General political and economic circumstances in Afghanistan have improved since January 2004, but the narcotics situation continues to worsen, despite positive steps taken by both the government and international donors. Dangerous security conditions make implementing counternarcotics (CN) programs difficult and present a substantial obstacle to both poppy eradication efforts by the national government and to international efforts to provide related assistance. As a result of the profound destruction and disruption of normal life brought about by more than 25 years of conflict, the lack of legitimate income streams, and the limited enforcement capacity of the national government, the area devoted to poppy cultivation in 2004 set a new record at 206,700 hectares, more than three-times the area devoted to poppy last year. Opium gum production of 4950 metric tons in Afghanistan dwarfed opium gum production in second-place Burma (292 metric tons) by a factor of almost 17 times. Burma’s heroin production potential at 28 metric tons is a small fraction (4.8 percent) of Afghanistan’s heroin production potential of 582 metric tons. Afghanistan’s illicit opium/heroin production can be viewed, for all practical purposes, as the rough equivalent of world illicit heroin production, and it represents an enormous threat to world stability.

With an estimated 40 to 60 percent of its GDP attributed to narcotics (IMF), Afghanistan is on the verge of becoming a narcotics state. Despite the many obstacles, the Government of Afghanistan (GOA) has undertaken major institutional and policy changes that have directly benefited its counternarcotics objectives and have established a sound structural basis to attack the problem. President Hamid Karzai, following his election victory in October, has repeatedly spoken out against the drug trade and has issued decrees banning drug cultivation and trafficking. International counternarcotics (CN) activities, following the overthrow of the Taliban, remain under a multilateral mandate, with the United Kingdom in the lead on CN measures. The international community is continuing to work with the GOA to determine how best to attack Afghanistan’s drug problem in a more aggressive manner, including more widespread eradication and efforts against heroin refiners and traffickers. In light of the growing threat the drug trade poses to Afghanistan and the world, the U.S. adopted an enhanced counternarcotics policy in 2004 and a comprehensive program consisting of public information campaigns, alternative livelihood projects, law enforcement development, including justice reform, and interdiction and eradication.

Afghanistan remains a significant location for the cultivation, refining, and transit of all forms of unrefined (opium), refined (heroin) and semi-refined (morphine base) opiates. Drugs have been a major factor in the Afghan economy since the Soviet invasion of 1979. Criminal financiers and narcotics traffickers in and outside of Afghanistan take advantage of the ongoing instability. The process of reconstruction that began in 2002 continues to accelerate and is laying the basis for successful counternarcotics programs in the future. Some Afghan opiates reach the United States, but Colombia and Mexico remain the U.S.’ largest source for heroin.

Policy Initiatives. The U.S. and the international community, under the UK as lead nation on CN, and the country office of the UN Office on Drugs and Crime (UNODC), maintained an intense policy dialogue with President Karzai, the Afghanistan National Security Council, and various Afghan Ministries throughout the year on the subject of combating narcotics. Urged on by the international community and recognizing the need for action on the counternarcotics front, the GOA has made significant structural, policy and institutional changes to combat narcotics cultivation, production, and trafficking in Afghanistan, including the following:

• A new Counternarcotics Ministry created in December 2004 replacing the Counternarcotics Directorate to coordinate and oversee CN policies and other line ministries, involved in aspects of counternarcotics policy. The CN Ministry will raise the profile of GOA CN activities and facilitate communication between CN policy makers and practitioners and the President.

• In November 2004, the position of Deputy Minister for Counternarcotics was created in the Ministry of Interior to oversee and coordinate CN enforcement activities.

• A Central Poppy Eradication Force was established in April 2004 to carry out centrally-directed, forced eradication across the country.

• In October 2004, the National Interdiction Unit, a special interdiction force trained by the U.S. Drug Enforcement Administration, was created under the existing Counternarcotics Police.

• The review and updating of the May 2003 National Drug Control Strategy is underway to better address the growing problem and reflect the higher priority the GOA places on CN activities.

Law Enforcement Efforts. The most immediate concern of the GOA is to establish security and rule of law throughout the country. In the current difficult security environment significant drug enforcement work has not yet been possible, beyond a few limited areas. Efforts have been focused on planning and implementing near-term governmental reforms, which lay the groundwork for serious law enforcement actions against illicit cultivation and trafficking of narcotics in the near-term.

The GOA is reviewing a new basic drug law, the Anti-Narcotics Amendment. This revision of the country’s basic narcotics law will bring it into compliance with international norms for counternarcotics laws and remove significant loopholes that constrain aggressive law enforcement and hinder the judicial process.

Over 33,000 Afghan National Police were trained in 2004 under an accelerated training program managed by the German government and supported by the U.S. Over the longer term, additional support to equip, mentor and train the border, highway and regular police force in the field will be required, as well as further institutional development of the Ministry of Interior MOI.

The MOI established a Counternarcotics Police department (CNP-A) in 2003 and has established, with help from the international community, three sections of the CNP-A: investigation, intelligence and interdiction. However, piece-meal training and limited funding have hampered development of these units. A new program to build a National Interdiction Unit (NIU) capable of undertaking low and mid-level targeted interdiction operations across the country, under the tutelage of the U.S. Drug Enforcement Administration, is underway. Eventually, this force will be integrated with the CNP-A’s other units to build a unified force with regional headquarters around the country.

The same limitations that adversely affect interdiction of narcotics and enforcement of the ban on narcotics cultivation and trafficking hamper the interdiction of precursor substances and processing equipment. The GOA has a sophisticated understanding of this issue, but action in this regard is dependent upon establishment of the necessary specialized police, and licensing arrangements. There are currently no registries or legal requirements for tracking, storing or owning precursor substances.

The U.S. is also providing support for justice reform and training in judicial and prosecutorial enforcement of counternarcotics laws. Aware that general justice reform is a long-term process, the U.S., UK and other donors established the "Counternarcotics Vertical Prosecution Task Force" in late 2004 to move expeditiously against narcotics criminals. The program, to be carried out under the auspices of the UNODC, includes initial training of a select group of judges, prosecutors, and police in specific counternarcotics issues; refurbishment of a secure prison facility; and establishment of a secure court to hold and try major drug offenders. The U.S. plans to assign experienced Federal prosecutors to the Task Force to assist their Afghani counterparts in building and trying cases.

Corruption. In general, most officials at the national level are believed to be free of direct criminal connection to the drug trade. At the provincial and district levels, however, drug-related corruption is pervasive. Involvement ranges from direct participation in the criminal enterprise, to benefiting financially from taxation or other revenue streams generated by the drug trade. The national government has officially condemned the illicit drug trade, but does not have sufficient power throughout the national territory to suppress it.

Agreements and Treaties. Afghanistan is a party to the 1961 UN Single Convention, the 1971 UN Convention on Psychotropic Substances and the 1988 UN Drug Convention. The GOA has no extradition or legal assistance arrangements with the U.S. Afghanistan is not a party to any treaties providing for mutual legal assistance between itself and any of its neighbors, the U.S., or any other major CN nation. Afghanistan is a party to the UN Convention against Transnational Organized Crime and a signatory to the UN Convention Against Corruption.

Illicit Cultivation/Production. Afghanistan contains the largest area of illicit opium poppy cultivation in the world. Poppy is grown commercially in all of its 34 provinces. In 2004, Afghanistan had an unprecedented 206,700 hectares of land planted to poppy. Opium production was an estimated 4950 metric tons. If all of Afghanistan’s opium production were refined into heroin, an estimated 582 metric tons of heroin could have been produced. None of these figures has any precedent. For example, the largest prior production of opium in Afghanistan was 3108 metric tons of opium in 2000; 2004’s production of opium exceeded this level by almost 60 percent. The largest area ever dedicated to growing opium was 165,800 hectares in Burma in 1993; the land devoted to poppy in Afghanistan last year exceeded Burma’s ‘93 cultivation by almost 25 percent. Only pitiful yields for South Asia of 24 kilograms of opium gum per hectare, caused by disease and drought, saved the world from even larger opium gum production in Afghanistan. If yields in 2004 had matched the yields achieved in 2003, Afghanistan would have produced 9715 metric tons of opium, with a potential yield of heroin in excess of 1000 metric tons.

With limited national enforcement reach, the GOA has not been able to enforce its decree banning opium production. The Central Poppy Eradication Force and provincial forces have undertaken only marginal crop destruction in a few locations. This eradication has had no material effect on the quantity of opium gum produced in Afghanistan. The aftermath of a quarter-century of warfare, multiple changes of government, and an embedded tradition of poppy cultivation has made it very difficult to implement eradication plans. Even a centrally-trained and directed Afghan force faces significant opposition by local people involved in the trade. The lack of sustainable alternative sources of income compounds the difficulty of reducing the opium poppy crop. Because so much of the rural economy is dependent on the opium trade, a major forced eradication campaign, without the provision of viable alternatives, could destroy the already fragile Afghan economy. Rebuilding the agricultural sector and rural economy is fundamental to reducing opium poppy cultivation in Afghanistan.

Drug Flow/Transit. Drug cultivation in Afghanistan is facilitated by both domestic and foreign individuals who lend money and/or provide agricultural inputs to Afghan farmers. These individuals then buy their crop at previously set prices, or accept repayment of loans "in kind", i.e., with deliveries of raw opium. In many provinces there also are opium markets, under effective protection of regional strongmen, where opium is traded freely to the highest bidder and is subject to taxation by those strongmen. An increasingly large portion of Afghanistan’s raw opium crop is processed into heroin and morphine base by drug labs inside Afghanistan, reducing its bulk by a factor of 10 to 1, and thereby facilitating its movement to markets in Europe, Asia and the Middle East through Iran, Pakistan, and Central Asia. In the South, Southeast and Northeast border regions, Pakistani nationals play a very prominent role in all aspects of the drug trade. Distribution networks are frequently organized along regional and ethnic lines (i.e., Baloch tribesmen on both sides of Afghanistan’s borders with Iran and Pakistan, and the Tajiks in northern Badakhshan Province). Other organized criminal groups are also believed to be involved in transportation onwards to Turkey, Russia and the rest of Europe.

Demand Reduction/Domestic Programs. The GOA recognizes that it has a domestic drug use problem, particularly with opium. Its National Strategy includes demand reduction and rehabilitation programs for existing and potential drug abusers. However, in the context of the overall shortage of general medical services, very limited GOA resources are being directed to these programs. The U.K., and Germany and the U.S., to a lesser degree, have funded specific demand reduction and rehabilitation programs. The GOA (collectively, the MOI, the President’s executive office, the National Security Council) has established public outreach campaigns to discourage drug abuse.

Bilateral Cooperation. The United Kingdom was designated as international lead country on CN activities in Afghanistan in 2002. In 2004, as the drug problem continued to grow out of control and evidence mounted that drug proceeds were supporting Taliban remnants and terrorist groups, the U.S. expanded its CN programs. CN is now one of the U.S.’s top priorities, as solving the narcotics problem is critical to achieving overall success in Afghanistan. The U.S., in coordination with the GOA and the UK, has crafted a comprehensive and integrated program and will provide substantial resources to achieve the following aims:

• Encourage popular support for the government’s CN programs through a broad public affairs campaign.

• Build sustainable alternative sources of income to poppy in rural areas.

• Build capacity to arrest, prosecute and incarcerate drug offenders.

• Destroy drug labs and stockpiles.

• Dismantle the drug trafficking/refining networks.

• Enforce the poppy ban through eradication.