(Cross-posted at Registan.net)

For a while, I’ve been openly skeptical of the claim that opium cultivation in an of itself is "driving" the Taliban insurgency in Afghanistan. For one, it assumes a direction of causation that is merely stated and never argued; for another,  it creates the impression that, if only there were no opium, neither would there be a Taliban.

For otherwise smart people to make that sort of claim about an explicitly religious movement is puzzling and often annoying (when it gets repeated like it’s common, intuitive wisdom on the op-ed pages). But even if they derive money from collaborating with the drug lords, the Taliban’s funding has almost never been even mostly come from the opium trade. Indeed, reaching back far into the 1990s, it was obvious even then that most of their money came either directly from certain national intelligence services (namely Pakistan, Saudi Arabia, and the UAE), or from the donations of wealthy private individuals through a system called hawala.

Hawala is a rather ingenious method of international Islamic finance, used to transfer money for anything from donations and remittences to international NGO funds . The challenge in estimating how much money travels over hawala networks is that it is trust-based, and by western standards VERY informalized. As such, we have no idea how much money gets transmitted across state lines by hawala merchants apart from very rough estimates. Researching how much money these networks handle is damned near impossible: a hawala dealer will never work again if he develops a reputation for divulging his sources, funds, or methods—especially to an American government agent.

This is the problem Yochi Dreazen picks up in today’s Wall Street Journal.

Gen. Petraeus estimated that the Taliban raise a total of "hundreds and hundreds of millions of dollars" each year from the three sources, and said the U.S. doesn’t have precise figures.

The Taliban have depended in part on foreign support for decades. In an interview last week, Defense Secretary Robert Gates said some Afghan militants could draw on "external funding channels" created in the 1980s for wealthy Muslims — with U.S. support — to funnel money to Islamic fighters battling the Soviet military. "It wouldn’t surprise me if those channels have remained open," he said.

Two senior U.S. officials said the Central Intelligence Agency has identified individuals and charities suspected of providing the bulk of the Taliban funding, but declined to name them, citing continuing operations to disrupt the money flows…

American officials said most of the money was sent to the Taliban through the informal hawala money-transfer system — a network of money brokers with little outside oversight. A 2006 World Bank report about Afghanistan said the hawala system "carries out the majority of the country’s cash payments and transfers."

The thing is, this is not a new problem by any stretch of the imagination. Not only was the hawala system identified as quite probably THE primary method of fundraising during the crop of Taliban books in the late 1990s (think William Maley and Larry Goodson as much as you do Ahmed Rashid), but when the Taliban began reconstituting itself as a major insurgent force—in 2003, for those of who thought things were okay until 2007 or so. Just one story from the CS Monitor, dated May 8 2003:

Much of the funding came through a black-market banking system called hawala, which is common throughout the Middle East and South Asia. But Mr. Hamidullah says that Pakistan generally sent its money by hand, using ISI officers. "During Taliban times, Pakistani colonels would bring money to support Taliban soldiers," he says.

Today’s Taliban continues to receive funding, he adds, some of it from rich Arab donors, but much of it from the intelligence agencies of Russia, Iran, and Pakistan. "There are some countries that are against the polices of the US and the United Nations, and they support the guerrillas. The most important role belongs to Russia, Iran, and Pakistan."

And yet there Secretary Gates is, acting as if hawala is a new problem. I feel comfortable placing much of the blame for this on President Bush—the issue of non-opium funding has been in the open for decades now, yet as Rajiv Chandrasekaran revealed in his brilliant behind-the-scenes piece on Bush’s relationship with Afghan President Hamid Karzai,  President Bush expended a huge amount of effort trying to manipulate everyone, from the Afghan government to his own Department of Defense, into making opium eradication one of their primary tasks in Afghanistan.

As I’ve said repeatedly over the years, the over-focus on opium within Afghanistan—which, let us be honest, is a trailing indicator, and not a cause of anything aside from some (and only some) corruption—will lead to spectacular failure. Secretary Gates’ discussion of the Taliban’s alternate funding sources, while long overdue, is perhaps too late to bring about meaningful change in a policy that doesn’t even focus on the problem of narcotics, but just one, single cash crop that also happens to be most of Afghanistan’s economy.