Mark A. R. Kleiman’s Illicit Drugs and the Terrorist Threat: Causal Links and Implications for Domestic Drug Control Policy discusses the link between drug trafficking and terrorism:
The international traffic in illicit drugs contributes to terrorist risk through at least five mechanisms: supplying cash, creating chaos and instability, supporting corruption, providing ?cover? and sustaining common infrastructures for illicit activity, and competing for law enforcement and intelligence attention. Of these, cash and chaos are likely to be the two most important.
His discussion of that first mechanism, cash, provides some interesting numbers:
There is no consensus on the total amount of international financial flows associated with the illicit drug trade. A United Nations figure of $400 billion per year is often cited, and compared with world trade figures in various categories of licit goods (textiles, petroleum, and food, for example).In the single biggest drug market, that for cocaine, the United States is reported to consume about one-third of the world total in terms of bulk. Yet the dollar value of all U.S. illicit drug markets combined is less than $65 billion per year, according to a study by the Office of National Drug Control Policy.4 If the U.S. market is truly in the range of $65 billion, and the U.S. accounts for no less than one-third of the world total, then the actual amount is no more than half as great as the U.N. estimates, or about $200 billion. (That figure would be smaller than the licit retail market in alcohol or tobacco products.)
However, even that lower figure does not represent funds potentially available to fund terrorism. That $200 billion would, if accurate, represent the total value of all illicit drugs, priced at the retail level. The vast bulk of that retail value consists of the illicit earnings of traffickers within the country in which the drugs are sold, not the revenues available to producers and international traffickers.
[...]
However, even though only a tiny fraction of the world?s drug dealing revenues goes to benefit terrorist groups, that relatively small amount could still be a large fraction of the world?s terrorist revenues. Unfortunately, the amount of money required by terrorists to do enormous damage is relatively slight. The September attacks are variously estimated to have cost between $500,000 and $2 million to carry out.
Large-scale drug trafficking frequently involves corrupt contacts between traffickers and officials and can reduce the respect the public has for the agencies of government.
The Medellin Cartel in Colombia famously offered officials a choice of ?plata o plomo? (literally, ?silver or lead?): those who refused corrupt cash risked violence against themselves and their families.
The US does not import much heroin from Afghanistan:
The United States gets the bulk of its heroin from poppies grown in Colombia, a smaller amount from poppies grown in Southeast Asia, and relatively little from poppies grown in Southwest Asia, including Afghanistan. Most of the heroin produced from the Afghani poppy crop either stays in Asia or is trafficked into Europe. Thus in the period leading up to September 11, 2001, European heroin consumption potentially helped finance Al Qaeda activities, or helped support the Taliban regime which harbored Al Qaeda, but heroin consumption in the United States likely did not. U.S. heroin consumption may have contributed to the terrorist threat in Colombia, and perhaps in Mexico, but likely had very little impact on Afghanistan or its neighbors. (Unlike petroleum, for example, which is traded in world markets, so that increased demand or decreased supply anywhere tends to raise prices everywhere, the illicit trade in heroin tends to be compartmentalized, so that prices for poppy can be high in Colombia but low in Afghanistan, or vice versa.)
How effective is the War on Drugs?
Perhaps the greatest
surprise in the field of drug policy over the past generation has been the persistent failure of hard-drug prices to rise in the face of greatly expanded enforcement efforts. The scale of the drug enforcement enterprise, as measured by the number of traffickers in prison, has grown nearly 30-fold since 1980; even adjusting for the rise of heroin and cocaine volumes over that period, the increase in enforcement intensity
(the ratio of enforcement effort to the size of the underlying market) has been roughly five-fold. Yet cocaine and heroin prices have actually fallen, in inflation-adjusted dollars, by approximately 80% each, and remain near their lowest levels.