PANICKED OPIUM TRADERS UNLOAD HUGE STOCKS

Price Plummets As Refugees Seek Cash In Pakistan

ISLAMABAD, Pakistan -- Just as the Dow Jones industrial average fell
precipitously in the wake of the terrorist attacks in the U.S., so did the
main economic marker in the ramshackle street bazaars of Pakistan's North
West Frontier province.

Traders in Peshawar reported that the price of opium had plunged from $700
a kilo to $90 since Sept. 11. They blamed the drop on panic selling by
Afghan traffickers and refugees who have been crossing the border into
Pakistan ahead of anticipated U.S. military strikes.

"The refugees are selling their valuables, and this includes opium, so
right now there's a glut on the market," a senior international law-
enforcement official said.

Feeding the West's voracious appetite for heroin, which is made from opium,
is one of the few signs of economic life in Afghanistan, where the per
capita GDP is less than $800 and a quarter of the children die before their
5th birthday.

Five years ago, Afghanistan passed Burma as the leader in opium production.
Today, it is responsible for about 70 percent of the total world production.

The drug trade has become an important source of revenue for the Taliban
regime, which levies a 10 percent tax on peasant farmers who sell raw opium
to dealers. That generated about $10 million for the Taliban last year and
$18 million the year before that, according to the UN's Drug Control Program.

Given the Taliban's extreme vision of Islam, its leaders have had to
improvise a somewhat ambiguous theology on drugs. The regime has decreed
that drug use and the sale of drugs to users are un-Islamic, but it
accommodates the economic necessity of peasant farmers who grow opium
poppies and produce raw opium as a means of survival. It also has found it
politically expedient to coexist with the local drug lords.

Last year, after several years of negotiations with the Taliban, the UNDCP
persuaded Mullah Mohammed Omar, the Taliban's spiritual leader, to issue a
decree banning the cultivation of opium poppy.

"The Taliban took a unilateral decision. It was unconditional, linked to a
religious theme," said Bernard Frahi, UNDCP program director in Islamabad.

Omar's word is writ in Afghanistan, and U.S. officials who toured the
country in June confirmed that the opium poppy had been eradicated in all
areas controlled by the Taliban.

For its efforts, the Taliban leadership hoped it would get diplomatic
recognition and economic aid for farmers who had given up their most
reliable cash crop.

Taliban Motives Questioned

International narcotics officials were not satisfied. They suspected that
traffickers and farmers had stockpiled part of the previous year's bumper
crop. Some suggested that the Taliban, in cahoots with traffickers, may
have implemented the ban to prop up prices that had slipped as a result of
a market oversupply in 1999 and 2000.

The sudden glut in Peshawar last week would seem to bear out those suspicions.

In the present climate of extreme tension between the U.S. and Afghanistan,
some U.S. officials have made extravagant claims about the Afghan drug
trade being used to finance international terrorism, linking it to Osama
bin Laden and his Al Qaeda network.

Top international law-enforcement experts are skeptical.

"It could be argued that Osama bin Laden profits from the protection of the
Taliban, and the Taliban profits from drug trafficking, but we have no
corroborated evidence that he has any direct involvement in drug
trafficking," said a senior official who spoke on condition of anonymity.

The heroin trade from the so-called Golden Crescent is controlled by
tightly knit networks of tribes and families that straddle the Afghan-
Pakistani border. Unlike the drug cartels of South America and Southeast
Asia, these networks are virtually impossible to infiltrate,
law-enforcement officials say.

The opium poppy is cultivated by peasants for whom it is a cash crop as
well as a source of credit and savings. "The farmers are not criminals.
They would be happy to plant something else provided we help them," Frahi said.

Opium and the cultivation of opium poppies are deeply rooted in the culture
here, but cultivation on an industrial scale did not occur until the Soviet
invasion of Afghanistan in 1979.

Weapon Against Soviet Troops

To counter the Soviets, the CIA began to recruit, arm and train thousands
of mujahedeen--holy warriors--from throughout the Middle East. From the
outset, the CIA recognized the potential of stimulating drug production to
finance the operation and to spread addiction among the poorly disciplined
Soviet troops.

President Jimmy Carter rejected using drugs as a weapon of war, but when
the Reagan administration came to power in 1981, CIA Director William Casey
jumped at it, according to the memoirs of some of the key players in the
operation.

How much of a role the CIA played in promoting the Afghan heroin trade is
unclear. The evidence is mostly circumstantial, but certainly the Soviet
army withdrew from the country in 1989 with a drug problem that still
plagues Russian society.

When the Soviets withdrew, Afghanistan and Pakistan were producing about
800 tons of raw opium each per year. Since then, Pakistani production has
fallen to near zero, while Afghanistan's increased to 4,600 tons during the
record 1999 harvest.

Pakistan, which had virtually no drug addiction problem before 1979, now
has about 4 million addicts. The government cracked down on traffickers and
stepped up development assistance to farmers to get them to plant crops
other than poppies.

Pakistan was declared "poppy-free" this year, although some would argue the
problem merely moved to Afghanistan.

Still, Frahi was heartened by this year's eradication of poppy cultivation
in Afghanistan.

"Without spending a single dollar, based on advocacy alone, we managed the
elimination of opium in Afghanistan," he said.

But he acknowledged that the triumph is likely to be short-lived. With the
U.S. threatening Afghanistan with military strikes, impoverished farmers
will feel pressure to revert to their most reliable cash crop.

Planting season begins in a few weeks. Drug monitors think the Taliban
already has given farmers the go-ahead.