Afghans are growing more opium poppies than ever before and it is threatening to wipe out gains made to help the impoverished country improve health, education and governance, the US watchdog for spending in Afghanistan said on Tuesday.

John Sopko, the special inspector-general for Afghan reconstruction, told a House subcommittee that the narcotics trade is tainting the financial sector, stoking corruption, and helping Taliban insurgents and criminal networks. He said there already are signs that elements within the Afghan security forces are making arrangements with rural populations to permit opium poppy growing as a way to build local patronage networks.

"The expanding cultivation and trafficking of drugs is one of the most significant factors putting the entire US and international donor investment in the reconstruction of Afghanistan at risk," he said in prepared remarks.

"Meanwhile, the United States and other donor nations assisting Afghanistan have, by and large, made counter-narcotics programming a lower strategic priority at the same time that the 2014 drawdown of US and coalition forces increases the security risks in the country."

More production

The UN Office of Drugs and Crime said Afghanistan produced nearly $3 billion in opium plus its heroin and morphine derivatives last year - up from the $2 billion produced the year before.

From 2002 through March of this year, the US had provided more than $7 billion for counter-narcotics efforts and agriculture stabilization programs, an important component of the US strategy to curb opium poppy production.

That's jeopardizing US reconstruction programs at a time when the US military is withdrawing troops, which is making it more difficult for aid workers to visit rebuilding sites. "On my trips to Afghanistan in 2013 and earlier this year, no one at the (US) embassy could convincingly explain to me how the US government counter-narcotics efforts are making a meaningful impact on the narcotics trade or how they will have a significant impact after the US-led combat mission ends in December," Sopko said.

Sopko said his team plans to conduct a comprehensive audit to assess how US taxpayer money has been spent on programs to counter narcotics trafficking and whether it's been effective.

On his recent visits, he said, he spoke with Afghan officials about whether the country will become a successful modern state or an insurgent state.

"There is a third possibility," he said. "A narco-criminal state."

In the hearing, Congresswoman Ileana Ros-Lehtinen noted that in 2009, the US, along with other donor nations, pledged to provide 50 percent of developmental aid straight into the coffers of Afghan ministries. But that year, various oversight reports determined that some ministries were ill-equipped to receive the assistance because of a lack of adequate management or oversight. Still, "USAID apparently continued anyway, without regard to these warnings," she said.