Drug money funding Kashmir ultras, LTTE — Report

"Of the total 400 billion USD generated globally through illicit trade of drugs, 150 billion dollars reach drug mafias operating from Pakistan," says C Chakrabarty, member of the International Narcotics Control Board (INCB). A sizeable amount of illegal money also goes towards the payment of primary opium cultivating farmers in Afghanistan, the largest producer of opium in the world.

Narco-terrorism is the `unholy nexus’ which exists between terrorism and the narcotics trade which provides "big money in a hurry" for the purchase of weapons and finances operations which could range from assassination bids, extortion, hijacking, bombings and the general disruption of legitimate governments, he says.

Narco-terrorism is largely a post-Soviet phenomenon fed by the loosening of controls on the borders and the advent of the disparate Mujahideen groups who came to power in Afghanistan after the fall of Najibullah, says Sreedhar, senior fellow at the Institute for Defence Studies and Analyses.

"The drug trail was established during the Afghan war as a source of income needed to run the resistance movement against the Soviets. The new rulers, competing for political supremacy, either continued with the lucrative phenomenon or had no time to curb it," he says.

The paucity of resources among the various warring frontiers in Afghanistan and the Pakistani quest to establish a pro-Pak regime in Kabul resulted in narcotics playing a decisive role in South West Asian politics.

With the Pakistani economy in a shambles, and estimates indicating that the country’s external debt had touched an all time high of over $36 billion dollars by December 1999, the ISI is not in a position to mobilise enough funds for the the Mujahideen. It had to rely extensively on drug money to sustain its operations, Sreedhar says.

In fact, it is estimated that about 20-25 per cent of Pakistan’s GDP is generated through drug money. Earlier estimates had placed drug money generated as equal to 5-6 per cent of the GDP of Pakistan (1993), he points out. Several interrogation reports of the mercenaries captured by the Indian Army have also indicated that each of these mercenaries was paid as high as 10,000 USD for operations, he says.

The threat of narco-terrorism has also resulted in the emergence of the mafia model of development, says Sreedhar, noting that despite the grim economic scenario of the Pakistani economy there are no starvation deaths… the country continues to feed more than a million refugees from Afghanistan.

"Equally amazing is the fact that despite all types of alarm bells on poor foreign exchange earnings, Pakistan has not defaulted in its debt obligations till now. All this indicates that Pakistan is getting money from somewhere to keep itself going," he states.

Besides, the 1992 US CIA report "Sowing the Wind: Heroin in Pakistan" states that narcotic money operates in every economic activity in Pakistan – from construction activity to arms purchases. According to the report, narcotics is becoming the "life blood of Pakistan’s economy and political system."

The Paris-based NGO, Geopolitical Drugs Watch – Observations Geopolitical des Drogues – in its 1998 annual report went a step further by alleging that even Pakistan’s nuclear programme was being financed by drug money.

"All this leads to one inference – that drug money and banking institutions in Pakistan function as structurally complimentary to each other. This facilitates capital accumulation to each other. The black and grey money makers keep the Pakistani economy going and in the process Pakistan emerges as another example of the mafia model of development for subsistence level economies," explains Sreedhar.

The problem of narco-terrorism has multiplied in Afghanistan with the advent of the Taliban. The last three years have witnessed a phenomenal growth in the production and export of opium. While hardly any processing was done earlier and raw opium was sent out, a hundred laboratories have sprung up under Taliban control.

The recently released INCB report states that production of opium in 1999 increased sharply compared with the 1998 figure, to a record level of about 4,600 tons. Also 97 per cent of the area under opium poppy cultivation was on the territory controlled by the Taliban which also continues to collect taxes on the opium poppy crop.

Moreover, the UN sanctions imposed on Afghanistan in November 1999 could also mean that Kabul will face greater economic hardship and would take recourse to increased drug trafficking, says Sreedhar.

When all these factors are taken into consideration, there remains no doubt that cross-border terrorism in Jammu and Kashmir is also clearly being sustained by narcotic money, he says.

But Narcotic Control Bureau sources are quick to point out that though there have been clear cases of drugs and weapons having being smuggled together into India, there has been no concrete evidence of sale of drugs or drug proceeds earned or trafficking being utilised in terrorist activity.

"Though there has been no concrete evidence to suggest that a nexus does exist, the fact of the two travelling together certainly points towards this phenomenon," they say. The nexus that produces the deadly spectre of narco-terrorism.