AFTER MORE than 15 years of civil war, a cautious note of optimism was sounded in Lebanon this month as thousands of militia fighters began to withdraw from positions in Beirut. If the plan of Syrian-backed President Elias Hrawi to extend the government's authority is to succeed, however, Hrawi must be prepared to expose one of Lebanon's most closely guarded secrets: a multibillion dollar underground economy fueled by the production and trafficking of illegal drugs.

Over the past decade, drug production in Lebanon has soared, turning that tattered nation into a major world center for narcotics. Western intelligence agencies estimate that over 4 million pounds of hashish and 20,000 pounds of heroin are produced there annually. Experts also say that tons of cocaine are being refined in secret laboratories. If world prices remain stable, the region's drug barons can expect to make more than $4 billion in profits this year.

While there are no official figures on the export of hashish and heroin, Western diplomats in Lebanon acknowledge that the drug harvest is the single largest export commodity, accounting for well over half of the foreign-exchange earnings. International bankers familiar with Lebanon estimate that as much as 50 percent of the country's remittances from abroad are related to drug trafficking.

Part of the harvest stays in Lebanon to service an estimated 40,000 local drug users. But about three-quarters of it is smuggled to Egypt, Israel, Europe and North America. According to U.S. law enforcement officials, nearly 2,500 pounds of Lebanese heroin makes its way to the streets of America each year, nearly a fifth of all heroin brought here annually. The rest is smuggled into Western Europe, where it accounts for over half of Europe's heroin consumption. The marijuana harvest, which is processed into hashish, accounts for 75 percent of worldwide consumption.

Lebanon for years should have been a major front in the drug war. In fact, the Middle East's flourishing drug trade is virtually ignored by the United States -- a quiet policy that has been in effect since the early Reagan years. The reason may be that some of that country's biggest drug dealers are also the people holding the hostages in Lebanon. The United States may have kept a tight lid on information about Lebanese trafficking out of concern that any attention given the region's drug trade would affect the hostages.

When Syria subdued rebellious Christian Gen. Michel Aoun last month, it emerged as the unchallenged power-broker in Lebanon. But Syria has been the main beneficiary of Lebanon's thriving drug trade for nearly a decade. Lebanon's drug crops are found in the Bekaa Valley, a strip of land about 75 miles long, running north-south in the eastern part of country. With tens of thousands of troops stationed in the Bekaa, Damascus has long controlled Lebanon's drug-producing region.

However, Washington ignores Syrian complicity in the drug trade, acutely aware that raising the issue might jeopardize a valuable channel to Lebanese hostage-takers and would unnecessarily offend Syrian President Hafez Assad. Now that Syria is one of the three Arab nations with troops in the multinational force in the Saudi desert, it is even more unlikely that Washington will focus on the issue.

Syria is not the Bekaa's only player. Nearly every faction and militia that holds any power at all in Lebanon has been part of the trafficking network, relying on drug profits to finance military activities. The 15-year-old civil war was fueled by drug revenues. In fact, drug fights between militias protecting their turf and source of funds were so frequent and so intense that it has often been difficult to distinguish those battles from those inspired by ideological and political differences.

Much information about the Lebanese drug industry remains in the hands of various Western intelligence agencies, subordinated to other foreign policy interests. However, new information concerning the drug trade is coming to light.

Before the collapse of Aoun, some Lebanese Christian officials in search of political and financial support tried to rekindle American interest in their cause by sharing data on the drug trade. A few months ago, the Lebanese Narcotics Bureau, then Christian-run, leaked a report on the drug industry to the press. Although it failed to mention any Christian drug-smuggling, it was a good account of Lebanese and Syrian trafficking. In addition, a senior member of Lebanon's defunct cabinet visited Washington last January and talked to government officials and journalists about the drug trade and the possibility of crop-substitution programs in the Bekaa. Israeli narcotics officials are also making more information available due to Israel's own growing population of drug abusers, and the tide of hashish and heroin that has been entering their country from Lebanon since the 1982 invasion. Traveling by car through the narrow roads of the Bekaa, it is as though a multi-colored carpet extends over the countryside. Thousand of acres of marijuana and poppy fields grow side-by-side in clearly delineated plots. Before Syria took control of the Bekaa in 1976, marijuana fields covered less than 10 percent of the Valley. But over the next six years, under the watchful eye of Syria's occupying army, the acreage space devoted to marijuana steadily expanded. By 1982, it covered nearly 90 percent of the region.

Heroin came to the Bekaa around the same time. In 1982, poppy growers from Turkey began to teach local farmers how to plant and cultivate poppy plants, and how to extract and refine opium and heroin from the potent flower. By the mid-1980s, poppy fields were rapidly replacing the marijuana fields. As a result, heroin production rose and hashish production fell. The lighter weight and higher price of heroin also made smuggling easier and increased drug revenues substantially. Today, narcotics agents estimate that 30 percent of the farmers in the Bekaa cultivate opium poppies and produce over 10 tons of pure heroin in a normal season.

Every harvest season, An Nahar, the leading Beirut newspaper, publishes the local and international prices of hashish, opium and heroin. In a good year, local farmers may sell a ton of hashish for $500. But by the time that ton reaches the streets of the West, it is worth about $10 million. Heroin and cocaine, of course, fetch far higher prices.

The drug trade has created an economic boom in the Bekaa. Thousands of people have moved to the valley city of Baalbek, quadrupling its pre-civil war population of 30,000. Shopkeepers run a brisk business in consumer items like stereos, cameras, TVs, VCRs and food-processors. New homes, schools, hospitals and factories have been built, and big American cars crowd the narrow streets. For the 80,000 Shiite peasants who harvest the drug crops, the trade has meant a stable source of income -- they earn about $10 a day.

Senior Syrian military and intelligence officers stationed in the Bekaa have long been directly or indirectly involved in trafficking and have grown rich off the drug trade -- which explains why there is such heavy competition among Syrian officers to be posted in Lebanon.

In his definitive 1988 biography of Hafez Assad, British writer Patrick Seale omitted any mention of drugs in a passage which aptly describes the smuggling of contraband between Syria and Lebanon. But despite the omission, the passage's implication is clear:

". . . from 1976 when the Syrian Army went into Lebanon, controlling road traffic and even ports like Tripoli and more or less absorbing the Biqa', the traffic became almost institutionalized, with the Syrian army itself heavily involved in it. For the military, from general to sergeants, a posting in Lebanon was a chance to make a fortune."

How far up the Syrian military ladder does drug involvement extend? According to senior intelligence experts in Israel and the West, it reaches the inner circle of Syria's government. There is evidence clearly implicating Syria's military, which has either extorted money from drug growers, or simply siphoned off considerable amounts of hashish and heroin, smuggling it independently to the West either through Tripoli or Damascus. Most intelligence experts have confirmed that millions of dollars worth of heroin are flown out of the international airport in Damascus to points in Europe and the Middle East.

Syrian trafficking is only half the picture, however. Nearly every faction and militia in the country smuggles drugs as well and fights hard either to maintain or enlarge its share of the $4 billion business. Organized trafficking in Lebanon did not begin with Syria's occupation of the Bekaa in 1976. Prior to this, the Christians dominated the drug trade. In the 1960s powerful Christian families pioneered the narcotics business and divided drug revenues among themselves and their militias.

At first, Christian leaders would simply send military units to the Bekaa, where they would extort payment from drug growers. But as local resistance grew, the method of collection changed to a kind of "export tax" imposed on drug farmers and independent smugglers. Christian militias established checkpoints on the vital roads leading from the Bekaa to specific ports on the coastline which smugglers had been using for years. Stationed along these checkpoints, "government tax collectors," accompanied by armed forces to insure payment, would stop all vehicles and search for drugs. Payments ranged anywhere from 20 to 40 percent of the cargo's value. In addition, "customs officials" were present at most drug handling ports just in case one of the hashish convoys slipped by a roadblock.

By the mid-1970s Christian drug barons had set up their own smuggling networks and were reportedly making over a billion dollars a year from Christian-run ports.

Christian complicity in the drug trade has been well-documented by the U.S. Drug Enforcement Administration and other monitoring groups. But because the United States was supporting the Christian cause in Lebanon at the time of the documentation, efforts were made to prevent such disclosures.

The Christian monopoly over the drug trade began to deteriorate in the late 1970s. Syria had taken control of the Bekaa and violent inter-Christian feuding erupted as a result of the 1978 assassination of Tony Franjieh, a Christian chieftain. Disagreements between the Christian factions over equitable divisions of drug revenues soon followed. Wholesale slaughter between Christian clans arising from drug disputes was further aggravated by stringent Syrian security measures over the Bekaa Valley. Although hundreds of thousands of pounds of hashish were still coming out of the Bekaa, Christian forces now had to share drug revenues with their Syrian counterparts.

The Christians also had to contend with the growing power of a variety of other factions and militias -- Druze, Sunni, Shiite, Palestinian -- all of whom started to encroach on the Christian trade by setting up their own smuggling networks.

Palestinian groups, in particular, took a large chunk of the drug business away from the Christians. In 1970, thousands of Palestinians came streaming into southern Lebanon following the PLO's expulsion from Jordan during "Black September." The ancient port of Tyre in southern Lebanon became a Palestinian stronghold and the PLO's central clearinghouse for hashish. During the late 1970s, the PLO's income from drug-trafficking reportedly peaked at $300 million annually. In the early 1980s drug production exploded. The volume of hashish skyrocketed from hundreds of thousands of pounds to millions. Added to that, Lebanese heroin was now on the market. And as the value of the drug crop increased, so did fierce fighting between the many Lebanese factions that smuggled it. The growing heroin traffic also led to a change in the methods of smuggling. While hashish is still mainly transported overland or by sea, traffickers took to the skies to smuggle heroin. Within the last decade, single runways appeared all over Lebanon.

Aoun was said to be opposed to drug trafficking and tried to put an end to smuggling -- at least in the Christian ports under his control. As a result more drugs were being trafficked through Moslem-controlled ports, north and south of the capital. In the various harbors south of Beirut, controlled by Sunni, Hezbollah, Druze and Amal factions, business is booming. To the north, Syrian armed forces are busy escorting hashish convoys to Tripoli and other drug ports, where waiting ships take the precious cargo to distribution points around the Mediterranean.

While the world remains preoccupied with one Middle Eastern outlaw in the Persian Gulf, it's business as usual for the drug merchants of Syria and Lebanon. And if, as President Bush announced only a few weeks ago, the drug war is still among the nation's top priorities, then Washington can add another troubling item to its list of current Middle Eastern woes.

Ralph Cwerman is a New York-based political analyst specializing in Middle East and U.N. affairs.