THE POLITICAL ECONOMY OF DRUG TRAFFICKING INTRODUCTION 1. Pervasiveness of issue 2. Challenges for research 3. Categorizing “illicit drugs”— Marijuana Heroin Cocaine ATS/designer drugs 4. Note: Dangerous prescription drugs

READING Smith, Talons, ch. 14 DFC, Contemporary, chs. 2 and 9 (Mexico + Colombia)

THE GLOBAL MARKET: SOURCES OF SUPPLY 1. Worldwide flows, variations by drug Consumption around the world * 149-272 million users * 15-20 million “addicts” or problem users * $320 billion per year (est.)

Amphetamine Type Stimulants Global Production and Trafficking MDMA Amphetamine Type Stimulants This is a graphic depiction of the global situation and shows how drug production and trafficking have evolved since the mid 1990s to 2000 There has been a definite shift in cocaine production from Peru to Colombia Heroin production figures date to 2000 and show a huge increase in SWA. These numbers have changed for 2001as a result of the Taliban ban on opium cultivation -- current figures show a dramatic 98% drop in Afghani cultivation and SEA is now the primary producer. It remains to be seen what the future holds. Cocaine Heroin Potential Cocaine Production (mt)

* Values for Latin America are projected Sources of Heroin Metric Tons 5,106 5,082 5,000 4,452 4,263 4,068 3,671 3,441 3,389 3,302 1996 was barely 1% short of 1993 Record Cultivation 1997 is 6% short. 1,264 ONDCP/FEB02 * Values for Latin America are projected

Estimated Cocaine Flows ca. 2000 54 percent Mexico/Central Direct to U.S. 43 percent Caribbean Corridor 54 percent Mexico/Central American Corridor

Interdiction of Cocaine, 1999 75 METRIC TONS DETECTED DEPARTING FOR NON-US MARKETS Arrival Zone Seizures Transit Zone Seizures MEXICO / CENTRAL AMERICAN CORRIDOR -60 MT -37 MT 512 Metric Tons Depart South America for U.S. 54% 277 MT 382 MT Potentially Arrives in the U.S. 43% 220 MT CARIBBEAN CORRIDOR -14 MT -7 MT 3% 15 MT DIRECT TO CONTINENTAL U.S. -12 MT

Price structure of one kilo of pure cocaine, ca. 2000: Who Are the Winners…? Where are the profits? Price structure of one kilo of pure cocaine, ca. 2000: Coca leaf (e.g., farmgate in Peru) $ 300 Coca base (farmgate) 900 Cocaine hydrochloride (export/Colombia) 1,500 Cocaine hydrochloride (import/Miami) 15,000 Cocaine (67% pure/dealer U.S.) 40,000 Cocaine (67% pure (retail/U.S.) 150,000

DIMENSIONS OF U.S. DEMAND % Reporting Past Month Usage, 1985-2000 New survey series* Overall drug use remains level. The rate of any illicit drug use in the population aged 12 and older is statistically unchanged from the 6.4 percent reported in 1997, 6.2 percent in 1998, and 7.0 percent in 1999. Among those aged 12-17, current use of "any illicit drug" in 1999 shows a significant 21% decline from 1997. Among those aged 18-25, current use of "any illicit drug" in 1999 shows a significant 28% increase from 1997. *The survey methodology was changed in 1999. Estimates based on the new survey series are not comparable to previous years. Source: SAMHSA, National Household Survey on Drug Abuse.

U.S. DRUG USERS, 1990-2010 1990 = 13.5 million (6.7%)

Drug Use by Drug Type

Drug Abuse by Age Cohort Percent Reporting Past Month Use of any Illicit Drug Prime example of an aging cohort of drug users -- this group began use in 1970s. Source: 2000 National Household Survey on Drug Abuse

Drug Usage among Students, 2000 Percent Reporting Use of “Any Illicit Drug” Source: Monitoring the Future Study

Consumer Expenditures on Illicit Drugs, 2000 U.S. Users Spend $63.2 Billion Annually Billions of Dollars (Projections for 1999) Source: ONDCP Paper, What America’s Users Spend on Illegal Drugs

U.S. POLICY: THE DRUG WARS 1. Participants and processes 2. Strategic content: Goal: Reduce illegal drug use and availability Enforcement > education, treatment, thus 2:1 ratio in federal budget Supply control > demand reduction, thus interdiction and eradication Assumption: One policy fits all…. Incarceration as deterrent

Cocaine and Heroin Prices: 1981-2010

Reasons for Drug Arrests, 2000 Source: Uniform Crime Reports, FBI.

IMPLICATIONS FOR LATIN AMERICA 1. Economic costs and benefits 2. Violence (and “drug wars” in multiple forms) 3. Corruption 4. Growth in consumption 5. Threats to governability Challenges to sovereignty—e.g., invasion of Panama 1989 Process of “certification” (now modified)

Cultivation (Mexico): 2000-2009

QUESTIONS OF PUBLIC POLICY: WHAT ARE THE ALTERNATIVES? INTRODUCTION 1. What might be desirable? Or feasible? 2.    What are the prospects?  

ARE THERE ALTERNATIVES? 1. Continuation (or acceleration) of current policy:  ·        Increased budgets  ·        Establish coherence  ·        Long-term durability  

2.      Legalization: ·        Regulation, not legalization ·        Decriminalization? ·        Partial or complete?

3. Changing priorities: ·        Demand reduction > law enforcement ·        Law enforcement = more on money laundering, less on retail pushers ·        Focus on governability as key issue in Latin America  ·       Multilateral efforts against consumption and demand, rather than supply  ·       Terminate/ignore certification?  

ENLIGHTENMENT IN LATIN AMERICA! Marijuana personal use is decriminalized in : Argentina Brazil (depenalized) Colombia Costa Rica Mexico Peru Uruguay (now broadly legalized) Venezuela