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It has transformed social relations and weakened states and legal economies throughout the region. Sustainable peace will require not just an end to fighting and a political agreement but a regional economic transformation that provides alternative forms of livelihood and promotes accountability. The pursuit of politics through both peaceful and violent means requires money. Just as in many parts of the world political power is a principal means to the pursuit of wealth, war too may create conditions for economic activity, though often of a predatory nature. Political leaders speak in public about their ideas and goals, but much of their daily activity is devoted to raising the resources to exercise power and reward supporters or themselves. How political leaders raise and distribute these ideas often determines the outcome of their acts, as much as if not more than their goals and intentions. The current form of war is neither interstate war nor classic civil war, but transnational war involving a variety of official and unofficial actors often from several states. Such wars develop particular patterns of economic activity. The longer they persist, the more society and economy adapt to war, creating a relatively stable type of social formation, the civil or transnational war economy. A few profit, while most have no say in the development of their own society. Peacemaking requires not only political negotiations but transforming the war economy into a peace economy and creating institutions for accountability over economic and political decision making (Ignatieff, 1998; Wallensteen and Stollenberg, 1998; Holsti, 1995; Reno, 1998; Kaldor, 1999; Keen, 1998; Jean and Rufin, 1996). The war economy of Afghanistan, which exemplifies this type of system, is an open war economy affecting a broad region. Afghanistan, stateless and devastated has become both a source of the world’s most infamous opium transport and marketing center. The spread of means of transportation and communication, the development of cultural, similarity, and economic ties between Afghans and all the neighboring societies, the opening of borders and lack of customs enforcement in many areas, and the increase in opium production and other contraband activities, the Afghan war economy has given rise to a pattern of regional economic activity and associated social and political networks that compete with and at times undermine official economies and states. Transformation of this criminalized war economy is thus essential not only to Afghanistan but to neighboring regions. The economic and political stability of Pakistan, in particular, is threatened by phenomena associated with the political economy of war in Afghanistan, but the phenomena also reach into Iran, the Arab states of the Persian Gulf, and Central Asia, and, through the drug trade, into Russia, Europe, and North America. The pre-war society of Afghanistan cannot be reconstructed, but today’s structures developed from transformations of that fragile and fragmented society. Furthermore, in the event that political conditions permit an attempt at reconstruction, an understanding of prewar social, economic, and political relations is necessary if Afghans and international actors are to avoid replicating or even magnifying dysfunctional features of the system that proved so vulnerable to external intervention and institutional collapse (Rubin, 1995a). In the 1970s Afghanistan had an economy and society bifurcated between a rural, largely subsistence economy and an urban economy dependent on a state that in turn drew most of its income from links to the international state system and market. Agriculture and pastoralism accounted for about 60 percent of GDP, and about 85 percent of the population depended on the rural economy for its livelihood. As late as 1972, economists estimated that the cash economy constituted slightly less than half of the total. This figure probably increased later in the 1970s, as a result of the expansion of the national market after completion of the nation-wide ring road and a rise in remittances from labor migration to Persian Gulf countries after the 1973 oil price rise (Rubin, 1995a, 62-75; Fry, 1974, 135-62). Government expenditure consumed less than 10 percent of the whole economy, less than 20 percent even of the cash economy. Government domestic revenue was even less than that. In the 1960s foreign aid accounted for 40 percent or more of the budget, including virtually all development projects. This aid came from both the Soviet- and US-led alliance systems, though the former predominated, especially in the military. As aid declined in the late 1960s, export of natural gas from northern Afghanistan to the Soviet Union (principally Uzbekistan) replaced it, so that these rentier incomes continued to finance slightly less than half the budget. Most of the rest came from taxes on a few items of foreign trade and government monopolies of commodities such as fuel and tobacco (Rubin, 1995a, 296-7). Urban society depended on the redistributive activities of the state. Since after the mid-1950s the private sector was largely confined to trade, the state controlled most urban employment, which expanded together with the foreign funded state. The state controlled almost the entire educational system (secular and Islamic), which expanded rapidly since the 1950s. The exception was the private, rural madrasas (Islamic academies) that steadily lost influence and prestige. The Islamic Movement of Taliban later emerged from these madrasas (and their kindred institutions in Pakistan) after nearly a generation of destruction of the state schools and the competing elites (nationalists, communists, Islamists) they had spawned (Roy, 1986; Rubin, 1995b). The production of opium was related to one of the major macro-economic changes induced by the war: a rapid increase in the supply of money, which, combined with the destruction of the much of the subsistence economy, induced an apparently large, if as yet unmeasured, monetization of economic and social relations, as well as hyper-inflation. In those areas where it could be grown economically, opium was the main expanding source of cash incomes, for both commanders and the peasantry. In some regions of Afghanistan (the upper Helmand Valley in particular), the climate and soil combine to create the world’s highest opium yields. The ease of marketing opium made it an obvious target for taxation and predation by local power holders. Equally important, however, is that unlike any other crop available to the peasants, its cash value as an export was so certain that the buyers – socio-economic conflicts related to the war have also developed at the local level in ways that differ from region to region. The collapse and partial revival of the state, the destruction of assets, and the mass displacement and partial return of the population has created a growing crisis in property relations. The old regime in Afghanistan had established private property in land and pasture and used these regulations in favor of Pashtun nomads and settlers in northern and central Afghanistan Peace could come to Afghanistan in many forms. It could, for instance, arrive in the guise of a victory by one faction, most likely the Taliban, or a melding or reconfiguration of existing armed groups, ending open fighting and transforming the criminalized war economy into an even faster-expanding criminalized peace economy. Indeed, whatever political group might take control of Afghanistan, the economic incentives for misgovernment are nearly irresistible. Only the drug and transit trade are really worth the effort of taxation, while the rest of the economy is hardly productive enough to make governing it worthwhile. It is difficult to recover the cost of more than a very sparse administration of such an economy and society. Such a political economy would leave the power holders as unaccountable to most Afghan people as they were under previous regimes. Most of the population would be left to fend for themselves, in conditions of greater security, but without a development agenda, public services, or reforms, notably in the status of women. Such a peace would continue to threaten the region, as expanding drug trade, money laundering, and smuggling would undermine governance in several countries, strengthen Taliban-like forces in Pakistan, continue to pose both political and practical obstacles to international reconstruction assistance, and provoke a defensive reaction from Afghanistan’s other neighbors in Iran and Central Asia. The resulting tensions among and within states in the region would make such a peace elusive indeed. A more challenging but, if successful, more rewarding alternative, is to consider peacemaking in Afghanistan as part of a larger problem, of transforming the political economy of a region. The current dysfunctional regional political and economic relationships would also have to be changed. At the moment Pakistan’s actions in Afghanistan are the result of semi autonomous groups within the state and society pursuing their goals. Pakistan needs to develop the institutional basis for articulating a national interest that would unite both economic and security concerns, as well as the welfare of its own people. Articulation of such a national interest would also favor more equitable relations with Afghanistan. Most important is working with Afghans to change the image and role of the state, seen largely as a distant and indifferent if not hostile power. Local power structures that have largely grown up as defensive measures of self-rule to keep the state or powerholders away have to be incorporated into official structures of planning and service provision. It is unlikely that any central power will find it worthwhile to provide localities with much in the way of governance and services. For this very reason, Afghanistan needs a decentralized governance structure in which provinces and localities should receive official authority to tax and plan in consultation with local shuras (councils). In the past local societies developed unofficial power structures to shield themselves from the state, rather than participate it, and the centralizing mentality shared by the Taliban and much of their opposition reproduces that past pattern. Instead, modest local resources under local control could be directed into locally accountable planning processes rather than a dysfunctional central state. The central state will still be needed for provision of basic security and dispute resolution, but a clear division of labor among levels of governance will promote greater accountability over the reconstruction process. The disintegration of the state creates such potentials, though the criminalized economy that has filled the gap in providing livelihoods has created interests that will resist it. But unless peacemaking can appeal to the interests of powerful economic actors and transform them into agents of peace, it will be limited at best to halting fighting in one place before social and economic forces provoke it once again elsewhere in this dangerous region. Bibliography: Rubin, Barnett R. 1995a. The Fragmentation of Afghanistan: State Formation and Collapse in the International System. New Haven, Conn.: Yale University Press. _____ . 1995b. The Search for Peace in Afghanistan: From Buffer State to Failed State. New Haven, Conn.: Yale University Press. _____. 1997. "Arab Islamists in Afghanistan." In John L. Esposito, ed., Political Islam: Revolution, Radicalism, or Reform? Boulder, CO: Lynne Reinner, pp.179-206. Rufin, Jean-Christophe. 1996. "Les économies de guerre dans les conflits internes." In Jean and Rufin (1996): 19-60. Swedish Committee for Afghanistan. 1988. The Agricultural Survey of Afghanistan: First Report. Peshawar: Swedish Committee for Afghanistan. UNOCHA, 1997. 1998 Consolidated Appeal for Afghanistan. Islamabad. Wallensteen and Stollenberg, 1998. Kaldor, Mary, 1999. New and Old Wars: Organized Violence in a Global Era. Cambridge: Polity Press. Zolberg, Aristide, Astri Suhrke, and, Sergio Aguayo. 1989. Escape from Violence: Conflict and the Refugee Crisis in the Developing World. Oxford: Oxford University Press. Word Count: 1789
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