The latest review of the U.S. strategy in Afghanistan notes that coalition troops are making gains against the Taliban on the battlefield. But that hasn't stemmed the flow of money into Taliban coffers.
U.S. diplomatic cables released by WikiLeaks reveal growing U.S. frustration with Arab allies and their failure to deal with charities and private donors who send money to the Taliban and other extremist groups.
But analysts and officials say that donations to the Taliban could become a moot point given the group's growing ability to generate cash on its own.
Taliban Expands Role In Drug Trade
U.N. investigators are fanning out across Afghanistan this month to assess and forecast the country's opium crop in the coming year.
They haven't yet filed their report. But already, their boss says he is worried.
"The prices have been skyrocketing over the last months and that is bad news," says Jean-Luc Lemahieu, who heads the U.N. Office on Drugs and Crime in Afghanistan.
"The last time we had seen that happening was in the period of 2000, 2001, 2002, and we know what happened after that ... the increasing cultivation areas and the high production," he says.
With farmers able to make 10 times more money on opium than wheat, temptation is high, Lemahieu says. The Taliban and other anti-government elements take their cut from farmers' opium crops.
The Taliban also is becoming a bigger player in running drug labs and smuggling, says scholar Gretchen Peters, who studies organized crime and insurgency in Afghanistan and Pakistan. She wrote the book Seeds of Terror: How Heroin Is Bankrolling the Taliban and al Qaeda.
"These days you hear multiple reports of Taliban commanders running their own drug labs, running processing centers that process the raw opium into morphine base, into heroin and in fact exporting those shipments and profiting at much higher levels than they were before," she says. "That would indicate that the Taliban is turning something much more along the lines of a drug cartel than a political movement."
Drug money isn't the only source of income filling Taliban accounts. Experts say extortion, smuggling, kidnapping and payments from Western contractors trying to keep their projects safe also provide a hefty sum.
Controlling The Flow Of Funds
But just how much the militants bring in is unclear. Estimates range from tens of millions of dollars to half a billion dollars each year.
Most analysts and officials agree that the Taliban earns far more than it spends.
Instead of sending a surge of more troops to Afghanistan, we really need to send a surge of accountants.
"Certainly al-Qaida would love to have the kind of money that's coming into the Taliban," says Alex Strick van Linschoten, a scholar and author who spent years living in southern Afghanistan to research the Taliban and al-Qaida.
He says more Taliban money appears to be leaving Afghanistan these days than is staying. He adds that he knows one Taliban commander who bought an apartment in Dubai with the proceeds.
The author adds that the Taliban leadership in Pakistan is trying to get a better handle on the finances. That's evident in the rule books the Taliban issues.
"There've been three different versions, and each one has slowly tried to gain more control over this kind of financing element of things. And slowly we've seen more bureaucracy develop," he says.
Peters says the Taliban leadership in Quetta, Pakistan, also punished some individual commanders for hanging on to money.
She says the U.S.-led coalition needs to figure out where the money is going if the coalition is to win.
"Instead of sending a surge of more troops to Afghanistan, we really need to send a surge of accountants," Peters says.
Difficulties Clamping Down On Taliban Financing
The failure to adequately address funding of extremist groups like the Taliban is frustrating not only to the West, but also to some of America's allies in the Arab world. At a recent regional security conference in Bahrain, Nasser al-Bloushi, the island kingdom's ambassador to Paris, complained that none of the leaders there were talking about the subject.
"Continuity of terrorist attacks is not only on account of their determination, but because we failed to stop the flow of finance into their hands," he says.
It isn't because the West isn't trying, says Nigel Inkster, who used to work for British intelligence. He is now a director at the Institute of International Strategic Studies, which organized the Bahrain conference.
"Obviously this money does not come with a tag saying 'Taliban,' and a lot of it, I think, may be quite hard to distinguish or identify," he says.
Inkster adds that as long as drugs and corruption remain key sources of revenue in Afghanistan, it will be very difficult to clamp down on Taliban financing.
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