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Last Updated: Monday, 22 September, 2003, 12:04 GMT 13:04 UK
Opium crop clouds Afghan recovery
Heroin poppy cultivation in Afghanistan
Afghanistan is mass producing heroin again
Opium growing is coming to dominate Afghanistan's economy, providing roughly half the war-shattered country's wealth, the International Monetary Fund (IMF) has warned.

"A dangerous potential exists for Afghanistan to progressively slide into a 'narco-state' where all legitimate institutions become penetrated by the power and wealth of (drug) traffickers," the IMF said.

Afghanistan now provides about 75% of the world's opium crop, it added, which is worth around $20bn

The IMF published its report on Afghanistan during its annual meeting, which is taking place this year in Dubai in the Persian Gulf.

The international community must not for a moment lose its focus on Afghanistan
James Wolfensohn, President, World Bank
Meanwhile, on the sidelines of the meeting, the Afghan finance minister Ashraf Ghani pleaded for more aid for his country from Western donors, while warning that the deterioration of security in Afghanistan was dire and that without an "infusion of urgency" into everyone's commitment, the country could all too easily become a "narco-mafia state".

Progress threatened

The IMF praised the Afghan government's reconstruction efforts, saying a new currency, better banking system and improved tax collection had all strengthened the economy.

Heroin poppies in Afghanistan
Growing opium earns more than growing wheat
But the production of opium is a "dark cloud over this scenario", said Adam Bennet, IMF head of mission in Afghanistan.

Afghanistan's official, non-opium economy is growing sturdily, up 30% in the 12 months to end-March 2003 The current year is expected to see 20% growth.

But if the opium trade were included in the official figures, the IMF reckons it would make up between 40% and 60% of gross domestic product.

Rich pickings

Afghan farmers can make 38 times as much growing opium as they can from wheat.

Mr Ghani told officials from G7 nations and international donors that that the cost of rebuilding his country had been underestimated.

He said Afghanistan needed reconstruction aid of $30bn over the next five years.

Mr Ghani said that the money would be well-spent, with the West already spending $10bn each year on military and security costs.

And he warned that "the costs of failure in Afghanistan will hit budgets in major Western countries...for years to come".

Mr Ghani also said his country received pledges for more than $1.2bn of extra financial aid at the Dubai meeting.

The bulk of the money came from the United States, while the European Union put up about $45m for help with security.

"The international community must not for a moment lose its focus on Afghanistan," said James Wolfensohn, World Bank President.

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04 Aug 03  |  South Asia

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