Corporate Takeover

Two fundamental questions being debated in the White House and Pentagon are the similarities and differences between Iraq and Afghanistan. Differences appear to outweigh similarities, but one divergence is especially striking. The Iraq insurgency, while organized to a degree, was more of an ad hoc movement that often competed with itself.

The Taliban, despite its variances, is cohesive, regulated, and draws on a continuous past. It is a mature insurgency and bringing it down won’t compare to Iraq.

A flurry of admissions by US officials that Taliban participation in Afghanistan is unpreventable, coupled with General McChrystal's warning that the Taliban can’t be destroyed, prompted immediate speculation over the White House’s internal debate. Those advocating a limited strategy, either a middle way or counter-terrorism, yield to Taliban influence.

But believing the fire can be contained without being extinguished could be a catastrophic mistake. Ceding ground grows the Taliban corporation.

The NYT was only the latest to highlight a disturbing discovery - the Taliban’s war chest is full of more than opium cash. During an overhaul of their counter-narcotics strategy, including the deployment of DEA officers, Special envoy Richard Holbrooke admitted, “In the past there was a kind of a feeling that the money all came from drugs in Afghanistan, That is simply not true.”

Instead the Taliban has, according to the Washington Post, “embraced a strategy favored by multinational corporations: diversification. With money pouring in from so many sources, the Taliban has been able to expand the insurgency across the country with relative ease, U.S. and Afghan officials said.”

And good corporations plan for the future.

Celebration initially greeted a UN report documenting a 22% drop in opium cultivation, but high-yield crops and better irrigation reduced total opium production only 10%. A drop in opium price resulted not from counter-narcotics, but an abundance of opium almost double the world demand. An even more distressing problem - opium stores have steadily vanished since 2006.

UN, US, and Afghan officials agree that the Taliban has stockpiled opium to a tune of 10,000 tons, up from 8,000 in 2008. UN officials estimate the total value at export price at around 3.2$ billion. This reservoir is meant to insulate the Taliban from drops in supply, but also acts as a nest-egg for the future. The Taliban is preparing for the long-term.

And as the White House found out, drugs are only part of the equation, not the largest chunk. If President Obama were to freeze troop levels or deploy a limited number of troops (under 10,000), the Taliban will gradually expand and establish momentum as it grows its economy. A security vacuum exposes a favorite target - foreign contractors. Bribes to protect development projects are unsustainable, allowing the Taliban to make money off America’s troop shortage.

This counterinsurgency strategy isn’t viable. Convert Afghans to alternative crops and the Taliban will tax those too. Extortion has expanded beyond opium into legitimate businesses, farmers, timber and gemstone markets, and antiquity smugglers. The Taliban is the mob, imposing taxes on territory and pinching Afghan and Western subcontractors for protection money to safeguard development projects.

“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, a former Foreign Ministry official for the Taliban.

Such analysis, if true, poses a deadly risk to any strategy allowing the Taliban to regain territory. The more it spreads the more money it will make, not from increased opium expansion but by taking over the entire local economy. Allowing the Taliban to seize territory makes choking its funding impossible. America is already having trouble denting the flow.

In another indication that nation-building is necessary for American success, Afghanistan lacks a modern financial system. No paper trails means US officials can’t document monetary transitions to prevent money laundering from drugs and foreign donations, the largest portion of Taliban funding. Laws are being written as fast as possible.

"We're going after this with a great deal of urgency and a huge amount of effort to even more effectively disrupt the networks that fund the Taliban," said David S. Cohen, the Treasury Department's assistant secretary for terrorist financing.

But this problem cannot be solved through laws and regulations alone. Foreign donations, the primary source of funds, will increase with the Taliban’s ground success. Moreover, Afghanistan clearly doesn’t have the tools Western officials are used to, a quintessential sign that it needs nation-building - not counter-terrorism.

"They want Afghanistan back," Joint Chief of Staff Michael Mullen said over the summer. ‘We can’t let them or their Al Qaeda cohorts have it. It’s not just about instilling fear or spreading violence. They want Afghanistan back...That means not giving the Taliban the freedom of movement they've had for the last three years."

Unless President Obama increases the competition and find a new business strategy, the Taliban corporation will threaten to put America out of business.