UN DRUG CONTROL AGENCY WINS BACK DONORS

The head of the United Nations' anti-drug programme, Antonio Maria
Costa, said yesterday he was successfully overseeing a new era of
transparency and good governance within his controversial
organisation.

"We are. ..recovering from a situation that led to an abysmal
relationship with donor governments," Mr Costa told the FT.

Mr Costa, an economist and former secretary-general of the European
Bank for Reconstruction and Development, took over as executive
director of the UN Office for Drug Control and Crime Prevention
(UNDCP) in May last year.

He succeeded fellow Italian Pino Arlacchi, who was the subject of an
internal UN investigation into alleged mismanagement of funds and
concerns over the drug programme's recruiting and auditing methods.

The controversy surrounding Mr Arlacchi surfaced in early 2001, when
several European donors cut off funding for the Vienna-based
organisation.

Mr Costa said donations from member states to the organisation had
recovered in recent months after dropping by between 20 and 25 per
cent during the last days of the Arlacchi era.

A detailed report on Afghanistan commissioned by Mr Costa, due to be
published next month, is expected to confirm the extent to which that
country remains a key producer of the world's opium, with cultivation
identified as resuming in five provinces after the US military
offensive against the Taliban regime.

The report is thought to have identified the deeply engrained
dependence of sectors of the population on the opium economy and its
continuing survival against the background of poorly developed
economic and social alternatives.

Mr Costa conceded that the cash-for-drugs eradication programme
promoted by western governments following the fall of the Taliban had
helped increase illicit drug prices. He said he wanted tougher
interdiction to be accompanied by greater investment from the
international community in the development of a stable and legal economy.

While backing the current involvement of the US Drugs Enforcement
Agency in Afghanistan, Mr Costa said he was against the military
getting involved as, he argued, this would only lead to the
displacement of the drugs trade elsewhere.