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Well
1. Drugs supporting terrorism: In economics, there is a whole class of unreported incomes, transactions, and careers defined as the black market. Those who participate in "illegal" careers are funded through currencies that are generally laundered through clandestine methods (think Arab currency markets based wholely on IOU type documents and word of mouth with no record keeping) and become hard to trace. A major source of income for terrorism is, sadly, drugs. That is not to say that it is the only source. But it is still a major one. Afghanistan under the Taliban did NOT curb or abolish drugs. That is a lie and to just assume that a theocracy is fully moral, is sad. The Taliban came to regulate drugs to capture the strongest income producing export that required little to no development or investment. One reason that the Islamic republic of Iran decided to help with the war against the Taliban regime (outside the Sunni vs Shiite conflict) was to rid Iran's border cities of huge drug problems arising from the Taliban's exports of poppy. The Taliban was fully fine with people outside of their country using drugs. If you want another example, we can look at Columbia. This country is incredibly more complicated than Afghanistan and I don't want to get into all the details, but the rebel FARC, which is considered a terrorist group by many, funds itself mainly through two methods. The first is kidnappings and the second (Which is the main one) is drug sales. Regardless of whether you consider the US an imperialist power which should have no presence within latin america, you cannot deny the brutality and the crimes of FARC which fit into the loosely defined "terrorist group" profile.
2. Conflict diamonds: First I would like to remind everyone how brutal the situation is in Sierra Leone...where an astoundingly large population of civilians are maimed for life in order to prevent their resistance (note they were not resisting yet). Diamonds can however be traced. The largest diamond company in the world (De Beers Group) could easily identify which diamonds are theirs since they include marks into the diamonds as you mentioned. However, you don't realize the role De Beers plays in the diamond market. It owns almost the entire market from the mines to the refiners, and is a virtual monopoly in the diamond industry. Whether it is to advocate social reforms or maintain its monopolistic role, De Beers keeps tight watch over its diamonds and is against conflict diamonds which are from mines outside its control and thus competing against its own. As for the funding that went through to other terrorist groups: illegal/conflict diamonds have been used for everything from terrorism to transferring of funds between mafias...not just terrorism, but definitely including terrorism.
I've included no analysis in this posting but hey, I have got to go to white castle and chow down before doing massive amounts of reading for the one class I managed to not show up to more than 2 times this quarter. blah.
-Rudey
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