1. REVISED SCHEDULE February 2: Drug Trafficking February 9: Migration February 16: Mexico’s War on Drugs March 02: War on Terror March 09: Obama and Latin America 1

2. PAPER ASSIGNMENT 2 Topic: Any subject related to U.S.-Latin American relations (whether or not covered in class)—proposed by student and approved by TA Examples: Sports (e.g. baseball), film (depictions of Latina women), music (lyrics, popularity of stars, etc.), advertising (Corona beer) In-class examples: Content of Latin American nationalism, impacts of drug war (e.g., Plan Colombia or Plan Mérida), reactions to 9/11, Bush/Obama relationship with Latin leaders, Hugo Chávez phenomenon, evaluations of NAFTA Length: 8-12 double-spaced pages (plus notes or bibliography) Due: Wednesday, March 2

3. FORMAT FOR PAPER 3 Introduce topic (and its importance) Present a central question Describe sources and methods (how will you answer your question?) Analyze information and data Conclusion: –Respond to your central question(s) –Suggest avenues for further research (optional)

4. 4 THE POLITICAL ECONOMY OF DRUG TRAFFICKING INTRODUCTION 1. Pervasiveness of issue 2. Typicality? Or an extreme case? 3. Categorizing “illicit drugs”— Marijuana Heroin Cocaine Designer drugs 4. Note: Dangerous prescription drugs

5. 5 READING Smith, Talons, ch. 8 [review] CR Selection 5: Astorga and Shirk, “Drug Trafficking Organizations and Counter-Drug Strategies” DFC, Contemporary, chs. 2 and 9 (Mexico + Colombia)

6. 6 OUTLINE The Global Market The Structure of Profits Patterns in U.S, Consumption U.S. Policy: The Drug Wars Implications for Latin America Drug Wars in Mexico Questions of Public Policy: What Are the Alternatives?

7. 7 THE GLOBAL MARKET: STRUCTURE AND SCALE 1.Worldwide flows, variations by drug 2.Consumption around the world 3. Roles for Latin America: the rise of “cartels” 4.The U.S. market: magnitudes, profits and costs

8. 8 Global Production and Trafficking Amphetamine Type Stimulants Cocaine MDMA Potential Cocaine Production (mt) Heroin

9. Sources of Heroin * Values for Latin America are projected 3,4413,389 3,671 3,302 4,068 5,106 5,000 4,452 4,263 5,082 1,264 Metric Tons ONDCP/FEB02

10. 10

11. 11 54 percent Mexico/Central American Corridor Estimated Cocaine Flows 43 percent Caribbean Corridor 3 percent Direct to U.S.

12. 12

13. 13 Perspectives on Cocaine U.S. Portion of Worldwide Consumption Declining 1990 = 400 MT 2000 = 300 MT Worldwide Consumption Increasing 1990 = 500 MT 2000 = 600 MT All coca grown in the Andean Region

14. 14

15. 15 Where are the profits? Price structure of one kilo of pure cocaine, mid-1990s: Coca leaf (e.g., farmgate in Peru) $ 370 Export of finished product (Colombia) $1,200 Import of finished product (Miami) $20,500 Wholesale by kilo (in Chicago) $31,000 Wholesale in one-ounce packets (Chicago) $62,000 Final retail value (Chicago) $ 148,000 Who Are the Winners…?

16. 16 Trends in Drug Consumption, 1985-2000 Percent Reporting Past Month Use of Any Illicit Drug Source: SAMHSA, National Household Survey on Drug Abuse. *The survey methodology was changed in 1999. Estimates based on the new survey series are not comparable to previous years. New survey series*

17. 17 Current Usage by Drug, 2000 (incl. crack) Past Month Users (in Millions) (any psychotherapeutic) Source: 2000 National Household Survey on Drug Abuse

18. U.S. DRUG USERS 2000= 14.0 million (6.3%) 2004= 19.1 million (7.9%) 2007= 19.9 million ( ̴ 8%) 18

19. 19 Marijuan a only Marijuana and some other drug Only a drug other than marijuana Percent Reporting Past Month Use of Illicit Drugs, 2000 Source: 2000 National Household Survey on Drug Abuse Usage of Marijuana

20. 20 Percent Reporting Past Month Use of an Illicit Drug Drug Abuse by Age Cohort Prime example of an aging cohort of drug users -- this group began use in 1970s. Source: 2000 National Household Survey on Drug Abuse

21. 21 Drug usage among High-School Seniors Percent Reporting Use of “Any Illicit Drug” Source: Monitoring the Future Study

22. 22 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

23. 23 Economic Costs of Drug Abuse Dollars, in Billions Source: Office of National Drug Control Policy, 2001.

24. 24 Calculation of Economic Costs of Drug Abuse (Billions of dollars) Source: Office of National Drug Control Policy, 2001.

25. 25 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…. Criteria for evaluation

26. 26 Federal Expenditures on Drug Control, 1980-2000 Dollars, in Billions FY 2003: President’s Request FY 2002: Enacted Level All Other Year: Actual Expenditures

27. 27 Composition of Federal Expenditures, 2000 Fiscal Year 1986 -2003 Dollars, in Billions

28. 28 Challenges to Interdiction 19902000 CHANGES IN THREAT World consumption dominated by US Transit movement via aircraft Cultivation primarily from Peru and Bolivia Increasing European consumption Transit movement via maritime vessels Cultivation primarily from Colombia TRANSIT ZONE SOURCE ZONE ARRIVAL ZONE 50% 3% direct 16% 21% 10% SOURCE: Annual Interagency Assessment of Cocaine Movement, April 2001 ONDCP/FEB02

29. 29 Interdiction of Cocaine, 1999 512 Metric Tons Depart South America for U.S. Arrival Zone Seizures Transit Zone Seizures MEXICO / CENTRAL AMERICAN CORRIDOR -60 MT-37 MT 3% 15 MT 43% 220 MT 54% 277 MT 75 METRIC TONS DETECTED DEPARTING FOR NON-US MARKETS -14 MT-7 MT -12 MT DIRECT TO CONTINENTAL U.S. CARIBBEAN CORRIDOR 382 MT Potentially Arrives in the U.S.

30. 30 U.S. Prison Population, 1985-2000 Source: Bureau of Justice Statistics, 2001 State Prisons 1,236,476 Local Jails 621,149 Federal Prisons 145,416 Number of Inmates, in Millions

31. 31 Imprisonment of Drug Offenders, 1980-2000 Source: Bureau of Justice Statistics 251,200 Drug Offenders in State Prisons in 1999 68,360 Drug Offenders in Federal Prison in 1999

32. 32 Reasons for Drug Arrests, 2000 Source: Uniform Crime Reports, FBI.

33. 33 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 6.Challenges to sovereignty—e.g., invasion of Panama 1989 7.Process of “certification” (now modified)

34. 34

35. 35

36. 36 QUESTIONS OF PUBLIC POLICY: WHAT ARE THE ALTERNATIVES? INTRODUCTION 1. What might be desirable? Or feasible? 2. What are the prospects?

37. 37 ARE THERE ALTERNATIVES? 1.Continuation (or acceleration) of current policy:  Increased budgets  Establish coherence  Long-term durability

38. 38 2. Legalization:  Regulation, not legalization  Decriminalization?  Partial or complete?

39. 39 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  What about certification?

40. 40 Availability of Treatment Percent of Population 12 or Older.

41. 41

42. 42

43. 43 Costs and Benefits of Drug Treatment Source: CSAT, National Evaluation Data Services Report

44. ENLIGHTENMENT IN LATIN AMERICA! Marijuana personal use is decriminalized in : –Argentina –Brazil (depenalized) –Colombia –Costa Rica –Mexico –Peru –Uruguay –Venezuela 44

45. 45 AND NOW, THE WAR ON TERRORISM…