SMACK IN THE MIDDLE

The Taliban Won Plaudits And Profits For Banning Opium. But War Will
See The Drug Trade Surge.

Kandahar, the citadel of Taliban rule, has its own version of Wall Street
called the opium bazaar, just beyond the stalls selling raisins and
pistachios. And the Taliban is guilty of insider trading. Two summers ago,
some of the biggest customers in the clamorous lane were local Taliban
commanders who had been tipped off that the supply was about to be
choked--Taliban supreme leader Mullah Mohammed Omar declared poppy
cultivation to be "un-Islamic"--and saw the chance to make a killing.

Back then, it was a bearish market. Afghanistan provided 75% of the world's
opium and its derivative, heroin. A kilo of sticky, greenish black opium
sold for only $30. Taliban commanders began buying up tons of opium and
stockpiling it in warehouses around Kandahar and in Pakistan's tribal
frontier land. The year after Omar's ban, annual production plummeted to
185 tons of opium, compared with about 3,300 tons the year before,
according to United Nations antidrug officials. Prices soared, hitting $700
a kilo in Kandahar before the Sept. 11 attacks. "Some Taliban commanders
were bragging about the huge fortunes they had made," says Haji Mohammed, a
Kandahar merchant interviewed in Quetta.

During the boom in the summer of 2000, nobody in the Kandahar bazaar
trifled with the Afghan currency--only greenbacks were accepted. And the
trade was so frenetic, according to Mohammed, that dealers didn't bother
counting money: they used scales to weigh bags stuffed with precounted $100
bills. (Double-crossers don't last long in this bazaar.) In the days
following the attacks in the U.S., opium hoarders, including several
influential Taliban commanders, began selling off their stocks to
accumulate funds for the impending war with the U.S. According to traders
arriving in Quetta, the stockpilers were also worried that their stores
might go up in roiling, million-dollar puffs of smoke in a U.S missile
attack. So far, apparently, the opium bazaar has survived the constant
bombings.

Word also spread around Kandahar that if the U.S. attacked, the Taliban
leader would retaliate by allowing farmers to grow opium poppies again.
However, Mullah Omar denied last month that he was lifting the ban on poppy
growing. Harsher still, he threatened that the Taliban would kill any
farmer disobeying his edict. Currently, opium sells for around $380 a kilo
in Kandahar and in the tribal bazaars outside Peshawar, where Pashtun
shopkeepers keep bricks of opium and hashish inside glass display cases.

Experts are divided over the Taliban's intentions. Some argue that Omar's
ban on poppy growing was a deliberate move to drive up opium and heroin
prices. Others say the one-eyed cleric genuinely wanted to join with the
international community to help wipe out drugs, and expected a payback in
aid for starving Afghan farmers. That assistance--sacks of wheat seed,
fertilizer and food-for-work schemes--was on its way when the attacks on
the U.S. occurred; the U.N. pulled its foreign staff out of Afghanistan
soon after.

If you listen to merchants from Kandahar who have fled their city since
Sept. 11, Omar knew his commanders were making a killing in the opium
trade, and he benefited, too. "When he was made supreme leader, Mullah Omar
was wearing a broken pair of sneakers," says merchant Amanullah Khilji.
"Now he has a fleet of seven brand-new, bulletproof Land Cruisers from
Dubai, a gift from his smuggler friends." Before the ban, the Taliban raked
in about $30 million by taxing growers, say antinarcotics officials.

In Washington, lawmakers claim the Taliban and suspected Saudi terrorist
Osama bin Laden are cohorts in the drug trade. At a recent Congressional
hearing, Republican Mark Souder spoke of the "dark synergies between
narcotics trafficking and international terrorism." While some extremist
Afghan clerics argue that drugs are a legitimate weapon to undermine
Western society, there is no evidence that bin Laden's al-Qaeda network
ever used Afghan heroin to finance its suspected terrorist activities. An
Arab diplomat in Islamabad claims that most of bin Laden's funds come from
rich Islamic sympathizers in the Gulf States and in the Middle East. "Bin
Laden has access to plenty of money. He doesn't need to dirty his hands
with drugs," the diplomat says.

Meanwhile, a province held by Washington's unruly ally, the Northern
Alliance, accounts for most of Af-ghanistan's opium production this year. A
U.N. drug survey released last month shows farmers in Badakhshan province
have carpeted their steep mountain valleys with scarlet-colored opium
poppies. Using satellites and investigators on the ground, the U.N.
determined that cultivation this year in Badakhshan has jumped from 2,458
to 6,342 hectares, which accounts for 83% of Afghanistan's estimated total
production of 185 tons of opium. Drug traders were quick to give farmers
cash up front to get planting. Still, say antinarcotics experts, that is a
colossal drop in supply, compared with last year's harvest.

Converted into morphine or low-grade heroin, most of the drug is shipped to
Europe (and some to the U.S.) across the Iranian desert through Tajikistan
or through the Pakistani port of Karachi, with significant amounts leaking
into local markets along the way. According to Bernard Frahi, director of
the U.N.'s drug control program in Islamabad, Pakistan now has about
500,000 heroin addicts. In Peshawar, heroin is cheap. Addicts gather in a
waste-filled culvert on the road to the Khyber Pass. Their salwar kameez
are stained and dirty. They are out of it, indifferent when a junkie in
their midst overdoses and slumps over, retching. And they shuffle by
uncaring when another companion is dumped into a shallow grave and covered
with rocks along the road leading up to the Afghan border.

Faced with a prolonged war, Afghan farmers may have no choice but to
replant their opium crops this month, despite Omar's death threat. "They
are desperate," says Mohammad Amirkhizi, a specialist on Afghanistan for
the Office for Drug Control and Crime Prevention in Vienna. "It's the only
crop they have to live off." As more bombs fall in Afghanistan, more heroin
is bound to come out.