Saturday, January 5, 2008
Economists Weigh in on Counter-Narcotics in Afghanistan
Amid all the ideologically-driven policy proposals about narcotics in
Afghanistan, the Financial Times has done reality a favor: it has
published a proposal [Link] from two real-life economists, about how
to use economic policy to help Afghans move out of illicit drug
production.
Edmund Phelps, 2006 Nobel laureate in Economics, and Graciana del
Castillo (ex-IMF), both now of Columbia University, note the
elementary but often ignored point:
Lack of productive alternatives [not GREED! -- BRR] has driven
farmers to turn to growing poppies. Drug-traffickers support farmers
by advancing credit and sharing some of the risks of production. Some
farmers can survive only by selling their crops in advance. If the
crops fail, they become in debt to the traffickers, creating a vicious
circle.
Phelps adn del Castillo repeat just what the Afghan government has
been saying about the massive failures of the international aid
program:
Since US military intervention and the Bonn agreement of late
2001, government tax revenue has averaged only about 5 per cent of
gross domestic product. Warlords have been left to control a large
percentage of customs revenues collected at the borders. Furthermore,
donors channel a large part of their aid – up to 75 per cent at times
– outside the government budget or control. As a result, the Karzai
government has been unable to provide basic services and lawful
employment. Unfulfilled expectations of better living conditions and
the thriving drug business have put the Taliban back into control of
large parts of the territory.
http://icga.blogspot.com/2008/01/economists-weigh-in-on-counter.html
