18 December 2009

"Seeds of Terror: The Taliban, the ISI and the new Opium wars" by Gretchen Peters

Gretchen Peters, the Harvard graduate who covers Af-Pak region for ABC News provides an objective analysis of the role of poppy seeds in nourishing terrorism.

If you are a venture capital investor, investing in Afghanistan/Pakistan in poppy seeds is the way to go.  Reasons:

Illegal drugs is a big market.  8% of global trade (against 5.3% for motor cars).

Poor governance in Afghanistan facilitates drug lords to “order” farmers to grow poppy; buy future deliveries under "salaam" system; bribe those in power to overlook trafficking; pay Taliban war lords to oversee safe transportation; produce heroin in the lawless borderland between Afghanistan and Pakistan; export through Iran/Turkey or Pakistan to hungry markets in Europe and launder the money through Middle East.

The farmers get a pittance (and yet that pittance is 12 times what they would get for normal food crops).  But the Taliban warlords net quite a pile; $ 439 million in 2007!

The business model evolved over a period of time.

Cause 1:  In its obsession to win the cold war, US overlooked supporting religious zealots.  Zbignew Brezezinski asked, “What was more important?  A few stirred up Muslims or the liberation of Central Europe and the end of the cold war?”.

Cause 2:  US conveniently ignored the drug connection of the mujahideen.  Robert Peck of State Department testified to Congress in 1986 that US did not have enough evidence to believe the rebels were involved in narcotics trade.  In 1989 Ann Wrobleski of State Department defended eloquently that “opium is the only currency the rebels have”.

Cause 3:  Pakistan army and ISI did not have compunction in using drug money to fund covert operations.  Nawaz Sharif, in a 1994 interview to Washington Post confessed that General Aslam Beg, Chief of Army and General Asad Durrani of ISI sought his permission to fund covert foreign operations through large scale drug deals.

Cause 4:  Warlords like Gulbuddin Hekmatyar and Jalaluddin Haqqani (both now allied with Taliban) saw huge opportunity in being part of the supply chain but cleaned up their prospectuses by providing a religious coat to the business model and allying with Taliban.

Cause 5:  Taliban saw the drug revenue as a reliable source of income to fund its activities.  Selling drugs to non muslims was seen as part of the jihad.  Though Mullah Omar banned poppy cultivation for one year (that was revoked later) in 2000, it was an ultimate insider trading con.  That just pushed up prices ten times.  Net margins went up.  The only folks to suffer were the farmers.

Cause 6:  Post invasion, US pursued stability; but overlooked poppy harvest, heroin production and transport.  Again, obsessive pursuit of one priority and compromise with another that could hurt US in the long run.  The 1988 warning Edmund McWilliams issued to Milton Brearden of CIA that “we are financing our own assassins” is continuing to be ignored.

If Harvard were to issue a degree in being a Commander in Chief, course 101 would be on “cutting the funding for your enemy” and course 102 would be on “not taking your eye off all your other enemies”.

Gretchen Peters has several valuable suggestions:

One, bomb the refineries and chemists.  There are just 24 of them.  Should not be too much to ask after you have spent $ 2 trillion on a war machine.

Two, bomb the drug convoys.  You don’t need drones.  These convoys start in Afghanistan; mostly from Helmand province.

Three, exert influence over money launderers.  In the end, Gretchen Peters says, the drug lords keep their money in western banking institutions.

Four, go easy on the farmers.  They don’t love Taliban.  They hate Taliban.  It is just that they don’t have anyone else to love.  Install a government that can move into that sweet spot.

If not, remember Gretchen Peter's quote, “Amerians may have the watches; but Taliban have the time”.

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