Money earned from the opium and heroin trade in Afghanistan is what is allowing pro-US warlords in the country to operate, a high-profile Washington lawyer and expert in international financial crime said today. "The revenue of poppies is essential for the warlords supporting the United States," Jack Blum told a House panel focusing on international corruption.

The country's largest domestic product, Blum explained, was heroin, and without the profit from the drug trade any government would be hard-pressed to provide for its people and support the war on terrorism. "It's a terrible, terrible dilemma, because it is the only source of revenue the state has," he said, adding the problem was being debated by governments trying to stop the drug trafficking.

"It's possibly one of the most complicated, atrocious problems any one could understand," said Blum. Asked about chasing drug traffickers into neighbouring countries such as Pakistan in an effort to stem the flow, Blum said he had little hope such cross-border hunts would help. "The problem of corruption surrounding drugs on that route is absolutely astonishing, and I have no faith that any agreement to chase or not to chase would make any difference."

Afghanistan is thought to be responsible for 75 per cent of the world's opium and 80 per cent of the heroin traded on the streets of Europe.

The United States in February waived narcotics sanctions against Afghanistan despite the country's "demonstrable failure" to curb poppy cultivation in a move aimed at supporting the interim government in Kabul.

The waiver was part of Washington's effort to reward and support the Afghan interim government led by Hamid Karzai that took power after the Taliban were ousted in the US-led war on terrorism.

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