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Drugs, Oil, and War: The United States in Afghanistan, Colombia, and Indochina

a book by Peter Dale Scott

(2003, ISBN 0-7425-2522-8)


This book, Drugs, Oil, and War: The United States in Afghanistan, Colombia, and Indochina, explores the underlying factors that have engendered a U.S. strategy of indirect intervention in Third World countries through alliances with drug-trafficking proxies. This strategy was originally developed in the late 1940s to contain communist China; it has since been used to secure control over foreign petroleum resources. The result has been a staggering increase in the global drug traffic and the mafias assorted with it, a problem that will worsen until there is a change in policy.

The book also traces some of the processes by which covert interventions have escalated into war. Parts 1-2 of this book include an extensive introduction and lengthy new chapters on Afghanistan and Colombia. Part 3 consists of five updated chapters from my 1972 book The War Conspiracy: The Secret Road to the Second Indochina War.

This book explores ongoing causal patterns that have helped shape U.S. foreign policy, sometimes at a deeper level than was recognized even by bureaucrats in high places. Under pressure from interested outsiders, decisions were made by the United States, after World War II in Burma and again in Laos in 1959-1965, to back armies and governments that were supporting themselves through the drug traffic. This has led to a linked succession of wars, from Vietnam to Afghanistan, which have suited the purposes of international oil corporations and U.S. drug proxy allies, far more than those of either the U.S. government or its people. Those decisions were also major causes for the dramatic increase in drug trafficking over the last half century.

Today drug networks are important factors in the politics of every continent. The United States returns repeatedly to the posture of fighting wars in areas of petroleum reserves with the aid of drug-trafficking allies (or what I call drug proxies) with which it has a penchant to become involved. Surprisingly, this is true even in Colombia, where we are nominally fighting a war on drugs; yet the chief drug-trafficking faction, the paramilitaries, are allies of our allies, the Colombian army. Worse, they are the descendants of yet another clever CIA notion -- to train terrorists to fight the left -- which has once again come back to haunt us.

This is the situation that has recently engaged the United States in Afghanistan, a country through which until 1998 a U.S. oil company, UNOCAL, hoped to build oil and gas pipelines. The drug-trafficking network of al-Qaeda and Osama bin Laden, a former CIA ally operating out of caves designed and paid for by the CIA, has just been defeated with the help of another drug proxy, the Afghan Northern Alliance. In the pursuit of bin Laden, the United States defeated his allies the Taliban (which in 2000 had enforced a total ban on opium cultivation in its area), with the aid of the Northern Alliance (which in the same period had overseen a trebling of opium cultivation in its area).

As this book goes to press, the new Afghan government has initiated a nominal ban on opium cultivation. But the United States has not given the Hamid Karzai regime enough financial support to make the ban work. Clearly the drug traffic itself is now a well-financed transnational power player in the region, and there are no serious current plans to reduce it. (There are only minimal plans to repair the devastation wrought by U.S. bombing on an Afghan economy that was already in ruins after decades of international and civil war.)

Even if there were an effective ban on opium production and trafficking in Afghanistan, one could still predict with some confidence that it would increase in a neighboring area, such as Tajikistan or Kyrgyzstan. As the drug traffic grows in the new area, it will help destabilize the host states in the region, none of which is too secure to begin with. Without a change in policy, the United States, which has already sent troops into the region, will sooner or later be confronted with another crisis that calls for intervention.

These problems facing America are by no means entirely of its own making. But one recurring cause, commonly recognized, is U.S. dependence on foreign oil and its need to control international oil markets. Past U.S. support for drug proxies is another more covert and less recognized contributing factor, one that must be acknowledged if the root causes for these crises are to be addressed.

Conversely, the great resistance that still exists to acknowledging past U.S. involvement in and responsibility for covert intrigues contributes to our present inability to bring true peace and security to the rest of the world. The agencies responsible for past errors are too concerned to preserve not only their reputations but their alliances and, above all, the corrupt social systems in which such alliances have thrived. Consequently an international drug traffic, which the United States helped enlarge, continues to thrive.

I shall argue in this book that covert operations, when they generate or reinforce autonomous political power, almost always outlast the specific purpose for which they were designed. Instead they enlarge and become part of the hostile forces the United States has to contend with. To put it in terms I find more precise, parapolitics, the exercise of power by covert means, tends to metastasize into deep politics, an interplay of unacknowledged forces over which the original parapolitical agent no longer has control. This is the heart of the analysis.

In my book Deep Politics and the Death of JFK (pp. 7-8), I give a seminal example of this process: U.S. parapolitical use of Mafia figures like Vito Genovese in postwar Italy. This was a conscious operation that soon led to the deep political dominance of Italian party politics by a Mafia out of control. That example will serve in miniature for the history of all U.S. interventions since then in Asia. In 1951 a decision was made to ship arms and supplies to the armies of the Kuomintang (KMT) drug network in Burma. This led to a fivefold increase in Burmese opium production in less than a decade, from eighty to four hundred tons. By 1999, the peak year before the ban imposed by the Taliban took effect, world opium production had reached 7,000 tons. Of this, 4,700 tons, or 70 percent, was being grown in Afghanistan and trafficked by heirs of the mujahedin who in the 1980s had been financed, armed, and supported by the CIA.

Again, the United States was not solely responsible for this growth. Some of it would have occurred anyway, possibly (as the U.S. government used to contend) under the guidance of a hostile power such as China or the Soviet Union. The point is that the drug problem cannot be understood, let alone properly addressed, until the parapolitical consequences of CIA involvement have been acknowledged and corrected.


The presence of drug trafficking in the background of these interventions is paralleled by considerations about oil. Here too decisions made freely after World War II have helped to enmesh the United States in a problematical situation—the risks from terrorism are continuously increasing and extrication will not now be easy.

Right after World War II, building on the so-called Quincy Agreements with Saudi Arabia in 1945, the United States moved to dominate a global system for the production and distribution of oil. Starting with the Truman Doctrine in 1946, U.S. geostrategic thinking was oil based. What began as a strategy for containment of the Soviet Union has become more and more nakedly a determination to control the oil resources of the world. This pursuit has progressively deformed the domestic U.S. economy, rendering it more and more unbalanced and dependent on heavy military expenditures in remote and ungovernable areas -- most recently Afghanistan. It has also made the United States an increasingly belligerent power, fighting wars, especially in Asia, where it turns time after time to allies and assets prominent in the global drug traffic.

From the outset U.S. strategy in Southeast Asia envisaged protecting what President Eisenhower once referred to as "the rich empire of Indonesia," whose primary export was oil. <1> In the 1970s, as opium production in Asia shifted west from the Golden Triangle to the Golden Crescent, so also U.S. interventions, first covert and then overt, shifted from Indochina to Afghanistan.

I do not mean to suggest that domination of oil resources was the sole consideration on the minds of U.S. policy planners. On the contrary, they believed in their own rhetoric of defending the so-called free world from communist domination, whether Soviet or Chinese. But inasmuch as what they feared above all was communist control of oil resources, the result of their planning was continuously to strengthen U.S. domination of an increasingly unified global oil system.

From Iran in 1953 to Indonesia in 1965 and Ghana in 1966 the CIA was involved in the covert overthrow of governments around the world that (as Michael Tanzer noted years ago) had threatened to nationalize their oil industries. <2> As U.S. interventions overseas increased in the 1960s, so did U.S. dependence on overseas oil to meet its growing demands. When this exposure led to the oil shocks of the 1970s, the United States was forced into a double policy of controlling the international flow of oil and petrodollars. As we shall see, it solved the latter problem by means of secret agreements that maintained the strength of the U.S. dollar at the expense of the Third World.

The resulting impoverishment of the Third World has been accompanied by a disastrous increase in global terrorism, which has now become a major focus of U.S. foreign policy. Yet, as Frank Viviano observed in the San Francisco Chronicle (September 26, 2001), "The hidden stakes in the war against terrorism can be summed up in a single word: oil. The map of terrorist sanctuaries and targets in the Middle East and Central Asia is also, to an extraordinary degree, a map of the world's principal energy sources in the 21st century. The defense of these energy resources -- rather than a simple confrontation between Islam and the West -- will be the primary flash point of global conflict for decades to come, say observers in the region." <3>

Although it was not part of his subject, Viviano's observations can be applied also to other regions of oil and terrorism, such as Indonesia, Colombia, Somalia, and (because of oil pipelines) Chechnya and even Kosovo.

In short the etiology or origin of global terrorism is rooted partly in the historical context of previous U.S. policy decisions with respect to both drugs and oil. I say this not to cast blame but to suggest the proper direction to search for solutions. Decision makers of a half century ago cannot be faulted for lacking the foreknowledge that comes more easily in retrospect. It is, however, not too late to address the legacy they have left us -- a suspect affluence grounded in part on the impoverishment of the rest of the world. As long as that legacy is not corrected, we can be sure that the problem of terrorism will remain with us.


The problem will not be solved by putting more and more U.S. troops abroad, from Colombia to Kyrgyzstan. (Both countries, as it happens, are in oil regions and are experiencing a rapid increase in drug trafficking). The quintessential example of such a build-up of U.S. arms and personnel was Iran in the 1970s -- a major cause, as is now obvious, for the Iranian revolution against the U.S. client shah. Hundreds of millions of U.S. dollars for the Somali dictator Siad Barre encouraged him to pursue increasingly oppressive policies, which led in 1991 to his overthrow.

With respect to drugs, I will only say that the United States must end those repressive policies whose result (and often intention) is to maintain the high drug prices that strengthen and enrich the international drug traffic. With respect to oil, we must intensify the search for technological ways to reduce consumption at home and move toward a more multilateral and equitable oil system abroad. Above all, the United States must return to the multilateral system of global regulation that it helped establish after World War II and renounce the fatal temptation to become a hegemon. We must not repeat the follies of Napoleon and Hitler in the heartlands of Eurasia.

This shift will require a different strategy to deal with the dollar and with petrodollars, particularly those from Saudi Arabia and its neighbors in the Persian Gulf. At present the United States balances its payments by secret agreements with Saudi Arabia to recycle petrodollars to the United States and to ensure that OPEC sales all over the world are denominated in U.S. dollars. These arrangements to ease pressure on the U.S. currency have helped, as an inevitable consequence, to create debt crises all over the Third World.

The same secret agreements, discussed in chapter 1 of this volume, are perhaps the prime example of how secret U.S. policies, barely documented, can give rise to global conditions of misery and unrest. People’s strategies of public opposition to official policies, such as the rallies that activists like Noam Chomsky indefatigably address, are in my opinion unlikely to succeed until they expose the unjust secret arrangements and deals on which these official policies are based. The U.S. political establishment, seemingly unassailable on its surface, becomes more vulnerable when the private, covert, and sometimes conspiratorial origins of what passes for public policy are exposed. This book is dedicated to examining war policies at this deeper level.

Meanwhile, official strategies that enrich the United States by impoverishing the rest of the world diminish the possibilities of peace and progress for this country. And our security is put still more at risk by giving military aid to unpopular dictators. The United States tried this strategy in Vietnam in the 1960s, Iran in the 1970s, and Somalia in the 1980s, to name a few. We are still suffering from the anti-American reactions these policies produced. Yet today, as if we had learned nothing, we are establishing bases and giving military aid to the dictator of Uzbekistan -- an ex-Soviet apparatchik with no program for dealing with his extensive Muslim opposition except to imprison them.

We cannot expect a reversal of these strategies from America’s present leaders of either party, constrained as they are by an increasingly oppressive global system that is in large part of those parties’ own making. Recent revelations have shown the extent to which contributions from energy companies have constrained both parties in America as they have politicians abroad. What we hear instead from Washington, although not without opposition, are increasingly strident calls for unilateralist policies in an allegedly unipolar world. Triumphal unilateralism in the United States and terroristic Islamism abroad have become more and more similar to (and dependent on) each other, with each invoking its opposite to justify its excesses.

The future of American democracy rests on our ability to recognize and separate our nation from the causal factors that lie at the heart of U.S. global policies -- policies that have produced such harmful results, not only for those who have been victimized on a world scale but also for Americans.

To these ends I offer, hopefully, the findings of this book. Part Three of what follows is from my 1972 book The War Conspiracy, chapters long on detail but short on deep political analysis. At the front of the book are chapters on the deep politics of U.S. engagements in Afghanistan, Colombia, and Indochina. The patterns in each case are, I believe, more easily discerned by a comparative analysis of the others. Above all, we see the recurring lobbying activities of groups like the American Security Council, in which oil companies are represented, as well as the lobbying activities of airlines with government contracts for arms shipments, and with alleged involvement also in drug trafficking and/or organized crime.

The point of these chapters, and of the book, is not to compete with what I describe as the archival histories of these events, which chronicle them from the documented perspective of the policy makers. It is to focus on deeper causal patterns arising from less documented sectors of society, which have tended to be overlooked in serious academic analysis. It is at this level, I submit, that we can isolate and expose factors more easily amenable to correction.

It would be folly to suggest that this book can bring peace to the world. But I do believe that it suggests new ways in which to search for peace. Above all I hope that it may help Americans understand how they may love their country and still come to accept its share of responsibility for an international order that cries out for amendment.

Just as some in the U.S. government demonize others as terrorists forming an "axis of evil," so others turn such epithets back on the U.S. government itself. I myself see little value in depicting either the United States or its enemies as an intractable other, to be opposed by means that may well prove counterproductive. Just as Islamism needs to be understood in its complexity, so does U.S. power, which is at least as complex. Above all we have to recognize that U.S. influence is grounded not just in military and economic superiority but also in so-called soft power (an "ability . . . that shapes the preferences of others," that "tends to be associated with intangible power resources such as an attractive culture, ideology, and institutions"). <4>

We need a "soft politics" of persuasion and nonviolence to address and modify this country's soft power. Such a proposal is not utopian: the soft politics of the antiwar movement helped, despite many key errors of strategy, to hasten U.S. disengagement from Vietnam. As it becomes increasingly clear that that war "dealt a major blow to the United States' ability to remain the world's dominant economic power," <5> even the exponents of America's hard power may come in time to express their gratitude to critics of the Vietnam War.

As this book goes to press, this country is facing the prospect of yet another needless and disastrous intervention in Iraq. For our sake as well as for the sake of the rest of the world, we must continue to develop alternative soft processes of change.

<1> Dwight D. Eisenhower, speech, August 4, 1953; The Pentagon Papers: The Defense Department History of United States Decisionmaking on Vietnam, Senator Gravel ed. (Boston: Beacon, 1971-1972), 1:592.

<2> Michael Tanzer, The Political Economy of International Oil and the Underdeveloped Countries (Boston: Beacon, 1969).

<3> Frank Viviano, San Francisco Chronicle, September 26, 2001, www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/26/MN70983.DTL.  

<4> Joseph S. Nye Jr., The Paradox of American Power: Why the World's Only Superpower Can't Go It Alone (Oxford: Oxford University Press, 2002), 9.

<5>Immanuel Wallerstein, "The Eagle Has Crash Landed," Foreign Policy, July-August 2002, www.foreignpolicy.com/issue_julyaug_2002/wallerstein.html.

The US dependency on international oil and petrodollars has been accelerated, in the context of globalization and war.

At the height of the Vietnam War, with inflation threatening to wreck his domestic program for a "great society," Lyndon Johnson relaxed the import quota system that had been introduced by Eisenhower to protect domestic US oil production. <19> This increased US vulnerability to the pressure of OPEC oil boycotts in the 1970s, and that vulnerability would be further heightened after Nixon abolished quotas altogether in 1973.

The US handled the quadrupling of oil prices in the 1970s by arranging, by means of secret agreements with the Saudis, for the recycling of petrodollars back into the US economy. The first of these deals assured a special and on-going Saudi stake in the health of the US dollar; the second secured continuing Saudi support for the pricing of all OPEC oil in dollars. <20> These two deals assured that the US economy would not be impoverished by OPEC oil price hikes. The heaviest burdens would be borne instead by the economies of less developed countries. <21>

From these developments emerged the twin phenomena, underlying 9/11, of triumphalist US unilateralism on the one hand, and global third-world indebtedness on the other. The secret deals increased US-Saudi interdependence at the expense of the international comity which had been the base for US prosperity since World War II. They also increased Saudi leverage on U.S. foreign policy, as was seen in the 1979 sale of F-15 fighter planes to Saudi Arabia, against strong Israeli opposition. <22> In particular they explain why George Bush moved so swiftly in 1990 to counter the threat posed by Saddam Hussein to U.S.-Saudi security in the Persian Gulf. The threat was not just that the US itself would lose oil from the Gulf, against which the U.S. was partially insured by the redundancy in world oil supplies. A bigger threat was that Saddam would become the dominant power in the Persian Gulf, directly controlling 20 percent of OPEC production and 25 percent of world oil reserves. <23>

The US-Saudi deals also increased the dependence of the US on oil- and drug-funded Arab assets such as BCCI, the Bank of Credit and Commerce International, which in the 1980s became a chief paymaster for the anti-Soviet Afghan mujahedin, and even ran arms directly to them from Karachi. <24> (The failure of the US Government to investigate and prosecute BCCI reflected not only the extent of BCCI penetration of US ruling circles, but also the dependency of the US economy on the continued influx of petrodollars and narcodollars. As a former NSC economist commented, "[Treasury Secretary James] Baker didn't pursue BCCI because he thought a prosecution of the bank would damage the United States' reputation as a safe haven for flight capital and overseas investments." <25>

Some had expected that the successful OPEC revolt in the 1970s against Washington's and London's economic policies would presage a "new economic order" that would strengthen the South vis-à-vis the North. The secret Saudi-US deals led to a different outcome: a "new world order" that saw increasing US military dominance combined with increasing economic instability and occasional crises elsewhere. Statistics reveal the change in direction. Between 1960 and 1980 per capita income grew 73 percent in Latin America and 34 percent in Africa. Between 1980 and 2000 income grew less than 6 percent in Latin America, and declined by 23 percent in Africa. <26>

This loss of economic stability and momentum, combined with political impotence in the face of US military hegemony, are of course root factors to be addressed in any serious effort to combat terrorism.



<19> Yergin, The Prize, 538-39.

<20> David E. Spiro, The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets (Ithaca: Cornell UP, 1999), x: "In 1974 [Treasury Secretary William] Simon negotiated a secret deal so the Saudi central bank could buy U.S. Treasury securities outside of the normal auction. A few years later, Treasury Secretary Michael Blumenthal cut a secret deal with the Saudis so that OPEC would continue to price oil in dollars. These deals were secret because the United States had promised other industrialized democracies that it would not pursue such unilateral policies." Cf. 103-12.

<21> "So long as OPEC oil was priced in U.S. dollars, and so long as OPEC invested the dollars in U.S. government instruments, the U.S. government enjoyed a double loan. The first part of the loan was for oil. The government could print dollars to pay for oil, and the American economy did not have to produce goods and services in exchange for the oil until OPEC used the dollars for goods and services. Obviously, the strategy could not work if dollars were not a means of exchange for oil. The second part of the loan was from all other economies that had to pay dollars for oil but could not print currency. Those economies had to trade their goods and services for dollars in order to pay OPEC" (Spiro, Hidden Hand, 121).

<23> See also below. John Loftus and Mark Aarons (The Secret War Against the Jews (New York: St. Martin's Press, 1994), 343), who do not mention the two secret financial deals with the Saudis, offer a different and I think one-sided account of the sale of the F-15s; cf. Spiro, Hidden Hand, 123-24.

<23> Yergin, The Prize, 772.

<24> Cooley, Unholy Wars, 116-17.

<25> Jonathan Beaty and S.C. Gwynne, The Outlaw Bank: A Wild Ride into the Heart of BCCI (New York: Random House, 1993), 357.

<26> Greg Palast, The Best Democracy Money Can Buy (London: Pluto Press, 2002), 48. Palast supplies examples of how the IMF, created at Bretton Woods in 1944 to promote economic stabilization and growth, has since 1980 promoted the opposite by policies that contract economies to preserve debt payments. Cf. Nobel-winning economist Joseph Stiglitz, formerly of the World Bank, on the IMF response to the Asian crisis of 1997: "It went to the countries and told them to be more contractionary than they wanted, to increase interest rates enormously. It was just the opposite of the economic analysis that was the basis of the founding of the IMF. Why? In order to make sure that creditors got repaid" (Joseph Stiglitz [Interview with Lucy Komisar], Progressive [June 2000]: 34).