What is state failure? See my conceptualisation of state failure on the right flank below.

Thursday, June 14, 2007

On the air tonight, on aerial spraying again

The MStFB Poppy Series No. 5
This is just a somebody-please-explain-this type of post here, to serve as an update to my poppy series. In my previous 'poppy post' I made some arguments in favour of aerial spraying in Afghanistan, as a means that could be effectively used to counter the increasingly wide-spread poppy cultivation there.
I've just come across an analysis in which Nick Grono and Joanna Nathan from the International Crisis Group present some arguments against aerial spraying. Now, since I haven't claimed that aerial spraying should be the central element of a 'golden' strategy, this wouldn't come as a shock even if I would be the kind of person who rigidly sticks to any given point of view he ever voiced. But the arguments put forward by the authors just failed to convince me on the issue. Here's the relevant paragraph from their article in The Christian Science Monitor.
"In fact, when it comes to controlling drug production in Afghanistan, it is much easier to say what won't work than what will. For example, large-scale forced eradication (for example, by aerial spraying of crops, as advocated by some US policymakers), will not work. It might cause a temporary dip in production – but it will also force prices higher, thereby increasing incentives to produce more the following year. Indeed, it will probably benefit the drug traffickers who have a stockpile to sell at inflated prices, while farmers whose livelihoods are destroyed could be driven into the arms of insurgent groups."
Now, to counter this, here's first of all a quote from Antonio Maria Costa, executive director of UNODC, from an article of his that I already quoted on this site.
"Annual demand for opium is approximately 4,500 tons. Last year a record 6,100 tons were produced in Afghanistan alone. That country's production is 30 percent more than total world demand. Heroin prices should, in theory, be plummeting. But they are not. So what is going on? Does opium defy the laws of economics? Historically, no."
See? The seeming lack of price elasticity, or the disconnect between the change of supply and world prices is evident on the basis of what Mr Costa is saying there. At least in one direction that is, in the case of a seeming growth in supply. OK, so Grono and Nathan may still have it right. Their hypothesis that a drop in supply could lead to a rise in world prices might still be correct.
However, I'll quote some more from Mr Costa's article.
"Major traffickers are withholding significant amounts."
OK, I don't want to distort Mr Costa's arguments. In his article he also examines the possibility that new markets may have emerged to absorb the extra supplies. But he deems that unlikely and maintains as his working hypothesis that what I have just cited. And, actually, Grono and Nathan might be acknowledging the same thing when they talk of traffickers' stockpiles to sell. But would traffickers really be selling those stocks at inflated prices, as Grono and Nathan claim?
If there are huge stocks of heroin piled up in some places, and suddenly there would be a significant drop in supply at the source, in Afghanistan, a price rise to me seems unlikely. The level of supply to the world market could be maintained by traffickers, since the world is already in effect over-supplied, and so here comes the part where I welcome an explanation by anyone observing this matter, regarding the following question. Why wouldn't the level of supply be maintained by traffickers? Is stockpiling heroin such a safe option for them that they would just go on stockpiling endlessly? I consider that unlikely. And if supply is maintained, and historically heroin doesn't defy the law of economics, as Mr Costa is saying, then prices shouldn't rise. To support this hypothesis one can point to the trend that the purity of heroin-on-the-streets is going up (as Mr Costa notes), so in a way traders are already getting rid of redundant supplies. So what Grono and Nathan are not saying explicitly is that not prices in general but farm-gate prices might be the ones rising as a result of eradication. That can work as an incentive even locally, where the eradication has taken place, if growers don't have to reckon with the possibility of eradication coming again. But the point is that in this case they might have to.
That's the main point in what I'm saying, actually. I think aerial spraying should only be used as a deterrent, as it couldn't really be aimed at wiping out production completely, so it might not take place on a scale that Grono and Nathan seem to be considering. (Remember that in my proposed strategy 'large scale eradication' as such can only be interpreted on the micro-level, after having divided Afghanistan's areas, to be covered by a smart poppy program, into small units of analysis, following a village-by-village, or community-by-community approach, whereby you come up with different solutions for each unit of analysis.)
So, in a sense, what they are saying is therefore irrelevant to my arguments, and what I'm saying is irrelevant to their arguments. To counter their central point on aerial spraying from another angle, however, it could also be translated into a general claim that any success in the war on drugs is inevitably a failure, because it will just lead to price increases, and meanwhile the demand for drugs will not go away, so production is here to stay. But wait a minute... 'here' might mean any place on the globe. Even such overall pessimism shouldn't tell one that in a given place, like Afghanistan, one cannot arrive at a good solution that works in the long run, locally. And to rid Afghanistan of the heroin challenge seems like an important task, not just for the sake of Afghans, from a humanitarian point of view, but also from the perspective of the outside world's security interests (notably those of the West).
I can very much agree, of course, with the rest of the conclusions of the CSM article. Small farmers' livelihood shouldn't be destroyed, yes, and going after the major traffickers may also be useful, yes. Infrastructure for small farmers, that is agreed as well, as I have pointed to this before. And demand reduction is also a key objective.

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