The US totally failed to stop the drug trade in Afghanistan, but the Taliban found a better way to cash in

• The US withdrawal from Afghanistan marks the end of 20 years spent trying to rebuild the country.
• One of the most futile parts of that reconstruction effort has been US-funded counternarcotics programs.
• Afghanistan’s drug trade remains profitable, but evidence suggests the Taliban has found a more lucrative source of income.
• See more stories on Insider’s business page.

After 20 years and billions of dollars, the US failed to stop the drug trade in Afghanistan. While that trade remains lucrative, evidence shows the Taliban now makes more money from taxing goods – a sign of the group’s growing sophistication.

Afghanistan is the world’s largest producer of opium, its largest cash crop, with annual exports valued at $1.5 billion and $3 billion in recent years, according to a 2018 report by the Special Inspector General for Afghanistan Reconstruction, a US watchdog agency.

Since 2002, the US has allocated roughly $8.97 billion to counternarcotics programs as part of its reconstruction efforts, according to SIGAR’s most recent quarterly report.

But Afghanistan’s drug trade, particularly that of opium, has thrived, rising steadily from a historic low in 2001, when the US invaded. (The Taliban banned opium in 2000.)

Cultivation of opium poppies and production of opium in Afghanistan both hit record highs in 2017, according to SIGAR.

The global area under opium cultivation fell in the following years but rebounded in 2020, which was “primarily the result of an increase in opium poppy cultivation by 37 percent in Afghanistan,” according to the UN Office on Drugs and Crime.

“It is a total failure,” John Sopko, the head of SIGAR, said of counternarcotics efforts during a Defense Writers Group event with reporters on July 29.

Despite US counternarcotics efforts – which included trying to develop the legal economy and to deter farmers and traffickers – SIGAR has said drug production and trafficking remain “entrenched” in Afghanistan.

“There are a number of things we did in Afghanistan which were too difficult, so we just kicked the can. Narcotics, that was one,” Sopko said. “We just basically kicked the can down, just gave up.”

At times, that trade continued with US protection.

According to Sen. Chris Murphy, a congressional delegation in 2011 traveled to a recently recaptured part of Herat Province where, with US protection, farmers could harvest crops and sell them, rather than being forced to give them to the Taliban.

Murphy and others with the delegation noticed that the crops – which the farmers were now selling to the Taliban – were poppies.

“So the U.S. is here protecting the heroin trade that provides the Taliban with an income to continue the insurgency we are supposed to be fighting?” Murphy recalled saying.

Afghanistan’s diverse drug trade remains profitable, but the Taliban appears to have found a more complex and more lucrative enterprise – taxing goods and fuel in transit.

An August 2021 report on economic activity in Nimroz Province by the Overseas Development Institute, a British think tank, found that the “$5.1 million in revenues collected by the Taliban from the production and trade in illegal drugs was … only a fraction of the $40.9 million income earned from taxing transit goods and fuel.”

Nimroz is a hub for drug refining – it borders Helmand Province, a major drug-producing region – and has important border crossings with Iran and Pakistan. The Taliban’s focus on taxing trade is visible in other areas it has captured in recent weeks.

After the group captured the US-built Sher Khan Bandar border crossing, an important gateway to Tajikistan in Kunduz Province, in July, a Taliban spokesman told The Wall Street Journal “that the routine work of the border, the customs, will be running as before.”

“The reason is that we don’t want to create problems for businessmen, for traders, for common people,” the spokesman said.

That trade and taxation dynamic may help explain the failures of US and other foreign efforts in Afghanistan.

“Humanitarian and development spending in Afghanistan is based on faulty estimates of licit and illicit resource flows, and military action has targeted drug labs on the mistaken premise that illegal drugs are the Taliban’s primary source of revenue,” the ODI report says.

In addition to showing the Taliban’s administrative acumen, that tax revenue may insulate the Taliban from outside pressure.

“Our results suggest that reducing funding for humanitarian and development projects might not be so persuasive to the Taliban, because there are plenty of hidden sources of cash circulating, although these might not be applied to similar development or humanitarian purposes,” the ODI report says.