Publication: Responding to Afghanistan's Opium Economy Challenge : Lessons and Policy Implications from a Development Perspective
Loading...
Published
2008-03
ISSN
Date
2012-05-29
Author(s)
Editor(s)
Abstract
Opium, Afghanistan's leading economic activity, lies at the heart of the challenges the country faces in state building, governance, security, and development. With their narrow law enforcement focus and limited recognition of development, security, and political implications, current global counter-narcotics polices impose a heavy burden on Afghanistan. This paper first provides a summary overview of Afghanistan's opium economy and the factors determining rural households' decisions on cultivating opium poppy. It then discusses the dynamic evolution of the Afghan drug industry in recent years, in particular its consolidation around fewer, powerful, politically-connected actors and the associated compromising of parts of some government agencies by drug industry interests. The paper reviews the experience with different counter-narcotics interventions, analyzes some proposals not yet tried in Afghanistan, and draws lessons and policy implications. Unfortunately there are no "silver bullets"-easy, quick, or one-dimensional solutions, and a longer-term horizon along with sustained commitment and resources will be required in order to phase out the opium economy over time. The paper concludes by putting forward some broad principles and approaches of a "smart strategy" against drugs in Afghanistan.
Link to Data Set
Citation
“Byrd, William A.. 2008. Responding to Afghanistan's Opium Economy Challenge : Lessons and Policy Implications from a Development Perspective. Policy Research Working Paper; No. 4545. © World Bank. http://hdl.handle.net/10986/6563 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication The Economic Value of Weather Forecasts: A Quantitative Systematic Literature Review(Washington, DC: World Bank, 2025-09-10)This study systematically reviews the literature that quantifies the economic benefits of weather observations and forecasts in four weather-dependent economic sectors: agriculture, energy, transport, and disaster-risk management. The review covers 175 peer-reviewed journal articles and 15 policy reports. Findings show that the literature is concentrated in high-income countries and most studies use theoretical models, followed by observational and then experimental research designs. Forecast horizons studied, meteorological variables and services, and monetization techniques vary markedly by sector. Estimated benefits even within specific subsectors span several orders of magnitude and broad uncertainty ranges. An econometric meta-analysis suggests that theoretical studies and studies in richer countries tend to report significantly larger values. Barriers that hinder value realization are identified on both the provider and user sides, with inadequate relevance, weak dissemination, and limited ability to act recurring across sectors. Policy reports rely heavily on back-of-the-envelope or recursive benefit-transfer estimates, rather than on the methods and results of the peer-reviewed literature, revealing a science-to-policy gap. These findings suggest substantial socioeconomic potential of hydrometeorological services around the world, but also knowledge gaps that require more valuation studies focusing on low- and middle-income countries, addressing provider- and user-side barriers and employing rigorous empirical valuation methods to complement and validate theoretical models.Publication The Marshall Plan: Then and Now(Washington, DC: World Bank, 2025-10-14)This paper is a product of the Development Policy Team, Development Economics. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Geopolitical Risks and Trade(Washington, DC: World Bank, 2025-09-23)This paper studies the impact of geopolitical risks on international trade, using the Geopolitical Risk (GPR) index of Caldara and Iacoviello (2022) and an empirical gravity model. The impact of spikes in geopolitical risk on trade is negative, strong, and heterogeneous across sectors. The findings show that increases in geopolitical risk reduce trade by about 30 to 40 percent. These effects are equivalent to an increase of global tariffs of up to 14 percent. Services trade is most vulnerable to geopolitical risks, followed by agriculture, and the impact on manufacturing trade is moderate. These negative effects are partially mitigated by cultural and geographic proximity, as well as by the presence of trade agreements.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Enhancing Food Security in Afghanistan : Private Markets and Public Policy Options(Washington, DC, 2005-08)This report analyzes some key aspects of food security, namely production, trade, markets and food aid at the national level, and consumption at the household level. In doing so it aspires to make a contribution to the on-going work in Afghanistan regarding the attainment of the poverty and hunger Millennium Development Goal. The major findings of the report can be summarized as follows: Food security (at the national level) does not necessarily require national self-sufficiency in wheat or other food staples, as long as the country has access to international markets. Rather, diversification into legal high-value crops and livestock products may be the most effective means of increasing food security, by generating foreign exchange and raising the incomes and purchasing power of the rural poor. In spite of very difficult conditions, wheat markets in Afghanistan have performed fairly well and private sector international trade has helped to stabilize supply and prices. Therefore, further developing the infrastructure and institutions to support wheat markets and facilitating private sector trade is called for and will enhance food security. At the household level, food insecurity in Afghanistan is largely caused by inadequate access to food resulting from low household incomes. For most of Afghanistan, where availability of food is not a constraint, increasing cash incomes is the more efficient means of enhancing food security of the poor. Development of both private and public capacity for data collection and analysis is a high priority for effective formulation, assessment and implementation of food policies.Publication Securing Durable Development in Afghanistan : Policy Notes for the Government(Washington, DC, 2010-04)The government of Afghanistan has an opportunity in the coming months to turn the country around. It is now opportune to improve security, governance, and development. Unprecedented international military support, political attention and aid are available to Afghanistan. The government is inheriting years of good economic performance, notable progress on social outcomes, and continuing strong support from the international community. Gross domestic product (GDP) has grown at an average of 12 percent in the last five years with moderate inflation and a stable Afghani. The National Solidarity Program is spurring community-driven rural development in nearly all districts of the country and the large opium economy is in retreat. Significant progress has been achieved in basic education and health. Gender indicators are improving. The government and its development partners have an obligation to seize this opportunity for all Afghans. All donors made an explicit commitment at the London Conference in January 2010 to progressively cede leadership to the Afghan people. The donors agreed to route half of their development aid through the national budget from the current one-fifth in the next two years, as local capacity to execute development programs improves. Further, donors aim to work together to improve aid effectiveness by better alignment with Afghan priorities, minimize opportunities for corruption and improve aid predictability. This overview summarizes the view of the World Bank on priority development issues and policy actions. It is intended to be a useful reference for the government as it prepares for the Kabul conference. The issues and policy options proposed are consistent with the ands and the Bank's interim strategy note of May 2009. It synthesizes the key findings and analyses of the detailed policy notes which draw upon the World Bank's past and ongoing work in Afghanistan, as well as wider experiences, including those from other countries experiencing conflict.Publication Afghanistan : Economic Incentives and Development Initiatives to Reduce Opium Production(2008-02)This report is about how to progressively reduce over time Afghanistan's dependence on opium - currently the country's leading economic activity - by development initiatives and shifting economic incentives toward sustainable legal livelihoods. Specifically, the report identifies additional investments and policy and institutional measures to support development responses that can counterbalance the economic advantages of opium. It analyzes ways to change the relative incentives between licit and illicit cropping and to help enhance rural livelihoods for the poor, under better governance and security conditions. The report puts forward concrete recommendations and the expected impacts on growth, poverty reduction and the opium economy are assessed. The report first briefly discusses the policy context (Chapter 1) and provides an overview of the opium economy (Chapter 2), focusing on how different segments of the rural population interact with it. The report then analyzes the scope for increasing value added, competitiveness and productivity in agriculture (Chapter 3) and for promoting enterprise development and off-farm employment (Chapter 4). The complementary role of further investments in rural infrastructure is examined in Chapter 5, and measures for strengthening governance are analyzed in Chapter 6. In Chapter 7 issues that cut across all counter narcotics efforts are examined. A final chapter looks at implementation, and at issues of prioritization, synergies and phasing (Chapter 8). The recommendations of the report are encapsulated in a matrix at the end of the Executive Summary.Publication Cocaine Production and Trafficking : What Do We Know?(World Bank, Washington, DC, 2008-05)The main purpose of this paper is to summarize the information currently available on cocaine production and trafficking. The paper starts by describing the available data on cocaine production and trade, the collection methodologies (if available) used by different sources, the main biases in the data, and the accuracy of different data sources. Next, it states some of the key empirical questions and hypotheses regarding cocaine production and trade and takes a first look at how well the data match these hypotheses. The paper states some of the main puzzles in the cocaine market and studies some of the possible explanations. These puzzles and empirical questions should guide future research on the key determinants of illicit drug production and trafficking. Finally, the paper studies the different policies that producer countries have adopted to fight against cocaine production and the role consumer countries play in the implementation of anti-drug policies.Publication Afghanistan : Economic Incentives and Development Initiatives to Reduce Opium Production(Washington, DC, 2008-02)This report is about how to progressively reduce over time Afghanistan's dependence on opium - currently the country's leading economic activity - by development initiatives and shifting economic incentives toward sustainable legal livelihoods. Specifically, the report identifies additional investments and policy and institutional measures to support development responses that can counterbalance the economic advantages of opium. It analyzes ways to change the relative incentives between licit and illicit cropping and to help enhance rural livelihoods for the poor, under better governance and security conditions. The report puts forward concrete recommendations and the expected impacts on growth, poverty reduction and the opium economy are assessed. The report first briefly discusses the policy context (Chapter 1) and provides an overview of the opium economy (Chapter 2), focusing on how different segments of the rural population interact with it. The report then analyzes the scope for increasing value added, competitiveness and productivity in agriculture (Chapter 3) and for promoting enterprise development and off-farm employment (Chapter 4). The complementary role of further investments in rural infrastructure is examined in Chapter 5, and measures for strengthening governance are analyzed in Chapter 6. In Chapter 7 issues that cut across all counter narcotics efforts are examined. A final chapter looks at implementation, and at issues of prioritization, synergies and phasing (Chapter 8). The recommendations of the report are encapsulated in a matrix at the end of the Executive Summary.
Users also downloaded
Showing related downloaded files
Publication Morocco Economic Update, Winter 2025(Washington, DC: World Bank, 2025-04-03)Despite the drought causing a modest deceleration of overall GDP growth to 3.2 percent, the Moroccan economy has exhibited some encouraging trends in 2024. Non-agricultural growth has accelerated to an estimated 3.8 percent, driven by a revitalized industrial sector and a rebound in gross capital formation. Inflation has dropped below 1 percent, allowing Bank al-Maghrib to begin easing its monetary policy. While rural labor markets remain depressed, the economy has added close to 162,000 jobs in urban areas. Morocco’s external position remains strong overall, with a moderate current account deficit largely financed by growing foreign direct investment inflows, underpinned by solid investor confidence indicators. Despite significant spending pressures, the debt-to-GDP ratio is slowly declining.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.