Thriving Afghan opium crop hampers development: IMF

By Lesley Wroughton

WASHINGTON (Reuters) - A thriving Afghan opium crop earned farmers about $1 billion in 2007 and together with a resurgence in violence was hampering economic development, the International Monetary Fund said on Wednesday.

In an annual economic review of the Afghan economy, the IMF said opium production in Afghanistan had spiraled to 8,200 tons in 2007 from 185 tons in 2001 and was by far the largest cash crop in the country.

"The volatile security situation and the persistence of the drug economy are weakening attempts at broadening economic development," the IMF said.

"The drug economy, while being a source of livelihood for many households, continues to be a major obstacle for Afghanistan to regain its comparative advantage in traditional exports," it added.

It said Afghanistan's share of world opium supply increased to about 93 percent in 2007 from 52 percent in 1995, making it the world's largest opium producer despite efforts since the fall of the Taliban six years ago to bring production under control.

Despite the presence of more than 50,000 foreign troops led by NATO and the U.S. military, as well as some 140,000 Afghan troops, militants have made a comeback in the past two years, and more than 11,000 people have been killed in violence.

As part of their campaign to drive out foreign troops and topple Afghanistan's government, the al Qaeda-backed Taliban largely rely on suicide raids and roadside bomb attacks.

The IMF said it was not qualified to comment on Afghanistan's opium production, and cited figures from the United Nations Office on Drugs and Crime that estimate the total value of the opium harvest in Afghanistan was worth about $4 billion in 2007, compared with $2.7 billion in 2005.