Tuesday, December 29, 2009

Afghan opium revenues down 18% in 2009

The estimated value of opium and opium derivatives produced in Afghanistan fell significantly between 2008 - 2009, reducing revenues for drug producers and traffickers in the region, according to a new UN survey.

The survey reports that the potential export value of Afghan opium fell by 18% in 2009 to US$2.8 billion, due to a number of factors. Cultivation and production have fallen in many regions, with 20 of the 34 regions that make up the country now classed as 'poppy free', up from 18 in 2008. Also, opium prices are lower on the world market due to over-production in previous years leading to an excess of supply.

Governments of NATO countries are likely to hail the findings as evidence of success for their anti-narcotics operations. However, this would be an overly-simplistic interpretation of the data. The report suggests that market forces may be the primary cause for the decrease, citing the glut of cheap Afghani opium on the world market. Although opium production is markedly down in some regions, in the volatile Western region, it increased by 26% from 2008.

According to the UN Afghan Opium Survey report:

"Security has been a major problem in the Western region. Because the lack of security compromises the rule of law from the legitimate Government, counter-narcotic interventions are limited and this region consistently show very high opium cultivation."

Despite the fall in revenues, opium is still big business in Afghanistan, with opiate revenues amounting to a staggering 25% of GDP in 2009.

In a statement commenting on the report's findings, UNDOC Executive Director, Antonio Maria Costa, said:

"Annual fluctuations of opium cultivation and production do not tell the whole story ... I hope that the new Afghan National Drug Control Strategy, currently under preparation, will reassert that success will come when Afghanistan's farmers have sustainable licit livelihoods, when drug traffickers no longer operate with impunity, and when people no longer have to pay bribes for basic services. The alternative of a society wracked by drugs, insurgency, and corruption is untenable."

Read more in the full Afghan Opium Survey (18MB PDF), from the United Nations Office of Drugs and Crime


Sunday, December 13, 2009

Did drug money prop up the banking system during the meltdown?

A new report from the head of the UN office for Drugs and Crime suggests that some major financial institutions may have only survived after injections of liquidity from narcotics gangs.

Apparently, drug proceeds were one of very few sources of liquidity during the global meltdown last year and some unnamed banks may have relied on such streams to avoid going under.

Full report over at The Guardian