Rising Concern for the Drug Economy

Afghanistan's official GDP figures do not include what is now widely recognized as a large illegal economy associated with opium production. According to the United Nations Office on Drugs and Crime (UNODC), Afghanistan's opium production is estimated to be equivalent to 40 percent of formal GDP.²² Many Afghan farmers have been driven into poppy production due to poverty and lack of alternative livelihoods. As many as 1.5-2 million people may be involved in opium production. In some parts of the country with concentrated poppy cultivation, wage rates of as high as $11-12 per day have been reported, five times the market wage rate for rural unskilled labor. In addition to the overwhelming economic incentive for farmers, the phenomenal rise of the opium economy can also be attributed to comparative advantage in terms of easiness to transport and well-organized markets from farm gate to the border and beyond.²³

The Afghan government considers poppy cultivation and heroin production to be one of the most serious obstacles to developing Afghanistan into a stable democracy. It established an Anti-Narcotics Directorate and adopted a National Drug Control Strategy that includes stronger law enforcement and development of alternative livelihoods, and aims to reduce opium production 70 percent by 2008, and eliminate it altogether within 10 years.²⁴ Resolution of this issue obviously requires intense international cooperation as well as the government’s own efforts.

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