BILL MOYERS: Hollywood last year gave us a record number of movies about war and terrorism but there's one film we'll see at the Oscar's this Sunday night that tells us more about the enemy we're fighting than it ever intended.

Charlie Wilson's War was described by its star, Tom Hanks, as a "serious comedy". It portrays a fun-and-freedom loving communist-loathing Texas Congressman, who, with the help of earmarks, slipped hundreds of millions of taxpayer dollars into a covert war against the Russian occupation of Afghanistan back in the 1980s.

While the movie has a happy Hollywood ending, the story wasn't over when the Afghans drove the Russians from their country. In 1988, CBS documented the real Congressman Wilson during a trip to Afghanistan where he was filmed presenting arms to the mujahideen. He even tried one on for size. Those mujahideen fighters did whip the Russians, thanks to the deadly weapons Wilson helped them acquire, especially stinger missiles that brought down Soviet helicopters. But in time those freedom fighters became the Al Qaeda and Taliban who ran Afghanistan as a theocracy and a training camp for Osama bin Laden's suicide bombers.

Now both the Taliban and Al Qaeda are back. And it's Americans, not Russians, they want to kill. The war is not going well for Americans and our NATO allies. This week was one of the deadliest yet. Suicide bombings in the country's largest cities — Kabul and Kandahar — killed over 130 Afghan civilians.

The attacks occurred soon after the frank assessment of an independent non-partisan study group that said, in its opening statement: "Make no mistake, NATO is not winning in Afghanistan." The report lays the blame for the lack of progress on "too few military forces and insufficient economic aid," and calls for "immediate action and attention in order to prevent a setback to regional and global security."

With conditions worsening, Secretary of State Condoleezza Rice dropped in for a surprise visit earlier this month and as usual offered a cheery diagnosis:

CONDOLEEZZA RICE: I think it is fair to say that if you look at the Afghanistan of 2001 and the Afghanistan of now there is a remarkable difference for the better.

BILL MOYERS: But the day before, her own State Department warned travelers against going to Afghanistan. With the growing power of the Taliban and Al Qaeda and widespread crime, violence is on the rise — an estimated 550 Afghan businessmen were kidnapped last year. President Bush is sending another 3200 marines to the country, with the first deployment this spring. And Secretary Robert Gates has been making the rounds in Europe pleading for NATO to send more combat troops to the international force. There were no takers. Gates had to admit:

ROBERT GATES: Many of them, I think, have a problem with our involvement in Iraq and project that to Afghanistan.

BILL MOYERS: Meanwhile, Afghanistan is back producing opium in a big way — the world's number one supplier of heroin, according to the United Nations. Half a million acres are dedicated to its poppy fields. With a cut of those profits reportedly going to the Taliban and other rebels, the chairman of the Joint Chiefs of Staff says the west is facing "a classic growing insurgency".

No one has watched events on the ground in Afghanistan more closely than the American Sarah Chayes, who was born in Washington D.C. She has lived in the former Taliban stronghold of Kandahar, near the southern border with Pakistan, since the weeks following 9/11. Back then, she was an NPR reporter covering the Taliban. But she soon left an award-winning career in journalism to live and work as a private citizen in Afghanistan.

For almost seven years she has been helping to rebuild that country's civil society. Frontline World followed Chayes as she negotiated with Afghan bureaucrats and warlords to literally rebuild a village. Chayes later organized the Arghand Cooperative to offer Afghans an alternative to working in the poppy trade. Composed of men and women, her coop produces skin-care products from local herbs and botanicals in the region around Khandahar, where she lives. Along the way, Chayes wrote The Punishment of Virtue, about the resurgence of the Taliban.

Welcome to the Journal.

SARAH CHAYES: Thanks so much for having me.

BILL MOYERS: Are there any good tidings from Kandahar, where you lived?

SARAH CHAYES: You know, there's a sort of litany that public officials, when they do want to put a happy face on things, always run through. Like, there are schools, and there are people in schools, and there are kids in school. That's true. The roads in town are paved. The road to Kabul is paved. But there's almost always like a flip side to these stories. It's great to have paved roads in town. But the road to Kabul, I can't drive it anymore. I could drive up to Kabul before it was paved because it was safe enough to drive up there. But now, you're going run into Taliban check-points in two or three provinces, between Kandahar and Kabul. So I can't drive that road.

BILL MOYERS: You're at risk there, right? Why do you keep going back?

SARAH CHAYES: I think it's really important. I think that where this world is going in the 21st century, is partly going be determined by what happens in Afghanistan. And I just can't imagine anything that would be more important to devote yourself to.

BILL MOYERS: Why is Afghanistan so important?

SARAH CHAYES: You know, there's a title of a book that's come into parlance now: Clash Of Civilizations. There are a lot of people, I think, both in the West and in the Muslim world, who believe in clash of civilizations. Who want to see the world as a place dominated by two irrevocably hostile blocs. I don't want to live in that kind of world. I think that we live in an interconnected world full of rich, flawed, varied civilizations that are inextricably intertwined. And so what I'm doing in Afghanistan is working for that intertwined world. Working —

BILL MOYERS: You're going to thread it.

SARAH CHAYES: Yeah.

BILL MOYERS: But, you know, some people do miss the Cold War. They miss that two superpowers —

SARAH CHAYES: In that regard, I would say that Osama bin Laden and certain members of our government are actually on the same team. Because they're working toward, they want to split the world apart, into two poles that are enemies. I'm on that other team.

BILL MOYERS: When you left National Public Radio back in 2002, didn't Karzai's brother ask you to join in helping to build a civil society?

SARAH CHAYES: Yeah. Well, it was his uncle first, who just popped this question. "Wouldn't you come back and help us." Like, how do you say no to that one? And then I did work with president Karzai's older brother, who had founded a non-profit organization called Afghans for a Civil Society.

BILL MOYERS: Oh, yeah. You were there for the fall of the Taliban.

SARAH CHAYES: Just after.

BILL MOYERS: Just after.

SARAH CHAYES: Yeah.

BILL MOYERS: Just after the fall of the Taliban. And now, six years later, they're back?

SARAH CHAYES: Yeah. I mean, you know, these are districts that are in the hands of the Taliban. There's a district I used to go to frequently. We would gather herbs for our essential oil distilling up there. And now there was a deal between the district chief, the government and the Taliban saying, "so long as you don't kill the police, we'll let you go wherever you want." Now couple of things have happened. One is people are just so disaffected with the government that we put in power.

BILL MOYERS: Ordinary people.

SARAH CHAYES: Ordinary people.

BILL MOYERS: Disaffected?

SARAH CHAYES: Yeah. Their government is shaking them down. I have people telling me, "We get shaken down by the government in the daytime, and shaken down by the Taliban at night. What are we supposed to do?"

BILL MOYERS: This is the Karzai government.

SARAH CHAYES: That's correct.

BILL MOYERS: This is the government the United States put in power.

SARAH CHAYES: That's correct. It's basically a criminal enterprise. And we haven't really asked it for any accounts in any serious way. And that's where the average person in Kandahar is totally perplexed. They assume that this degree of corruption, which is everywhere. You hear about it in the police department. It's not just the police department, it's in customs. It's in any adminis — you have, you want to get a driver's license, you have to fork over money.

Teachers. Yeah, kids are in schools. Teachers aren't in schools. Because their salary is $50 a month. And so they can't afford to teach. They need to do something else. In order to make enough money, they'll teach in a private school. Or they'll raid the international development assistance that's provided to students through the schools. For example, you'll have — let's say each student is supposed to get five kilos of rice. The principal of the school is going to skim off one of those kilos and then sell. So that's 2,000 kilos he gets, if there's 2,000 kids in school. Then he sells that on the market.

BILL MOYERS: Right.

SARAH CHAYES: And then he distributes, you know, some of it to teachers.

BILL MOYERS: Does the government look the other way? Or is the government participating in it?

SARAH CHAYES: Well, every government official that I know is participating. So — with the exception of President Karzai himself, personally. How can he possibly not know if I know? But it's not just them, what about us? We put — us, the international community — we put these people into power. They wouldn't last a day if we weren't backing them up and propping them up in a way. So my question is, why is it that we don't begin putting some pressure on them to treat their citizens with common decency?

BILL MOYERS: What is life like under this kind of circumstance for ordinary people?

SARAH CHAYES: Well, in our case, for example, we import two products to make our soap. Most of our ingredients are local. But we import coconut oil and palm oil. So I know the cross border tribes. I can run that stuff across the border.

BILL MOYERS: This is the Pakistan border.

SARAH CHAYES: Correct.

BILL MOYERS: Yes.

SARAH CHAYES: Any time I want to. I said, "No, I'm not going do that. I don't want to pay customs, you know." So we deliver the oil to the customs. And then, there's this whole rigmarole about how we have to have this agent who's going to — you know, he's going get our stuff out of customs. And we're going have to pay him. There's no list that says, "this much of the truckload is your goods, and, therefore, you owe this much customs on these goods." You just get a bill from this guy. Which is astronomical. He's going to kick back half of that to the customs agents. And if you refuse to go that route, then all of a sudden, your stuff is held up, and it needs to get sent to Kabul to be tested for health reasons and all this stuff.

BILL MOYERS: Are the basic needs of ordinary people being met?

SARAH CHAYES: Well, currently, there's enormous inflation. The price of wheat has doubled. Now this is a global problem. But the price of wheat has doubled in about the last six months. And that means that a government salary, which is at, let's say, $50 a month. That buys you not one sack of wheat. And an extended family is going eat three sacks of wheat in a month. So that means you've got a whole system that obliges people to be corrupt.

BILL MOYERS: But as I listen to you, I keep thinking, we've given — the United States and the international community — has given over a billion dollars to the government of Afghanistan. What's happened to it?

SARAH CHAYES: Well, for example we have one machine that really needs decent electricity.

BILL MOYERS: In your co-op?

SARAH CHAYES: In my co-op. We're getting three, four hours of electricity every three days. It'll come on any time. You don't know when it's going come on. So it'll come on at 1:30 in the morning, and the guys stay the night on rotation. So whoever the poor fellow is who had to spend the night that night, it's like, I'm knocking on the door, and it's like, we have to get up because there's electricity. So then we'll run the machine until 6:00 in the morning when the electricity ends.

Now, okay, they're working on it, but it's six years after the fall of the Taliban. These are the things that people are wondering. If we're not there to provide reliable infrastructure, there's another real issue which is employment. And this is a kind of economic ideological problem. That when we talk about development aid, we talk about public facilities. And it's sort of against our religion to think about building a factory that would actually employ people. But Afghans don't understand that. They say, "Why aren't you people building any factories?" That's why I made my little soap factories. Because so many people were saying, "what are you foreigners doing here, if you're not employing people, getting people off the street?"

BILL MOYERS: So what —

SARAH CHAYES: So, we're not doing those things. And we're not providing a government that they can you know, feel any pride in. So that's where you go starting to hear people say, "what are you people doing for us."

BILL MOYERS: So, put on your old reporters hat.

SARAH CHAYES: Right.

BILL MOYERS: Follow the money. Where has that billion dollars gone that we have been providing?

SARAH CHAYES: You know, you can drive around the streets of Kandahar. You can drive around the streets of Kabul, and you see some massive buildings. Massive buildings. You see the price of property in Kandahar is probably close to the price of property in New York City.

BILL MOYERS: So who's living in those buildings? Who's using those buildings?

SARAH CHAYES: Government officials and drug traffickers. So it's either the opium money, or it's the development money. And we're not following that money trail. The same problem in Iraq. I mean, there's just millions of dollars that are kind of leaking out of the system.

BILL MOYERS: So, has this become an opium economy?

SARAH CHAYES: Definitely, it's an opium economy. And it's totally integrated into the economy. It's a normal aspect of the economy. And you can feel it. For example, in opium harvesting season, we needed one of our herbs. We needed somebody to harvest herbs up in the hills. We couldn't get anybody because there were, you know, buses at the — Helmand is the province right next door to us where most of the opium is growing. And there would be, you know, from the Helmand bus depot, they would just drive people straight out into the fields. Because, and the price of labor was going up. Normally, labor is — unskilled labor is $4 a day. It was $20 to $25 a day in opium harvesting season. It totally absorbs all of the available manpower. Now, the cliché that I don't subscribe to is that the Taliban are running the opium business.

BILL MOYERS: Because that's what we hear.

SARAH CHAYES: Yes. They're not.

BILL MOYERS: That's what's said official.

SARAH CHAYES: No.

BILL MOYERS: You don't think they are?

SARAH CHAYES: No, no, of course not. It's a business. It's businessmen.

BILL MOYERS: Criminal gains.

SARAH CHAYES: They're just businessmen. They happen to traffic opium rather than trafficking, you know, cars, or trafficking televisions. They're businessmen who buy and sell opium. And it's a slightly complicated buying and selling. But, in fact, they've got some really excellent business practices. Like they provide credit to farmers.

So, for example, one of the reasons that so many people grow opium is, there is no available access to credit. Ordinary credit. Not just business credit. But like, I mean, I suspect most of the people listening to us have a credit card in their pocket. Afghans need credit, just as much as we do. They can't get it. And so, they borrow money. They need to marry off their sons, for example. It's going cost them $5,000 or $10,000. They have to pay a bride price. They have to have a feast for the entire village. They have to — you know, where are they going get that money? So they turn to the opium trafficker, who lends them money. And he demands repayment in opium.

BILL MOYERS: So what happens if the American ambassador there, who's a big advocate of aerial spraying to destroy the poppy fields. What happens if he succeeds? What happens if the United States government sprays all the poppy plants and kills them, as happened in Colombia. What do the farmers do?

SARAH CHAYES: They join the Taliban. I mean, it's the biggest gift we could possibly do for the insurgency. What else would they do? They're furious. Their livelihood is taken away. Their children might be poisoned. Or they might think their children are poisoned. They join the Taliban. They take revenge.

BILL MOYERS: So if people were not growing poppies, what would they be growing?

SARAH CHAYES: What exists down there is very valuable crops. Almonds, apricots. It's fruit crops mostly. To me, the way to attack opium is to compete with it. Like let's make it possible to make a living and not — you don't have to import some exotic new plant. They've got almonds, they've got apricots, they've got pomegranates. They've got cumin, they've got anise seed. Wild pistachios. We're putting all this stuff in our soap.

Why isn't there a fruit juice factory in Kandahar? It's the pomegranate capital of the world. You know, everyone's talking about the antioxidant qualities of pomegranates. That it's the Garden of Eden of pomegranates down there. And what's amazing is, with all this money that you mentioned being spent over there, you can't get any money to do stuff like that.

BILL MOYERS: We've also given a lot of money to Pakistan, across the border.

SARAH CHAYES: Right. Correct.

BILL MOYERS: To help fight the insurgents, right? What's happening to that money?

SARAH CHAYES: Well, we're paying a billion dollars a year to Pakistan, which is orchestrating the Taliban insurgency. So, it's actually US-taxpayer money that is paying for the insurgents, who are then killing, at the moment, Canadian troops. Now if I were the government of Germany or France, I'd have a hard time putting my troops in that kind of equation. I would demand from Washington, that Washington require a lot different behavior from Pakistan.

BILL MOYERS: But the money's supposed to be to stop the Taliban in Afghanistan.

SARAH CHAYES: Has anybody done very strict accounting on where that money is going? I suspect that if you start looking at some of the receipts, you'll find that there's money missing. I mean, I find it really amazing that, for example, recently, there was a cross border raid that killed an Al Qaeda commander named Al-Libi in Beluchistan province of Pakistan. Now, the entire Taliban top command, or at least the top command of the part that's operating in the south, is based on Beluchistan province. People know exactly where they are. Why have we never required those guys heads from Islamabad? Or why have we not considered taking them out ourselves? It's been very clear to me, watching since 2002, that Pakistan has been buying us off, by a well-timed delivery of an Al Qaeda operative, which has then caused us to look the other way about the Taliban.

BILL MOYERS: Isn't it because we were so concerned — the government was so concerned with fighting the terrorist, that we made this alliance with Pakistan in order to try to find Osama bin Laden, and to prevent the spread of terrorism.

SARAH CHAYES: Correct. And we made an alliance with these thugs that we then placed into positions of power. It's like a western movie. You know, you've got a posse. You're going go out after the outlaws, so you gather together a posse and it's usually a posse of criminals, right? But in a western movie, you don't then put the posse on the city council. You know.

BILL MOYERS: So who is the sheriff?

SARAH CHAYES: We're the sheriff.

BILL MOYERS: We are?

SARAH CHAYES: In this particular metaphor, we're the sheriff, right? We're going go out after the outlaw, Osama bin Laden. We gather this posse of Afghan criminals to gallop off with us. And then we put them in positions of the governor. We make them into the governor, the mayor, the, you know. And we don't ask them anything about how they're governing. We don't demand — all we say is, we have to support the Afghan government. We have to support the Afghan government. And so we've fed them money, we've fed them arms, and then we say to the people, "okay, you're supposed to hold your government accountable." They're looking at these thugs with the whole power of the entire world, is what it looks like to them, behind them. And the Afghan people say, "you want us to hold them accountable?" So this, I think, is really the root of the problem.

BILL MOYERS: Why is the southern part of Afghanistan so important to us?

SARAH CHAYES: It's kind of like the marrow of the country's bones. Afghanistan was founded in Kandahar. Later the capital was moved to Kabul. Kandahar was really the capital, the Taliban's capital. It's also the part of the country that the Pakistani government has been able to control most successfully by proxy. So, this is why 99 percent of the people in Kandahar believe that we are allied with the Taliban. Everybody thinks that America is allied with the Taliban.

BILL MOYERS: Because we're supporting Pakistan?

SARAH CHAYES: That's right. That's right.

BILL MOYERS: So what's our bind in southern Afghanistan?

SARAH CHAYES: I think there are two binds. One is our relationship with Pakistan, which is a contradictory one. And the other is our unwillingness to hold Afghan public officials to any standard of decency in government. We keep hearing in the west about the democratically-elected Afghan government. And, oh, no, we can't get in there and interfere with any of these people, because they're the government of a sovereign country.

Well, you could have fooled the Afghans. The Afghans — the only person who's really elected, who has any power, is president Karzai. But every other government official that Afghans interact with on a daily basis, they didn't elect. And they don't have any recourse. They've got no way of lodging a complaint against this person. Or nobody who can put any leverage on them. And that's the other bind. We're only fooling ourselves when we talk about this democratically-elected Afghan government.

BILL MOYERS: And yet you're still there trying to make soap.

SARAH CHAYES: Yeah.

BILL MOYERS: Yeah. How's the co-op doing?

SARAH CHAYES: The co-op is doing great. It's doing incredible. We are flooded with demand. We can't produce up to the demand.

BILL MOYERS: For the soap you make.

SARAH CHAYES: For the soap, which we export to the U.S. and Canada. And my folks are getting more and more proud about the job that they're doing. They're seeing this as a vessel that can carry them across these troubled waters to some kind of future. But we're in an atmosphere of war. Three of my guys, I had to move them into town, because they're at too much risk in their villages.

BILL MOYERS: In their what?

SARAH CHAYES: In their villages. One of them was laid-in-wait for by Taliban last week.

BILL MOYERS: Are they tempted to join the Taliban?

SARAH CHAYES: No. But, I did ask one of them — one of my guys has an orchard. His sharecroppers were killed in one of these drive-by incidents. There was an improvised bomb that hit a Canadian armed vehicle. The scared Canadian soldiers fired. Killed a sharecropper and his 7-year old son. The 12-year old son survived. We started talking about this in the cooperative. And I asked my other guys, "you know, well, if that happened to you, if your brother, for example, got killed in one of these things, what would you do?" One of them said, "I would resign on the spot, and I'd pick up my gun and start shooting Canadians." Then I said, "what if it was the Taliban who killed your brother?" And he said the same thing.

So this is another way that I can see this whole thing coming apart. It's a kind of privatization. You know. You've got people now with blood feud against NATO troops because of things like, you know, civilian casualties. These are people who need — it's blood debt. They need to recoup that debt. And they're not going to be persuaded out of that.

BILL MOYERS: There's a thin line. As I listen to you, there's a thin line we sometimes walk, we human beings, between hope and folly.

SARAH CHAYES: Hmm.

BILL MOYERS: Are you very close to that line?

SARAH CHAYES: I don't think that hope is relevant. I think determination is all that counts. You just have to try. It doesn't matter if you hope you're going succeed or not. You have to keep trying.

BILL MOYERS: Sarah Chayes, good to see you.