Drug money feeds Taliban's war chest

Proceeds from illicit opium trade range from $70m to $400m a year

In Afghanistan, the Taliban have imposed an elaborate system to tax the cultivation, processing and shipment of opium, as well as other crops like wheat grown in the territory they control, American and Afghan officials say. In the Middle East, Taliban leaders have sent fund-raisers to Arab countries to keep the insurgency’s coffers brimming with cash.

Estimates of the Taliban’s annual revenue vary widely. Proceeds from the illicit drug trade alone range from $70 million to $400 million a year, according to Pentagon and United Nations officials. By diversifying their revenue stream beyond opium, the Taliban are frustrating American and Nato efforts to weaken the insurgency by cutting off its economic lifelines, the officials say.

Despite efforts by the US and its allies in the last year to cripple the Taliban’s financing, using the military and intelligence, American officials acknowledge they barely made a dent. “I don’t believe we can significantly alter their effectiveness by cutting off their money right now,” said Representative Adam Smith, a Washington State Democrat on the House Intelligence and Armed Services Committees who travelled to Afghanistan and Pakistan last month. “I am not saying we should not try. It is just bigger and more complex than we can effectively stop.”

The Taliban’s ability to raise money complicates the Obama administration’s decision to deploy more US troops to Afghanistan. It is unclear, for example, whether the deployment of 10,000 Marines over the summer to Helmand Province, the heart of the opium production, will have a sustaining impact on the insurgency’s cash flow. And American officials are debating whether cracking down on the drug trade will anger farmers dependent on it for their livelihood.

But even if the US and its allies were able to stanch the money flow, it is not clear how much impact it would have. It does not cost much to train, equip and pay for the insurgency in impoverished Afghanistan — fighters typically earn $200 to $500 a month — and to bribe local Afghan security and government officials.
Inexpensive operations
“Their operations are so inexpensive that they can be continued indefinitely even with locally generated resources such as small businesses and donations,” said Kenneth Katzman, a Middle East specialist at the Congressional Research Service and a former analyst of the region at the CIA.

American officials say they have been surprised to learn in recent months that foreign donations, rather than opium, are the single largest source of cash for the Taliban. The CIA recently estimated in a classified report that Taliban leaders and their associates had received $106 million in the past year from donors outside Afghanistan. Private citizens from Saudi Arabia, Pakistan, Iran and some Persian Gulf nations are the largest individual contributors, an American counterterrorism official said.

Another major source of financing for the Taliban is criminal activity, including kidnappings and protection payments from legitimate businesses seeking to operate in Taliban-controlled territory, American authorities say.

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