WASHINGTON — Al-Qaeda is in its worst financial state in years, and its influence is waning because of a shortage of funds, the U.S. Treasury said on Oct. 12.

At the same time, the Taliban in Afghanistan and Pakistan is thriving on the proceeds from poppy harvests and the international drugs trade.

Treasury Department Assistant Secretary David Cohen said that in recent years the West had enjoyed success in cutting funding to Al-Qaeda. So far this year, he said, the organisation had made four “public appeals” for money, because the U.S. and its allies had singled out its biggest donors.

“We assess that Al-Qaeda is in its weakest financial condition in several years and, as a result, its influence is waning,” he said in a speech in Washington, adding that the shortage of funds was undermining recruitment and training.

Cutting funds to Al-Qaeda has been a pillar of counterterrorism policy since the bombing of the World Trade Centre in New York in Sept. 2001. That task, in relative terms, has been easier than defeating the ideology of extremist organisations. Osama bin Laden’s organisation received much of its funding from wealthy Islamist benefactors, through a network of accounts and front companies. Over the years, the West has managed to expose and close many of these channels.

Analysts warn, however, that attacks are not expensive. Experts believe the World Trade Centre event cost about $500,000 to plan and execute, the 2004 Madrid bombings $10,000, and the July 2005 London attacks just a few thousand pounds.

Cohen also warned Al-Qaeda still had multiple donors “ready, willing and able” to contribute and the network’s funding problems could quickly be reversed.

Cohen said the Taliban was in a much better financial position. Afghanistan’s booming drugs trade, fuelled by its massive poppy harvests, is a major source of funds. The Taliban also extorts money from poppy farmers and heroin traffickers and demands protection payments from Afghan businesses.

NATO Commander in Afghanistan U.S. Gen. Stanley McChrystal said the Taliban’s various sources of cash were a major factor in its increasingly lethal insurgency.

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