Vice Squad
Friday, November 19, 2004
The more things change, the more they remain the same in Afghanistan

On Thursday, the UN released a report described in the New York Times (registration required) stating that “the fear that Afghanistan might degenerate into a narco-state is becoming a reality.” I guess the US and NATO military presence as well as elections haven’t made that much difference with respect to the drug production and trade. Markets work. As long as producing opium and heroin provides the greatest risk-adjusted returns, people are going to do it. It might be perhaps somewhat surprising that the cultivation of these drugs has apparently reached its highest level in history, according to the report. While the UN and various officials cited in the NYT article are naturally upset about the facts stated in the report, I can’t claim to be too worried about all this. It does suggest, however, that the US, NATO, and Afghan government’s control of the country is quite tenuous. The UN report states that more than 321,000 acres of land were planted with poppy in 2004, representing a 64% increase over last year. Apparently, poppy production has spread to every Afghan province. This year’s harvest was estimated at 4,200 tons, a 17% increase over last year’s output. Despite the largest ever area planted, however, this was not the highest production ever because of the draught and disease.

One good thing about the great economic achievements of the Afghan farmers is that perhaps they have lowered the price of the drugs in the US and Europe. Not having purchased any heroin lately (or ever, for that matter) I don’t know if this has actually occurred. But, assuming a relatively inelastic demand for the stuff, the price effect must be substantial.

Another good thing is that the greater supply should allow the anti-narcotics agencies around the world to report greater successes is seizing ever larger quantities of opium and heroin. In fact, recently, a Russian news website has reported the start of the trial of the “organizers of the international narco-syndicate” that supplied several Russian provinces with large shipments of Afghan heroin. The police claims to have cut this distribution channel and have confiscated about 130 kilos of heroin. Apparently, the usual shipments were about 100 kilos each. And that was in 2003. I wonder what other channels are being used to deliver the 2004 bumper crop of Afghan drugs. Somehow, I don’t think that they all stay in Afghanistan. I am sure we can expect more reports of the exploits of the anti-drug agents around the world.

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