The drug trade serves as a source of revenue for the Taliban insurgency and other terrorist groups and has forced the Afghan economy into a state of crippling dependence on poppy cultivation. The pervasive and lucrative nature of the illegal drug industry has made it difficult for the U.S. to develop effective counter-drug strategies that complement U.S. counterinsurgency and counterterrorism goals. Links between Afghan officials and the domestic drug industry further complicate U.S. policy. As a result, U.S. drug policy in Afghanistan has shown mixed results at the tactical level and has been largely ineffective on a strategic level.
Poppy cultivation has decreased to some extent in a handful of provinces over the past five years, but this progress is tentative. Without a robust, long-term cooperative strategy that consistently targets the major drug lords, offers alternative means of livelihood to impoverished farmers, and rebuilds irrigation and roads crucial for sustaining new economic activity, the drug industry will remain pervasive. If left unchecked, it will contribute to deteriorating sociopolitical conditions and foster an economic environment favorable to the Taliban and other terrorist groups.
U.S. Afghan Drug Policy: History of Trial and ErrorShortly after the U.S. intervention and toppling of the Taliban in late 2001, the U.S. took a hands-off approach to the drug problem in Afghanistan, focusing on working with former war lords (who had ties to the drug industry) to destroy al-Qaeda bases and keep the Taliban at bay. The British government, instead, was assigned the lead role for counternarcotics in Afghanistan during an April 2002 meeting in Geneva of the major donor countries. The British pursued a policy of compensating poppy growers for their eradicated poppy crops. This strategy backfired, however, as it ended up lining the pockets of local commanders and alienating farmers from the Karzai administration.
The Taliban had suddenly and unexpectedly imposed a ban on opium poppy cultivation in 2000, causing opium production to fall by nearly 90 percent in 2001. This possibly gave international observers the false impression that the opium problem had largely gone away. Analysts later assessed that the Taliban was using the ban as a temporary measure to drive up their drug profits, and almost certainly would not have sustained the ban,\ if they had remained in power. Within a few years of the U.S.-led intervention in Afghanistan, opium cultivation and production returned to pre-2001 levels, and eventually surpassed them.
By 2004 the U.S. recognized the need to pursue a more robust counternarcotics policy and the U.S. military expanded its mission to include some interdiction and other counternarcotics operations. During this period, the U.S. State Department worked with local Afghan forces to pursue a program of forced eradication, which sparked rebellion in some areas and fueled corruption among local officials who found ways to boost their own opium profits by increasing prices. Eradication also spurred local farmers, particularly in the southern Pashtun belt, to throw their support behind the Taliban since the new policies hurt their own economic fortunes while lining the pockets of the Afghan authorities.
Toward the end of the Bush Administration, U.S. counternarcotics policy began to place greater emphasis on alternative livelihood assistance and decreased the focus on eradication. Emphasis on alternative development assistance has deepened under the Obama Administration. A surge in poppy cultivation in 2006 and 2007, particularly in Helmand, also prompted greater U.S. and NATO attention to the drugs issue. In October 2008, NATO agreed to target Taliban-linked drug traffickers in its military operations.
Although emphasizing different priorities, both the Bush and Obama Administrations have pursued a five-prong counternarcotics strategy that relies on (1) public information campaigns, (2) judicial reform, (3) alternative livelihood development, (4) interdiction, and (5) eradication.
Drugs and the TalibanWhile it has been difficult to accurately assess to what extent the Taliban and other terrorist groups profit from the drug trade, it is estimated that in 2009 the Taliban received $150 million in drug money. Other sources of income for the Taliban include donations from private individuals and organizations in Pakistan, the United Arab Emirates, and Saudi Arabia, as well as profits from local tax schemes, kidnapping ransoms, and smuggling.
With the drawdown of U.S. and coalition forces, there is concern that even the limited progress made in countering the narcotics trade in Afghanistan will be sacrificed. There are currently around 60,000 U.S. forces in Afghanistan and that number will decrease to around 32,000 by February 2014. It is unclear how many U.S. troops will remain in the country post-2014, but the number is unlikely to top 10,000. Thus there will be greater pressure on the Afghan National Security Forces (ANSF) to fight the Taliban, and fewer resources for counternarcotics operations.
There has been a great deal of tension in the U.S. policy community over the relationship between counterterrorism and counternarcotics operations. The two policies have often been pitted against one another partly because of a perception that counternarcotics operations serve as a diversion from the fight against terrorism. Another major complication has been the fact that former warlords, who are now part of the government and who helped the U.S. fight the Taliban, maintain links to the drug trade. Finally, as pointed out earlier, government campaigns that focused on eradication and that were poorly executed have pushed impoverished farmers to support the Taliban, which permits poppy cultivation and protects drug traffickers.
When they started taking over the country in the mid-1990s, the Taliban immediately tried to ban the cultivation of poppy and promoted aggressive eradication on the basis that Islam prohibits the consumption of drugs. Within a few months, however, the Taliban leadership realized that the opium ban threatened to cause widespread public unrest and disrupt the Taliban’s ability to consolidate control over the country.
Thus, they asserted that drug consumption was still illegal, but that the production and sale of opium would be allowed. Highlighting the relevance of poppy to the Taliban, renowned drug expert Vanda Felbab-Brown noted: “The importance of the drug economy to the Taliban’s political control is further underscored by the fact that the Taliban did not yield on any other doctrinal issue nor did it reverse any other of its extremely unpopular repressive policies.” Recognizing the lucrative nature of the drug trade, the Taliban began to manage and control the industry, allowing the group to guarantee order, security, and a measure of economic prosperity. The Taliban’s support of the drug trade became the key source of its political legitimacy in poppy-growing regions.
A recent study conducted in Helmand province by David Mansfield demonstrates how Afghans base their political leanings on their individual livelihoods. Afghans who relied on poppy cultivation favored Taliban rule because it allowed them to continue growing opium. One respondent said: “The price of poppy has increased, this is why my life has improved. We pray to Allah to keep the Taliban strong as they help the local people. When this [the Karzai] government comes we don’t see any benefits from them, we just see losses.” Those who owned local businesses or shops, on the other hand, supported the government, noting that “[b]ecause of this government business has improved. Because of development assistance there is more money in Helmand and people spend it in my shop.”
In Afghanistan’s Counternarcotics Strategy, the Ministry of Counternarcotics makes a three-pronged distinction among people involved in the drug trade: (1) major traffickers who focus on material benefits and income, (2) traffickers who use the drug income to strengthen and fund their ties to terrorists, and (3) low-level traffickers who traffic due to lack of social opportunities, unemployment, and poverty. The distinctions among these groups are not always clear-cut, however.
While terrorists and criminals may have different end goals, they operate in the same illicit business and often develop symbiotic relationships. Links between Taliban insurgents and drug smugglers were highlighted in the case of Haji Bashir Noorzai, a major drug trafficker, who was arrested in the U.S. in 2005; convicted of smuggling $50 million worth of heroin into the U.S. in 2008; and sentenced to life in prison in 2009. His indictment alleged that he provided explosives, weapons, and personnel to the Taliban in return for protection of poppy crops and trafficking routes.
Economic and Cultural ChallengesFinancial Complications. Due to an underdeveloped and struggling financial system, Afghans have traditionally relied primarily on the system of hawala to make money transfers. Hawala is the primary alternative to a formal banking system in Afghanistan, as it is in many Muslim communities in the developing world. A hawaladar, or a broker, is the middle-man operation that facilitates the transfer of funds. The system is often used for international remittances because the hawaladar typically offers a better exchange rate and does not require traditional identification from the person making the transaction. The hawaladar rarely tracks the financial exchange other than in a notebook with limited identifiers, essentially running an informal business.
Since 90 percent of transactions in Afghanistan go through the hawala system, it is difficult to distinguish a legal transaction from an illegal one. In fact, hawala is often used by drug traffickers and the Taliban to meld illegally acquired funds into the legal market. From there, it is nearly impossible to know where the funds originated.
In 2012, Afghanistan’s main financial institution, the Kabul National Bank, collapsed due to fraud. Since then, Afghanistan has struggled to normalize currency exchanges. Millions of Afghans had entrusted their money to the Kabul National Bank, and its collapse evinced a national economic crisis as well as a wariness of the international banking system. Embezzlement by high-level bank employees led to a loss of approximately $935 million of its Afghan customers’ money. The negligence and purposeful misappropriation of funds, failure to appropriately audit the bank, and corruption amongst primary shareholders led to the bank’s demise. Since there is no longer a trusted banking authority, Afghans rely on the hawala system more than ever.
Legal and Judicial Framework. The lack of a unified, effective, and institutionalized judiciary in Afghanistan contributes to the drug problem. The 2004 Afghan constitution established an independent judiciary, but the formal judicial system does not reach all parts of the country and faces a variety of challenges, such as lack of trained officials, corruption, and nepotism. Thus, the formal system has failed to gain the confidence of the Afghan population, and in many parts of the country, people continue to rely on traditional and customary forms of dispute resolution. Certain terrorist and drug-financing laws in Afghanistan are not in line with international standards, making it even more difficult to prosecute drug cases.
Customary tribal justice is applied throughout the country, especially in Pashtun areas, and is comprised of jirgas and shuras. A jirga is a group of male elders who deliberate on the actions of members of their community. Shuras are consultative gatherings that enable both men and women to discuss and negotiate problems within their community.
The United States acknowledges both the formal and informal judicial systems in Afghanistan as sources of law and its administration. The mix has made it more difficult to prosecute high-level traffickers and narcoterrorists, however. A Counternarcotics Tribunal was established in 2005 under the jurisdiction of the supreme court to prosecute drug traffickers and enforce counternarcotics laws. Prosecuting most high-profile drug-trafficking cases still requires direct assistance from the U.S., however.
Irrigation and Infrastructure. Opium growth is common in areas that lack proper forms of irrigation since poppy cultivation requires less water in relation to the value of the harvest than wheat and other crops. Studies of particular regions in Afghanistan, such as Nangarhar and Helmand, have concluded that opium growth is particularly prevalent in areas where irrigation is lacking, although it is also frequently found on irrigated lands.
Afghanistan’s irrigation system is composed of 28,000 informal systems, and 90 percent of Afghanistan’s arable land is irrigated by informal, rather than formal, irrigation. Afghanistan’s informal systems consist of surface-water systems, groundwater systems, such as springs, a limited number of wells, and tunnels used to extract shallow groundwater (called “karezes”). Its formal systems are largely outdated and have not been maintained due to a lack of technical knowledge necessary for upkeep. There are only 10 formal systems, each of which operates at low capacity. There are a number of programs in place to develop the irrigation system in Afghanistan. The World Bank, the Asian Development Bank, the Japan Fund for Poverty Reduction, and others have heavily invested in the rehabilitation of formal systems. Despite these programs, Afghans still struggle to deliver the water to where it is most needed. And Afghanistan’s Ministry of Agriculture, Irrigation, and Livestock estimates that roughly 60 percent of water in the existing formal systems is lost or misallocated.
The National Solidarity Program (NSP) of the government of Afghanistan represents the single largest investment in rural Afghanistan. It operates in all 34 provinces and is aimed at creating elected community development councils. Now in its third phase, the NSP receives funding from the World Bank and 33 other donors that make up the Afghanistan Reconstruction Trust Fund (ARTF). Since its establishment in 2002, the NSP has disbursed $1.2 billion for rural infrastructure projects. While a portion of this funding goes toward irrigation and drainage projects, the World Bank says there is a need for more financing for projects to develop “agricultural water sources, including watershed management, storage, irrigation development and on-farm water management.”
Current U.S. InitiativesCounternarcotics initiatives have accounted for about 5 percent of total U.S. aid provided to Afghanistan since 2001. These programs are implemented by the U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL) in conjunction with the Department of Defense, the U.S. Agency for International Development (USAID), and the Drug Enforcement Agency (DEA). In addition to specific counternarcotics operations, other programs that support efforts to counter the drug industry include U.S. funding for infrastructure, such as road construction (which makes up about 15 percent of U.S. aid to Afghanistan), rule of law programs, and alternative development programs that form part of USAID’s Economic Support Funds (ESF).
Alternative Livelihood Assistance. As referenced earlier, the U.S. has transitioned from emphasizing eradication to promoting alternative livelihood programs—a transition that began at the end of the Bush Administration and was strengthened during President Barack Obama’s first term. Eradication and interdiction assistance had long been given priority over livelihood assistance. This changed as U.S. officials recognized that eradication could not occur until an alternative form of livelihood took hold with Afghan farmers. The late Richard Holbrooke, while serving as the U.S. State Department Senior Representative for Afghanistan and Pakistan, declared in 2009 that U.S. efforts to eradicate opium poppy crops in Afghanistan had been “wasteful and ineffective.” Holbrooke was a major proponent for shifting U.S. counternarcotics efforts toward helping Afghan farmers.
U.S. policymakers learned that eradication can often harm the farmers more than it harms the drug lords. Without adequate emphasis on alternative work for farmers, Afghans were robbed of their livelihoods before they were given the opportunity or skillset to engage in other vocations. This lesson was learned first in Colombia in the early 2000s; the eradication measures ended up benefitting the leftist guerillas, who capitalized on the people’s anger at the government for destroying their only source of income.
While USAID has intensified its focus on alternative development programs in Afghanistan in the past several years, media reports note that such alternative programs have so far only reached about 30 percent of households that rely on opium cultivation for their incomes. Alternative livelihood programs equip farmers to participate in legal markets rather than the illicit production of drugs. They do so by providing alternative seeds, agricultural training, and monetary assistance.
The Afghan government and international community have supplemented alternative livelihood assistance with microfinance in an attempt to diversify the market. Microloans total $142.3 million with 245,046 borrowers. One of the major purveyors of microfinance, the Microfinance Investment Support Facility for Afghanistan (MISFA), has reached more than 82,000 Afghans and invested over $93 million. MISFA receives funds from the World Bank and subsequently distributes loans to a diversified set of microfinanciers who grant loans to the people of Afghanistan. Partner organizations of MISFA include The First MicroFinance Bank, Mutahid Development Finance Institution, OXUS Afghanistan, and Hope for Life. About 24 percent of MISFA borrowers are women. While microfinance in Afghanistan often fails to target those most deeply entrenched in poverty, some organizations are starting to diversify their investments by requiring that 25 percent of their portfolios go to Afghans living on less than $1 per day.
Current alternative development assistance programs emphasize farming as the primary means for development, even though the percentage of cultivation-suitable land is low. For instance, about 80 percent of Afghanistan’s 32 million people are engaged in farming. About 12 percent of the land in Afghanistan is arable, and of that, only half is under cultivation. Roughly 25 million people rely on 6 percent of the land.
Although Afghan officials tend to claim that the former governor of Helmand’s (Mohammad Gulab Mangal) free wheat program is a success, most in the policy community have recognized its failures. The governor’s program failed because it ignored existing land-density issues, flooded the market with an oversupply of wheat, and was not a major job creator Regardless of the crop, the lack of cultivatable land will pose major obstacles to farm-based alternative development programs. What is needed are high-value labor-intensive cash crops that economize on scarce arable land and irrigation water.
Eradication. There are several different forms of eradication, including aerial spraying, manual eradication, and military and law enforcement raids. Each of these options presents its own set of problems.
Drug producers and traffickers often benefit from eradication because they have significant stockpiles of poppy that they can sell at increased prices to meet demand. The U.S. Counternarcotics Strategy states, “The U.S. Government no longer funds or supports large-scale eradication of poppy fields (though we do not object to Afghan-led local eradication).”
Nonetheless, the U.S. continues to provide modest assistance for eradication measures. For example, through the Good Performers Initiative (GPI), the U.S. rewards provinces that discourage the growth and in other ways reduce or eliminate the production of opium through Afghan government-led eradication programs. In 2013, the State Department allocated $18.2 million for programs under the auspices of the GPI. In addition to funding the GPI, some U.S. assistance for eradication is also provided through the DEA Foreign Advisory Support Teams (FAST), elite tactical units that are deployed overseas for a limited period of time to conduct counter-drug missions.
Military Engagement. U.S. military involvement in combatting the Afghan drug trade has been limited by NATO caveats and U.S. legal distinctions between fighting an insurgency and enforcing Afghan law. U.S. engagement with Afghan forces on counternarcotics operations primarily consists of training and equipping members of the Counternarcotics Police of Afghanistan (CNP-A), intelligence sharing and limited airlift support to the National Interdiction Unit (NIU), and military assistance to the Counternarcotics Infantry Kadak (CIK). The U.S. previously provided substantial assistance to Afghanistan’s Poppy Eradication Force (PEF).
The U.S. is most engaged with the NIU, with which the DEA has supplied FAST teams that helped carry out a number of successful operations including drug raids and interdiction, destruction of drug factories, and seizures of precursor chemicals required to turn opium into heroin.
According to current U.S. law, the military must prove a nexus, a direct connection, between counterterrorism efforts and counternarcotics operations in order to provide support to law enforcement. Additionally, the U.S. Code states that it is legal for U.S. troops to supply assistance to law enforcement operations, but the military’s direct participation in law enforcement activities is illegal. “Military lift and security support have been provided by special operations forces (SOF) to target high-value individuals where the nexus can be established. In this case, there is no restriction to military support because it is considered a military mission rather than a law enforcement mission.” The military can only directly target drug traffickers that have proven ties to insurgents. Proving these links can be difficult and time-consuming, making it unfeasible for the military to engage in situations that require a quick response.
Addiction: A Regional ConcernThe drug trade has a negative impact on the average person in Afghanistan and has also affected millions living in surrounding countries. Drug addiction, opium brides, and family duress are just a few of the many problems that accompany the drug trade.
Drug addiction has become a generational epidemic. Nearly 1.5 million adults are addicted to drugs in Afghanistan. Such high rates of addiction have trickled down into the younger population, where more than 300,000 children are now addicts. 
In 2005, Iran had the highest percentage of drug addicts in the world, with 2.8 percent of its population over the age of 15 hooked on drugs. Today, Iran still has one of the highest rates of opium addiction: Some 2 million people are addicted to drugs and an estimated 16 million people are affected by drug use.
While Pakistan claims to have eliminated poppy production, the country serves as a major conduit of Afghanistan’s drugs. According to a 2012 U.N. report, an estimated $30 billion worth of drugs passed through Pakistan last year. There are an estimated 6.4 million drug users in Pakistan.
Official estimates state that at least one million individuals are addicted to heroin in India, but in reality there are likely more than five million heroin users in the country. As a result, India has many villages that face a severe shortage of men. In Punjab state, drug overdoses have left many children without fathers, and women as the primary breadwinners. While estimates vary on the precise levels of drug addiction, it is uncontested that Punjab has a serious drug epidemic. In addition to Afghan heroin flows, much of India’s illegal drugs come from leakage from the licensed opium-production sector and from Burma.
Afghanistan, in particular, experiences a prevalence of opium brides, child labor, and child drug abuse. Many young girls are traded as goods to be forcibly married to foreign men in exchange for drugs. Other girls end up as child prostitutes, or skirt the system by trafficking drugs themselves. As the opium trade has increased, there has been a notable increase in underage marriages, which comprise an estimated 60 percent of marriages in Afghanistan. While child marriage is a cultural tradition in much of Afghanistan, it is technically illegal under Afghan law to be married before age 16. Due to Afghanistan’s failure to reduce the number of trafficking victims, and its inability to comply with the Trafficking Victims Protection Act’s (TVPA) minimum standards, the U.S. has placed Afghanistan on the Tier 2 Watch List. Many fear that trafficking and forced marriages will only increase after U.S. troops leave the country in 2014.
Strategies for the U.S.The illegal drug industry in Afghanistan is pervasive, highly profitable, and driven by international demand. In order to effectively counter it, the U.S. should pursue a long-term strategy that focuses on incentivizing Afghan farmers to grow legal crops. Experience demonstrates that there are no quick fixes to the massive drug problem in Afghanistan and that policies that center first on eradication can exacerbate the problem. Instead, U.S. anti-drug policies should ensure the economic security of average Afghans by supporting alternative livelihoods for the farmers. U.S. aid will only be effective, however, if the Afghan policy environment is conducive to economic growth and if the Afghan government makes an effort to reduce corruption and ensure a level playing field for investors.
As it continues its counternarcotics efforts in Afghanistan, the U.S. should:
- Assist Afghanistan in diversifying its economy through establishment of viable, long-term alternative development programs and increased foreign investment in Afghanistan’s mineral resources. The unstable security environment in Afghanistan makes it difficult to establish alternatives to poppy cultivation. Opium has remained the predominant cash crop in Afghanistan because it is easy to grow, employs a significant number of people, and is lucrative. Nonetheless, creating viable, long-term alternatives is possible. Programs implemented in Pakistan, Lebanon, and elsewhere have demonstrated a marked reduction in opium production with the introduction of alternative crops, such as garlic and onions. The current alternative-livelihood programs that the U.S. is implementing include mainly short-term cash-for-work programs. There is a need to develop longer-term strategies and to identify linkages between these individual programs to the broader national and regional economies to make them more sustainable.
- Eliminate funding for the Good Performers Initiative (GPI). The GPI is a program administered by the U.S. and the United Kingdom to reward Afghan governors for reducing or eliminating poppy cultivation in their respective provinces. Just this year, 21 of the 34 provinces received funds from the GPI, and 17 received over $1 million in reward for being “poppy-free” provinces. While the assistance is intended to go toward development of alternative livelihood assistance programs, it is more often pocketed by the governors themselves. Rampant corruption has led to most of the profits being squandered on the development of short-term and unsuccessful alternative livelihood assistance programs. Not only is the GPI ineffective in achieving its goals, it contradicts current U.S. policy, which is to focus less on eradication. Eliminating the program would allow the U.S. to re-allocate the money to more effective alternative livelihood assistance programs.
- Restructure plans, but continue to support the development of viable infrastructure projects, including through the Afghanistan Infrastructure Fund (AIF), on the condition that the U.S. leaves a substantial residual force in Afghanistan post-2014. Infrastructure development not only facilitates economic activity inside Afghanistan, it helps connect Afghanistan to regional and global markets, making it easier for Afghans to export legal crops. To effectively manage the security transition and support these development efforts, however, the U.S. must leave a residual force in the country beyond 2014. If the U.S. fails to leave any troops behind in Afghanistan, development projects like those funded through the AIF will almost certainly be unsustainable—lacking sufficient security, they will become soft targets for terrorists. The U.S. has heavily invested in infrastructure and road development in Afghanistan since 2002, but a recent report by the Special Inspector General for Afghanistan Reconstruction (SIGAR) criticizes U.S. efforts to improve Afghan infrastructure and argues that several projects are behind schedule and will not be completed by the 2014 deadline for withdrawing U.S. combat troops.
- Invest in and improve irrigation systems for agriculture. Poor irrigation and decreased access to water is often a contributing factor in a farmer’s decision to grow opium. The problem in Afghanistan is not necessarily a lack of water, but a lack of training in proper irrigation technique, failure to maintain existing irrigation systems, and inadequate investment in accompanying infrastructure. A number of irrigation programs are already in effect, but any investment in formal irrigation systems must ensure that the technical knowledge for upkeep of the system is imparted to the Afghan public.
- Streamline and facilitate effective military support for Afghan-led counternarcotics operations and continue purchase of Russian Mi-17 helicopters for the use of the Afghan Air Force. The U.S. military commanders on the ground should have more leeway to determine when their support is needed by the Afghan authorities in conducting counternarcotics operations, especially in areas where the Taliban poses a significant threat. Present military constraints make it difficult for American troops to aid ANSF and NIU operatives when they conduct raids and directly target major drug traffickers. Since they are required to prove a nexus between drug trafficking and terrorism operations, American troops are often unable to provide the security measures that are necessary to directly target traffickers in a timely manner. For example, Afghan law enforcement agents often require U.S. air support to conduct effective counternarcotics operations. Afghan capability to provide air support for law enforcement is limited, and does not include nighttime air support. Furthermore, cordon security is necessary for many of the law enforcement agents because most of their operations are conducted in Taliban-infiltrated areas in the southern provinces, thus requiring a military response.
- Continue funding for special counternarcotics courts, such as the Criminal Justice Task Force and the Afghan Judicial Security Unit. The U.S. currently provides rule of law training through the Afghan Judicial Security Unit (JSU) and should continue to create a robust framework for legal and judicial reform. In 2013, the INL requested over $181 million for justice reform and an additional $63 million for Counternarcotics Justice and Anti-Corruption Aviation Support. From 2005 to 2010, the Criminal Justice Task Force (CJTF) prosecuted and convicted 440 people and actively targeted those in the Afghan government who were mired in the drug trade. While these courts have been effective in prosecuting low-level officials, some have contended that they need additional capacity to prosecute high-level officials and deal with security concerns.
- Provide U.S. assistance in a policy environment conducive to long-term economic growth. U.S. assistance should focus on encouraging free market–oriented policies, reducing regulatory impediments to business formation, and addressing corruption—all problems identified in Afghanistan by The Heritage Foundation’s Index of Economic Freedom.
The U.S. and international community should focus on providing an appropriate framework for development through microloans, microfinance, foreign direct investment (FDI), and other venues for investment. MISFA has been a highly successful microcredit program, but it needs to be ramped up considerably.
Future microcredit programs should focus on providing long-term solutions. Programs such as the Helmand Food Zone and Cash for Crops wheat programs have proved unsustainable and ineffective. If geared toward agricultural growth, alternative livelihood assistance and microfinance will not merely subsidize farming activity, but will facilitate the skills necessary to grow fruits, vegetables, and other crops that are usually labor-intensive, profitable, and can grow despite uneven soil quality.
In the short-term, legal agriculture production is the best economic alternative to poppy cultivation. Investment in agriculture should focus on lucrative plants such as almonds, pomegranates, and grapes, as opposed to wheat. Some agricultural experts claim that these crops have the ability to produce equal or greater profits than opium.
However, over the longer term, mineral resources can help support economic growth, generate sizable exports, and provide revenues to the government. Afghanistan has potentially valuable natural mineral resources including copper, iron, and lithium.The U.S. military and geological experts have mapped out the locations of the mineral deposits and Afghanistan may have the potential to become a leader in exports of minerals.
The U.S. should work with the Afghan government to encourage international investment in Afghanistan’s mineral wealth with an eye toward facilitating a level playing field and transparent process for investment. International investors will also largely base their decisions on the security situation.
According to the SIGAR report, the U.S. has spent approximately $1.02 billion on the AIF since fiscal year 2002. The AIF is operated by the State and Defense Departments, and implements water, power, and transportation projects. In 2013 alone, $325 million has been allocated to the AIF. The SIGAR report argues that the AIF operated six to 15 months behind schedule, had misdirected Commander’s Emergency Response Program (CERP) funds, and has mismanaged contracts and plans for completion. SIGAR recommends that a clearer and more comprehensive vision for infrastructure development in Afghanistan be created to clarify cooperation between State, Defense, and USAID.
The U.S. House of Representatives voted to slash funding for the AIF when it passed its version of the National Defense Authorization Act (NDAA) in late July, with Members arguing that the funds would be better used for reducing the U.S. deficit. Without AIF’s continuation, however, an estimated 400,000 Afghans will be without power and the economic viability of certain provinces in Afghanistan will be in question. Rather than significantly cutting funding for AIF and halting projects, State, Defense, and USAID should revise time lines for projects to reflect realities on the ground and develop a strategy that helps ensure Afghan commitment to the projects once U.S. combat forces depart. Seeking to complete all projects by a hard and fast 2014 deadline makes little sense.
Scrutinizing government programs is a fundamental responsibility of Congress, and Members are correct to demand that U.S. aid to Afghanistan is used effectively. Congress should, however, also acknowledge that abrupt aid reductions could undermine programs that are advancing U.S. interests, such as denying the Taliban a source of income and bolstering support for the government. U.S. legislators and policymakers should seek to enhance the effectiveness of the programs and provide sufficient funding that allows critical programs to become self-sustaining. These are the post-conflict projects that are helping the Afghan and coalition forces win the peace in Afghanistan. Abruptly cutting them would undermine the Afghan government and create a governance vacuum that the Taliban would quickly fill.
Congress has recently sought to eliminate funding for the purchase of Russian Mi-17 helicopters for ANSF and Afghan Air Force (AAF) use. However, Mi-17s will be critical to the function of Afghan forces post-2014 because they are the most cost-effective and capable helicopters to be employed in Afghanistan. The U.S. should continue with the purchase of the 86 Mi-17s to ensure that ANSF has robust airlift capabilities going forward.
ConclusionWhile Congress has a responsibility to oversee aid to Afghanistan and is rightly insisting that this aid is used effectively, counternarcotics programs remain integral to U.S. stabilization efforts in Afghanistan. With the drawdown of international troops, there is a risk of a spike in drug production. It is in the U.S. national security interest to help the Afghans counter, and eventually uproot, the drug industry through the maintenance of funding for key military, infrastructure, and counternarcotics operations. Failure to target this industry, which continues to take a toll on the sociopolitical development of the country and benefit insurgents, would perpetuate the cycle of instability in Afghanistan and increase the risk that it once again becomes a haven for international terrorists.
—Lisa Curtis is Senior Research Fellow for South Asia in the Asian Studies Center at The Heritage Foundation. Olivia Enos, Research Assistant in the Asian Studies Center, assisted in researching and writing this paper.