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Afghan Insurgents' Diverse Funding Sources Pose Challenges

The largest source of cash for the Taliban was once thought to be Afghanistan's opium, made from the type of poppies shown above.
The largest source of cash for the Taliban was once thought to be Afghanistan's opium, made from the type of poppies shown above. (By Julie Jacobson -- Associated Press)
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"Eliminating insurgent access to narco-profits -- even if possible, and while disruptive -- would not destroy their ability to operate so long as other funding sources remained intact," McChrystal wrote.

U.S. officials said reliable estimates of the Taliban's overall cash flow are difficult to calculate because the insurgency is a decentralized movement comprising many factions and commanders. But annual revenue is thought to total hundreds of millions of dollars.

Money skimmed from the narcotics business -- Afghanistan is the world's top opium producer -- still offers crucial support to Taliban operations, particularly in the southern provinces where opium-producing poppies grow in abundance, officials said.

The U.S. military has estimated that the Taliban collects $70 million annually from poppy farmers and narcotics traffickers. The U.N. Office on Drugs and Crime, which monitors opium production, earlier projected that the Taliban and its affiliates earned as much as $400 million a year from the drug trade. The agency later revised the figure sharply downward, to about $100 million a year.

"The international community and the Americans have been deceiving themselves for the past seven years, saying the Taliban has been getting all of their money from drugs," said Waheed Mojda, who served as a Foreign Ministry official for the Taliban before the U.S.-led invasion of Afghanistan in late 2001.

Increasingly, Taliban commanders are paying for their operations through a variety of extortion schemes, U.S. and Afghan officials said. Many insurgent leaders impose a "tax" on local Afghans or take a cut from gemstone, timber or antiquity smugglers. Ransoms from kidnappings in Afghanistan and Pakistan also have proven lucrative.

Another rich source of revenue: extortion payments from Afghan and Western subcontractors forced to cough up "protection money" to safeguard redevelopment projects, according to U.S and Afghan officials.

"The Taliban know they cannot rely on just one source of money," said Hekmat Karzai, director of the Center for Conflict and Peace Studies in Kabul. "Any of these sources could potentially evaporate."

This year, the U.S. government created a special investigative unit called the Afghan Threat Finance Cell. Modeled after a similar U.S. unit in Iraq, it gathers financial information about the Taliban for law-enforcement and intelligence purposes.

The cell has about two-dozen members drawn from the Drug Enforcement Administration, U.S. Central Command, the Treasury Department and the CIA. The FBI is expected to join soon.

Kirk E. Meyer, a DEA official who directs the cell's operations in Afghanistan, said the mission is to understand how the Taliban-led insurgency is financing its operations, as well as to find ways to put pressure on its money supply.

"I think it's possible to have an impact on certain areas," he said. "It is not going to be the silver bullet, but if it's integrated with what everybody else is doing, like DEA and the military, it's got to have an impact."

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