David Lazarus / San Francisco Chronicle – 2005-02-07 08:44:35

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/02/06/BUG7FB6ER11.DTL

(February 6, 2005) — President Bush didn’t have much to say about Afghanistan — our other, quieter war — in his State of the Union speech the other night. Perhaps that’s just as well.

Eddy Faiez, who runs a small shop on San Francisco’s Market Street called Afghan Treasures, returned to his native Kabul for a few weeks last summer to seek new business opportunities. He didn’t find any.

“You still need a connection with the government to open doors for you,” Faiez, 48, said amid his inventory of silver jewelry, caps, bags and rugs. “It’s the same situation as before.”

Afghanistan’s economic recovery, or lack thereof, provides an indication of what may be ahead for Iraq. Both countries have now enjoyed Western-style elections. But it’s a whole lot harder to install Western-style capitalism and markets, not to mention the financial benefits of a healthy economy. “For some people, things are good, yes,” Faiez said. “For most people, it is still very difficult.”

US forces attacked Afghanistan — Operation Enduring Freedom — in October 2001, following al Qaeda’s terrorist strikes on the World Trade Center and Pentagon.

“We will win this conflict by the patient accumulation of successes,” Bush said at the time, “by meeting a series of challenges with determination and will and purpose.” Defense Secretary Donald Rumsfeld told an interviewer last week that the United States can be proud of “a wonderful accomplishment” in Afghanistan.

About 18,000 US troops remain stationed in the country at a cost to American taxpayers of nearly $1 billion a month.

IMF Condemns Afghan’s Narco-economy
So how wonderful is our accomplishment? The International Monetary Fund, for one, is less than dazzled by what’s transpired in Afghanistan since the 2001 invasion.

In a report issued late last month, the IMF said it regrets “indications that widespread corruption, the rise in drug activities and the lack of transparency in many areas may have undermined the business environment.”

The IMF was particularly concerned about Afghanistan’s resurgence in opium farming, making the country once again the world’s leading producer of the raw ingredient for heroin. Three years after US forces arrived, Afghanistan is now responsible for about 87 percent of the world’s opium supply, officials estimate.

Opium contributes almost $3 billion in annual revenue to the local economy, an amount equal to 60 percent of Afghanistan’s legitimate gross domestic product, according to the IMF.

Researchers at the United Nations believe that roughly 10 percent of Afghanistan’s population of about 25 million is directly involved in poppy cultivation. Many more are believed to work in processing, trafficking and other illicit activities.

In a December report, the World Bank observed that “there is no track record for dealing with a narcotics problem of this magnitude.”

“Born of desperation and opportunism, opium production has become the mainstay of the Afghan rural economy and dominates the nation’s exports,” the bank said. “The drug trade, with substantial involvement of criminal elements from outside Afghanistan, has fed warlordism in an infernal exchange between drugs and guns, and has spawned a gigantic criminal activity that threatens the integrity and capacity of the state and may maintain shadowy links with terrorism.”

In this light, it’s hardly surprising that Bush didn’t dwell on Afghanistan in his State of the Union speech. (The fact that most Americans don’t seem to know or care what’s happening in the country is another matter.)

As for Faiez, he told me he knows his homeland has problems. All he wants is to find a way to help the economy along by providing an outlet for Afghan crafts in the United States.

“When I was in Kabul last year, I found that the government doesn’t even have the ability to ship here regularly,” Faiez said. “I could do it by FedEx, but that would cost a lot of money.” Instead, he ships his goods from neighboring Pakistan. Faiez said that much of what he sells at Afghan Treasures is in fact made in Pakistan because it’s much easier to do business there.

What exactly does he have on hand from Afghanistan?

Faiez glanced around his shop.

“Nothing,” he said.

David Lazarus’ column appears Wednesdays, Fridays and Sundays. He also can be seen regularly on KTVU’s “Mornings on 2.” Send tips or feedback to dlazarus@sfchronicle.com.