that only 30% of the hawala market's overall transaction volume is directly linked to drugs. Analysis of data gathered in places like Herat was complicated by confirmed links between drug money and legitimate imports. The southern region (Helmand and Kandahar provinces) is also a key centre for money laundering in Afghanistan (about 60% of the funds are drug related and 80-90% of the hawala dealers in Kandahar [the former Taliban stronghold] and Helmand are involved in money transfers related to narcotics). Helmand has emerged as a key facilitator of the opium trade, both between provinces and exports, while overall estimates of the local hawala markets' drug-related component are of a similar order of magnitude to those in Kandahar. This finding adds weight to the notion that the major trading centers in these two neighboring provinces should be treated as essentially one market. Bearing this in mind, the study calculated that Helmand could account for roughly US$800 million of Afghanistan's drug-related hawala business and that Herat is the second largest contributor, with in the range of US$ 300-500 million of drug money laundered annually. Furthermore, Dubai appears to be a central clearing house for international hawala activities. In addition, various cities in Pakistan, notably Peshawar, Quetta, and Karachi, are major transaction centers. It appears that even in the case of drug shipments to Iran, payments for them come into Afghanistan from Pakistan ... the hawala system has been key to the deepening and widening of the "informal economy" in Afghanistan, where there is anonymity and the opportunity to launder money. Hawala, however, also contributes positively to the regional economy. It has been central to the survival of Afghanistan's financial system through war. According to Maimbo (2003), "integral to processes of early developmentand vital for the continued delivery of funds to the provinces." "The hawala system also plays an important role in currency exchange. It participates in the Central Bank's regular foreign currency auctions, and was instrumental in the successful introduction of a new currency for Afghanistan in 2002-2003." Possible effects on Iran There are claims and counterclaims that the US may have used groups involved in drug smuggling in an effort to destabilize Iran. Hard evidence is lacking. The group, "Jundullah", is made up of ethnic Baluchis, and is in the Baluchistan region of Pakistan, bordering Iran. It has taken responsibility for the deaths and kidnappings of more than a dozen