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Drugs and development in Afghanistan (English)

This paper analyzes the linkages between drugs and development in Afghanistan. It argues that the opium economy-including its nexus with insecurity, warlords, state weakness, and poor governance-constitutes a central development problem for the country. The Afghan drug industry is unprecedented in international experience, in terms of its relative economic size, its penetration of the policy, economy, and society, and the insecure and lawless environment in which it has thrived. While international experience can provide some useful lessons, Afghanistan's own largely unsuccessful experience in anti-drug efforts suggests the problem is of a different order of magnitude. The development implications of the opium economy include pluses as well as minuses. Among the former are the support provided by the opium economy to overall economic activity, and the balance of payments. The opium economy has boosted rural incomes, and has served as a coping mechanism helping large numbers of poor people through wage labor, sharecropping, and tenancy arrangements which provide them with access to land and credit, albeit on unfavorable terms. Major drawbacks of Afghanistan's opium economy, include large price and quantity volatility, which can have a major macroeconomic impact, and the price and exchange rate effects of the economy's heavy reliance on opium, which could discourage production of other tradables through a "Dutch disease" effect. The positive and negative development impacts of the opium economy need to be fully taken into account in the counter-narcotics strategy. From a development perspective, it would make sense for the strategy to focus on the most damaging aspects of the opium economy, which would imply emphasis on interdiction of trafficking and processing, and sanctions against drug industry principals and sponsors. It is also important that the strategy include measures to address the adverse side effects of successful anti-drug actions in the macroeconomic, livelihoods, and poverty spheres.




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Byrd,William Ward,Christopher S.

Drugs and development in Afghanistan (English). Social development papers. Conflict prevention and reconstruction series ; no. CPR 18 Washington, D.C. : World Bank Group.