1. 1 Overall Classification is UNCLASSIFIED 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 Conflict 04 May 2010

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

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

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

5. 5 UNCLASSIFIED INSERT Wing_WSV_Opium_Lab_IEDs.wmv FILE HERE

6. 6 UNCLASSIFIED INSERT Lead_WSV_Opium_Lab_IEDs.wmv FILE HERE

7. 7 UNCLASSIFIED INSERT OPIUM LAB SLIDE PHOTO HERE

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

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

10. 10 Takeaways UNCLASSIFIED 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.

11. 11 Myth baseline: Crime / Conflict Nexus UNCLASSIFIED 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.

12. 12 Myth baseline: Crime / Conflict Nexus UNCLASSIFIED 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.

13. 13 The Result UNCLASSIFIED 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.

14. 14 The Plan UNCLASSIFIED 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.

15. 15 Negative Consequences of Opium Economy UNCLASSIFIED 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.

16. 16 Negative Consequences of Opium Economy UNCLASSIFIED 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).

17. 17 Negative Consequences of Opium Economy UNCLASSIFIED 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.

18. 18 Opium Economy: Physical UNCLASSIFIED 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.

19. 19 UNCLASSIFIED INSERT OPIUM POPPY PICTURE SLIDE PHOTO HERE

20. 20 Opium Economy: Political UNCLASSIFIED 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)

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

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

23. 23 Opium Economy: Political UNCLASSIFIED 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

24. 24 Opium Economy: Political UNCLASSIFIED 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.

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

26. 26 Opium Economy: Political UNCLASSIFIED 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.

27. 27 UNCLASSIFIED Opium Seizures 2002 – 2007

28. 28 Opium Economy: Political UNCLASSIFIED 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.

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

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

31. 31 Opium Economy: Economic UNCLASSIFIED While wheat, saffron, and pomegranates can fetch 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.

32. 32 Opium Economy: Economic UNCLASSIFIED 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.

33. 33 …And Don’t Forget About Cannabis UNCLASSIFIED 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

34. 34 Bankrupt the Insurgency Myth UNCLASSIFIED 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.

35. 35 Bankrupt the Insurgency Myth UNCLASSIFIED 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.

36. 36 Taliban Opium Profit Myth UNCLASSIFIED 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.

37. 37 Taliban Opium Profit Myth (Part Deux) UNCLASSIFIED 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.”

38. 38 Taliban / Trafficker Strategic Alliance Myth UNCLASSIFIED 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.

39. 39 Taliban / Trafficker Strategic Alliance Myth UNCLASSIFIED 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.

40. 40 Al Qa’eda (AQ) Afghan Opium Trafficking Myth UNCLASSIFIED 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.

41. 41 Al Qa’eda (AQ) Afghan Opium Trafficking Myth UNCLASSIFIED 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.

42. 42 Eradication Myth UNCLASSIFIED 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.

43. 43 Eradication Myth UNCLASSIFIED 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.

44. 44 Interdiction Myth UNCLASSIFIED 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.

45. 45 Interdiction Myth UNCLASSIFIED 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.

46. 46 Opium Purchasing Myth Opium Purchasing Myth UNCLASSIFIED 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.

47. 47 Opium Purchasing Myth Opium Purchasing Myth UNCLASSIFIED 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.

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

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

50. 50 Alternative Development Myth UNCLASSIFIED 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.

51. 51 Alternative Development Myth UNCLASSIFIED Fact: -For alternative development to succeed, it must address the requisite social and economic drivers creating a lucrative environment for opium:  Lack of security.  Lack of physical infrastructure – roads, transportation, processing facilities, electricity, etc.  Lack of microcredit.  Health care and education.  Assured markets and crops that approach opium’s labor-intensive employment and profit.

52. 52 Paradoxes of CN and COIN UNCLASSIFIED CN, like COIN is counterintuitive and complementary -“The more you protect..”; “Doing nothing is the best…” Intelligence drives operations: misguided CN policies (eradication, lack of alternative development, lack of security, etc) recruits for the Taliban and hinders intel. In Afghanistan, illicit economies and criminality are so intertwined that destabilizing the “shadow” economy can undermine stability operations, hinder COIN objectives and possibly cause state failure. CN policies must generate intel, reduce Taliban political capital, provide a modicum of political and economic stability and a zero-sum game for financial resources.

53. 53 Recommendations UNCLASSIFIED NATO’s primary objective is to defeat the Taliban and provide security in Afghanistan. Without security, both CN and COIN will fail. 1.Dedicate sufficient resources to winning this war. 2.Oppose all illicit economy, especially CN policies, that recommend a single-focus strategy to disrupt Taliban funding flows. 3.Execute a blended, concurrent, comprehensive approach of laissez-faire and targeted interdiction in the southern and eastern provinces and other areas under Taliban control and interdiction, amnesty, targeted eradication and alternative development in areas under NATO control.

54. 54 Recommendations UNCLASSIFIED 4.Ensure all interdiction “nexus” targets are vetted and analyzed for 2 nd and 3 rd order effects. 5.Militarily, determine which “nexus” targets are prime for “hard interdiction” (kill or capture) with legitimate insurgent ties (dual use labs; major trafficker, chemist); otherwise, leave smaller players to law enforcement. 6.When prioritizing assets (intel; helos) and objectives, always choose COIN and military objectives over CN objectives.

55. 55 Recommendations UNCLASSIFIED 7.With credible evidence, work government officials that are “soft interdiction” targets (coercion or prosecution). a.“Name and shame” drug trade players. b.Offer amnesty; force to renounce drug involvement. c.Exploit intel; ensure validity and compliance. d.“Purge and prosecute” those who fail to renounce. e.Start with top officials and work sequentially to not cause state failure. 8.If Karzai releases or pardons government officials after the “purge and prosecute” phase, explore legality of detaining traffickers in US facilities, and extradite and prosecute in the US.

56. 56 Recommendations UNCLASSIFIED 9.After the aggressive counter-corruption program, invest significant funding to develop competent bureaucrats and battle the Afghan leadership human capital deficiency. 10. Follow-up the corruption purge with an aggressive media campaign to stress the efforts and progress made. 11. After alternative development is established in stable and secure provinces, attempt a licensing pilot program. 12.Once the Taliban are defeated and security established, determine if opium licensing can be expanded. Execute targeted eradication for all unlicensed opium plots.

57. 57 Recommendations UNCLASSIFIED 13.Once security is established, work with the Pakistani government to improve border security and prevent smuggling as well as an opium “balloon-effect” in Balochistan, NWFP and FATA. 14.Review current US prohibitionist drug policies for changes that could alleviate Afghan opium economy influence at home, while diverting US law enforcement officials away from CT efforts. Encourage Western allies to do the same. 15. Establish a zero-tolerance drug policy for all ANA and ANP; pay ANSF twice as much as Taliban soldiers; fund this pay through international aid until opium licensing established then pay with state funds.

58. 58 Conclusion UNCLASSIFIED Thesis focused on -1. Can CN sever Taliban financial resources, enabling defeat; and -2. Can CN complement and enable COIN objectives. “NO” – eradication, and other singular-focused approaches have failed to bankrupt and defeat an insurgency. Attempting to deny the Taliban opium returns results in enormous political, security, social and economic costs that counter COIN objectives without decreasing Taliban political capital and financial resources. The West’s Afghan opium economy obsession is a myth.

59. 59 Conclusion UNCLASSIFIED To achieve success, security must be established. Implementing eradication, interdiction or alternative development without security or individually, is a recipe for failure. To complement and enable COIN objectives, CN must be threat-tailored, aligned and blended: -In areas under Taliban control (no security), implement a blended approach of laissez-faire, targeted interdiction and counter-corruption programs. -In areas under NATO control, interdiction, amnesty, alternative development and targeted interdiction.

60. 60 UNCLASSIFIED Discussion