Commission Des Communautés Européennes

COMMISSION DES COMMUNAUTÉS EUROPÉENNES

SEC( 2004 ) 467 FINAL BRUXELLES, LE 23.04.2004

BUDGET GÉNÉRAL - EXERCICE 2004 SECTION III - COMMISSION TITRES 19, 31

VIREMENT DE CRÉDITS N° DEC11/2004

DÉPENSES NON OBLIGATOIRES

EN EUROS

ORIGINE DES CRÉDITS

DU CHAPITRE - 31 02 RÉSERVES POUR LES INTERVENTIONS FINANCIÈRES ARTICLE 31 02 41 - 19 10 06 Aide à la réhabilitation et à la reconstruction de l'Afghanistan CC - 15 000 000 CP - 15 000 000

DESTINATION DES CRÉDITS

AU CHAPITRE - 19 10 RELATIONS AVEC L'ASIE ARTICLE - 19 10 06 Aide à la réhabilitation et à la reconstruction de l'Afghanistan CC 15 000 000 CP 15 000 000

EXPOSÉ DES MOTIFS

La Commission propose un virement de €15 million en crédits d'engagements et de paiements à partir de la réserve (chapitre 31 02) à la ligne 19 10 06 (Reconstruction de l'Afghanistan). Ce montant avait été entré dans la réserve, en attendant la présentation par la Commission d'un programme intégré destiné à combattre la drogue en Afghanistan (comprenant l'appui au développement alternatif, afin de fournir aux agriculteurs de nouvelles possibilités et de limiter l'exportation de la drogue). Ce programme a été préparé par la Commission et est joint en annexe à la proposition de virement (voir annexe technique).

I. RENFORCEMENT a) Intitulé de la ligne

19 10 06 – Aide à la réhabilitation et à la reconstruction de l'Afghanistan b) Données chiffrées à la date du 25.03.2004 CE CP

1A. Crédits de l'exercice (budget initial + BR) 168 000 000 113 500 000 1B. Crédits de l'exercice (AELE) 0 0 2. Virements 0 0

3. Crédits définitifs de l'exercice (1A+1B+2) 168 000 000 113 500 000 4. Exécution des crédits définitifs de l'exercice 127 500 000 6 466 468

5. Crédits inutilisés/disponibles (3-4) 40 500 000 107 033 532 6. Besoins jusqu'à la fin de l'exercice 55 500 000 122 033 532

7. Renforcement proposé 15 000 000 15 000 000

8. Pourcentage du renforcement par rapport aux crédits de 8,93% 13,22% l'exercice (7/1A) c) Justification détaillée du renforcement

Voir l'exposé des motifs.

II. PRÉLÈVEMENT a) Intitulé de la ligne

31 02 - RÉSERVES POUR LES INTERVENTIONS FINANCIÈRES - Article 19 10 06 Aide à la réhabilitation et à la reconstruction de l'Afghanistan b) Données chiffrées à la date du 25.03.2004 CE CP

1A. Crédits de l'exercice (budget initial + BR) 15 000 000 15 000 000 1B. Crédits de l'exercice (AELE) 0 0 2. Virements 0 0

3. Crédits définitifs de l'exercice (1A+1B+2) 15 000 000 15 000 000 4. Exécution des crédits définitifs de l'exercice 0 0

5. Crédits inutilisés/disponibles (3-4) 15 000 000 15 000 000 6. Besoins jusqu'à la fin de l'exercice (*) 0 0

7. Renforcement proposé 15 000 000 15 000 000

8. Pourcentage du renforcement par rapport aux crédits de 100,00% 100,00% l'exercice (7/1A) (*) Sans objet pour une ligne de crédits provisionnels ou de réserve c) Justification détaillée du renforcement

Voir l'exposé des motifs.

4 TECHNICAL ANNEX

Subject: Afghanistan: Commission programme in the field of fighting against drug

I. Introduction

Opium poppy production is one of the biggest challenges facing Afghanistan. Since the Taliban imposed production ban in 2000, cultivation has risen dramatically, and Afghanistan is once again the largest producer of opium poppy in the world following bumper crops in both 2002 and 2003. The total value of the opium economy is put at about US $ 2.3 billion – equivalent to about 50 percent of Afghanistan’s legal GDP1. The increase in cultivation is linked to poor security and weak law enforcement as well as to poverty. Not only does poppy provide a revenue base for those with no interest in building a strong and cohesive Afghanistan, but at present the risk of traffickers being caught and prosecuted is low. Coupled with genuine hardship among the landless poor, it is perhaps unsurprising that cultivation has risen. A particular concern is the spread in cultivation. While only seven out of Afghanistan’s 32 provinces were producing opium poppy in 1994, cultivation has now spread to 28 provinces. Nonetheless it is important to remember that cultivation still covers only 1% of total arable land and less than 3% of irrigated land. The United Nations Office on Drugs and Crime (UNODC) Farmer Intentions Survey for the 2003/4 season (February 2004) shows that, despite drops in the opium price in 2003, high labour costs and some attempts at eradication (21,400 hectares in 2003), farmers still intend to plant opium on a larger area for the 2003-4 season. The key challenge facing the Afghan Government and the international community is how to stamp out this pernicious trade. The Afghan Government is clear that the drug economy is a threat to Afghanistan's progress in establishing a stable and moderate country. At the 9 February Kabul Drugs Conference, President Karzai gave an extremely strong opening speech which was televised for the national news, he said:

“Poppy is the major problem facing Afghanistan…….……Religion, economy and security are the three pillars of Afghan society – they are destroyed by poppy”. He stressed the Afghan Government’s determination to stop cultivation and noted that “money from drugs smuggling feeds terrorism”. But he said this could only be achieved with the full support of the International Community. The conference was the first time that Afghan Ministers, Governors and Police Chiefs have publicly gathered together to underline their determination to fight illegal drug production. The Commission, the UNODC, the World Bank and all major donors also attended. There were clear messages on:

• The need to rapidly strengthen law enforcement – in particular to target traders and traffickers through a trained counter narcotics police and effective border control;

• The need to put sustainable alternative livelihoods in place quickly, and to ensure that all National rural development programmes maximise the impact they can have on reducing opium poppy cultivation;

• The need to reduce demand. There are now an estimated 1 million heroine addicts within Afghanistan, and the number is growing.

The Conference agreed action plans to support the implementation of the National Drug Control Strategy in three key areas – law enforcement, demand reduction and alternative livelihoods.

1 UNODC opium poppy survey 2003.

II. The national drug control strategy.

In May 2003, the Afghan National Drug Control Strategy (NDCS) was adopted by the Afghan Cabinet and approved by President Karzai. The strategy was developed in collaboration with both the UNODC and the United Kingdom (the lead donor on anti-narcotics).

The Commission provided technical expertise to the Afghan Government to help them develop and present the strategy. It has strong support from the international community and is the key document for co-ordinating anti-narcotics activities.

The overarching goal of the NDCS is to reduce poppy cultivation by 70 % in 5 years and eliminate it within 10 years. The strategy embraces effective law enforcement, alternative livelihoods, institution building, demand reduction and judicial reform. The evidence from elsewhere – Thailand and Pakistan – suggests that a broad based approach is critical for success and that a sustainable solution will take time.

A strong anti-drugs law – which explicitly bans production - was adopted by the Afghan Government in October 2003. In recognition of the special nature of the drug problem and the need for a specialized agency to deal with it, the Afghan Government has established a Counter Narcotics Directorate (CND) reporting directly to the powerful National Security Council.

The UK is the lead donor on drugs and has earmarked US $ 114 million over three years to build Afghan anti-narcotic capacity – including police and border control training – and to promote sustainable, alternative livelihoods. What is absolutely clear is that without better law enforcement – especially interdiction – the Afghan Government will struggle to control opium poppy production and trafficking in the short term.

The UK has helped the ATA set up a National Counter Narcotics Police as well as a mobile detection unit in Kabul. These efforts to improve interdiction have had some early successes with big hauls in the North.

As lead donor for overall Police reform and training, Germany has also a key role to play to building effective law enforcement agencies. In collaboration with the US a total of 20,000 new and existing police will have received training by June 2004. Germany has already started rolling out police training to the Provinces. The Commission is actively supporting this through its contribution to the Law and Order Trust Fund (LOTFA) which provides dedicated support to the police (see below).

III. EC analysis of the present situation

• Afghanistan’s national drug control strategy is a good basis for action. Well co-ordinated action within a robust national strategy is essential to make progress in the fight against drugs;

• The illicit drugs economy in Afghanistan cannot be treated separately from the other major challenges facing the country including, insecurity, warlordism, corruption, a weak formal economy, abuse of human rights and long-term poverty. The illicit economy is both a cause and a symptom of these problems.

• There is widespread agreement that a sustainable solution hinges critically on helping rural populations to find alternative sources of livelihood. Some opium farmers are resource-rich, but the majority are poor, often involved in sharecropping arrangements that require opium cultivation. However, the absence of data on farmers’ situations makes it difficult to determine the right balance and sequencing between

6 poverty alleviating approaches to crop reduction and law enforcement approaches such as forcible eradication.

• Law and order is the key missing link. Together with the lack of sufficient financial resources, the inability of the Afghan Government to project its power and enforce law across Afghanistan remains the major bottleneck. Security problems, political instability and corruption are preventing the extension of the rule of law into all regions of Afghanistan.

• The Afghan Government has made some notable progress over the last months in launching a range of extensive national development programmes that prepare the ground for regional development and will help with drug control objectives.

• Quick fixes may help in the very short term but they can also complicate finding durable, long term solutions. For example, upfront eradication in areas where alternatives do not exist is unlikely to be successful. Indeed by putting upward pressure on local prices it may actually increase the incentive to grow poppy in the future. It is therefore important that eradication is well targeted on those areas where alternatives exist, and where it can be carried out in a transparent and impartial way.

IV. The EC’s contribution to counter-narcotics efforts in 2003-2004.

The EC 2003-2006 Country Strategy Paper2 sets out how the Commission will contribute to the Afghan’s Government’s development goals by promoting security and helping to reduce poverty. Three areas of EC activity will make an important contribution to drug control:

• Promoting effective law enforcement - € 68.5 million;

• Promoting sustainable alternative livelihoods - € 9 million;

• Promoting rural development - € 100 million.

In 2003 – 2004, this means the Commission will allocate a total of € 177.5 million to activities that will help to tackle opium poppy production. Of this total, € 121 million has already been committed.

The Commission approach embraces all three areas in recognition of the need for a comprehensive solution as set out in the National Drugs Control Strategy. Action in one area only will not succeed.

In addition – and as already outlined - the Commission has provided technical assistance to the Afghan Government. The EC-funded policy advisor at the National Security Council has been critical in developing the National Drugs Control Strategy and in the organisational development of the Counter Narcotics Directorate.

Detail: promoting effective law enforcement.

In 2003-2004, the Commission will commit:

• € 65.5 million to support the police in delivering effective law enforcement across Afghanistan;

• € 3 million to reinforce border control along the Afghan / Iran border.

2 E/137/2003 « The CSP 2003-2006 and the NIP 2003-2004 approved by the Commission 6 February 2003.

Establishing an efficient, well trained police force is critical to future security in Afghanistan, including in the fight against opium poppy production. Commission support to the police is via the Law and Order Trust Fund (LOTFA) which is aimed at supporting the Ministry of Interior’s efforts to reinstate and strengthen the police force across the country. The assistance funds substantial recurrent costs (salaries); recruitment and re-training, acquisition of non-lethal equipment (such as fire fighting, highway security, anti terrorism and counter-narcotics activities), and the rehabilitation or reconstruction of the police department facilities.

In addition, the Commission is funding, alongside Austria, a specific project to enhance the capacity of the Afghan Border Force to interdict drug trafficking and reduce the flow of drugs over the Afghanistan/Iran border. The project – implemented by the UNODC - will train and equip border police in 25 border posts in Herat, Farah and Nimruz.3 The project will also consider ways of introducing a basic criminal intelligence system and establish a mechanism for Afghan and Iranian border control officers to share information and cooperate on law enforcement issues.

Detail - promoting sustainable alternative livelihoods

In 2003-2004 the Commission will commit:

• € 9 million to promote alternative livelihoods in Eastern region.

Agriculture currently accounts for over 50% of GDP and provides the basis for the livelihoods of over three-quarters of the population. Generating sustainable and legitimate sources of income is critical if communities are to permanently shift away from opium poppy production.

The EC has contracted the Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) to carry out a Project for Alternative Livelihoods (PAL) for a period of three years. The project will operate in key opium producing areas in three provinces Nangarhar, Laghman and Kunar. In total these provinces cultivated 22,836 hectares of opium poppy in 2002-3, accounting for almost 1/3 of the estimated national harvest.

Key strategic elements of the project are: • A broad-based, multi-sectoral approach. This will include the support of sustainable alternative farming systems, off-farm income generation, and non-farm employment, infrastructure development and social services (e.g. education, health); • Drug demand reduction initiatives (prevention, treatment and rehabilitation); • Close coordination & cooperation among the key stakeholders in both planning and implementation will receive particular attention. This includes the communities (“Shura”) and their Village Development Committees, government and non-government organizations, other donor assisted projects, and the private sector. • Strengthening the formal and informal links between these provinces and the national administration.

In addition to developing alternatives to opium production for these provinces, the expectation is that this project will provide valuable experience of what works in an Afghan context which can be used elsewhere in Afghanistan.

3 The Governments of Iran and Afghanistan have a bilateral agreement whereby Iran will build 25 border posts within Afghan territory.

Detail - the wider rural development programme

In 2003 – 2004 the Commission will commit € 100 million to rural development. This will be an important contribution to providing the building blocks for rapid growth in the rural economy and hence the provision of long term legitimate employment for rural communities. As the recent report “Securing Afghanistan’s Future” notes, Afghanistan is unlikely to move away from opium poppy cultivation without economic growth and development that delivers tangible income increases for the poorest.

Key elements of the wider rural development programme that will make a difference include:

• € 23 million for Government led nationwide programmes aimed at delivering employment and services to the poorest and building strong community structures;

• € 25 million to support the Kunduz River Basin Management;

• € 18 million to support the development of the livestock and horticultural sectors;

The two national programmes being supported by the Commission are:

• The National Solidarity Programme (NSP). This aims to enable communities - through the establishment of local self-governing institutions - to plan, finance, and manage local development and block grants. From 2004, the NSP will specifically include a commitment from the local community not to engage in opium poppy production.

• The National Emergency Employment Programme (NEEP). This aims to establish a safety net for the most vulnerable by providing short term employment opportunities reconstructing public infrastructure assets.

The NSP and the NEEP will rehabilitate rural infrastructure, create local employment, and generate income. Agricultural productivity and access to services will be improved through farm-to-market roads, soil conservation and small and medium scale irrigation. In the medium term, farmer services should improve through the development of rural finance4, processing and marketing. These are all critical ingredients for the legal rural economy to flourish.

In addition, the Afghan Government’s overall development framework recognises the need for further investment in: (i) agricultural production and natural resource management; (ii) off farm and non-farm enterprise and employment creation; and (iii) market development.

The EC is responding by supporting the natural resources investment programme of the Afghan government. In particular, € 25 million has been allocated to support the Kunduz River Basin Management programme aimed at improving the water resource management for irrigation in three Northern provinces, and € 18 million will be provided to horticulture (seen as one of the best alternative crops to poppy) and livestock sectors.

4 To support access to credit in rural areas the Commission has committed € 1 million for the development of the First Micro-Finance Bank in Afghanistan

9 These EC funded projects and investments need to be complemented by a process of “mainstreaming” drug control objectives into programmes for national development and rural growth across the whole reconstruction process.

V. EC plans for future action in 2005-2006.

Our existing approach of promoting sustainable alternative livelihoods, improving law enforcement through police reform and border control, and working to build a strong legitimate rural economy is a coherent basis for future action. In 2005-2006 we hope to build on these areas, in particular:

• Law Enforcement: The EC will remain engaged in developing a strong and professional police force as well as in the wider reform of the security sector. Effective law enforcement capacities to provide intelligence, investigation and interdiction are of particular importance.

• Alternative Livelihoods: Acknowledging the tremendous challenges within this sector the EC will consider how best to build on its existing projects to promote alternative livelihoods.

• Wider rural development. This will remain a focal sector for the Commission, and we would expect to build on the activities undertaken in 2003 -2004 to support Government led nationwide programmes, to manage water resources effectively and to help revitalise key sectors within the agricultural economy.

VI. Conclusion

The Commission, and the wider international community, are strongly committed to tackling drug cultivation and trafficking in Afghanistan. In 2003, the Afghan Government adopted a comprehensive National Drug Control Strategy, and they stressed their determination stamp out opium poppy production at the recent Kabul Drugs Conference - they recognise that this is a critical element in delivering stability and security in Afghanistan.

The Commission actively supports the National Drug Control Strategy. Over 2003-2004, the Commission will commit a total of € 77.5 million to the areas of law enforcement, border control and alternative livelihoods. In addition, the wider rural development programme totalling €100 million will help to build a strong and vibrant rural economy able to provide sustainable and legitimate incomes for the rural population.

The current EC Afghanistan Programme therefore has a good balance of investment between building effective law enforcement capacity, providing alternative livelihoods and promoting the licit rural economy. Nonetheless, the Afghan Government and the international community both realise that stamping out poppy production will require real determination and long term commitment. This is not a fight that can be won overnight.

In recent weeks there has been much discussion of how to contain production in 2004. The Commission feels two areas are of particular interest: • massive information campaigns making better use of ulemas, tribal elders and other traditional networks; • a more deliberate naming-and-shaming strategy towards public figures involved in the illicit drug economy: such an approach could bring high returns in a culture putting a strong emphasis on personal honour.

In the longer-term, the international community can expect to see dramatic real gains once security sector reform has come to fruition, particularly the re-establishment of an effective national police, 10 border control and national army. These will enable the Afghan Government to exercise control across Afghanistan, and ensure the law is enforced fully.

Commission Services 2004.