and military means to insurgents. Coalition activity in Afghanistan has concentrated on the war on terror: success will prove more difficult and more time consuming, unless the insurgents' sources of funding are choked.

The solution of the drug problem in Afghanistan will take time. This long-term frame will carry serious consequences not only within the country's borders (the focus of this note). According to some estimates, in the next 10 years (the time frame commonly envisaged to bring the problem under control) a few hundred thousand addicts will die because of the Afghan opium, the vast majority of them in countries crossed by traffickers' routes. An even larger number of drug-injecting people will have contracted HIV/AIDS.

The above appraisal is meant to prove that time is of the essence in more than one respect. UNITED NATIONS NATIONS UNIES

EXECUTIVE OFFICE OF THE SECRETARY-GENERAL CABINET DU SECRETAIRE GENERAL

FACSIMILE TRANSMISSION

Date: 6 July 2004 Ref: To: Mr. Antonio Maria Costa From: S. Iqbal Riza Executive Director Chef de Cabinet ODC New York Vienna Fax No.: +43 1 26060-5866 Fax No.: 2129632155 No. of pages: (including this one) 3 Subject: Mission Report "The Afghan Drug Problem as of mid-2004"

DearJVJ£«--€o~s~ta7

Thank you for your very instructive and comprehensive report from your mission to Central Asia and Afghanistan.

I have shared this report with those colleagues most keenly interested in the issue, namely Messrs. Brahimi, Guehenno, Malloch Brown and Prendergast.

The problem is of such enormity that it requires our priority attention. Rest assured that you have the full support of the Secretary-General in your efforts.

Thank you and best regards.