Despite over $7.6 billion in expenditures by the United States to prevent opium cultivation in Afghanistan, crop yields have risen to their highest levels during the harvest this year. Cultivation of the poppy is a “significant” source of revenue for local Taliban groups, according to the new report released by the UN Office on Drugs and Crime. An “unprecedented” 209,000 hectares was harvested this year, according to the report’s author, John Sopko, special inspector general for Afghan reconstruction. Afghanistan produces more than 80% of the world’s opium. The US Embassy in Kabul offered a rather lame response to the damning report, calling it “disappointing news,” and stating that the goal has been to help Afghans develop the ability to lead and manage a long-term counter-narcotics effort.

Financial estimates in the report reflect overall spending on these initiatives since 2002, and shows that initially there was a sharp decrease in poppy cultivation from 2007 to 2009 when the US increased troop presence to more than 50,000, and included counter narcotics operations as part of formal military operations. Poppy is favored over more traditional crop substitutes because of its price per kilo, and the fact that its economies of scale are far lower than wheat, barley, or cotton, the three cash crops that have been pushed by the US State Department as substitutes.

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News Briefs:

• The Ukrainian military used cluster bombs to attack rebel positions in Donetsk, Ukraine, killing several civilians in an act that appears to be a violation of the cease-fire signed over a month ago by Ukrainian President Petro O. Poroshenko. If substantiated, the use of cluster bombs in populated areas could provide ammunition for Russian President Vladimir Putin as he continues to label the Ukrainian military as a vengeful body acting punitively against its citizenry.

• Russia has curbed the flow of fruits and vegetables from Ukraine due to fears of the re-export of European goods. Russian consumer health agency Rosselkhoznadzor stated that the immediate ban of all Ukrainian produce will prevent “improper labeling” and obligate its Ukrainian counterpart to ensure that all goods leaving Ukraine are indeed Ukrainian. Ukraine currently exports more than 50% of its fruits to Russia, making economic fallout likely.

• British-Australian metals and mining giant Rio Tinto has increased pressure on the Mongolian government regarding a temporary impasse over negotiations of the firm’s $5.4b operation at the Oyu Tolgoi copper and gold mine. Negotiations over the mine’s status have gone on for 18 months, and given the mine’s size and potential importance to the Mongolian government, officials have balked at previous profit sharing proposals and insisted on favorable conditions for themselves.

• Kazakhstan recently announced it has no plans to devalue its currency even further due to the falling value of the ruble and the price of crude oil, its primary export. The 25% slide in value of crude since June are not “critical” to the tenge, and the Kazakh Central Bank chairman Kairat Kelimbetov said that “the corridor has enough margin of safety for us to stay in,” citing the February exchange rate correction inadvertently valued into the tenge all the changes that are currently being witnessed in the global economy.

• The Tajik government has set in motion plans to open the country to increased foreign direct investment through a conference designed to attract investors from all over the globe. The conference has already attracted the attendance of 600 individuals, and coincides with Tajikistan’s Central Bank being assigned its first S&P credit rating and Tajikistan’s massive state-owned aluminum company stating that it would consider being listed in the next few years. Conditions in Tajikistan are far from favorable for investors, though the country is rich in gold and silver, is a large producer of antimony, and has attracted foreign energy giants to search for natural gas near the Tajik-Afghan border.