| Ander Nieuws week 36 / nieuwe oorlog 2007 |
The vast increase in opium poppy farming in Afghanistan is indicative of an inability to grasp a basic law of economics
August 29, 2007
By Simon Jenkins
The British government for sure knows how to do one thing. It knows how to help farmers in need. Since it arrived in Afghanistan in 2001 and was put in charge of the staple poppy crop, ministers have spent hundreds of millions of pounds on promoting it. On Monday the United Nations announced the result. Poppy production in Afghanistan has soared since the invasion, this year alone by 34%. The harvest in the British-occupied protectorate of Helmand rose by 50% in 12 months. This is a dazzling triumph for agricultural intervention.
Ministers may deny this was their policy, but they cannot be that inept. They faced a heroin epidemic at home. Suddenly finding themselves charged with controlling almost all the world's opium production, they must have known what they were doing. By alienating farmers and forcing them into the arms of the Taliban, they would drive up illicit production and encourage oversupply. While that would increase heroin consumption in Britain in the short term, as it has done, oversupply would eventually cause prices to collapse. At that point, the British policy of "poppy substitution" with wheat and other crops would start to bite and supply would be stifled. What happened when that stifling drove prices back up again was someone else's concern.
I cannot think of any less daft explanation for a policy that otherwise defies every law of economics. Kim Howells, the Foreign Office minister responsible for flooding British streets with cheap heroin, may squabble with his American colleagues over whether poppy eradication is better than substitution, but one thing is certain. Since Nato arrived in Afghanistan, opium has become to the local economy what oil is to a Gulf state. It is roughly 60% of the domestic product and 90% of exports, with productivity per hectare rising by the year.
Afghanistan now enjoys a global opium monopoly, supplying an estimated 93% of total consumption. This relatively sophisticated consumer business has developed in conditions of near anarchy, with the country under military occupation and a government impotent outside its capital. Nor has it depended on any trade agreement, aid or price cartel. Traders enjoy no regulation, red tape or export controls, other than a need to bribe Afghan officials. They have even started to bring within Afghanistan's borders some of the added value in opium processing that previously went to factories and dealers in Iran and Pakistan. This offers the hope of more money and jobs trickling down to local towns. The free market is working.
Howells claims he wants to imprison the opium traders and destroy their factories, and had been given £22.5m by Gordon Brown to that end. Since he has so far arrested nobody important, unsurprising with a mere 7,000 troops, we must assume he again has a subplot. He is making the British so unpopular among the Afghan peasants as to leave the promotion and protection of the poppy crop to the Taliban and other warlords. They have been as good as he knew they would be, boosting poppies today as they curbed them, at the west's bidding, in 2000.
The British regard excluding both the Taliban and any tribal leaders dependent on drugs from the new state as their sacred post-imperial duty. As long as that is the case, and the Americans keep bombing, Taliban leaders will be able to recruit jihadists from across the world. They can arm and pay them from drugs profits as long as the British keep consuming heroin. Since Britain says it wants to stop this by equating the price of poppies with that of wheat (meaning the price of poppies must fall by 90%), the foreign secretary, David Miliband, was right to say this month that Britain is in Afghanistan "for the long haul". I assume he meant forever.
Every schoolchild economist knows demand will always attract supply. If the government wants to restrict demand for heroin in Britain, it could do so by making it more expensive. This was the covert rationale for the spectacularly failed poppy eradication policy of 2001. But impoverishing local Afghan farmers, processors and traders, who receive a tiny proportion of the eventual street price, will not achieve this any more than it has done already.
The only way, repeat the only way, of curbing the heroin trade is by curbing demand. London's policy, shared with Washington, of trying to stop its people from consuming heroin and cocaine by disrupting the supply chain, was never going to work. It has merely made supply more profitable. It has been pursued for the cynical reason that politicians find it easier to blame some poor foreign country for a British social problem than to tackle that problem domestically. While Britons and Afghans are dying in Helmand, the budget for drug rehabilitation at home is pitiful even by European standards.
The visionary proposal of the Senlis Council thinktank, to buy the entire Afghan poppy crop, which some have been pushing for five years, must now be rated close to hopeless. The hope is that the UN could use the opium to meet a world shortage of morphine, in the same way as the Turkish and Indian crops are bought at present. The Afghans would thus get a fair and legal return for what they produce so successfully.
After the invasion in 2001, poppy production was minimal and bulk purchase might have been worth a try. But the US privately allowed anti-Taliban warlords to start replanting and the proposal is now pie in the sky. To buy the whole crop would be wildly expensive and logistically close to impossible. Without curbing demand, stemming one supply route would merely increase price and stimulate substitute supply from elsewhere.
Growing, processing, transporting, protecting and selling opium dominates the Afghan economy. As Declan Walsh reported in yesterday's Guardian, 3.3 million people and hundreds of towns depend on it. Half Hamid Karzai's cabinet is said to be involved to some degree in the opium trade, not to mention the network of corrupt provincial governors and police chiefs. There is now a huge vested interested in what is overwhelmingly Afghanistan's most successful business.
If Britons want to stop Afghans growing poppies they must stop using heroin. But the government is as bad at reducing drug demand at home as it is good at increasing supply abroad. At every level, its policy is a disaster.
Guardian Unlimited (c) Guardian Newspapers Limited 2007
| Ander Nieuws week 36 / nieuwe oorlog 2007 |