November 16, 2010:  In Afghanistan, drug gangs, and the Taliban, are suffering a growing cash shortage. The drug gangs were hurt by a shortage of product. A fungus cut the poppy crop in half this year, causing the price of opium (scraped from poppies) to more than double. But the cost of hashish (cannabis, or marijuana, resin) more than doubled as well, mainly because so many farmers were persuaded, or forced, to cut the amount of land devoted to growing cannabis. This was done by providing the farmers with legal (but less lucrative) alternatives, as well as better security and economic opportunities (mainly more roads, but also access to electricity and medical care.) These benefits are hard to sustain, given the corruption and willingness of the drug gangs and Taliban to use murder and mayhem to terrorize farmers.

There has also been more attention paid to opium smuggling, as this is a major concern for Pakistan (and its several million opium addicts). Iran has put more troops on their border, for the same reason, and made it more difficult to get opium into the country. The drug gangs have responded by converting more of their opium into heroin and morphine. But that requires more imports of industrial chemicals for the conversion.

Heroin is much less bulky than opium, and easier to smuggle. As a more expensive drug, it finds most of its users in more affluent areas (like the Persian Gulf, Europe and North America). If you can get the needed chemicals, the math works in your favor. Ten tons of opium can be refined into 1.3 tons of heroin, which is worth 30-40 times as much as opium.

This conversion requires 2.6 tons of acetic anhydride, an industrial chemical. This is a clear liquid that is flammable and poisonous if you inhale it. There is no legal use for acetic anhydride inside Afghanistan. With bribes and transportation costs, the drug gangs pay about $2,000 per ton to get it to Pakistan. Then it has to be smuggled into Afghanistan, by truck. There are a limited number of roads, with the border manned by guards who are accustomed to being bribed. There are several other chemicals needed to refine the opium (to morphine, then to heroin), but acetic anhydride is the hardest to get, and the one needed in the largest quantities. Smaller quantities of hydrochloric acid are also needed, but this is a more common industrial chemical.

Pakistan drove the heroin trade out in the 1990s, in part, by interfering with the supply of acetic anhydride. While there was a market for opium, it was mainly local, and the large amount of opium available drove the price down. The real money was in heroin, where smaller, more valuable amounts, were easier to move out of the country to more lucrative foreign markets.

The more debilitating drugs like heroin and cocaine are more expensive, more potent and have less than 20 percent of the market of marijuana and hashish. Cocaine and heroin are more likely to disable users, including much higher risk of accidental death. The 30 million cocaine or heroin users (about 60 percent of them prefer the less debilitating cocaine) are actually dwarfed by the slightly larger number of addicts for synthetic drugs (everything from methamphetamine to Ecstasy and especially prescription drugs).

But cocaine and heroin come from farm crops (coca for cocaine, poppies for heroin) that are very profitable for poor farmers in places like the South American highlands (coca) or Central Asia (Afghanistan at the moment). In both these places, the illegal crops account for the majority of the supply for that illegal drug on the planet. In the case of cocaine, the drug is largely produced by gangsters, with some help from political outlaws (mostly leftist groups). There is some terrorism, but it is all local.

The big danger is the heroin trade, where Islamic terrorists have partnered with tribe based drug gangs to produce most of the world's heroin. This sort of thing is nothing new. For decades after World War II, most of the heroin came   from the remote Burma (now Myanmar)-China border area, where the drug gangs could afford to raise and equip private armies. But both of those nations eventually cracked down on that business, and it moved to Pakistan for a while, but was forced, by a violent government reaction, across the border into Afghanistan. In both earlier cases, controlling the supply of acetic anhydride played a major role in crushing the heroin trade.

The Afghan government is reluctant to shut down the heroin trade, partly because many senior government officials are being bribed, and partly because it would cause more tribal warfare (most of the tribes oppose the heroin trade, and only a few of the Pushtun tribes in the south control most of the heroin production). Moreover, there is the likelihood that the poppy growing and heroin production would just move to another Central Asian nation. The Islamic terrorists would follow. So the problem really is to crush, or otherwise neutralize, the Taliban, al Qaeda and other Islamic radicals who are sustaining their violence via drug profits. The Taliban earns $50-100 million a year from helping protect the drug gangs.

This means that manufacturers and distributors of acetic anhydride have been under scrutiny, and pressure to control the supply of the chemical entering Afghanistan, for nearly a decade. The smugglers have been very resourceful, using bribes and threats to get past government restrictions. The chemical enters Afghanistan from all neighboring countries, except Iran (which has a small army of incorruptible troops on the border trying to keep out the opium and heroin.) The acetic anhydride is often bought in Europe or Russia, labeled as some other product, and sent on its way to Pakistan or one of the Central Asian neighbors of Afghanistan, where bribes or threats are used to get it into southern Afghanistan, where the processing labs are. This smuggling network is now under major attack. Russia is determined to control their growing addiction problem by keeping the smugglers (who bring drugs out and chemicals in) away from the border. But all this effort is crippled by the corruption and lawless nature of the border area. The example of Colombia shows that you can fight back. But it's not easy, and progress is slow. The big difference between Colombia and Afghanistan is that Colombia eventually reached a point where the general populace decided that the drug gang reign of terror was too much to bear. A largely corruption free government was elected, and using several billion dollars of aid from the United States, and the general backing of the population, began to roll back the drug gangs and their leftist rebel allies. Afghanistan still has a lot of popular support in the south, where about a quarter of the population benefits economically from the drug trade. Senior government officials take bribes from the drug gangs. Despite the fact that 20 of 34 provinces are free from drug producing activities, most of the 14 provinces that are in the drug business are dominated by Pushtuns (40 percent of the national population.) The northern, non-Pushtun, and largely drug free, provinces have fought the Pushtuns before, as recently as 2001. Drugs may yet push Afghanistan into another civil war.