Opium, and the economy it spawned, has for long been regarded as the root of Taliban funding. Poppy cultivation in the insurgency ravaged South and East Afghanistan was estimated to have contributed almost 50 per cent to the nation’s GDP. In recent months, analysts have pointed to other branches of funding for the Taliban. Of these, foreign donations in the form of “Islamic charities” have emerged as the largest source.
The US Central Intelligence Agency recently estimated that Taliban leaders and their associates had received $106 million in 2008 from such charities based outside Afghanistan. American counter-terrorism officials have identified private citizens from Saudi Arabia, Pakistan, Iran and some Persian Gulf nations as the largest individual contributors to these charities. With a perceived decline in Al Qaeda’s global fund-generating capacities, traditional sources of terror funding in Persian Gulf kingdoms have switched their investment to the more successful Taliban insurgency.
Taliban leaders have sent fund-raisers to Arab countries to keep their war chests overflowing. Although there is little evidence to suggest official complicity in Saudi Arabia, the United Arab Emirates and other Persian Gulf states, US agencies continue to suspect Pakistani intelligence operatives as a source of funding.
All this is not to belittle the continued role of opium and the drug trade. Afghanistan produces more than 92 per cent of opium in the world. Taliban commanders levy a 10 percent tax on poppy farmers. Taliban tribal fighters also supplement their pay by working in poppy fields during harvest.
Moreover, the biggest source of drug money for the Taliban is the regular payment made by drug traffickers to the Taliban leadership based in the Pakistani border city of Quetta. According to an August 2009 UN report, drug traffickers had stockpiled more than 10,000 tonnes of opium, worth billions of dollars, enough to satisfy world demand for two years. So, in the highly unlikely scenario of the US succeeding in cutting off funding through foreign donations, the Taliban would continue to secure financial support from traditional sources for a long time to come.
The war economy in Afghanistan is also “criminalised” with kidnappings, extortions, taxes and protection payments from non-governmental and reconstruction agencies seeking to operate in Taliban-controlled areas generating enough income for the Taliban.
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The US and its allies have made concerted efforts over the past year to cut off funds to the Taliban through military and intelligence-based action. The US has created two new entities — the Afghan Threat Finance Cell and the Illicit Finance Task Force — aimed at disrupting the trafficking networks and illicit financing. But such efforts have not been effective. In spite of a sanctions regime, individual donors have managed to disguise their contribution and have avoided detection.
Though there has been a marginal decline in opium production this year, the lack of a “unified Nato strategy” remains a problem. While the US has preferred “aerial eradication”, the British seek to “win the hearts and minds” of the Afghans. Destroying opium crops without providing alternative livelihood options drives these impoverished farmers into the arms of the Taliban. During my field visits to Afghanistan, several interlocutors spoke resentfully about the denial of this source of livelihood while alternative income sources are not provided. They blamed the Hamid Karzai government, charging it with linkages to the drug trade.
The Obama administration has said that it seeks to revise the counter-narcotics policy by de-funding and de-emphasising eradication and focusing on interdiction and rural development. Whether such a policy is actually put into practice and whether it will deliver, in terms of choking the supply lines of the Taliban insurgency, would depend on the efficacy of its implementation in the long term.
Afghanistan’s neighbours, particularly Iran and Pakistan, have a stake in curbing the drug flow as it affects their own populace. Innovative counter-narcotic strategies require greater regional cooperation and joint border patrolling, information exchange, legal measures and, most importantly, the provision of alternative livelihoods to those involved in cultivation and trade.
India has rich experience in these areas that it can share. Saffron cultivation as an alternative to poppy could be a viable option. Lessons derived from such regional experiences would go a long way in breaking new ground and undermining the financial resource base of the insurgency.
The author is associate fellow, Institute for Defence Studies & Analyses, New Delhi