SKOPJE, Macedonia, Oct. 24 (UPI) -- Conspiracy theorists in the Balkans have long speculated on the true nature of the Albanian uprising in Macedonia. According to them, Afghanistan was about to flood Europe with cheap opium through the traditional Balkan routes. The Kosovo Liberation Army - - denounced by the State Department as late as 1998 as a drug trafficking organization -- was, in the current insurrection, in its new guise as the National Liberation Army, simply establishing a lawless beachhead in Macedonia, went the rumors.
The Taliban were known to stock about 3000 tons of raw opium. The Afghanis -- Arab fighters against the Soviet occupation of Afghanistan -- another 2000 tons (their fee for providing military and security services to the Taliban). Even at the current, depressed, prices, this would fetch well over $2 billion in next door Pakistan. It also represents 5 years of total European consumption and a (current) street level value in excess of $100 billion.
The Taliban may well intend to offload this quantity in the next few months and to convert it to weapons. Destablizing the societies of the West would be another welcome side effect.
It is ironic that the Taliban collaboration with the United Nations Office for Drug Control and Crime Prevention culminated this year in the virtual eradication of all opium poppies in Afghanistan. Only 18 months ago, Afghan opium production (c. 4600 tons a year) accounted for 70 percent of world consumption (in the form of heroin). The shift, starting in 1997 and partly forced on the Taliban by an unusual climate, from poppies to cereals was thus completed successfully.
Afghanistan is not a monolithic entity. It is a mountainous and desert territory (about 251,000 sq. miles in size, less than 10 percent of it cultivated). Administratively and politically, it is reminiscent of Somalia. The Taliban government -- now recognized only by Pakistan -- rules the majority of the country as a series of tribal fiefdoms. The country, ruined by a decade of warfare between majority Pushtuns and minority Tajiks and Uzbeks in the north, lacks all institutions, or infrastructure. In an economy of subsistence agriculture and trading, millions (up to one third of a population of 27 million) have been internally displaced or rendered refugees.
One third of all farms have been vacated. Close to 70 percent of all villages are demolished. Unemployment -- in a mostly unskilled workforce of 11 million -- may well exceed 50 percent. Poverty is rampant, food scarce, population growth unsustainable. The traditional social safety net -- the family -- has unraveled, leading to widespread and recurrent famine and malnutrition. The mainstays of grazing and cattle herding have been hampered by mines and deforestation.
The Taliban regime has been good to the economy. It restored the semblance of law and order. Agricultural production recovered to pre-Soviet invasion (1978) levels. Friendly Pakistan provided 80 percent of the shortfall in grain; international aid agencies provided the rest. The number of heads of livestock -- the only form of savings in devastated Afghanistan -- increased. Many refugees came back.
Urban workers, mostly rural laborers displaced by war, fared worse, though. As industries and services vanished and army recruitment stabilized with the Taliban's victories, salaries decreased by up to 40 percent while inflation picked up (to an annual average of 20 percent-25 percent, as reflected in the devaluation of the currency and in the price of bread). More than 50 percent of the average $1 a day wage of the casual, unskilled, worker, is spent on bread alone!
But this discrepancy between a recovering agricultural sector and the dilapidated and depleted cities led to reverse migration back to the villages. In the long term it was a healthy trend. Paradoxically, the collapse of the central state led to the emergence of a thriving and vibrant private sector engaged in both legal and criminal activities. Foreign exchange dealing is conducted in thousands of small, privately owned, exchange offices. Rich Afghani traders have invested heavily in small scale and home industries (mainly in textiles and agri-business).
In some respects, Afghanistan is an extension of Pakistan economically and, until recently, ideologically. Food prices in Afghanistan, for instance -- the only reliable indicator of inflation -- closely follow Pakistan's. The Afghan currency (there are two -- one issued by the Taliban and another issued by the deposed government in Faizabad) is closely linked to Pakistan's currency, though unofficially so. The regions closest to Pakistan (Herat, Jalalabad, Kandahar) -- where cross-border trading, drug trafficking, weapons smuggling, and illegal immigration (to Western Europe) are brisk -- are far more prosperous than the northern, war-torn, ones (Badakhshan, Bamyan). The Taliban uses economic sanctions in its on-going war against the Northern Alliance. In 1998-9, it has blockaded the populous provinces of Parwan and Kapisa.
Another increasingly important trade partner is Turkmenistan. It supplies Afghanistan with gasoline, diesel, LNG, and jet fuel (thus reducing Afghani dependence on hostile Iranian supplies). Uzbekistan and Tajikistan, its two other neighbors, are considered by the Taliban to be enemies. This enmity results in very high costs of transportation, which price a number of Afghan products out of foreign markets.
With Pakistan, Afghanistan has an agreement (the Afghan Transit Trade), which provides Afghanistan with access to the sea. Afghanistan imports consumer goods and durables through this duty free corridor (and promptly re-exports them illegally to Pakistan). Pakistani authorities periodically react by unilaterally dropping duty free items off the ATT list. The Afghans proceed to import the banned items (many of them manufactured in Pakistan's archrival, India) via the Gulf States, Russia, Ukraine (another important drug route) and into Pakistan.
The current conflict can be a blessing in disguise for Afghanistan. Western aid and investment can help resuscitate the Soviet-era mining (Copper, Zinc) operations and finally tap Afghanistan's vast reserves of oil and natural gas. With a gross domestic product per capita in Afghanistan of less than $800, there is room for massive growth. Yet, such bright prospects are dimmed by inter-ethnic rivalry, a moribund social system, decades of war and natural disaster (such as the drought in 1998-9), and intense meddling and manipulation by near and far.
One thing is certain: opium production is likely to increase dramatically. And Western users will be treated to ever-cheaper heroin and Hashish.