The greatest long-term challenge facing Afghanistan is probably that presented by the production of illicit drugs and the criminal networks that surround it. Indeed, President Hamid Karzai recognised this two days after his inauguration in December 2004, placing the issue at the top of his agenda and declaring a jihad against opium cultivation, drug production and trafficking.

In the intervening period, efforts to combat the drug menace have been stepped up and some progress has been made. At the same time, however, the limitations of policies in this area have become increasingly evident as the scale of the challenge has become clearer.

Since NATO is seeking to help bring peace and stability to Afghanistan through the peacekeeping efforts of the International Security Assistance Force (ISAF) it leads, the Alliance will factor in the drug menace in its areas of operations. Any threat to the Afghan government and efforts to build an effective, democratic state is also a threat to the NATO presence in the country. In addition, Afghanistan's opium crop presents a direct threat to Allied populations at home.

The statistics for 2005 are revealing. According to the UN Office on Drugs and Crime (UNODC), 87 per cent of world opium production and 63 per cent of world opium cultivation is in Afghanistan. An estimated 52 per cent of Afghanistan's gross domestic product, or around US$2.7 billion, was earned through illicit poppy cultivation. And opium production has surged since the ouster of the Taliban in 2001. In 2004 alone, opium production jumped 64 per cent to around 4200 metric tons. This compares with just 185 tons in 2001 following a ban on cultivation imposed by the Taliban.

To be sure, opium production declined slightly in 2005 to around 4100 metric tons. This should not be seen as a positive changing trend, however, as the decline is primarily the result of the current oversupply of opium on the world market and a poor harvest caused by severe draught in Afghanistan. Moreover, financial worries and pressure on farmers from drug barons are expected to cause opium cultivation in Afghanistan to rise this year.

Given the gravity of the problem, immediate action has now become crucial. While the Afghan authorities are ultimately responsible for combating narcotics, the international community also has an important responsibility in this respect. Moreover, it is already supporting the efforts of the Afghan government.

The United Kingdom has led the way in its capacity as G-8 lead nation on counter-narcotics. The United States has also been involved. Together they have supported the Afghan government by providing funding for alternative livelihood programmes and training for its Anti-Narcotics Special Task Force. The United Kingdom and United States have also assisted the Afghan authorities with the establishment of what has become the lead agency for drug law enforcement in Afghanistan, the Counter-Narcotics Police of Afghanistan. Moreover, they have helped set up a Counter-Narcotics Trust Fund and, together with Italy and the United Nations Office on Drugs and Crime, a Criminal Justice Task Force.

It is critical, however, that a still broader array of international actors becomes involved in such efforts and does so in a coherent fashion. NATO, if only by its presence in Afghanistan through the International Security Assistance Force (ISAF), cannot be isolated from this issue. Operation Plan 10302, the guidance document according to which ISAF forces should operate as they expand into southern Afghanistan, a major poppy-growing area, specifies the role of NATO forces in supporting Afghan counter-narcotics efforts. This includes logistic support, sharing intelligence and information, and providing training assistance to the Afghan National Army and police in counter-narcotics procedures. While ISAF must perform these duties, NATO-led forces must also avoid becoming so entangled in counter-narcotics activities that their ability to implement key tasks is undermined.

That said, success depends on the Afghan government's commitment to eliminating the problem and it is up to Kabul to lead the fight and expand Afghan ownership of an ever increasing range of counter-narcotics tasks. Indeed, Afghan authorities must continue to build government and local capacity in this area to demonstrate that they are increasing their counter-narcotic capabilities.

To date, Kabul has demonstrated more than good intent in addressing what it considers a vital and cross-cutting priority. At January's London Conference on Afghanistan, the Afghan government signed the Afghanistan Compact, an ambitious plan to build a better future for the country together with international support, which envisions the complete elimination of the drug problem. To this end, it has committed itself to a set of counter-narcotics benchmarks, including strengthening its law-enforcement capacity; cooperating and coordinating with neighbouring countries; achieving a sustained annual reduction in the amount of land under poppy cultivation; and increasing the number of arrests and prosecutions of traffickers and corrupt officials.

Earlier this year, the Afghan government also updated its National Drug Control Strategy in such a way that efforts focus on the four following priorities: strengthening state institutions; disrupting the drugs trade; strengthening and diversifying alternative livelihoods to farmers; and reducing the demand for narcotics and treating drug users. Moreover, the Central Poppy Eradication Force has been deployed in various regions to undertake manual eradication of opium. The Anti-Narcotics Special Task Force has also undertaken interdiction operations with some success.

The extent to which these efforts yield lasting results and play a decisive role in reducing the drug problem in Afghanistan remains to be seen. Meanwhile, government officials will have to focus on putting in place effective long-term measures, maintaining momentum and ensuring that the wider public continues to support its counter-narcotics efforts.

An effective Afghan counter-narcotics policy needs to focus on sanctioning primarily drug barons, not farmers. To this end, any eradication programme needs to be targeted and conducted in conjunction with sustainable alternative livelihood programmes. The latter should provide incentives to poor farmers – who represent about ten per cent of the total Afghan population – to turn to legal ways to make a living, by ensuring that they do not revert to poppy cultivation and by cushioning the impact of the reduction in the opium economy. Indeed, it is crucial that there be a balanced use of "carrots" and "sticks" to ensure that the Afghans are enticed and convinced to cooperate on counter-narcotics.

President Karzai has made clear the importance he places on alternative livelihood projects, requesting that international efforts be focused on them. The Afghan government has also promised help to farmers prepared to give up opium cultivation that it has been unable to deliver. Meanwhile, it has, nevertheless, pushed ahead with the destruction of poppy fields. Such an approach risks testing the patience and good will of those farmers who have voluntarily abandoned poppy production but have not yet been offered an alternative. It also sets a bad precedent. However, the international community is yet to make sufficient funds available to cover the whole of Afghanistan.

To be sure, the sums required to provide an alternative living for all farmers cultivating poppies in Afghanistan and ensure they do not resume their illicit activities are so great that it is unlikely they will ever be found. Moreover, Afghans are well aware that they can earn more from poppies than any other crop. Hence the importance of making a more forceful case in favour of alternative livelihoods to convince farmers to stay clear of illegal crop cultivation in the longer term.

Farmers and drug barons are, however, unlikely to give up their profitable revenues without a fight. Meanwhile, the resources available to the Afghan government to counter dissident voices are limited; corruption remains endemic despite the raft of anti-corruption measures agreed in the Afghanistan Compact; and the Central Poppy Eradication Force and the Counter Narcotics Police of Afghanistan, which remains a small force, have difficulties acting in the face of opposition. Indeed, last year, the Afghan government was obliged to suspend its eradication campaign in Kandahar province after a demonstration by angry farmers degenerated into clashes with the police. Moreover, justice reform, which is essential to combating narcotics by enabling the prosecution of drug traffickers, is yet to take place. The ability to implement programmes therefore depends to a great extent on the good will and cooperation of local authorities and tribal elders.

The issue of drug production and trafficking in Afghanistan is complex and risks spiralling out of control. The solutions require long-term, multifaceted and innovative approaches from both the Afghan government and the international community. All involved will need to show commitment for years to come. Yet such resolve will be hard to sustain as short-term results are difficult to discern, international attention wanes and donor fatigue sets in. But unless and until this issue is resolved, the security environment in Afghanistan will require the presence of an international stabilisation force.