DUBAI, Sept 22: A lucrative opium business threatens economic stability in Afghanistan, the IMF warned on Monday, and poppy crops should be destroyed to keep the country from becoming a narco-state run by powerful drug traffickers.

In its first full review of Afghanistan’s economy in 12 years, the International Monetary Fund said opium, made from poppies grown on fertile lands in the south, made up 40 per cent to 50 per cent of the Afghan economy.

Violence in poppy-growing areas has surged recently, blamed by police on ousted Taliban rulers keen to keep a grip on a $2.5 billion export business.

“There will need to be considerable attention paid to this area,” Adam Bennett, the IMF’s mission chief for Afghanistan, told a news conference in Dubai on the fringes of the annual IMF-World Bank annual meetings.

Mr Bennett said he had not seen signs of donor fatigue with Afghanistan even though the world’s focus had turned to rebuilding Iraq.

“I think the international community remains fully engaged with Afghanistan and Afghanistan’s needs in the period ahead,” he said.

Afghanistan said on Sunday after a donors’ meeting here that it had won pledges of more cash. US Treasury Secretary John Snow said he had a “pretty good” chance of persuading countries to match a new $1.2 billion US pledge.

“Appropriate funding at this point gives the country a chance to go in a direction that uplifts prospects for the people or to descend into poverty, criminality and drugs,” Mr Snow told reporters after the conference.

BOOMING BUSINESS: A quarter-century of strife has turned opium production into one of the most viable economic activities in Afghanistan, and Mr Bennett said wiping out the drugs trade would need to be coupled with stepped-up development efforts.