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Afghanistan

Afghanistan: Economic Incentives and Development Initiatives to Reduce Opium Production - DFID/World Bank Report

Attachments

EXECUTIVE SUMMARY

I. BACKGROUND

1. This report is about how to progressively reduce over time Afghanistan's dependence on opium - currently the country's leading economic activity - by development initiatives and shifting economic incentives toward sustainable legal livelihoods. These aspects will form an essential component of the broader counter-narcotics strategy, which also includes law enforcement, political and administrative actions, improving security, better governance, awareness-building, and demand reduction and treatment for Afghan problem drug users. The report does not cover these other topics, although as emphasized in the Government of Afghanistan's National Drugs Control Strategy (NDCS), it is only through a holistic strategy which encompasses all key elements that the country will escape from its dependence on opium. In particular, without strong economic and development underpinnings, other counter-narcotics efforts cannot achieve sustained success.

2. Specifically, the report identifies additional investments and policy and institutional measures to support development responses that can counterbalance the economic advantages of opium. It analyses ways to change the relative incentives between licit and illicit cropping and to help enhance rural livelihoods for the poor, under better governance and security conditions. The report puts forward concrete recommendations, and the expected impacts on growth, poverty reduction and the opium economy are assessed.

3. The report first briefly discusses the policy context (Chapter 1) and provides an overview of the opium economy (Chapter 2), focusing on how different segments of the rural population interact with it. The report then analyses the scope for increasing value added, competitiveness and productivity in agriculture (Chapter 3) and for promoting enterprise development and off-farm employment (Chapter 4). The complementary role of further investments in rural infrastructure is examined in Chapter 5, and measures for strengthening governance are analysed in Chapter 6. In Chapter 7 issues that cut across all counter narcotics efforts are examined. A final chapter looks at implementation, and at issues of prioritization, synergies and phasing (Chapter 8). The recommendations of the report are encapsulated in a matrix at the end of this Executive Summary

The Counter-Narcotics Challenge

4. Afghanistan is a desperately poor, war-ravaged country. The usual challenges of post-war reconstruction are made even more difficult by the continuing insurgency, by the age-old centrifugal forces that have always made Afghanistan hard to govern, by the extreme weakness of modern institutions, and by widespread corruption and lack of rule of law.

5. In the last two decades, Afghanistan has become the world's predominant supplier of illicit opiates, accounting for over 90% of world production and trade. Total gross revenues from the illegal drug trade in Afghanistan are equivalent to over one-third of licit GDP. Millions of Afghans benefit directly or indirectly from the opium economy.

6. The government's strategy, with global backing, is to fight drug trafficking and to progressively reduce opium production over time. Where farmers are better off and clearly have viable alternatives, law enforcement measures can be taken. Where farmers are poor, or where landless labourers are involved, government policy is to develop viable alternatives for the rural poor, and only then use sterner measures to enforce a ban on opium poppy cultivation.