PEACEW RKS

UNITED STATES

INSTITUTE OF PEACE

How Opium 

Profits the Taliban

Gretchen Peters
The views expressed in this report are those of the author alone.

They do not necessarily reflect views of the United States Institute of Peace.

United States Institute of Peace

1200 17th Street NW, Suite 200

Washington, DC 20036-3011

Phone: 202.457.1700

Fax: 202.429.6063

E-mail: usip_requests@usip.org

Web: www.usip.org

Peaceworks No. 62. First published August 2009.

Library of Congress Cataloging-in-Publication Data

Peters, Gretchen.

 How opium profits the Taliban / Gretchen Peters.

 p. cm. — (Peaceworks no. 62.)

 ISBN 978-1-60127-032-0 (pbk. : alk. paper)

1. Opium trade—Afghanistan. 2. Drug traffic—Afghanistan. 3. Taliban. 4. Afghanistan—

Economic conditions. 5. Afghanistan—Politics and government—2001. 6. United States—

Foreign relations—Afghanistan. 7. Afghanistan—Foreign relations—United States. I. Title. 

 HV5840.A53P48 2009

 363.4509581—dc22

 2009027307
Contents

Summary1

1. Introduction3

2. A Brief History7

3. The Neo-Taliban 17

4. Key Challenges 23

5. Conclusion 33

About the Author 37

 

 1

Summary

In Afghanistan’s poppy-rich south and southwest, a raging insurgency intersects a thriving 

opium trade. This study examines how the Taliban profit from narcotics, probes how traffickers influence the strategic goals of the insurgency, and considers the extent to which narcotics 

are changing the nature of the insurgency itself. With thousands more U.S. troops deploying 

to Afghanistan, joined by hundreds of civilian partners as part of Washington’s reshaped 

strategy toward the region, understanding the nexus between traffickers and the Taliban 

could help build strategies to weaken the insurgents and to extend governance. This report 

argues that it is no longer possible to treat the insurgency and the drug trade as separate 

matters, to be handled by military and law enforcement, respectively.

This report illustrates how—for more than three decades of conflict in Afghanistan—the 

opium trade has become deeply embedded in the politics of the region. Key players and families tied to opium smuggling, trafficking routes, and methods of laundering drug money have 

remained remarkably unchanged. So too has the West’s willingness to downplay the problem, 

repeatedly viewing narcotics as a “lesser evil” to the greater challenge at hand. 

Since the 2001 U.S.-led invasion of Afghanistan, the poppy trade has played a critical destabilizing role, both in corrupting the Afghan government and police and in bankrolling the 

resurgence of the Taliban. This study shows how Taliban commanders on the village level have 

expanded their activities related to drugs from collecting extortion and charging protection 

fees to running heroin refineries and engaging in kidnapping and other smuggling schemes. 

As insurgent commanders become more deeply tied to criminal activity, it will become more 

difficult for the coalition of foreign forces in Afghanistan to defeat them. Although there is 

wide variation across the war theater, drug profits flow up the chain of command within the 

Taliban and other insurgent and extremist organizations operating along the AfghanistanPakistan border. These funds appear to play a key role in funding the operational costs of the 

Taliban and many of these other groups. 

A key challenge to disrupting these drug profits will be penetrating and breaking up powerful 

drug networks that bankroll the insurgency and launder dirty money. Most smuggling networks appear to be run by close-knit families and tribes, making them difficult to penetrate. 

They appear to work with both insurgents and corrupt state actors and their motives are 

profit, not religion or politics. Another major challenge will be winning back the “hearts and 

minds” of Afghan villagers whose lives—and livelihoods—have been decimated by the drug 

trade and the incessant fighting but who also remain hostile toward Western forces. 

As much as the criminalized insurgency creates challenges, it also presents opportunities. The 

rising tide of violence and daily misery has made the Taliban deeply unpopular in the south 

and southwest, and nationwide polls indicate that they and other extremist groups have little 

support. At this point, the Kabul government and NATO forces are not well respected either, 

especially in the violence-wracked south. However, a reshaped military strategy that focuses 

on providing security to the local communities preyed upon by insurgents and criminals, that 

improves governance, and that provides alternative livelihoods could win public support and 

with it increased cooperation for fighting the insurgents and criminals. For many rural 

Afghans, the greatest perceived threat is crime and economic instability, not the insurgency 

per se.

 1
2 How Opium Profits the Taliban

A successful policy in Afghanistan would not prioritize but would mount a multipronged 

attack, combining intensive diplomacy; a reshaped military and intelligence strategy; police, 

judicial, and economic reform; and targeted development programs. Instead of nation building, this problem requires region building. As the biggest donor with the largest number of 

deployed troops there, the United States should take the lead in revitalizing the international 

community’s strategy toward Afghanistan. 
 3

Introduction

In Afghanistan’s poppy-rich south and southwest, known links exist between Taliban insurgents 

and the drug traffickers who operate along the Pakistan border. The fact that the Taliban profit 

from opium is routinely mentioned in media reports, academic studies, and comments by U.S. 

government officials, yet there is little concrete detail available to the public and policymakers on 

how the insurgents interact with drug traders and profit from opium. To the extent that NATO 

forces, civilian officials, and aid organizations operating in the south and southwest lack data on 

the issue or have failed to analyze it, they function in a relative vacuum. With thousands more 

U.S. troops deploying to Afghanistan, joined by hundreds of civilian partners as part of Washington’s reshaped strategy toward the region, understanding how the Taliban profit from the opium 

trade could help build strategies to weaken the insurgents and to extend governance. To that 

end, this study examines how the Taliban and traffickers interact in the southern poppy belt. It 

traces how those interactions have deepened since 2001 and examines the extent to which 

narcotics are changing the nature of the insurgency itself. 

It is widely alleged that corrupt officials within the Kabul government, the Afghan National Police 

(ANP), and various provincial administrations are also in the pay of opium traffickers, and recent 

media reports have suggested that some senior officials themselves engage in drug trafficking.1

As a 2008 British study reported, many Afghans in the country’s south believe that state 

actors earn greater profits from the drug trade than the insurgents.2 Corruption is an equally 

critical concern because it arguably contributes as much to continued insecurity in the Afghan 

south as does the insurgency by creating a perverse incentive for corrupt officials to establish 

good governance.3 Although this present study set out to focus exclusively on how insurgents 

in the south intersect the opium trade, further study probing how the opium trade involves 

state actors—and how the two issues themselves overlap—could also be tremendously constructive in helping to develop successful peacebuilding strategies.4

1. Two recent media reports on state corruption are Graeme Smith, “Afghan Officials in Drug Trade Cut Deals across 

Enemy Lines,” Globe and Mail, March 21, 2009, and James Risen, “Reports Link Karzai’s Brother to Afghanistan 

Heroin Trade,” New York Times, October 4, 2008.

2. According to the report’s author, “Whether correct or incorrect, the overall perception in the south is that corrupt 

government officials are earning more money from their direct or indirect involvement in the drug trade.” See 

David Mansfield, “Responding to Risk and Uncertainty: Understanding the Nature of Change in the Rural 

Livelihoods of Opium Poppy Growing Households in the 2007/08 Growing Season” (report, Afghan Drugs Inter 

Departmental Unit of the UK Government, July 2008), URL=www.davidmansfield.org/data/Field_Work/UK/

FINAL_UK_DRIVERS_REPORT_08.pdf (accessed May 15, 2009). 

3. This follows Richard Snyder’s theory that “lootable resources” such as opium generally fuel disorder in 

environments where “private economic actors enjoy exclusive, unregulated, and untaxed control over the income 

generated.” (See Richard Snyder, “Does Lootable Wealth Breed Disorder? A Political Economy of Extraction 

Framework,” Comparative Political Studies [October 2006]). Building on Snyder’s model, Jonathan Goodhand 

argues that “in some parts of Afghanistan drugs and corruption have contributed to a level of political order, 

whereas in other areas they have fuelled disorder.” See Jonathan Goodhand, “Corrupting or Consolidating the 

Peace? The Drugs Economy and Post-conflict Peacebuilding in Afghanistan,” International Peacekeeping 15, no. 3 

(June 2008), URL=www.informaworld.com/smpp/section~content=a793322435~db=all~ fulltext=713240928~d

ontcount=true#EN0002 (accessed May 15, 2009). A useful report for understanding the ground realities in south 

and southwest Afghanistan is Angel Rabasa et al., Ungoverned Territories: Understanding and Reducing Terrorist 

Risks, Project Air Force (Santa Monica, CA: RAND Corporation, 2007). The subject of state actors and antistate 

actors collaborating to profit off the drug trade is discussed in C. Christine Fair and Seth G. Jones, “Securing 

Afghanistan: Getting on Track” (Working paper, United States Institute of Peace, January 23, 2009), URL=library.

usip.org/articles/1012068.1022/1.PDF (accessed May 15, 2009). The authors of this report state that “a complex 

adaptive system” functions in the border areas, where multiple interconnected groups, including the Taliban, 

criminal gangs, warlords, and corrupt state actors, have adapted to the complex threat environment.

4. For useful data on corruption by the Afghan National Police, see Mansfield, “Responding to Risk and Uncertainty.” 

1
4 How Opium Profits the Taliban

To complete this study, the author and a group of local researchers surveyed three hundred 

people working in or alongside the opium trade in twelve cities and towns in southern 

Afghanistan and the border area with Pakistan.5 The questionnaire was circulated in the 

Pashto language, among male respondents who were Pashto in ethnicity.6 The local researchers selected the respondents based on their direct involvement in the opium trade, or their close 

relationship—usually through tribal affiliations or immediate family—to people working in the 

trade. The group surveyed included farmers who exclusively or partially cultivated poppy, truckers 

who exclusively or routinely transported opium, traders and smugglers who exclusively or routinely trafficked opium, and a small number of individuals employed in drug refineries. The dangerous security environment meant researchers could only question a limited number of 

respondents in each area. Additionally, due to low levels of literacy, the researchers had to help 

some respondents fill out the surveys. It is expected that this interaction affected the honesty of 

some respondents, particularly in cases where they may have feared implicating themselves. 

However, most of the surveys were deemed by the team to be legitimate, especially because a 

high number had handwritten notes in the margins to better explain or expand on the respondents’ views. 

Once the survey was complete, the author and six local researchers conducted dozens more indepth interviews with farmers, Taliban fighters, truckers, traders, and Afghan officials, including 

police and intelligence agents with the National Directorate of Security. The author also interviewed countless individuals—diplomats, law enforcement officers, academics, and intelligence 

and counternarcotics officials—from the United States, the United Kingdom, Europe, Pakistan, 

India, and Iran—and relied on media reports, academic studies, and reports by nongovernmental 

organizations (NGOs) to round out this study. 

The way that Taliban insurgents interact with traffickers, and the extent to which some insurgent 

leaders have themselves taken up trafficking, differs greatly across the zones of the insurgency. 

Surveys and most interviews conducted for this study focused on the southern Afghan provinces 

of Helmand and Kandahar. This study does not intend to provide an exhaustive account of how 

insurgents and traffickers interact from district to district across those two provinces, much less 

all of Afghanistan, but it serves to paint a broad picture of how the system works in order 

to provide NATO forces, diplomats, and aid workers with a framework for future, more

in-depth study. 

When U.S.-led forces invaded Afghanistan in October 2001, the Taliban’s ban on poppy cultivation had been in force for fifteen months, and there were virtually no poppy fields across the 

Afghan south.7 In the years that followed, however, as Afghanistan’s overall opium output 

For a thorough study on the challenges of police reform, which will be critical in any efforts by the Afghan 

government and the international community to combat drug corruption and other graft, see Andrew Wilder, 

Cops or Robbers? The Struggle to Reform the Afghan National Police, Issues Paper Series (Kabul: Afghanistan 

Research and Evaluation Unit, July 2007). For an examination of the sustainability of counternarcotics programs 

and notes on the questionable way “success” has been measured by the United Nations and the international 

community, see David Mansfield and Adam Pain, Counter-Narcotics in Afghanistan: The Failure of Success?

Briefing Paper Series (Kabul: Afghan Research and Evaluation Unit, December 2008). 

5. Surveys were conducted in Arghastan, Dalbandin, Gereshk, Kandahar, Musa Qala, Now Zad, Panjway, Registan, 

Sangin, and Spin Boldak in Afghanistan and among Afghan populations residing in Chaman and Quetta, Pakistan. 

A total of 299 questionnaires were considered for this report (four consequential surveys from Musa Qala were 

rejected). An earlier pilot survey of forty individuals in Baram Cha, a town which straddles the Pakistan-Afghanistan 

border, revealed similar findings to the larger study, but those results were not included in the final report because 

the pilot questions were refined for purposes of simplicity and translation for the wider survey.

6. The survey data do not allow for gender- or ethnicity-based comparisons.

7. According to crop surveys carried out by the UN International Drug Control Programme (UNDCP), Afghanistan 

produced 185 metric tons of opium in 2001, the majority of that in northern provinces outside Taliban control. 
Introduction 5

soared past previous records, poppy cultivation became increasingly concentrated in southern 

and southwestern provinces where security conditions were poor, insurgent activity was frequent and widespread, and the level of governance was low. By 2008, about 98 percent of 

Afghanistan’s poppy crop was grown in six southern and southwestern provinces, namely 

Farah, Helmand, Kandahar, Nimroz, Uruzgan, and Zabul.8

It is pertinent to mention external and internal factors that helped contribute to the disappearance of the poppy crop in other parts of Afghanistan and its concentration in the south. Rising 

global food prices and a ban on wheat exports from neighboring Pakistan made wheat and 

other licit crops more viable for farmers in more parts of the country where security and road 

transport were more reliable.9 In addition, counternarcotics strategies appeared to be showing at least temporary success in provinces such as Nangarhar and Badakhshan, while some 

farmers, particularly in the northwest, planted cannabis instead of poppy.10 Researchers David 

Mansfield and Adam Pain have argued that amid widening insecurity in the south and 

southwest, where many farmers lacked access to markets for licit crops because of fighting 

and poor transport conditions, poppy increasingly became “a low-risk crop in a high-risk 

environment.”11 As historian Barnett Rubin wrote, widespread poppy cultivation there was 

“the result—not the cause—of insecurity.”12

There was also historic precedence for insurgents in Afghanistan to support the opium trade. 

As poppy output expanded greatly in lawless parts of the south since 2001, Taliban actors 

expanded and diversified their ways of profitting from the drug trade.13 The study traces how 

drug money helped to fund the Taliban’s resurgence, outlines how it continues to finance their 

military operations in the south, and examines how some Taliban commanders have deepened 

their personal involvement in the opium trade. This study does not intend to suggest that the 

Taliban leadership has put aside its intention of driving Western forces from Afghanistan or 

implementing their strict version of sharia law. However, this study will demonstrate that 

insurgent actors in many Afghan villages today behave more like mafiosi than mujahideen.

More than 80 percent of those surveyed for this project believe Taliban commanders in 

See “Afghanistan: Annual Opium Poppy Survey 2001,” UNDCP, URL=www.unodc.org/pdf/publications/

report_2001-10-16_1.pdf (accessed May 15, 2009). The U.S. government also produces annual crop estimates 

based on satellite surveys, and in 2001 reported the opium crop to measure 74 metric tons, also placing most 

cultivation outside Taliban control zones. See Asa Hutchinson, “Statement before the House Government Reform 

Committee, Subcommittee on Criminal Justice, Drug Policy, and Human Resources,” U.S. House of Representatives, 

October 3, 2001, URL=www.usdoj.gov/dea/pubs/cngrtest/ct100301.html (accessed May 15, 2009). A separate 

study by the Donor Assessment Mission to Afghanistan came to similar conclusions. See “The Impact of the 

Taliban Prohibition on Opium Poppy Cultivation in Afghanistan,” May 25, 2001, URL=www.davidmansfield.org/

policy_advice.php (accessed May 15, 2009). 

8. See Afghanistan Opium Survey 2008 (UN Office on Drugs and Crime [UNODC], November 2008), URL=www.

unodc.org/documents/crop-monitoring/Afghanistan_Opium_Survey_2008.pdf (accessed May 15, 2009). 

9. Mansfield and Pain, Counter-Narcotics in Afghanistan.

10. Although the UNODC declared Nangarhar “poppy free” in 2008, the size of the poppy crop there has yo-yoed 

back and forth twice already since 2001, prompting some speculation that the battle is not over. For more on this, 

see Mansfield and Pain, “Counter-Narcotics in Afghanistan.” For a media report on farmers planting marijuana in 

place of poppy, see Rahim Faiez, “Afghans Turn from Growing Poppies to Pot,” Associated Press, November 28, 

2007. The issue is also discussed in the UNODC’s Afghanistan Opium Survey 2008. 

11. David Mansfield and Adam Pain, Evidence from the Field: Understanding the Changing Levels of Opium Cultivation 

in Afghanistan, Briefing Paper Series (Kabul: Afghanistan Research and Evaluation Unit, November 2007).

12. Barnett Rubin and Jake Sherman, Counter-Narcotics to Stabilize Afghanistan: The False Promise of Crop Eradication

(New York: Center on International Cooperation, February 2008), 13. 

13. This is not a phenomenon unique to Afghanistan. Antistate groups across the globe have displayed similar patterns 

of behavior, including the Revolutionary Armed Forces of Colombia (FARC), Hezbollah, the Liberation Tigers of 

Tamil Eelam, and the Irish Republican Army. All profited from drug smuggling in their respective zones, and their 

involvement in crime appears to have warped the purposes and goals of their movements over time.
6 How Opium Profits the Taliban

the south now fight for profit rather than religion or ideology.14 And according to recent 

NATO military intelligence, as few as 5 percent of insurgent commanders now fight for ideological reasons.15

NATO commanders and donor nations have tended to view Afghanistan’s opium trade as a law 

enforcement issue, often not considering its broader implications for trade, security, and development. The insurgency, meanwhile, is treated as a military matter. This division has stymied efforts 

to build a comprehensive strategy toward southern Afghanistan, where a more holistic approach 

could prove more successful. Peacebuilding strategies need to disrupt the insurgents’ criminal 

activity and degrade their ability to fund themselves. They must also simultaneously interdict and 

remove from office corrupt officials breaking the law and help local communities to gradually 

develop legal and sustainable activities as a replacement to opium. 

14. The survey asked, “Which of the following is a true and fair statement: (a) Taliban commanders are fighting for 

their religion and the freedom of Afghanistan; (b) Taliban commanders are mainly trying to make money; (c) 

Neither.” Of those surveyed, 18.98 percent chose a, and 81.02 percent chose b. None chose c. 

15. Interviews by author.
 7

A Brief History

Throughout the more than three decades of conflict in Afghanistan, the key players and families 

tied to opium smuggling, the trafficking routes, and the methods of laundering drug money have 

remained remarkably unchanged—so too has the West’s willingness to downplay or even deny 

the problem, repeatedly viewing narcotics as a “lesser evil” to the greater challenge at hand. 

The opium poppy has flourished along the Golden Crescent—Iran, Afghanistan, and Pakistan—

throughout recorded history. Cultivation began rising steadily in Afghanistan after the 1979 

Soviet invasion due to a combination of external regional factors and desperation brought on by 

the war.16 A New York Times report from the time reported that cash-strapped farmers chose 

to grow opium because it sold for as much as $50 per pound, many times more than what 

other traditional crops would earn.17 The Soviet’s scorched-earth policy destroyed thousands 

of acres of farmland and sent millions of refugees over the border to Iran and Pakistan, leaving 

fewer people to work on the remaining arable fields. Between 1984 and 1985, poppy cultivation more than doubled in Afghanistan, from 140 metric tons to 400, according to the 

National Narcotics Intelligence Consumers Committee Report for 1985–86. By 1986, it doubled again, the report said.18

A system swiftly developed in which large landowners and drug merchants would hire mujahideen to protect their drug shipments. Rebels used drug earnings to support the resistance. 

According to former mujahideen commanders and fighters interviewed for this project, many 

resistance commanders profited from the exploding poppy market to some extent—most commonly by taking a cut of goods passing through their control zones. Some mujahideen commanders looked to the narcotics trade to raise income because of the uneven manner in which 

foreign military aid, mostly from the CIA and the Saudi government, was distributed among the 

parties by Pakistan’s spy agency, the Inter-Services Intelligence (ISI), from the Pakistani frontier city 

Peshawar.19 Commanders such as Mullah Nasim Akhundzada, a powerful Helmand warlord, 

deepened their involvement in the opium trade to increase profits and establish economic 

independence, because they received comparatively less money from the ISI.20 “Akhundzada 

had his own power base,” said Peter Tomsen, the State Department’s special envoy to the 

16. A two-year drought in the Golden Triangle brought a temporary decline in Southeast Asian production. See 

Alfred W. McCoy, “Opium History, 1979 To 1994,” URL=www.a1b2c3.com/drugs/opi012.htm (accessed May 15, 

2009). Simultaneously, the new Khomeini regime next door in Iran, where opium was widely smoked, banned all 

forms of narcotics. That shifted Iran’s drug economy across the border. A similar shift took place along the Pakistan 

border. Until the war began, Pakistan’s Federally Administered Tribal Areas (FATA) and Provincially Administered 

Tribal Areas (PATA) produced more opium than all of Afghanistan, with a significant portion of it ending up on 

U.S. streets. Under pressure from Washington, Pakistan stamped out 80 percent of its poppy cultivation by 1986, 

resulting in some fields migrating across the border into mujahideen control zones.

17. Arthur Bonner, “Afghan Rebel’s Victory Garden: Opium,” New York Times, June 18, 1986.

18. “National Narcotics Intelligence Consumers Committee Report for 1985–86,” Narcotics Collection: Box 30, Folder: 

Pakistan/Afghanistan, National Security Archive, Washington, D.C., 74. 

19. The United States and Saudi Arabia were the central donors to the Afghan resistance, providing matching annual 

funds totaling hundreds of millions of dollars. The United Kingdom, China, and various European nations also 

contributed. All the money was funneled through the Inter-Services Intelligence, giving the Pakistani spy agency 

tremendous control over which commanders and parties would benefit. The ISI tended to benefit fundamentalist 

Islamic parties, aiming to weaken moderate mujahideen leaders with ethnonationalist ambitions to form a “Pashto 

nation.” Islamabad feared a “Pashto state” might threaten its territorial integrity.

20. Nasim Akhundzada was a member of the Revolutionary Islamic Movement, one of the less centralized mujahideen 

parties. Some historians believe he turned to the opium trade for spare funds because there was no organized 

mechanism within his party to distribute money received from the ISI. 

 7 2
8 How Opium Profits the Taliban

Afghan resistance from 1989 to 1992. “A guy like that wasn’t controlled by Peshawar.”21

Akhundzada set production quotas, implemented a predatory loan service to small poppy 

farmers that still exists today, and smuggled his output west, even maintaining an office in 

the Iranian border town of Zaidan to manage his shipments.22 In 1989, he reportedly threatened farmers who failed to plant poppy with castration or death. Production in Helmand that 

year skyrocketed past 250 metric tons of opium.23 

In other cases, commanders who were showered with foreign aid from Peshawar nonetheless 

developed deep involvement in the drug trade. Gulbuddin Hecmatyar and Yunis Khalis, two 

fundamentalist commanders, relied heavily on both their ties to the ISI and their heroin profits to 

build their power base, according to historians and former mujahideen. Operating mainly along 

the Pakistan border, Hecmatyar launched a two-year internal war against Nasim Akhundzada for 

control of Helmand’s rich poppy fields. By the end of the Soviet resistance, he invested in heroin 

labs along the border, working in partnership with Pakistani smuggling networks.24 U.S. officials 

assisting the war effort acknowledged Hecmatyar’s managerial prowess but worried about 

his rabid brand of Islam. They complain that efforts to cut his funding failed because of his ISI 

connections.25

The late Yunis Khalis, meanwhile, worked systematically to gain power in poppy-rich eastern 

Nangarhar province, where he skirmished with other mujahideen for control over poppy fields 

and the roads leading to heroin labs and hashish shops he ran along the border.26 His deputy, 

Jalaluddin Haqqani, operated along the Pakistan border and had close ties to Arab fighters 

(who would later form al-Qaeda) and powerful weapons smuggling networks. Former U.S. 

officials and mujahideen say that commanders such as Hecmatyar, Khalis, and Haqqani did 

not personally muddy their hands by moving drugs. They had subordinates who ran their 

narcotics operations but took a cut of all the profits in their control zones.

The next generation of Afghanistan’s leaders would rise from the ranks of these fundamentalist commanders and were well versed in this method of fund-raising. A young Mullah Omar 

at times fought under Yunis Khalis (the same man who gave Osama bin Laden refuge when 

he fled Sudan to Afghanistan in 1994). Jalaluddin Haqqani and Hecmatyar still operate today 

along the border fighting the NATO-led coalition. U.S. military intelligence believes that both 

men remain deeply dependent on smuggling narcotics and other criminal activity.27

If the mujahideen’s involvement in the poppy trade was cause for concern, more worrisome still 

were the Pakistan military’s links to heroin trafficking. Seventy percent of the world’s supply of 

high-grade heroin was produced in or smuggled through Pakistan by 1984, according to European police estimates. There was widespread evidence that the covert pipeline run by the ISI, 

which brought weapons and materiel by truck and donkey to the Afghan guerrillas, funneled out 

vast amounts of heroin.28

21. Peter Tomsen, telephone interview by author, July 28, 2007.

22. Barnett R. Rubin, The Fragmentation of Afghanistan, 2nd ed. (New Haven: Yale University Press, 2002), 263.

23. David MacDonald, Drugs in Afghanistan (London: Pluto Press, 2007), 89; Michael Griffin. Reaping the Whirlwind

(London: Pluto Press, 2001), 148; Rubin, The Fragmentation of Afghanistan, 263.

24. James Rupert and Steve Coll, “US Declines to Probe Afghan Drug Trade; Rebels, Pakistani Officers Implicated,” 

Washington Post, May 13, 1990; Rubin, The Fragmentation of Afghanistan, 257. 

25. U.S. officials, interviews by author, Washington, D.C., 2007.

26. MacDonald, Drugs in Afghanistan, 88. 

27. U.S. official, interview by author, Bagram Air Base, Afghanistan, August 2006.

28. Covert military aid for the mujahideen arrived at Pakistan’s seaport in Karachi and traveled to the Northwest 

Frontier Province (NWFP) in trucks run by the National Logistics Cell (NLC), a trucking company wholly owned and 

staffed by the Pakistan military. In 1985, the Herald, a Pakistani news magazine, quoted eyewitnesses reporting 
A Brief History 9

In 1986, two military officers were arrested separately, each carrying 220 kilograms of high-grade 

heroin. In both cases, military squads swiftly removed the men from police custody, and they 

swiftly “escaped” before any substantial investigation got underway. A heavily redacted 1987 

CIA analysis titled “Narcotics Trafficking and the Military” concluded that “corruption is widespread . . . and because of the generally low level of military salaries, it is likely to grow in the 

near term.”29

Officials at the U.S. embassy in Islamabad working to support the Afghan resistance ignored and 

even suppressed indications that resistance groups and Pakistan military allies were smuggling 

drugs. The Washington Post reported in 1990 that U.S. diplomats “received but declined to 

investigate” first-hand accounts that Afghan guerrillas and ISI agents “protect and participate” in 

heroin trafficking.30 Former officials posted to the U.S. mission in Pakistan now acknowledge 

that they routinely received reports that mujahideen profited from opium but now admit that 

they did not follow up on the reports, lest narcotics distract from the central mission. “You 

have to put yourself in the mindset of the period,” said Edmund McWilliams, another U.S. 

special envoy to the resistance who served from 1988 to 1989. “There was one single objective: defeating the Soviets. Raising issues like Hecmatyar and the ISI’s involvement in the drug 

trade was on no one’s agenda.”31

Washington’s policy toward the region itemized and prioritized issues considered critical to 

American interests: fighting the Soviets came first, then stopping nuclear proliferation, then 

stemming the flow of heroin. “Until we were sure the Soviets would go in 1988,” explained Larry 

Crandall, who was then the chief of the United States Agency for International Development 

(USAID), “we basically put drugs on the back burner.”32 By then a powerful and well-entrenched 

drug mafia operated on both sides of the Pakistan-Afghanistan border. When Soviet forces 

began to pull out and Western military aid was cut, mujahideen leaders competing for a stake 

in the new Kabul government turned their guns on each other. A civil war erupted between 

them and continued into the 1990s, dividing the country and Kabul itself into warring fiefdoms. As the Soviets left and covert U.S. funding dried up, Afghan commanders came to 

depend ever more heavily on opium profits to fund their war effort, thus creating the preconditions for the complete integration of narcotics—and reliance on drug money—into the politics of the region. Relentless fighting between mujahideen warlords put a chokehold on 

Afghanistan’s multibillion-dollar transit trade. Rival commanders erected roadblocks where 

they exacted stiff “taxes” for safe passage along the highways. Roadblocks were especially 

abundant in Kandahar, because there was no dominant commander there. The Pashto trucking mafia, which controlled shipping from the Karachi seaport through Quetta into Kandahar 

province at the Chaman border and which was heavily tied to smuggling drugs, was taking 

massive losses. They became determined to put an end to this intolerable situation. 

In this environment the Taliban emerged. Myths surrounding their origins focused on elevating the group’s barely literate, one-eyed leader to a semidivine status among Afghanistan’s 

uneducated masses. This also disguised the Taliban’s original financiers. The legend began in 

1994, when Mullah Omar, then a teacher in a small madrassa outside Kandahar, emerged as 

that “the drug is carried in NLC trucks which come sealed from the NWFP and are never checked by police.”

29. “Narcotics Trafficking and the Military.” Near East and South Asia Briefs, Central Intelligence Agency (January 30, 

1987), Narcotics Collection: Box 30 Folder, Pakistan: Narcotics Control Preparedness, National Security Archive, 

George Washington University. 

30. Rupert and Coll, “US Declines to Probe Afghan Drug Trade.” 

31. Edmund McWilliams, telephone interview by author, May 3, 2007.

32. Larry Crandall, telephone interview by author, September 20, 2007. 
10 How Opium Profits the Taliban

a local Robin Hood, protecting villagers from the excesses of violent and greedy mujahideen.33

The war-weary public embraced the Taliban, which swept across Afghanistan, capturing many 

towns without firing a shot. 

Many who encountered the Taliban at their outset say aspects of the tale were true: the early 

Taliban were well intentioned, even if their methods were medieval. According to people who 

witnessed the movement from its inception, they even initially made a commitment (which 

they acted on a handful of times) to stamp out the opium trade. This commitment was swiftly 

dropped as political realities and a need for funds overcame their original objectives.34 Despite 

their efforts at myth making, the Taliban’s rise to power in Afghanistan had little to do with the 

grace of Allah as they claimed. From its inception, the movement appeared to rely on the financial 

backing of an unholy alliance of drug smugglers, traders, and trucking groups. 

When the Taliban first appeared, many assumed—not entirely incorrectly—that they had Pakistan’s backing. Cables from the U.S. embassy in Islamabad in 1994 reflect American diplomats 

scrambling to discover who was financing the Taliban.35 Initial dispatches described Taliban 

goals to open highways and end banditry. Cables noted that the group appeared well funded 

but that their leaders would not reveal their financial benefactors.36 The Taliban issued a 

pamphlet outlining their rigid version of sharia. They prohibited most forms of entertainment, 

such as music and television, and banned alcohol and cannabis. On one issue the Taliban 

were conspicuously ambiguous: “The consumption of opiates is forbidden, as is the manufacture of heroin, but the production and trading in opium is not forbidden.”37

A Kandahari close to Mullah Omar visited the U.S. embassy in Islamabad in February, revealing 

that the “prominent trader” Haji Bashar Noorzai, a former commander who fought under Yunis 

Khalis, was Mullah Omar’s original sponsor as well as a key decision-maker and leading member 

of the ruling council.38 Today, Bashar Noorzai resides in a high-security Manhattan jail after 

being handed a life sentence in 2009 by a U.S. federal judge for smuggling millions of dollars 

of heroin for the Taliban into New York City.39 Although it is not clear whether Noorzai himself 

was a major drug dealer when the Taliban were formed, his clan was well known to American 

33. Ahmed Rashid, The Taliban: Militant Islam, Oil and Fundamentalism in Central Asia (New Haven: Yale University 

Press, 2000), 25. Anthony Davis, “How the Taliban Became a Military Force,” in Fundamentalism Reborn? 

Afghanistan and the Taliban, ed. William Maley (London: Hurst and Company, 1998), 43–44; and author’s 

interviews with various former Afghan, Pakistani, and Western officials who were on hand to witness the rise of 

the Taliban.

34. Former Afghan, Pakistani, and U.S. officials, interviews by author. 

35. Potential backers they considered included the ISI, the Saudis, or even Maulana Fazl-ur Rehman of the Jamiat-e 

Ulema-i-Islam (JUI), a leading Pakistani fundamentalist party providing Taliban fighters from its chain of madrassas. 

It was known that the then newly reelected Pakistani prime minister, Benazir Bhutto, wanted to open trade routes 

from Pakistan into the newly independent Central Asian states. Islamabad was in the market for a new protégé 

across the border, having watched its universally loathed client Hecmatyar repeatedly outwitted on the battlefield 

by his Tajik rivals. See “The Taliban File,” documents 1–8, 9/11 Sourcebook, National Security Archive, George 

Washington University, especially U.S. Consulate (Peshawar), “New Fighting and New Forces in Kandahar” (cable, 

November 3, 1994); U.S. Embassy (Islamabad), “The Taliban—Who Knows What the Movement Means?” (cable, 

November 28, 1994); U.S. Embassy (Islamabad), “[Excised] Believe Pakistan Is Backing Taliban” (cable, 

December 6, 1994); U.S. Embassy (Islamabad), “The Taliban: What We’ve Heard” (cable, January 26, 1995), 

URL=www.gwu.edu/~nsarchiv (accessed May 15, 2009).

36. U.S. Embassy (Islamabad), “The Taliban: What We’ve Heard.” 

37. Michael Griffin, Reaping the Whirlwind (London: Pluto Press, 2001), 153.

38. U.S. Embassy (Islamabad), “Finally, a Talkative Talib: Origins and Membership of the Religious Students’ Movement” 

(cable, February 20, 1995), Taliban File, 9/11 Sourcebook, National Security Archive, George Washington 

University. 

39. See Benjamin Weiser, “Afghan Linked to Taliban Sentenced to Life in Drug Trafficking Case,” May 1, 2009, 

URL=www.nytimes.com/2009/05/01/nyregion/01sentence.html (accessed May 15, 2009).
A Brief History 11

counternarcotics agents.40 The one-million-strong Noorzai tribe controls tens of thousands of 

acres of rich poppy farmland, as well as the key road out of southern Afghanistan. Bashar’s 

late father, Haji Mohammed Issa Noorzai, was a leading partner in the Quetta Alliance, a 

cartel identified by the Drug Enforcement Administration (DEA) as a union of “three interrelated heroin and hashish smuggling groups” that exported “multi-ton shipments of heroin 

and morphine base.”41

Noorzai was not the only benefactor for long. The Taliban conquered district after district in 

Kandahar, soon attracting other tribal chiefs with opium trade ties. As their reputation for 

providing security in the war-torn Afghan countryside spread, so did their ability to capture 

towns without a shot. In many communities, they were welcomed as protectors. In areas 

“where the new movement’s moral and religious standing failed to carry the day, generous 

disbursements of cash usually succeeded,” wrote historian Anthony Davis.42 The Taliban’s 

financial backers distributed bribes to regional strongmen as their fighters advanced on Kabul. 

Several key tribes joined the movement simply because Mullah Omar made deals not to 

crack down on poppy, according to a November 1996 DEA document.43 Supporting the 

poppy trade not only secured the Taliban financial backing, it also won them political support 

from tribes and the general public, particularly in regions where there were few other 

viable professions. 

In the spring of 1996, a jet chartered from Afghanistan’s state-run Ariana Airlines landed in 

Jalalabad carrying a man who would become another key patron to the Taliban. Osama bin 

Laden’s return to Afghanistan opened a new chapter in the Taliban chronicle, one that would 

make a dramatic impact on modern history. Although there are reports he was short on funds 

when he arrived from Sudan, the Saudi exile quickly made friends with Afghanistan’s new 

power brokers, helping to finance the Taliban’s takeover of Kabul.44 Bin Laden reportedly 

raised $3 million—possibly through donations—to pay off warlords who stood between the 

Taliban and the Afghan capital. The support came at a critical moment, and Mullah Omar would 

not forget it. In Ghost Wars, author Steve Coll wrote that the Taliban may have also received 

contributions for the push on Kabul from the trucking mafia, heroin traders, the ISI, and other 

Arab donors.45

40. Haji Bashar Noorzai was briefly detained by U.S. forces in 2001 and then released on the agreement that he would 

hand in weapons and negotiate the surrender of senior Taliban officials. His relationship with the United States 

later soured, and he fled to Pakistan. In April 2005, he flew to the United States to meet with counternarcotics 

agents believing he was going to cooperate with U.S. authorities who instead arrested him. He was convicted in 

2008. For more details, see “Warlord or Druglord?” Time, February 8, 2007, URL=www.time.com/time/magazine/

article/0,9171,1587252,00.html, and Benjamin Weiser, “Manhattan Jury Convicts Man Linked to Taliban Leader in 

Drug Smuggling Case,” New York Times, September 23, 2008, URL=www.nytimes.com/2008/09/24/

nyregion/24noorzai.html?ref=nyregion (both accessed May 15, 2009). 

41. That Issa Noorzai was a major smuggler and a member of the Quetta Alliance comes from author’s interviews 

with Afghan, U.S., and Pakistani officials and Noorzai tribesmen and from the Islamabad Country Office, Drug 

Enforcement Administration, “TKO Proposal,” March 25, 1993, Narcotics Collection Box 30, Folder: Pakistan, 

National Security Archives, George Washington University.

42. Davis, ”How the Taliban Became a Military Force,” in Fundamentalism Reborn, 50–51.

43. The DEA document is cited in Griffin, Reaping the Whirlwind, 154–55.

44. For years, it was widely believed that bin Laden inherited as much as $300 million from his father, a construction 

magnate, and used that money to finance al-Qaeda operations. But investigators with the 9/11 Commission later 

concluded his personal wealth was far smaller. In one of his only interviews with the media, Taliban leader Mullah 

Mohammed Omar told Peshawar-based journalist Rahimullah Yusufzai that bin Laden was almost penniless when 

he returned to Afghanistan in 1996. Yusufzai recounted Omar’s comments in an interview with the author 

in 2008. 

45. Stephen Coll, The Ghost Wars (New York: The Penguin Press, 2004), 332.
12 How Opium Profits the Taliban

Once in control of Kabul, the Taliban began issuing archaic decrees—banning girls from school 

and forcing men to pray five times a day—focusing the world’s media on their exacting interpretation of Islam. In addition to Western outrage over their treatment of women and anxiety about 

their ties to Arab and Pakistani terrorist groups, the Taliban immediately came under international 

pressure to crack down on the poppy trade. On September 10, 1997, the Taliban’s Foreign 

Ministry responded with the following declaration: 

The Islamic State of Afghanistan informs all compatriots that, as the use of 

heroin and hashish is not permitted in Islam, they are reminded once again that 

they should strictly refrain from growing, using, and trading in hashish and 

heroin. Anyone who violates this order shall be meted out a punishment in line 

with the lofty Mohammad and sharia law and thus shall not be entitled to 

launch a complaint.46

The ruling was amended ten days later with a note outlawing cultivation and trafficking of opium 

as well.47 Few paid heed. A year earlier, Afghanistan had produced 2,250 metric tons of 

opium, according to the United Nations Office on Drugs and Crime (UNODC). That number 

climbed to 2,800 tons in 1997, dipped slightly the next year due to widespread drought, and 

then soared in 1999 to 4,580 metric tons. The Taliban controlled most of the country by 1999, 

including all of the Pashto south. Afghanistan’s poppy crop represented about 75 percent of 

global production. Ninety-seven percent of it was grown in Taliban-held areas.48 Rather than 

combat the opium trade, the Taliban allowed local mullahs to collect a 10 percent agricultural 

tithe (known as ushr and derived from the Arabic ashr meaning ten) from farmers growing 

poppy as well as other produce. Ushr was generally collected in kind at the local level (as it is 

today) and then spent locally, according to Bernard Frahi, a UNODC official.49 In the southern 

provinces, the Taliban began collecting 20 percent zakat, an Islamic levy, on truckloads of 

opium as they left farm areas.50 Following a law enforcement crackdown in neighboring Pakistan, heroin refineries previously based in the FATA shifted across the border.51 The Taliban 

swiftly began taxing their output—charging $50–70 a kilo depending on whether the final 

product was morphine base or crystal heroin.52 According to a recently declassified 1998 CIA 

report, Haji Bashar Noorzai forged a deal with the Taliban to pay $230 for each kilo of heroin 

flown out.53 The Taliban also apparently taxed road exports; the DEA has posted on its 

Web site samples of the receipts handed out to truckers crossing the border into Pakistan 

or Iran.54

46. “Afghanistan, Drugs and Terrorism: Merging Wars,” TNI Briefing Series no. 2001/2 (Debate Papers no. 3, 

Transnational Institute, December 2001).

47. Ibid.

48. Barnett R. Rubin, “The Political Economy of War and Peace in Afghanistan,” World Development 28, no. 10 

(2000): 1795.

49. Bernard Frahi, telephone interview by author, August 2007. That poppy was collected and often spent at a local 

level is also cited in Rubin, “Political Economy,” 1796.

50. Rashid, Taliban, 118.

51. Former Pakistani official who worked along the border at the time, interview by author, Islamabad, 2007.

52. Jeffrey Bartholet and Steve Levine, “The Holy Men of Heroin,” Newsweek, December 6, 1999.

53. Director of Central Intelligence, “National Intelligence Daily,” Central Intelligence Agency, May 1, 1998, 7, National 

Security Archive, George Washington University. This document, yet assigned to a collection at the archive, does 

not specifically mention the Noorzais. It reads, “Under one such agreement [name excised]—the son of key 

Quetta Alliance member [name excised]—pays the Taliban about $230 for each kilogram of either heroin or 

morphine base being exported through the Jalalabad and Qandahar Airports.” Other public reference documents 

on Noorzai refer to his export deal with the Taliban. 

54. Hutchinson, “Statement before the House Government Reform Committee.”
A Brief History 13

Since the Taliban kept virtually no computer or paper records, it is impossible to calculate how 

much they took in state revenue, much less separate out what percentage of that was connected 

to narcotics. It is known that they also capitalized on a brisk smuggling network that took 

advantage of a 1965 bilateral transit trade agreement with Islamabad, which allowed licit commodities to be transported duty-free from Pakistan’s coast to landlocked Afghanistan. Known as 

the “U-turn scheme,” Pashto trucking companies carried goods ranging from refrigerators to 

foodstuffs from the port city Karachi up to the tribal areas, whereupon they would be smuggled 

back into Pakistan to avoid Islamabad’s protectionist customs fees. Trucks would reportedly 

return to the coast laden with hashish, heroin, and other contraband. Author Ahmed Rashid 

reported that Pakistan’s Central Board of Revenue estimated it lost $275 million during fiscal year 

1993–94, and a half-billion dollars the following year once the Taliban reopened the highways. 

The World Bank calculated the total illicit trade in legal goods to be worth $2.5 billion, and the 

United Nations estimated the narcotics trade at another $1.25 billion annually. “The cross-border 

smuggling trade has a long history,” Rashid wrote. “But never has it played such an important 

strategic role as under the Taliban.”55

U.S. and British intelligence and law enforcement agents widely believed that bin Laden, with 

Mullah Omar’s blessing, had turned the state-run Ariana Airlines into a “narco-terror” charter 

service ferrying Islamic militants, timber, weapons, cash, and heroin to the United Arab Emirates 

and Pakistan. “Al Qaeda moved drugs out, money in, and people around on Ariana,” said Steve 

Simon, a former senior director for transnational threats at the National Security Council.56

Mohammad Fedawi, president of Ariana during the Taliban takeover, said senior Taliban 

officials ordered him to hand out flight-crew passes to dozens of “foreigners,” including 

members of al-Qaeda, who would be allowed to travel to whatever destinations the airline 

serviced throughout the Indian Subcontinent and Middle East.57 “Sometimes they would 

schedule special night flights to Kandahar and to the Emirates,” mainly Sharjah and Dubai, 

Fedawi said. No one was allowed to see what they loaded on the planes in Afghanistan. 

Mounting concern that Ariana was moving drugs, weapons, and terrorists led the UN to 

impose international flight sanctions on the Taliban in late 2000, barring the airline from 

flying internationally.58

Far from being hurt by the sanctions, the Taliban appeared to continue to have a steady supply 

of weapons and money, although it was never entirely clear how much of it came from donations, Pakistani government support, or taxes from the opium trade and other smuggled goods. 

As far as Washington was concerned, the narcotics problem remained low on its list of priorities. 

“The drug issue was one thing on a long list that we were trying to get the Taliban to move on,” 

said Karl Indurfurth, then assistant secretary of state for South and Central Asian affairs. “Girls’ 

schools, terrorist camps, women’s rights. After the embassy bombings in Africa, Osama went to 

the top of that list.”59 The U.S. government pressed the Taliban on thirty different occasions 

between 1996 and 2001 to expel bin Laden from Afghanistan.60 “The message to the Taliban 

pre-9/11 was, we don’t like you, but we are willing to live with you if you give us al-Qaeda,” said 

Teresita Schaffer, a former deputy assistant secretary of state for South Asia.

55. Ahmed Rashid, “Pakistan and the Taliban” in Fundamentalism Reborn?, 77.

56. Stephen Braun and Judy Pasternak, “Long Before Sept. 11, Bin Laden Flew Aircraft under the Radar,” Los Angeles 

Times, November 18, 2001.

57. Mohammad Fedawi, interview by author, Kabul, March 2007.

58. Braun and Pasternak, “Long Before Sept 11.”

59. Karl Indurfurth, telephone interview by author, May 10, 2007.

60. “U.S. Engagement with the Taliban on Usama bin Laden,” U.S. State Department Summary (circa July 16, 2001), 

Sept. 11 Sourcebook, vol. II: The Taliban File, update of January 30, 2004, National Security Archive, George 

Washington University, Washington, D.C.
14 How Opium Profits the Taliban

The United Nations kept pressure over drugs, however, bringing officials to Pakistan to consult 

Islamic legal experts on the issue of growing and trading narcotics.61 The Taliban appeared desperate to gain international recognition for their regime, and wanted the UN sanctions lifted. In 

July 2000, the UN pressure appeared to pay off. As the autumn planting season was to begin, 

Mullah Omar announced a total ban on poppy cultivation. The following spring, American satellite photos and UN ground surveys indicated that just 8,000 hectares had been planted across 

Afghanistan—down from more than 82,000 hectares a year earlier. Most of it was planted in 

areas not controlled by the Taliban. 

It was the largest cutback in illicit drug production in Afganistan or any other nation in a single 

year. Frahi, who brokered the deal for the UNODC, called it “one of the most remarkable successes ever” in the fight against narcotics.62 In fact, the very opposite was true. The ban created 

a humanitarian crisis by leaving thousands of small farmers and share croppers without income, 

and almost overnight, the price of opium at Afghanistan’s border shot up from an all-time low 

of about $28 per kilo to between $350 and $400, according to UNODC and DEA accounts, 

leaving farmers heavily indebted for their farm loans. And despite the ban on growing poppy, 

Western authorities began to notice the Taliban made no effort to seize drug stocks or arrest 

traffickers. One Western mission to determine the scale of drug stockpiles being held reported 

that opium markets in Sangin, Ghani Khel, Musa Qala, Kajaki, and Achin appeared to have 

greatly reduced their levels of business, but the mission was never able to determine where, if 

any, stockpiles were being held.63 Meanwhile, U.S. officials reported that the Taliban still collected 

tax at refineries—now earning much higher revenue off a product that had increased tenfold in 

value.64 Levels of heroin purity declined somewhat in Western markets the following year, but 

the street price of heroin remained stable, indicating there was no supply shortage.65

Some Western and Afghan officials have concluded that the poppy ban was the ultimate insidertrading act. According to this theory, the Taliban believed they stood to gain millions of dollars in 

international aid and perhaps even recognition of their government (neither of which they 

received in the end, however). The UN-affiliated Narcotics Control Board concluded that after 

four years of bumper crops, stocks of Afghan heroin were big enough to supply the European 

market for four more years.66 More than a half-dozen well-placed tribal sources and Afghan 

officials interviewed for this project said senior Taliban leaders and Haji Bashar Noorzai purchased massive amounts of opium just before the ban. “It wasn’t religion,” said a Quettabased smuggler. “It was good business. They bought low, they sold high.”67

On September 11, 2001, the regional price of a kilo of opium had reached an all-time high of 

$746. Within weeks of the attacks on New York and Washington, it had dropped to $95 a 

kilo, according to DEA records, possibly indicating that owners were dumping stockpiles in 

anticipation of the U.S.-led invasion. Some U.S. officials feared that money raised from selling 

61. “Afghanistan: Drugs and Terrorism, Merging Wars.”

62. Martin Jelsma, “Learning Lessons from the Taliban Opium Ban,” International Journal on Drug Policy 16, no. 2

(March 2005).

63. The report said, “No one admits to holding sizeable stocks. The Taliban acknowledge that stocks probably exist 

in Afghanistan, but maintain that large stockpiles are either outside the country or in Badakhshan. They indicate 

interest in addressing the practicalities of stockpile destruction and action against traffickers and invite dialogue. 

Donor Assessment Mission to Afghanistan, “The Impact of the Taliban Prohibition on Opium Poppy Cultivation in 

Afghanistan.” 

64. U.S. officials, interviews by author. 

65. Jelsma, “Learning Lessons”; Hutchinson, “Statement before the House Government Reform Committee.” 

66. William Sami and Charles Recknagel, “Iran’s War on Drugs,” Transnational Organized Crime 5, no. 2 (Summer 

2002). 

67. Quetta-based smuggler, interview by author, Quetta, October 2003.
A Brief History 15

opium stockpiles could be used to buy weapons and ammunition.68 UN officials believed the 

Taliban, al-Qaeda, and allied drug lords collectively possessed more than 2,800 metric tons of 

opium, which could be converted to 280 tons of heroin. Sold on the wholesale market in 

Pakistan, the opium would fetch more than $1 billion, UN officials worried.69

As the United States prepared for war, the Joint Chiefs of Staff and top Bush administration 

officials complained how few targets in Afghanistan would have consequence militarily. The 

CIA and the British government each prepared comprehensive lists of potential targets, including about two-dozen major drug labs, storage warehouses, and other opium-related facilities.70 Yet from the onset of military operations in Afghanistan, the Bush administration and 

the Pentagon would conspicuously avoid targeting drug lords. 

On October 11, four days after Operation Enduring Freedom began, President George W. 

Bush sat down with his National Security Council, discussing, among other things, the continued search for targets. Defense Secretary Donald Rumsfeld said the Pentagon had considered 

hitting drug labs and heroin storage areas but did not because of concerns that there would 

be “collateral damage.”71 The CIA later concluded bombing these targets would have dramatically reduced the ability to produce opium in Afghanistan throughout 2002. “The drug 

targets were big places, like small towns that did nothing but produce heroin,” a CIA official 

said. “The British were screaming for us to bomb those targets because most of the heroin in 

Britain comes from Afghanistan, but they refused.”72

68. Hutchinson, “Statement before the House Government Reform Committee.” 

69. “Another Powder Trail,” Economist, October 18, 2001.

70. James Risen, State of War, (New York: Simon & Schuster, 2006), 154; and Robert Charles, former director of the 

U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs, interview by author, 

Washington, D.C., May 23, 2007.

71. Bob Woodward, Bush at War, (New York: Pocket Books, 2003), 228.

72. Risen, State of War, 154.

 17

The Neo-Taliban

The 2001 invasion of Afghanistan caused the Taliban and al-Qaeda to scatter but failed to put 

down either group once and for all. Rather than mounting a nationwide invasion with vast 

numbers of foreign troops, the United States and its allies opted for a “light-footprint” approach, 

relying on local proxies. Many senior al-Qaeda and Taliban leaders fled over the border into Pakistan. Numerous mid-level Taliban lay low in Afghanistan’s Pashto southwest, often in the fertile 

plains of western Kandahar and Helmand that also cultivated poppy. “There was no coordinated 

effort—they just escaped to places where they knew they’d find safe haven,” said journalist 

Rahimullah Yusufzai.73

It was not hard to melt away. Throughout 2002, there were just 4,500 troops with the International Security Assistance Force in Afghanistan, all of them based in the capital Kabul. Limited 

numbers of coalition forces deployed to the south and southeast and focused on hunting down 

“high-value targets”—not Taliban fighters. The coalition contracted anti-Taliban Afghan warlords, 

many with dubious records on narcotics and human rights themselves, to secure the countryside. 

U.S. officials privately acknowledged the bad behavior of various individuals in the new regime, 

but said they were needed in the hunt for terrorists. As had happened in Afghanistan in the past, 

Washington’s central priority took precedence over other challenges. 

In the spring following the invasion, poppy fields carpeted the Afghan countryside. The year 

before the invasion, Afghan farmers had harvested just 8,000 hectares—mostly in areas outside 

the Taliban’s control, according to the UNODC. In 2002, the total land area planted with poppy 

surged to 74,000 hectares, returning Afghanistan to its spot as the world’s leading opium producer.74 Across the border, agents from Pakistan’s Anti-Narcotics Force ambushed a camel 

convoy in the Baloch desert. The camels lugged nearly a ton of heroin and morphine base on 

their backs. Worth tens of millions of dollars, it was, at the time, one of the biggest drug hauls 

the world had ever seen.75

With few foreign troops posted outside Kandahar city, a dangerous security vacuum developed 

in the Pashto south. The Taliban quietly began to regroup, and commanders started reaching out 

to one another. Mullah Omar reportedly contacted his deputies one by one and appointed them 

to organize his fighters, pick up fresh recruits from Pakistani madrassas, locate weapons stashes, 

and raise funds.76 Drug smugglers close to the Taliban were some of the first investors, putting 

up small amounts of funds to help the movement start to rebuild, according to sources close 

to the Taliban interviewed for this study. Many commanders raised money by selling off opium 

stores they had hidden away, these sources said. 

The Taliban built their resources methodically. They began with low-intensity attacks in 2003, 

using teams on motorcycles to ambush foreign troops and aid workers. Off and on, they set 

off small bombs.77 Over time, cross-border attacks from Pakistan became more frequent. 

When Washington shifted its focus elsewhere, the Taliban surmised the moment was right to 

73. Rahimullah Yusufzai, telephone interview by author, October 10, 2007.

74. U.S. State Department, “International Narcotics Control Strategy Report 2002,” March 2003, vii–3.

75. Patrick McDowell, “As Disruption from War on Taliban Ends, Traffickers Moving Big Heroin Shipments,” Associated 

Press, March 3, 2002.

76. Elizabeth Rubin, “In the Land of the Taliban,” New York Times Magazine, October 22, 2006.

77. Gretchen Peters, “Hostilities Flare in America’s Other War,” Christian Science Monitor, March 31, 2003.

3
18 How Opium Profits the Taliban

relaunch. In March 2003, just as the United States was invading Iraq, journalist Yusufzai got 

a call from the Taliban military commander, Mullah Dadullah Lang. The Taliban had 

“regrouped,” he announced, and would soon commence a jihad to retake Afghanistan.78

Three months later, Mullah Omar appointed a new ten-man ruling council to lead the resistance.79 He named the mujahideen commander Jalaluddin Haqqani to control the southeastern region. Mullah Dadullah would command the south. The Taliban even mended ways with 

their former rival Gulbuddin Hecmatyar, who would lead the eastern flank, mainly in the 

mountainous provinces of Kunar and Nuristan. It was a loosely grouped alliance, with each 

region more or less responsible for raising its own funds, according to U.S. and Afghan officials. That being said, it would appear the central Taliban leadership—the so-called Quetta 

Shura—has maintained surprisingly strict control over drug money as it filters through the 

insurgent hierarchy in the south and southwest, according to dozens of interviews with smugglers, Taliban fighters, and Afghan officials in those areas. That appears to allow the Quetta 

Shura to maintain authority over dispersed and sometimes loosely affiliated Taliban commanders. Since 2001, Taliban commanders have diversified their activities within the opium 

trade. Examining the various ways Taliban commanders and members of the top leadership 

earn profit from narcotics illustrates how the myriad drug earnings enter the system.

Taxation

Taliban insurgents tax farmers in their control zones. Researchers for this study were told that 

Taliban commanders collect the full 10-percent ushr in some districts, while in others, commanders and local Mullahs share the take, according to a 2008 British report.80 In areas where the 

Taliban are dominant, the village-level Taliban subcommander will hand out written receipts 

for the amount of opium collected, and farmers interviewed for this study said the Taliban 

leadership was strict in assigning each commander’s control zone. Researchers for this study 

heard multiple cases in which farmers complained to the Taliban leadership of being overcharged, and the Quetta Shura responded by punishing the subcommanders. Likewise, Taliban 

commanders keep track of how much farmers and other members of the local community 

are earning by maintaining informants in each community, paying the equivalent of $10 a tip 

for information.81 In areas where there was no clear dominant force, there are reports of fighting 

between Taliban commanders, criminal gangs, and corrupt officials, who all appear to prey on 

the farmers. 

In addition to taxing poppy farmers, Taliban insurgents also collect a 10-percent tax from local 

shopkeepers and other small business owners, working over local communities much like mafiosi. 

When the Taliban in 2007 briefly took control of Musa Qala, a town in the poppy heartland of 

Helmand, their operatives collected about $8 a month from each family during a collection at the 

mosque, according to Fariq Khan, who ran a telephone shop. He said trucks passing through the 

78. Rahimullah Yusufzai, “Taliban ‘Aims to Regain Power,’” BBC, news.bbc.co.uk/2/hi/south_asia/2897137.stm 

(accessed May 15, 2009).

79. Rahimullah Yusufzai, as quoted in International Crisis Group, Countering Afghanistan’s Insurgency: No Quick Fixes, 

Asia Report no. 123 (Kabul/Brussels: ICG, November 2, 2006). He names the original 2003 members as Jalaluddin 

Haqqani, Saifur Rahman Mansoor, Mullah Dadullah, former Taliban army chief Akhtar Mohammad Osmani, 

Akhtar Mohammad Mansoor, former Taliban defense minister Mullah Obaidullah, Kandahar’s ex-security chief 

Hafiz Abdul Majeed, former Nimroz provincial governor Mullah Mohammad Rasul, Mullah Barodar, and former 

Taliban corps commander in northern Afghanistan Mullah Abdur Razzaq Akhundzada. 

80. David Mansfield, “Responding to Risk and Uncertainty,” 47. 

81. Provincial-level Afghan intelligence official, interview by author’s research assistant, Lashkar Gah, July 2007.
The Neo-Taliban 19

town paid $50 each.82 Other studies have suggested that the ANP extort the majority of 

payments from passing trucks and that Taliban in some areas do not participate in 

this practice. 83

In some areas, insurgents have extorted national enterprises: when the provincial director of 

an Afghan mobile phone network refused to pay his monthly “tax” in Zabul province, Taliban 

fighters blew three distribution towers in the Shah Joy district, cutting service there for a 

week.84 Similar forms of extortion appear to take place in other zones of the war theater. 

Researchers for this study heard of farmers, truckers, and small businesses paying extortion 

fees to insurgents across the southeastern and eastern zones of Afghanistan, while there are 

reports of similar practices across the border. For example, the New York Times reported in 

July 2007 that Taliban in the FATA’s Mohmand agency have earned tens of thousands of 

dollars taxing a marble quarry, as well as every truck carrying white stone out of it.85 More 

recent reports have discussed the Taliban in Pakistan’s Swat Valley taking over emerald mines 

there and selling gemstones on the black market to support their activities.86

In the rural environment, where there is little use for hard cash, much economic dealing is 

done in opium and other commodities of value.87 The Taliban maintain opium warehouses 

across Afghanistan’s southern poppy heartland, where insurgent commanders can deposit 

and later withdraw quantities of opium as if using an ATM machine.88 In December 2007, 

NATO forces that retook Musa Qala found 11 tons of opium stored in warehouses there.89

Taliban commanders at the village level also appear to receive millions of dollars each year 

worth of material supplies collected as tax from villagers and smugglers, although it is impossible to calculate an accurate total value for such barter deals.90 They often include vehicles, 

such as motorcycles, SUVs, or pickup trucks. Many commanders demand satellite and mobile 

telephones, or will collect top-up cards with talk-time credit from local shopkeepers. Other 

supplies they take as payment include weapons, ammunition, petrol, food, shelter, and even 

medical care for wounded soldiers.

Proceeds from ushr, as well as commodities collected in barter deals, appear to supply village 

and district-level Taliban with the bulk of their operational needs, everything from salaries for 

fighters and transport, fuel, food, weapons, and explosives.91 Each village-level subcommander must pay a percentage of the proceeds he collects to his military commander at the 

district level, who in turns pays off the district-level Taliban governor. A portion of these 

funds—still often transferred in the form of raw or partially refined opium—then reportedly 

filter up the Taliban chain of command to the provincial commander, who will hand over a 

82. Noor Khan, “Taliban Collected Taxes, Ran Heroin Labs, Had Own Judge in Afghan Town,” Associated Press, 

December 12, 2007.

83. See, for example, Mansfield, “Responding to Risk and Uncertainty,” 44. 

84. Provincial official in Zabul, interview by author’s research assistant, Kabul, August 2007. 

85. Pir Zubair Shah and Jane Perlez, “Pakistan Marble Helps Taliban Stay in Business,” New York Times, July 14, 

2008. 

86. Pir Zubair Shah and Jane Perlez, “Taliban Exploit Class Rifts in Pakistan,” New York Times, April 16, 2009.

87. This practice is not unique to insurgents. Opium is routinely traded as a form of currency across the poppy-rich 

south. A shopkeeper, for example, might accept payment for groceries, petrol, or other supplies in the form of a 

chunk of opium, and some keep weights and measures to calculate the correct rate. 

88. Afghan officials and tribal leaders not connected to the Taliban have also been caught with opium stashes.

89. Stephen Grey and Anna Schecter, “Exclusive: 11 Tons of Opium Discovered in Taliban Town,” ABCNews.com, 

December 20, 2007.

90. This issue is discussed in Mansfield, “Responding to Risk and Uncertainty,” 48. 

91. Afghan intelligence officials who have interviewed Taliban captured in battle, in interviews with the author’s 

research assistants, July 2007. 
20 How Opium Profits the Taliban

portion to the Taliban’s central financial committee.92 Because of the lower degree of command and control among the insurgents relative to their time in power during the 1990s, it 

would appear that the percentages of money sent up the chain of command vary across the 

southern conflict zone. And although researchers for this study heard multiple cases of Taliban 

commanders battling over drug spoils, in general, commanders all appeared to pay into the 

system, much as local mafiosi might hand a portion of their earnings to their boss.93

Protection Money

Providing protection for the opium trade is another lucrative form of earning for the Taliban in 

the south. It is common in Afghanistan for a local power broker—be they Taliban or not—to take 

a cut of commodities moving through his patch, or to receive payments for providing armed 

protection for a shipment as it passes. More than 65 percent of people surveyed for this study 

said the Taliban’s main activities related to drugs were providing security for opium crops as they 

grew and then protecting drug shipments as they leave the farm area.94 These fees can range 

up to 20 percent of the consignment, according to dozens of interviews with truckers and 

officials.95 Almost half those surveyed for this study described how low-level al-Qaeda operatives and other foreign jihadi groups, such as the Islamic Movement of Uzbekistan (IMU), provide 

security for shipments as they move out of Afghanistan—precisely the stage where one stands 

to profit most. 

Insurgents have broadly expanded their activities in the protection racket since 2001. In return for 

taxes they collect, the Taliban provide security for poppy farmers, building defensive positions 

around their fields or planting mines and IEDs ahead of visits by the eradication police.96 According to Afghan and NATO officials, Taliban units have also attacked security checkpoints to 

allow drug convoys to pass, and on occasion have even launched diversionary strikes to draw 

Western troops away from an area where a major consignment was passing.97 They have 

come to the protection of drug labs being raided by the paramilitary Force 333, according to 

a former commander of Force 333. “One time we went to raid a big lab in the Deshu district 

of Baram Cha,”98 a major center for heroin production in southern Helmand, he said. “Within 

twenty minutes there was a massive ambush. Bullets were flying everywhere.” The lab owner 

had called the local Taliban subcommander to come to his rescue. The attack was so vicious 

92. When the petals drop off the vivid opium poppy flower, they expose a green pod containing a thick, milky 

sap—opium in its purest form. Farmers harvest the sap as they have for centuries, by scoring the buds with a 

bladed instrument known as a neshtar and then collecting the sticky brown resin that dries on the buds with a 

curved scraping knife. In rudimentary “laboratories,” often nothing more than a mud hut with metal mixing drums 

and a brick stove, the raw opium is mixed with lime and boiled in water to make morphine base. Once poured 

into molds and sun-dried into hard bricks, it gets reduced in weight and volume, making it easier to smuggle. 

Depending on the region, Taliban subcommanders may collect wet opium gum, dry opium, or partially refined 

morphine base. In this report, these products are uniformly referred to as opium for simplicity’s sake.

93. Interviews by research assistant 1, Kabul, July 2007.

94. Members of the Afghan National Police also reportedly charge fees for opium shipments, as discussed in 

Mansfield, “Responding to Risk and Uncertainty,” 47. As Mansfield notes, some respondents did not believe that 

the Taliban charged fees for opium passing through their control zones. “Whether correct or incorrect,” he 

concludes, “the overall perception in the south is that corrupt government officials are earning more money from 

their direct or indirect involvement in the drug trade.” 

95. About ninety truckers were surveyed for this study, most of whom admitted to occasionally or routinely 

transporting opium.

96. Tom Coghlan, “Even the School Playground Has Been Turned into a Poppy Field,” Telegraph, February 8, 2007; 

and local farmers in Helmand, interviews by author.

97. There are also reports of ANP units conducting diversionary activities.

98. Baram Cha is sometimes spelled Baramshah or Baramcha.
The Neo-Taliban 21

the Force 333 commander had to call in air support from the American military to suppress 

the attack.99

Campaigns for territorial gain, such as a 2007 Taliban push into Deh Rawood district in Uruzgan, have been launched to aid smuggling activities.100 Deh Rawood is perched along the 

most important drugs- and arms-trafficking route in Uruzgan, connecting to Iran in the west 

and Pakistan in the south. The shift in battlefield tactics is a strong indication Taliban leaders 

work closely with traffickers, who appear to have tremendous decision-making influence over 

their strategic activities. This transformation in their battlefield tactics—from trying to make 

tactical gains to protecting drug shipments—mirrors similar behavior by insurgent groups 

around the globe. Many Taliban are no longer fighting for Allah but for the almighty dollar.

Heroin Labs

As they did during their time in power, Taliban insurgents collect taxes at drug refineries located 

near the Pakistan and Iran borders. Over time, some commanders took to running refineries 

themselves. When Afghan and international troops retook Musa Qala in December 2007, the 

Associated Press reported that the militants “oversaw heroin production” at as many as fifty 

heroin labs—and that the number of labs in operation expanded during their time in power. 

Some employed as many as sixty men.101 Meanwhile, the number of sites turning opium into 

crystal heroin, the high-end product exported to the West, climbed from thirty to fifty by 

2008. More simple rigs making morphine base operated off the back of souped-up pickups 

that can hurtle across the rocky terrain hugging the Pakistan border.102

99. Former commander of Force 333, interview by author’s research assistant, Ghazni, August 2007. 

100. Molly Moore, “NATO Confronts Surprisingly Fierce Taliban,” Washington Post, February 26, 2008.

101. Khan, “Taliban Collected Taxes.”

102. Abubakar Siddique and Salih Muhammad Salih. “Afghanistan: Poor Helmand Farmers Find Themselves in Eye of 

Drug Storm,” Radio Free Europe/Radio Liberty, October 10, 2007; and Western officials, interviews by author, 

2007–08.

 23

Key Challenges

As insurgents and terror groups have expanded their activities vertically through the drug trade 

and related criminal activities since 2001, they have swelled in military strength and territorial 

reach. Three challenges to weakening them will be disrupting money flows, penetrating networks, and winning back the support of Afghan people in areas the insurgents now dominate.

The Money Trail

The growing, refining, and moving of narcotics represent only one side of the drug trade. The 

object of the entire enterprise is earning profits. It is useful to study how money flows through 

the insurgent hierarchy to identify weak points where that cash flow may be disrupted. 

There are various ways insurgents profit from drugs, and there is a complex system to split profits 

between the loose alliance and the traffickers. Taliban soldiers captured in battle say poppy 

proceeds pay the bulk of their operational funding—including salaries for fighters and money to 

buy fuel, food, weapons, and explosives. As stated earlier, these field costs are by and large 

believed to come from the ushr fees collected at the farm level. The UNODC says that 98 percent 

of Afghanistan’s 7,700-metric-ton opium yield in 2008 came from Taliban regions and sold at an 

average of US$70 per kilogram. Accounting for differences in rates of ushr collected across the 

southern poppy belt, this would have netted the Taliban as much as $50 million in 2008, roughly 

10 percent of the total unrefined farm output in the south.103 Additionally, more than 50 refineries operate in Taliban-held areas, where insurgents collect a tax of as much as $250 for every 

kilogram refined.104 The UNODC estimated Afghan drug labs produced more than 500 metric 

tons of heroin and morphine base in 2008, which would yield another $125 million per 

year.105 Extrapolating the charges per truck leaving farm areas and protection fees reported 

to researchers for this study, the Taliban rakes in as much as $250 million more every year 

providing armed protection for drug shipments moving through their control zones. They also 

receive tens of millions of dollars worth of material supplies, including vehicles, food, and 

satellite phones.106

Major traffickers who smuggle tons of opium annually also pay directly to the top Taliban 

leadership, often to the tune of millions of dollars per year, according to Western officials and 

locals on the border. These cash “investments” appear to give some powerful smugglers real 

influence in the Quetta Shura’s decision-making process. In meetings with Taliban leaders, 

they also get contracted to provide a certain number of 4x4s and Toyota Hilux pickup

trucks each year. A few have built madrassas in neighboring Pakistan, where recruits can be 

trained, or hotels where Taliban fighters can escape for R&R. Traffickers also get billed for 

medical expenses incurred by Taliban injured on the battlefield, and at least one major dealer 

runs his own health clinic in Quetta, which is reportedly filled at any given time by wounded 

fighters.107

103. Author’s calculation.

104. David Rohde, “Second Record Level for Afghan Opium Crop,” New York Times, August 28, 2007; and interviews 

by author.

105. This assumes most or all refineries are in insurgent-held areas. Interview by author, Kabul, March 4, 2008. 

106. Multiple interviews by the author and the author’s research assistants. 

107. Smugglers and insurgents, interviews by author’s research assistants, Quetta, October 8–9, 2007. 

4
24 How Opium Profits the Taliban

Added together, drug-related profits earned by the Taliban and other extremist groups 

operating along the Pakistan-Afghanistan border could total as much as a half a billion dollars 

per year—similar to what Colombia’s FARC (Revolutionary Armed Forces of Colombia) earns 

annually in cocaine revenue. These are ballpark figures at best. When putting numbers on 

criminal activity—especially in a region where few paper records are kept—even the best 

estimates are just that. However, it is clear insurgents are earning astonishing profits off 

opium. Michael Braun, the former DEA chief of operations, recently said there are strong 

indications that al-Qaeda is “heavily involved” in Afghan opium trafficking.108 Researchers for 

this project heard repeated accounts of al-Qaeda operatives protecting drug shipments as 

they leave the region, although it remained unclear if they were simply freelancing for extra 

cash or operating within a larger, centrally directed policy to raise funds.109

Once inside the Taliban system, money appears to travel in various directions. Researchers for 

this project heard cases where subcommanders from poppy-rich areas had to pay into the 

central coffers, while others in strategic regions with less earning potential might collect a 

monthly stipend for operational expenses. The system appeared to be ad hoc and informal in 

nature. NATO officials estimate that the Taliban pay contract soldiers as much as $150 a 

month—a solid wage in a country where the average annual income is less than $500 

and where local policemen take home $120 a month.110 Wages vary by region, depending on 

the amount of military action. One source described a subcommander controlling twenty 

fighters from Helmand as collecting $5,000 monthly to pay for the salaries of his troops and 

their supplies.111

The poppy may be grown in Afghanistan and processed along the border into morphine base 

or heroin, but the command and control center for the drug trade as it relates to the Taliban, 

as with the insurgency itself, is in Pakistan—that is, off-limits to NATO troops and law enforcement advisers working with the Kabul government. Small, nondescript guesthouses in Quetta 

and Peshawar are routinely used as temporary meeting points for drug-related financial 

transactions, which take place roughly once every four to six weeks, according to multiple 

sources on both sides of the border. 

Each Taliban commander has a “money man” whom he sends to meet the powerful financial 

committee, which decides how funds are spent. The committee has tremendous influence 

over which subcommanders rise or drop in the rankings, because fighters win appointments 

to more lucrative postings according to their fund-raising ability. Despite evidence that the 

Quetta Shura tried to maintain rigid control over money flows, competition among commanders sometimes erupts into internal violence, as it did among rival mujahideen commanders 

during the Soviet resistance. In 2007, for example, eight died in Kapisa province during fighting between two Taliban commanders over rights to collect tax there. 

There are even tantalizing indications that high-level Taliban officials have themselves clashed 

violently for drug spoils. Researchers for this study heard reports that Mullah Obaidullah, who 

108. “US Launches New Fight against Afghan Drug Trade,” Associated Press, March 30, 2009, URL=articles.

lancasteronline.com/ap/4/us_afghanistan_drug_campaign (accessed May 15, 2009).

109. Although there is only fragmentary evidence that al-Qaeda operatives are using drug money to fund themselves 

in the Afghanistan-Pakistan war theater, the evidence is quite clear that crime, especially drug trafficking, is the 

main way radical cells fund themselves in Europe. European police have linked drug money to the 2004 train blasts 

in Madrid, the 2003 attacks in Casablanca, and the 2002 bombings of U.S. and British ships in Gibraltar. 

110. Ahto Lobjakas, “Afghanistan: NATO Downplays ‘Conventional’ Threat in South,” Radio Free Europe/Radio Liberty, 

January 23, 2007. Until recently, an average police officer earned just $70 a month in Afghanistan. In January 

2009, that wage was raised to $120 a month. 

111. Afghan provincial official, interview by author’s research assistant, Afghanistan, July–August 2007.
Key Challenges 25

was responsible for Taliban military and financial supplies, worked closely with senior traffickers 

to move drugs out of the region and bring weapons back. Sources said Obaidullah clashed with 

military commander Mullah Dadullah (who was killed in May 2007) after Dadullah independently 

tried to take charge of money and resources in the south. Dadullah also struggled for power with 

the late Mullah Ahktar Osmani, who was killed in a December 2007 air strike. Osmani took 

charge of collecting money and other resources for the Taliban in Baram Cha, the Helmand 

border town that is a center for opium production. After his death, there were rumors among 

the insurgents that Mullah Dadullah had passed information about Osmani’s whereabouts to 

NATO authorities so he could take control of the lucrative Baram Cha market. 

If true, these are hopeful signs for intelligence and law enforcement agents, who might use such 

rivalries to play the leadership off each other and weaken the movement. By and large, however, 

officials admit precious little is known about what happens to drugs proceeds earned by the 

insurgency once converted from opium into hard currency. Sources close to the movement 

identify Karachi as the place for Taliban money transfers to pay for weapons supplies and to 

launder drug proceeds. Officials also believe some drug money earned by the Taliban is invested 

in real estate in Quetta and nearby districts of Balochistan province. 

There is little sign that Taliban officials continue to play any role in the drug trade once the opium 

leaves Afghanistan or that they are involved in efforts to launder drug proceeds. Further study is 

needed in this area to determine who benefits most. Transfers in and out of Afghanistan itself 

are far larger than the country’s trade in commodities, fuel, and remittances from Afghans working abroad can explain, says Afghan Central Bank governor Noorullah Delawari. “The challenge 

is to separate the good from the bad,” he adds.112 Since 2001, the United Arab Emirates, Pakistan, and Afghanistan have adopted or drafted laws banning money laundering and tightening 

regulations on bank transfers. But there has been limited success tracking money flowing outside 

the banking system, much less pursuing those appearing to break the law. 

Authorities believe a significant portion of drug money connected to the insurgency is caught up 

in the region’s bustling hawala system, an informal money-transfer network that operates much 

like an unregulated version of Western Union. It is impossible to know how much money insurgents transfer through hawala, much less pinpoint how much is connected to drugs, donations, 

or payments for weapons or other supplies. The World Bank and the United Nations calculate 

that hawala dealers in Helmand and Kandahar alone move more than $1 billion of drug money 

annually. Surveyors identified fifty-four hawadars (hawala dealers) in those provinces as “specialists” in laundering opium money. Most traded exclusively in Pakistani rupees, indicating most 

payments flowed from Pakistan.113 Senior Pakistani officials believe a staggering one-third of 

their country’s $8 billion hawala trade is related to drug traffic, according to interviews by the 

author. Both Afghanistan and Pakistan have launched comprehensive programs to register 

hawaladars and are establishing cost-free mechanisms to identify the senders from the receivers. These programs should be supported and subsidized by the international community and 

the United States in particular.

Many traders barter Afghan opium for commodities, meaning there is virtually no money trail to 

follow. The Afghan market is desperate for basic goods such as vehicles, electronics, and construction materials. From the aptly named “Smugglers Creek” in Dubai, where hundreds of 

dhows are loaded with commodities bound for Pakistan, and the teeming Karachi port, where 

112. Noorullah Delawari, interview by author, Kabul, March 27, 2007.

113. Edwina Thompson, “The Nexus of Drug Trafficking and Hawala in Afghanistan,” in Afghanistan’s Drug Industry, 

eds. William Byrd and Doris Buddenberg (New York: United Nations Office on Drugs and Crime/World Bank, 

2007), 177–79. 
26 How Opium Profits the Taliban

tiny rowboats unload goods off larger vessels, to the Chaman border between Balochistan and 

Kandahar, where trucks stream into southern Afghanistan, one begins to understand the complexity of regulating regional trade in general, let alone isolating the “bad” from the “good.” It 

is not possible to calculate an annual dollar figure traded by traffickers associated with the 

insurgents, but analysts put the total in the billions. 

Drugs-for-commodities scams provide smugglers with a “legal” front for their activities. Haji 

Juma Khan (HJK), a major trafficker arrested in October 2008, was one of the largest importers 

of Toyota Land Cruisers in southern Afghanistan and his network also owns an electronics 

import-export firm in the United Arab Emirates, according to authorities. Haji Bashar Noorzai was 

Afghanistan’s leading tire importer, until he was arrested in New York in 2005. It is said an empty 

truck never passes over the rugged Durrand Line, the disputed border between Pakistan and 

Afghanistan. “The Pakistanis often complain about the Afghan Transit Trade Agreement,” says 

former U.S. special treasury agent John Cassara. “Basically, it is drugs going out and commodities 

going in.”114

A similar trick is known as trade-based money laundering: two traders agree to misprice a deal 

so extra money sneaks past authorities. For example, to move $50,000 worth of drug money, 

one would just transfer $200,000 of widgets but put their value as $250,000. Cassara proposes negotiating with the Pakistanis and Afghans to harmonize customs duties and collection 

points (thus reducing the incentive to smuggle legal goods). Foreign governments could also 

help the two countries establish Trade Transparency Units, or TTUs. These computer-based 

stations identify mispriced trades by spotting anomalies in the cost of commodities between 

point A and B. The United States has helped establish TTUs in South America, where Colombian and Mexican smugglers use similar techniques to launder cocaine money. 

None of the money laundering mechanisms being used in the Afghan opium market are 

unique to the region. The International Monetary Fund estimates about $1.8 trillion dollars of 

dirty money is laundered globally every year, mainly by moving it through informal markets, 

or posing it as legitimate business. Financial crime experts compare the hawala transfer system 

to the Black Market Peso Exchange, which moves cocaine money in Latin America. “Drug 

kingpins and terrorist financiers did not create this system,” says Raymond Baker, the director 

of Global Financial Integrity. “They simply stepped into the mechanisms we have created to 

make it easy to shift money across borders.”115

Smuggling Networks

Another key challenge to disrupting Taliban drug profits will be penetrating and breaking up the 

powerful drug networks that bankroll the insurgency. Most smuggling networks are run by 

close-knit families and tribes, making them difficult to penetrate by outsiders and making the 

task of determining who does what within the organization complex. Additionally, the networks 

which benefit the insurgents tend to operate from Pakistan, beyond the reach of NATO troops 

and Afghan and Western law enforcement officials. Islamabad’s poor track record in arresting 

traffickers (one major smuggler linked to the insurgency, Sakhi Dost Jan Notezai, has been 

wanted by the U.S. government since the 1980s, for example) gives little reason for optimism.

114. John Cassara, interview by author, Washington, D.C., June 29, 2007.

115. Raymond Baker, interview by author, Washington, D.C., July 17, 2007.
Key Challenges 27

The trafficking network that was run, until recently, by Haji Juma Khan, a Brahui tribesman from 

the isolated southwestern province of Nimroz, illustrates how closely powerful traffickers can 

collaborate at once with the Taliban leadership and corrupt officials in the Afghan, Pakistani, and 

Iranian governments. It is also a good case study in the challenges to breaking up such networks 

and makes clear that profit, not ideology, politics, or religion, is the main motive for such 

smugglers. 

Once ranked the top smuggler in Afghanistan, Pakistan, and Iran, HJK’s network moved an 

estimated $1 billion worth of opium a year. “He is the dominant player in Helmand, the center 

of gravity for the Taliban drug trade,” said a Western official.116 Similar to Pablo Escobar, the 

Colombian kingpin who packed jetliners with cocaine, HJK was notorious for his colossal drug 

shipments and his extravagant lifestyle. For a man who worked closely with the Taliban and 

al-Qaeda, HJK hardly behaved like a pious Muslim. He maintained dozens of residences across 

South Asia and the Arab Gulf, where lavish parties reportedly extended into the night whenever he was in residence.117

HJK hails from the Mohammed-Hasani tribe of the Brahui people, a Sunni Muslim ethnic 

group nearly two million strong spanning the tri-border region. Historians believe Brahuis 

immigrated to the remote area about three thousand years ago from the Indus Valley region. 

Linguists interpret their distinct language as grammatically derived from ancient Dravidian 

tongues. Today, territories the Brahui inhabit are as forbidding and isolated as any on earth. 

Smuggling is the central livelihood in the tri-border area, where physical boundaries between 

the three countries scarcely exist. Virtually everyone associated with HJK is also Brahui. It is 

not an easy clan for outsiders to penetrate.

Though details of his childhood and rise to power are scarce, HJK’s wealth and influence was 

established midway through the Taliban regime. He built a palatial compound in Zaranj, the 

barren capital of Nimroz province. HJK’s citadel, which was heavily fortified and guarded by 

dozens of armed men, dwarfed even the provincial governor’s mansion across the street. His 

massive hundred-plus vehicle convoys across the Iranian desert attracted the attention of 

foreign counternarcotics officials. British police then regarded HJK as the man who moved the 

most contraband from Pakistan’s Makran Coast into the United Arab Emirates. HJK ferried 

opium and hashish along the narrow channel of the Arabian Sea separating Pakistan from the 

Arabian Peninsula, coming aground on the stretches of empty coastline between Oman and 

the United Arab Emirates. “They would land along the remote beaches and bury their shipments in the sand,” said a former official.118

Before long, his authority eventually came to rival that of Haji Bashar Noorzai, the convicted 

trafficker who was Mullah Omar’s original benefactor. “Haji Juma Khan was number three in 

the Taliban by 2001,” said a Western official.119 U.S. intelligence also believes he became close 

to al-Qaeda during the 1990s and may have helped move al-Qaeda operatives around the 

region since the U.S.-led invasion.120 U.S. forces detained HJK in late 2001 near Kandahar, U.S. 

116. Western official, interview by author, Kabul, April 2006.

117. HJK is known to have maintained residences in Afghanistan (Helmand, Nimroz, and Kabul), Pakistan (Quetta and 

Karachi), the United Arab Emirates (Sharjah, Dubai, and possibly Abu Dhabi), and Iran (near the border, exact 

towns unknown). Prior to his arrest, the author visited one of his residences in Quetta and was told by a member 

of his staff, “Haji Juma Khan has 200 houses and this is one of them.” 

118. Former British official, interview by author, Kabul, November 2007.

119. Western official, interview by author, Kabul, June 30, 2004.

120. According to U.S. intelligence documents seen by the author. 
28 How Opium Profits the Taliban

officials now admit.121 Although he was known to be involved in drugs smuggling and 

tied to the Taliban, U.S. military intelligence let him go, believing him to be insignificant. It 

was a decision they would come to regret. By 2004, Western intelligence agents identified 

HJK’s drug network as a principle source of funding to the Taliban and al-Qaeda—and a key 

conduit for their weapons. He also maintained a powerful network of officials whom he 

paid off in the Afghan, Pakistani, and Iranian governments, according to Western officials and 

local sources. 

In addition to running a massive heroin refinery and maintaining huge underground storage 

depots in Baram Cha, he also established large heroin-producing bases in the remote Chahar 

Borjak district of southern Helmand and along the mountainous border with Iran, according 

to Afghan officials. His network maintains large, hidden weapons caches in those areas. Now 

under greater scrutiny, his refineries come in the form of mobile labs, often built in the bed 

of Toyota Hilux trucks or hastily erected in people’s homes.122 Until it was sealed by Pakistani 

paramilitary troops in 2007, he also kept a representative in the Girdi Jungle refugee camp, a 

notorious hub for smugglers sitting along the desolate Balochistan border. There, he would 

store narcotics coming out of Helmand in giant underground bunkers.123 HJK adjusted tactics 

after Western troops moved into Helmand. His caravans became more compact—just fifteen 

to twenty SUVs—and were guarded by fighters armed with heavy machine guns and rocketpropelled grenades. “We have tried to intercept his convoys,” said a senior Interior Ministry 

official in Kabul in 2007, “but his connections are very good within the government and 

police. He’ll get a tip off that we are coming and pass that information onto the Taliban and 

they will come out in force.”124

In addition to working land smuggling routes, HJK’s preferred method of moving contraband was 

on the open seas. In May 2004, acting on a tip-off, agents in Pakistan turned up evidence he 

was moving a fleet of cargo ships between the Pakistani port city Karachi and the United Arab 

Emirate of Sharjah, where the kingpin himself lived for several years after the Taliban government 

fell. Sharjah authorities eventually ejected HJK under pressure from the United States. Intelligence 

agents believed his vessels carried contraband out of Karachi and returned laden with weapons—

including plastic explosives and antitank mines. They would unload their cargo secretly and ship 

it overland to the militants.125 

Many opium smugglers in Afghanistan simply pay Taliban commanders to protect their drug 

shipments. HJK actively took a role in organizing the insurgency, counternarcotics officials say. 

“For some time, we knew that HJK was meeting directly with Taliban officials who would then 

sit down with al-Qaeda about battle plans,” said a U.S. official interviewed in 2007.126 Taliban 

troops helped protect his drug shipments as they snaked down through southwestern 

Afghanistan, but Afghan security officials say there was increasingly a blurring between the 

insurgents and his personal army. His network as of 2007 included a force of 1,500 armed 

fighters, who mainly operated in border provinces such as Farah and Nimroz, where they were 

often referred to as “Taliban” by the locals.127

121. U.S. officials, interviews by author. That HJK was detained by U.S. authorities is also referenced in Tim McGirk, 

“Terrorism’s Harvest,” Time (Asian edition), August 9, 2004. 

122. Provincial officials, interviews by author’s research assistants, Afghanistan, July 2007. 

123. Afghan and Pakistani officials, interviews by author and author’s research assistants, in 2007 in Helmand and 

Kabul.

124. Senior Interior Ministry official, interview by research assistant, Kabul, July 2007. 

125. McGirk, “Terrorism’s Harvest”; Western counternarcotics official, interview by author, Kabul, July 2004.

126. U.S. official, interview by author, Kabul, May 2004.

127. Provincial official, interview by author’s research assistant, Kabul, July 2007. 
Key Challenges 29

Narcotics leaving southwestern Afghanistan follow three general routes. The first takes contraband direct into Iran from the provinces of Nimroz or Farah. The second routing dips down into 

Pakistan’s Balochistan province and then heads west for the Iranian border. A third route smuggles 

drugs south to Pakistan’s Makran Coast and by boat to the Persian Gulf. Either way, corrupt 

officials in Iran and Pakistan are essential to the network formed by HJK. His team pays off a wide 

network of police, border guards, and intelligence agents in both countries, according to smugglers, Western officials, and Pakistani and Afghan investigators. 

Although HJK was tied to the Taliban and al-Qaeda, he also maintained an unparalleled Rolodex 

of corrupt government officials he could call on for help across South Asia and the Persian Gulf. 

In Afghanistan, that network included provincial governors, security agents, regional military 

commanders, and senior officials in the notoriously corrupt Highway Police, according to Western 

officials. So powerful were HJK’s regional law enforcement connections that Western law 

enforcement agents cooked up a plan to lure him to far away Indonesia, where he was arrested 

upon arrival and handed over to U.S. authorities.128 The U.S. government has refused to release 

details on events leading up to his arrest. Sources in Quetta and Baram Cha close to HJK’s network say his operations—run almost entirely by blood relatives—have continued unimpeded 

since the kingpin’s October arrest. While HJK’s capture was certainly a major victory for the DEA 

and Western law enforcement, the effect his removal from the scene will have on opium supplies, 

insurgent funding, and government corruption remains to be seen.

A State of Despair

Disrupting money flowing to the insurgents and breaking up trafficking networks will be two key 

challenges to the international community as it seeks to build peace in Afghanistan. A third major 

challenge will be winning back the “hearts and minds” of Afghan villagers whose lives—and 

livelihoods—have been chewed up by the drug trade and the incessant fighting. As a case study, 

Helmand province illustrates how poor rural families have been victimized by insurgents, corrupt 

state actors, drug traffickers, and also the international community.

Helmand province is about the size of West Virginia and the scene of heavy fighting between 

Taliban and NATO forces in recent years. If it were a separate country, Helmand would also be 

the world’s leading opium producer, with the rest of Afghanistan in second place. Insecurity bred 

by the fighting supports the opium trade by making it too dangerous for anyone else—such as 

the government or an aid group—to come in and establish an alternative. “We are caught here 

between the Taliban and government,” said farmer Dastoor Khan, expressing a sentiment the 

researchers for this project heard over and over.129 It is true traffickers and a handful of large 

landowners have earned millions off Helmand’s poppy crop, however the vast majority of 

poor farmers and sharecroppers are barely eking out a living. “We grow poppy, but the drug 

smugglers take it from us,” said Haji Ramtullah, a farmer in Maarja district. “We sell it cheaply. 

Then they take it over the border into Pakistan. They make twice as much as we do.”130

The town of Musa Qala, which has shifted between Taliban and coalition control, is emblematic of the province’s problems. NATO troops, mainly from Britain, fought a bloody campaign 

against the Taliban there in 2006, withdrawing in October after reaching a controversial peace 

deal with tribal elders who pledged to keep the Taliban away on their own. The deal fell apart 

128. Former U.S. official, interview by author, December 2009. 

129. Dastoor Khan, interview by author’s research assistant, July 2007.

130. “Helmand Heads for Record Poppy Harvest,” Afghan Recovery Report (ARR) no. 241, Institute for War and Peace 

Reporting, February 9, 2007.
30 How Opium Profits the Taliban

in February 2007, and the Taliban swarmed back into Musa Qala, establishing a district government, complete with a governor, police chief, and sharia courts. 

Local journalists from the Institute for War and Peace Reporting (IWPR) were invited into Musa Qala 

to report on life under the Taliban in November 2007, just a month before NATO troops retook the 

town.131 They found schools and hospitals shuttered and Taliban fighters patrolling the streets in 

police Jeeps they had commandeered from fleeing government forces. It was clear there was lots 

of money around: one report described a bustling drug bazaar where buyers piled sacks of opium 

into their trucks.132 But little of this money seemed to reach ordinary villagers, for whom ordinary 

commodities were scarce. One IWPR reporter found that as many as 75 percent of the town’s 

residents had fled and that, according to the only shopkeeper still operating, business was down 

80 percent. “The only people left are those who couldn’t afford to go. We are in a very bad economic situation,” said Hajji Nazar Mohammad, a town elder.133

Despite the violence, some residents in Musa Qala praised the Taliban for bringing security, 

saying corrupt and inept officials from the Kabul administration had performed no better in 

their eyes. “If the government wanted to help, why didn’t they do anything before the 

Taliban came,” asked Amruddin Kaka, an elderly resident.134 Basic government services barely 

exist across much of Helmand province, and to what little extent people do interact with 

government officials, it is usually to bribe them not to destroy their poppy fields. Haji Abdul, 

a seventy-three-year-old farm owner, said he paid two thousand afghanis per jerib (about a 

half acre) to the police, who would share the spoils with higher ups in the provincial and 

federal administration.135

Repeated and heavy bombardments have flattened homes and businesses in Musa Qala and 

elsewhere, killed scores of civilians, and embittered people against NATO. “I swear I will never 

forget my little daughter’s screams,” said Zmarai, from the village of Chenai. “She was scared to 

death of the bombs. There was blood coming out of my son’s ears.”136 The high number of 

civilian casualties will make it that much harder for the coalition and the Afghan government to 

win the hearts and minds of the Helmand people, who spoke often of failed promises to deliver 

aid and development. “I heard the government on the radio saying they’d help us,” Gul Mohammed told IWPR. “But we don’t want their help. We are not going to forget our dead just because 

they give us a plate of food.”137

The drug economy brings an increased level of brutality—a viciousness that seems far more senseless to many who live under it. Many complain of NATO bombs, the vicious tactics of local law 

enforcement officials, and Afghan intelligence agents. But they seem especially fearful of the brutal 

tactics of the insurgents. “I don’t think anyone likes the Taliban anymore,” says Shaystah Gul Khan, 

a farmer from Gereshk district. “The doctors and teachers have fled. They have closed the schools, 

and put mines on the roads. We haven’t seen anything but the destruction of our village and our 

life.” The Taliban, which used to ban TV entirely, began releasing a grisly video series showing their 

fighters beheading men they accused of spying for the Americans. It culminated in an April release 

131. For their full reports on Musa Qala, see URL=iwpr.net/?p=arr&s=f&o=340973&apc_state=henfarr340968 

(accessed May 15, 2009). 

132. Aziz Ahmad Tassal, “Winning Hearts and Minds,” IWPR, ARR no. 275, November 27, 2007.

133. Aziz Ahmad Shafe, “Taliban Ghost Town,” IWPR, ARR no. 275, November 27, 2007.

134. Tassal, “Winning Hearts and Minds.”

135. Rubin, “In the Land of the Taliban.” 

136. Jean MacKenzie, Aziz Ahmad Tassal, and Mohammad Ilyas Dayee, “What Next for Musa Qala?” IWPR, ARR 

no. 277, December 12, 2007.

137. Ibid.
Key Challenges 31

featuring a knife-wielding child executioner who looked barely twelve-years old.138 There were also 

reports of Taliban soldiers gouging out eyes or gutting enemies they captured in battle.139

As connections to the Taliban’s ideological roots withered, so did their strict social edicts. “We get 

taxed by the Taliban for opium just like before, but otherwise there’s no functioning government 

here,” says forty-two-year-old Haji Batoor Khan of Sangin. “The big change is that now we can 

play music and have weddings. Even the Taliban love music, dancing, and television.” Gone are the 

days of whipping men for trimming their beards: “We do not punish people for their hair and 

beards right now,” explained Haqani, a district governor in Musa Qala. “But once we take over the 

country, we will treat people according to the orders of our supreme leader Mullah Omar.”140

Their rigid brand of justice remains just as harsh as ever: “We punish those who commit crimes. If 

someone steals, his hand is cut off,” Haqani said. “So far we have not had one case of theft. If we 

do, the thief will be punished accordingly.”141 So will “spies” for the coalition. When NATO troops 

returned to Musa Qala in December 2007, they found alleged traitors had been hung in the town 

square.142

In Musa Qala, there was clear evidence farmers and fighters banded together to fight poppy eradication teams sent by the government. But it was often a marriage of convenience, more driven by 

economic need than ideology. “Here villagers get paid by the Taliban and they fight for money,” 

said a local source. An Afghan security official who monitored Musa Qala said Taliban fighting units 

there normally numbered between ten and twenty men but could quickly surge to sixty. “When 

the Taliban need reinforcements, the men arm up and ride out on motorcycles,” he said.143 Added 

Qais Azimy, an Afghan journalist with Al Jazeera who traveled extensively in Helmand: “There were 

those Taliban who would stay in the villages to protect the poppy fields and those villagers who 

would go off and join their attacks.” They do not support the wider movement, he said, they only 

join up to keep the NATO troops and the eradicators out.144 They may come together as a matter 

of survival, but 95 percent of the people surveyed for this project expressed an urgent desire to 

grow something other than opium.

Without a doubt, Helmand province is the most convoluted and intractable place within the wider 

Pakistan-Afghan narco-insurgency. Counterinsurgency tactics that brought security and economic 

opportunity to people at the villager level, coupled with efforts by law enforcement officials and 

military troops to interdict antistate and state actors linked to crime and violence, could help win 

hearts and minds in the area and increase the level of cooperation from the public in rooting out 

insurgents and criminals. Such an endeavor would almost certainly fail, however, unless there were 

rigorous and simultaneous efforts to root out corruption among state actors. 

138. The Associated Press reported that Ghulam Nabi, the man killed in the video, was accused of providing the 

evidence to the Americans that led to Mullah Osmani’s death in December 2006. After receiving the video, the 

Associated Press confirmed with Nabi’s father, Ghulam Sakhi, that Nabi had routinely hosted Osmani and Mullah 

Dadullah at the madrassa he ran in western Baluchistan province. Sakhi stated that his son had travelled to 

Peshawar and Wana, in South Waziristan, to “collect money” for guns and food and that he had personally 

spoken with Dadullah immediately before his son was killed. “They are the enemies of Islam,” he said of the 

Taliban. “They are behaving like savages.” Abdul Sattar, “Jihadist Video Shows Boy Beheading Man,” Associated 

Press, April 20, 2007.

139. Gretchen Peters, “They’re Back: A New, Vicious Taliban Take Shape in Afghanistan—Opium Funds a New Type of 

Taliban Army,” ABCNews.go.com and ABC News Radio, June 27, 2006; Pam Constable, “Afghan Corps Faces a 

Resurgent Taliban,” Washington Post, June 10, 2006; “Living under the Taliban,” IWPR, April 4, 2007.

140. Shafe, “Taliban Ghost Town.”

141. Tassal, “Winning Hearts and Minds.”

142. Khan, “Taliban Collected Taxes.”

143. Afghan security official, interview by author’s research assistant, Musa Qala, July 2007.

144. Qais Azimy, interview by author, Kabul, March 2, 2007. 

 33

Conclusion

Opium has long played a supporting role in the Afghan conflict, and today the drug trade has 

moved to center stage. Not only have narcotics corrupted the Afghan government, they have also 

begun to transform—through deepening ties between insurgents and drug traffickers along the 

Pakistan-Afghanistan border—the nature of the insurgency from one based on ideology to one 

increasingly driven by profit. Insurgent commanders from the district level up to the top leadership have expanded their involvement vertically through the drug trade, and it is important to 

recognize how this creates both challenges for the international community as well as opportunities to weaken the insurgency. 

Key challenges include the fact that the insurgency is now better funded than ever, and it would 

appear to be less reliant for financial support from neighboring Pakistan or donations from the 

Gulf. It will be complex to try and regulate regional trade and the hawala network, let alone the 

clan-based drug trafficking networks. As the core Taliban in the south and other extremist groups 

such as al-Qaeda have become more closely tied to crime along the Pakistan-Afghanistan border, 

levels of violence have increased. Additionally, insurgents have diversified into other criminal 

activities, including kidnapping for ransom, extortion, and, in some areas, human trafficking. The 

more complex the criminal networks become, the more difficult it will be for the coalition of 

foreign forces in Afghanistan to fight them. 

Indications that antistate actors and corrupt state actors work together in the most insecure parts 

of the south in order to profit monetarily also complicates matters, and there seem to be a limited 

number of reliable partners for the NATO forces and the international community in the south. 

To make matters worse, the problems plaguing Afghanistan have spilled over its borders. Drug 

trafficking and corruption also fuels growing instability in Pakistan, Iran, and Central Asia. If left 

unchecked, there is the ever-present risk that terrorists with global ambitions could spend their 

drug profits to launch attacks outside the region. 

However, the way in which the insurgency is becoming criminalized also presents opportunities. 

The rising tide of violence and daily misery has made the Taliban deeply unpopular in the south 

and southwest, and nationwide polls indicate that they and other extremist groups have little 

support.145 At this point, the Kabul government and NATO forces are not well loved either, 

especially in the violence-wracked south. However, a reshaped military strategy that focused 

on providing security to the local communities preyed upon by insurgents and criminals, while 

also improving governance and providing alternative livelihoods, could win public support and 

with it increased cooperation for fighting the insurgents and criminals. Additionally, there are 

indications that antistate actors at all levels of the insurgency compete for drug spoils. Military 

intelligence units within NATO should try to capitalize on these inner rivalries to weaken the 

insurgency, yet remain aware of the risk that fighting between rival commanders could cause 

collateral damage in the local community. 

It is crucial that the international community stop thinking of Afghanistan’s drug problem as 

Afghanistan’s drug problem. The poppy may be grown there and processed into morphine 

145. For a good summary of recent polling and data, see Jason H. Campbell and Jeremy Shapiro, Afghanistan 

Index: Tracking Variables of Reconstruction and Security in post-9/11 Afghanistan, (Washington, D.C.: 

Brookings Institution, May 19, 2009), URL=www.brookings.edu/foreign-policy/%7E/media/Files/Programs/FP/

afghanistan%20index/index.pdf (accessed May 20, 2009).

5
34 How Opium Profits the Taliban

base or heroin along the border, but to a significant degree, the southern Afghan poppy trade 

is managed from Pakistan. Drug profits get laundered between Karachi and the United Arab 

Emirates, and U.S. financial crime experts who have studied the trade believe some funds end 

up in Western banking institutions. A successful strategy to combat the issue must take into 

account both the multinational nature of the opium trade and work to dismantle financial 

flows keeping insurgent fighters funded and armed. 

When most visualize the war in Afghanistan, they think of pitched battles in rugged mountain 

hamlets and IED attacks along remote dirt roads. It is important to also keep in mind the 

powerful traders, smugglers, and money launderers pulling the strings from offices in Quetta, 

Karachi, and Dubai. The ambition of these businessmen is neither to spread Wahhabi Islam 

nor to create a Muslim caliphate. It is not even to eject U.S. troops from the Saudi peninsula. 

Their goal is to make money—lots of it. The UNODC and some counternarcotics officials 

estimate that fewer than two-dozen people control the vast majority of the Afghan opium 

market and profit most from it. Until the international community recognizes the critical role 

these individuals play in supporting and dragging out the conflict, it is unlikely there will be a 

reduction in violence. The continued success of these businessmen depends on Afghanistan 

(as well as border areas of Pakistan, Iran, and various Central Asian states) remaining unstable, 

undeveloped, and ungoverned. Breaking the union between terrorists and traffickers will 

require policies that make it both difficult for traffickers to profit and possible for villagers to 

earn a living growing and trading legal goods.

As C. Christine Fair and Seth G. Jones have argued, NATO should launch a “bottom-up” 

strategy that starts building security and public confidence at the village level, that uses foreign troops to mentor local security providers, and that recognizes that each community 

represents a unique campaign.146 NATO units that try to reduce criminality at the local level 

could find themselves winning over the local hearts and minds more easily. For many rural 

Afghans, the greatest perceived threat is crime and economic instability, not the insurgency per 

se. Specific strategies that could be employed to target the drug trade include

n establishing checkpoints manned by NATO troops and counternarcotics police to 

seize drug shipments on highways and making all vehicles subject to inspection, 

even those belonging to Western troops and senior Afghan officials and their family 

members;

n destroying drug labs and targeting opium convoys, which can be identified from the 

air and which normally do not travel on the main roads;147 targeting chemists working in drug labs for arrest or elimination;

n giving counternarcotics agents space on military missions so they may collect evidence to interdict smugglers or at least interrupt their traffic;

n targeting major drug traffickers who work with the Taliban and al-Qaeda for elimination—just like senior insurgent and terrorist leaders;148

146. For more on this, see Fair and Jones, “Securing Afghanistan.” 

147. Infared technology already being used in Pakistan could be put to use in the skies over Afghanistan to reduce the 

chance of high civilian casualties, because most drug convoys travel late at night on known smuggling routes. 

148. NATO should not be expected to conduct counternarcotics missions, but it should support them. A criminal 

investigation is different from a military intelligence mission, but the two can be complementary. Greater 

cooperation could support efforts to apprehend or eliminate Taliban insurgents and allied international extremist 

groups.
Conclusion 35

n working with the Kabul government to establish a mechanism for investigating 

Afghan state officials and police suspected of profiting from opium and removing 

from office and arresting those found guilty.149

Many of those who profit most from Afghanistan’s poppy crop do not actually reside in the 

country, meaning there will have to be international pressure on nations who host them to hand 

them over. Neither Pakistan nor the United Arab Emirates has a good track record of apprehending white-collar crime, particularly money laundering. There must be more focus—and increased 

international pressure—put on apprehending the individuals behind the region’s multibilliondollar opium market. At the very least, Western governments can launch a “naming and shaming” campaign, something the administration in Kabul claims to support.150

Along with programs to interdict traffickers and cut their profits, the international community 

should promote efforts to develop legal alternatives and regulated financial networks. Specifically, it should

n continue to help the Afghan government build a farm support network by funding 

rural development programs that will improve farmers’ access to regional markets 

and subsidize legal crops;

n subsidize cost-free mechanisms to regulate hawala and other informal money flows 

so that dirty money flows can be identified, isolated, and cut off;

n support Afghanistan and Pakistan in harmonizing customs duties and collection 

points to cut down on the smuggling of legal commodities hiding drugs profits;

n establish TTUs between Afghanistan, Pakistan, and the United Arab Emirates to 

monitor commodity flows and to try to isolate cases of trade-based money laundering, eventually expanding this system to include Central Asian states.

Some argue stamping out the drug trade will weaken the Afghan economy. That may be true in 

the short run and is something the donor community should accommodate for. But once drugs 

are replaced with legal commerce, exactly the opposite is true. Consider this: the export value of 

the 2007 opium harvest was $3.1 billion, according to the UNODC. Approximately 25 percent of 

the opium’s value, or $755 million, was paid to Afghan farmers, with the rest, almost $2.5 billion 

dollars, going to traffickers and money launderers who mainly live out of Afghanistan. “Drugs 

drain money from a country, and they don’t bring the profits back home,” says Raymond Baker, 

author of Capitalism’s Achilles’ Heel.

151 Governor Delawari, of Afghanistan Da Central Bank, 

puts it another way, “We get called a narco-state and the money ends up outside the 

country.”152 The net outflow of drug money offsets inflows of investment and aid, making it 

impossible to wrench Afghanistan out of poverty.

A successful policy in Afghanistan would not prioritize tactics but would mount a multipronged attack, combining intensive diplomacy; a reshaped military and intelligence strategy; 

149. Given the current weak state of Afghanistan’s judiciary and corrections system, negotiating an extradition treaty 

with Kabul so that corrupt officials will face trial elsewhere could provide a powerful disincentive to participation 

in the drug trade. One challenge is that Afghan lawmakers have so far neglected to debate or vote on an 

extradition treaty proposed by Washington.

150. Paul Taylor Sun, “Afghan Urges ‘Name and Shame’ War on Graft, Drugs,” Reuters, March 16, 2008. 

151. Raymond Baker, interview by author, Washington, D.C., May 2007.

152. Governor Delawari, interview by author, Kabul, March 27, 2007.
36 How Opium Profits the Taliban

police, judicial, and economic reform; and targeted development programs. Instead of nation 

building, the challenge of fighting corruption, the insurgency, and the drug trade, requires 

region building. As the biggest donor with the largest number of deployed troops there, the 

United States should take the lead in revitalizing the international community’s strategy 

toward Afghanistan.

Both the West and the Taliban are currently fighting a zero-sum game: the West wants to wipe 

out the insurgents and their al-Qaeda allies, and the Taliban want to drive foreign non-Muslims 

out of Afghanistan. The best strategy against the Taliban is not to try to wipe them out militarily 

but to make them irrelevant—by offering Afghans (and Pakistanis) a better alternative. The 

international community and the governments in Afghanistan and Pakistan have failed at this 

since 2001. Criminal and terrorist groups take root and flourish where there is an absence of 

good governance and security. To a great extent the strength of the Afghan insurgency is also a 

reaction to state corruption. The ultimate goal should not be the end of the Taliban and al-Qaeda, 

but the creation of a prosperous and stable Afghanistan and greater region. 
About the Author 37

About the Author

Gretchen Peters has covered Pakistan and Afghanistan for more than a decade, first for the 

Associated Press and later as a reporter for ABC News. She was nominated for an Emmy Award 

for her coverage of the 2007 assassination of Benazir Bhutto and won the SAJA Journalism 

Award for a Nightline segment on former Pakistani president Pervez Musharraf. She is the author 

of Seeds of Terror: How Heroin Is Bankrolling the Taliban and al Qaeda (2009). She has published 

numerous articles in leading media publications, including National Geographic, The Christian 

Science Monitor, and The New Republic and has served as a commentator on NPR and CNN.

The research for this publication was supported through a grant from the United States Institute 

of Peace. 
38 About the Institute

About the Institute

The United States Institute of Peace is an independent, nonpartisan institution established and 

funded by Congress. Its goals are to help prevent and resolve violent conflicts, promote postconflict peacebuilding, and increase conflict-management tools, capacity, and intellectual capital 

worldwide. The Institute does this by empowering others with knowledge, skills, and resources, 

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