Latin America: A toxic trade
By John Paul Rathbone and Adam Thomson
Latin America: While many of the region’s economies are booming, the battle against illegal drugs cartels is placing severe strain on resources and institutions, write John Paul Rathbone and Adam Thomson
Financial Times
http://www.ft.com/intl/cms/s/0/fd055994-ca8f-11e0-94d0-00144feabdc0.html#axzz1VZc5C6sJ
Amid the dizzying rise in commodities prices of the past decade, there are two notable exceptions: heroin and cocaine.
Both products have defied inflation in ways only computer microprocessors can match: narcotics are cheaper in real terms than they were 20 years ago.
This is just one illustration of a global failure to restrict the supply of illegal drugs. Though the fight has cost billions of dollars and thousands of lives, the trade – and its effects on those who take the products – has barely been dented. Production has increased, and global consumption with it. Of an estimated 272m users of illegal drugs worldwide, about 250,000 consumers lose their lives every year.
America remains the world’s largest drug market, and Europe is catching up fast. It is increasingly accepted that the prohibition policy known as the war on drugs launched 40 years ago by US president Richard Nixon “has failed” – as a recent report by the Global Commission on Drug Policy (endorsed by three former Latin American presidents, a former UN chief and a former US Federal Reserve head) bluntly put it.
This is prompting hand-wringing in Washington and other western capitals. But in Latin America, the biggest production and trading centre, the consequences of this failure continue to mount in ways barely appreciated elsewhere.
About 40,000 people have been killed in Mexico, mostly by cartels, since president Felipe Calderón launched an assault on organised drug crime four and a half years ago. In Central America levels of violence, by some estimates, are worse than in Afghanistan or Iraq.
Social and political peace are under threat. “A drug-trafficking tsunami has befallen the region,” says Kevin Casas-Zamora, a former vice-president of Costa Rica and now an analyst at Brookings, a Washington-based think-tank. General Douglas Fraser, head of US Southern Command, has called organised crime fuelled by drug trafficking Central America’s gravest threat.
Few suggest the region is about to become a collection of narco-states where governments are usurped by cartels, though that must be a risk for Guatemala, Honduras and El Salvador, the worst afflicted Central American countries. Most of the economies of a continent once associated with sovereign default and hyper-inflation are booming. While developed countries are mired in high borrowings and slow growth, Latin America has become a motor of the world economy better known for its booming economies than the cocaine trade.
Even so, most Latin American democracies are young. Mexico, Latin America’s second biggest economy, made its democratic transition just 10 years ago; Brazil, the biggest, barely 25. This makes such nations especially vulnerable to corruption and violence.
At least the days when the US “certified” countries on the basis of their ability to curb drug production are gone. Marijuana is now California’s largest cash crop, with estimated sales of $14bn a year. Most of the 10,000 illegal methamphetamine laboratories seized worldwide in 2009 were also in the US.
Even so, the west continues to impose considerable pressure on the region. Latin Americans have compelling reasons of their own to strengthen the rule of law. The economic and political benefits “would be huge”, says Agustin Carstens, head of Mexico’s central bank. The World Bank estimates that crime and violence cost Central America 8 per cent of its gross domestic product.
But many in the region have grown weary of the traditional approach, which focuses on criminalisation and repression but has little to show for it. Indeed, local drug consumption is rising; Latin American cocaine use is now almost equal to European levels, although still half the US rate.
For one, the intensity of the violence that always shadows the trade and attempts to curb it is grotesque: beheading, dismembering and the random slaughter of innocents. El Salvador, the region’s bloodiest country, suffered 71 homicides per 100,000 in 2010, according to national statistics; Brazil, 25. By comparison, the US homicide rate was less than six; Europe less than two.
Second, fighting traffickers puts a strain on countries lacking resources the developed world takes for granted. The continent remains one of the world’s most unequal regions. Even in Mexico, a member of the Organisation for Economic Co-operation and Development, the club of rich nations, the government defines its poverty rate at 46 per cent.
Third, it strains law enforcement institutions beyond their ability to cope. Mexico’s police service has been effectively balkanised by the constitution so that there are separate forces for the country’s 32 states, and for each of its 2,300 municipalities. In some Central American forces, officers have to buy bullets out of their own pockets.
Many institutions in wealthier nations would struggle when pitted against a highly sophisticated and ruthless transnational industry that, according to UN estimates, generates $85bn of profits annually from cocaine alone – equivalent to six times Coca-Cola’s pre-tax earnings last year.
“Fighting corruption and drugs is akin to using an Indian rubber eraser,” says Malcolm Deas of Oxford university, a historian of Colombia who has advised the country’s presidents. “The eraser always gets dirty, and some of it rubs off.”
Worldwide, recognition is dawning that the prohibitionist policies of the past century have not worked – and, as long as the drugs people want to consume are illegal and therefore supplied by criminal entrepreneurs, they are unlikely to work.
Even the presence of 100,000 of the best-trained soldiers with the most sophisticated weapons has done little to help staunch the flow of opiates from Afghanistan, which accounts for about two-thirds of global heroin production. Bad weather and plant disease did more to reduce supplies last year than any efforts by Nato-led troops or Afghan police.
As for Latin America, the only success story so far is Colombia, and only when judged by falling homicide rates rather than the export of illegal drugs. Furthermore, Bogotá’s success was thanks to conditions unrepeatable elsewhere.
First, there was a large flow of funds from the US. The $6bn spent on the ongoing Plan Colombia anti-narcotics and insurgency aid programme amounts to about 6 per cent of Colombia’s GDP for 2000 (the year the scheme began). By contrast, America’s equivalent initiative in Mexico is worth $1.4bn, less than 0.2 per cent of Mexico’s GDP for 2010.
Second, in the past 20 years Bogotá has made a sustained and near-superhuman effort at the cost of the lives of high numbers of police officers and judges. It has benefited from having a unified police force when it began to tackle seriously the problem of organised crime – something lacking in many other countries. “If your police forces are scattered, the narcos simply pick you off,” points out General Oscar Naranjo, head of Colombia’s police.
Third, the US and Europe provided on-the-ground training and intelligence in Colombia, which would be unworkable in most of Latin America. When Alvaro Uribe, then Colombia’s president, agreed in 2009 to let the US military use the country’s air bases to help local forces hunt down traffickers, it triggered protests across the region about “Yanqui” imperialism. Mexico’s constitution prohibits foreign troops from operating in the country, although a handful of retired US army personnel have recently been deployed there to get round such laws, according to The New York Times.
Finally, even when a crackdown is successful it simply pushes the mayhem into other countries. “The more success we have with interdiction, the more organised crime goes elsewhere,” says Laura Chinchilla, president of Costa Rica.
More and more people, and not just libertarians and hippies, are calling for a radical rethink of drug policy. The US, for example, was able to ignore the worst effects of its problem for many years. In practice the attitude was that, so long as there were not bombs going off or bullets flying in Washington, New York or Los Angeles, the violence did not matter. But in a more globalised world, and with bullets being sprayed around in neighbouring Mexico, Washington increasingly finds itself on the back foot, and confronting the possibility of violence spilling over the border.
What action it should take is unclear. Devoting more money to the problem is hardly likely, given the state of US finances. Drug use prevention campaigns also have a poor record, despite persistently high expectations. They are “cost-effective but not very effective”, points out UCLA professor Mark Kleiman, author of the recently published Drugs and Drug Policy: What Everyone Needs to Know. The legalisation debate is bogged down by legitimate fears about the risk of increased addiction rates; it will take years of study before this is better understood.
One promising, and cheap, alternative would be to slow the flow of arms south from the US. Colombian president Juan Manuel Santos recently lamented the fact that disassembled hand guns can be dispatched by Federal Express to his country, where they are pieced back together. In Mexico, as much as 70 per cent of guns seized come from America.
Yet this debate never gets off the ground because of the sensitivity of the issue for many Americans who assert their constitutional right to bear arms. As President Calderón said on a March visit to Washington: “I respect the Second Amendment, but we are requesting: don’t sell weapons to Mexican criminals.”
Some in the region believe that, while they take steps to deal with the problem, the west appears less willing to make sacrifices. Mexico, for example, has embarked on police reforms that will require constitutional change to come into effect, while a US ban on domestic sales of semi-automatic rifles that expired in 2004 is yet to be reinstated. Many believe the west has also failed to tackle money laundering. As Carlos Slim, the Mexican telecoms magnate who is the world’s richest man, has observed: “It is unfair that the drug-producing countries get to keep all the problems, and the consumer nations all of the profits”.
There is no silver bullet that can solve the drugs problem. But many in the region feel that the longer western consumer countries fail to take a meaningful role in reducing the extreme violence associated with attempts to curb their citizens’ desire to take illicit drugs, the more it will become apparent that they have blood on their hands. Security forces and traffickers have become embroiled in a kind of “arms race”, as the GCDP report put it. “Break the taboo on debate and reform. The time for action is now.”
By John Paul Rathbone and Adam Thomson
Latin America: While many of the region’s economies are booming, the battle against illegal drugs cartels is placing severe strain on resources and institutions, write John Paul Rathbone and Adam Thomson
Financial Times
http://www.ft.com/intl/cms/s/0/fd055994-ca8f-11e0-94d0-00144feabdc0.html#axzz1VZc5C6sJ
Amid the dizzying rise in commodities prices of the past decade, there are two notable exceptions: heroin and cocaine.
Both products have defied inflation in ways only computer microprocessors can match: narcotics are cheaper in real terms than they were 20 years ago.
This is just one illustration of a global failure to restrict the supply of illegal drugs. Though the fight has cost billions of dollars and thousands of lives, the trade – and its effects on those who take the products – has barely been dented. Production has increased, and global consumption with it. Of an estimated 272m users of illegal drugs worldwide, about 250,000 consumers lose their lives every year.
America remains the world’s largest drug market, and Europe is catching up fast. It is increasingly accepted that the prohibition policy known as the war on drugs launched 40 years ago by US president Richard Nixon “has failed” – as a recent report by the Global Commission on Drug Policy (endorsed by three former Latin American presidents, a former UN chief and a former US Federal Reserve head) bluntly put it.
This is prompting hand-wringing in Washington and other western capitals. But in Latin America, the biggest production and trading centre, the consequences of this failure continue to mount in ways barely appreciated elsewhere.
About 40,000 people have been killed in Mexico, mostly by cartels, since president Felipe Calderón launched an assault on organised drug crime four and a half years ago. In Central America levels of violence, by some estimates, are worse than in Afghanistan or Iraq.
Social and political peace are under threat. “A drug-trafficking tsunami has befallen the region,” says Kevin Casas-Zamora, a former vice-president of Costa Rica and now an analyst at Brookings, a Washington-based think-tank. General Douglas Fraser, head of US Southern Command, has called organised crime fuelled by drug trafficking Central America’s gravest threat.
Few suggest the region is about to become a collection of narco-states where governments are usurped by cartels, though that must be a risk for Guatemala, Honduras and El Salvador, the worst afflicted Central American countries. Most of the economies of a continent once associated with sovereign default and hyper-inflation are booming. While developed countries are mired in high borrowings and slow growth, Latin America has become a motor of the world economy better known for its booming economies than the cocaine trade.
Even so, most Latin American democracies are young. Mexico, Latin America’s second biggest economy, made its democratic transition just 10 years ago; Brazil, the biggest, barely 25. This makes such nations especially vulnerable to corruption and violence.
At least the days when the US “certified” countries on the basis of their ability to curb drug production are gone. Marijuana is now California’s largest cash crop, with estimated sales of $14bn a year. Most of the 10,000 illegal methamphetamine laboratories seized worldwide in 2009 were also in the US.
Even so, the west continues to impose considerable pressure on the region. Latin Americans have compelling reasons of their own to strengthen the rule of law. The economic and political benefits “would be huge”, says Agustin Carstens, head of Mexico’s central bank. The World Bank estimates that crime and violence cost Central America 8 per cent of its gross domestic product.
But many in the region have grown weary of the traditional approach, which focuses on criminalisation and repression but has little to show for it. Indeed, local drug consumption is rising; Latin American cocaine use is now almost equal to European levels, although still half the US rate.
For one, the intensity of the violence that always shadows the trade and attempts to curb it is grotesque: beheading, dismembering and the random slaughter of innocents. El Salvador, the region’s bloodiest country, suffered 71 homicides per 100,000 in 2010, according to national statistics; Brazil, 25. By comparison, the US homicide rate was less than six; Europe less than two.
Second, fighting traffickers puts a strain on countries lacking resources the developed world takes for granted. The continent remains one of the world’s most unequal regions. Even in Mexico, a member of the Organisation for Economic Co-operation and Development, the club of rich nations, the government defines its poverty rate at 46 per cent.
Third, it strains law enforcement institutions beyond their ability to cope. Mexico’s police service has been effectively balkanised by the constitution so that there are separate forces for the country’s 32 states, and for each of its 2,300 municipalities. In some Central American forces, officers have to buy bullets out of their own pockets.
Many institutions in wealthier nations would struggle when pitted against a highly sophisticated and ruthless transnational industry that, according to UN estimates, generates $85bn of profits annually from cocaine alone – equivalent to six times Coca-Cola’s pre-tax earnings last year.
“Fighting corruption and drugs is akin to using an Indian rubber eraser,” says Malcolm Deas of Oxford university, a historian of Colombia who has advised the country’s presidents. “The eraser always gets dirty, and some of it rubs off.”
Worldwide, recognition is dawning that the prohibitionist policies of the past century have not worked – and, as long as the drugs people want to consume are illegal and therefore supplied by criminal entrepreneurs, they are unlikely to work.
Even the presence of 100,000 of the best-trained soldiers with the most sophisticated weapons has done little to help staunch the flow of opiates from Afghanistan, which accounts for about two-thirds of global heroin production. Bad weather and plant disease did more to reduce supplies last year than any efforts by Nato-led troops or Afghan police.
As for Latin America, the only success story so far is Colombia, and only when judged by falling homicide rates rather than the export of illegal drugs. Furthermore, Bogotá’s success was thanks to conditions unrepeatable elsewhere.
First, there was a large flow of funds from the US. The $6bn spent on the ongoing Plan Colombia anti-narcotics and insurgency aid programme amounts to about 6 per cent of Colombia’s GDP for 2000 (the year the scheme began). By contrast, America’s equivalent initiative in Mexico is worth $1.4bn, less than 0.2 per cent of Mexico’s GDP for 2010.
Second, in the past 20 years Bogotá has made a sustained and near-superhuman effort at the cost of the lives of high numbers of police officers and judges. It has benefited from having a unified police force when it began to tackle seriously the problem of organised crime – something lacking in many other countries. “If your police forces are scattered, the narcos simply pick you off,” points out General Oscar Naranjo, head of Colombia’s police.
Third, the US and Europe provided on-the-ground training and intelligence in Colombia, which would be unworkable in most of Latin America. When Alvaro Uribe, then Colombia’s president, agreed in 2009 to let the US military use the country’s air bases to help local forces hunt down traffickers, it triggered protests across the region about “Yanqui” imperialism. Mexico’s constitution prohibits foreign troops from operating in the country, although a handful of retired US army personnel have recently been deployed there to get round such laws, according to The New York Times.
Finally, even when a crackdown is successful it simply pushes the mayhem into other countries. “The more success we have with interdiction, the more organised crime goes elsewhere,” says Laura Chinchilla, president of Costa Rica.
More and more people, and not just libertarians and hippies, are calling for a radical rethink of drug policy. The US, for example, was able to ignore the worst effects of its problem for many years. In practice the attitude was that, so long as there were not bombs going off or bullets flying in Washington, New York or Los Angeles, the violence did not matter. But in a more globalised world, and with bullets being sprayed around in neighbouring Mexico, Washington increasingly finds itself on the back foot, and confronting the possibility of violence spilling over the border.
What action it should take is unclear. Devoting more money to the problem is hardly likely, given the state of US finances. Drug use prevention campaigns also have a poor record, despite persistently high expectations. They are “cost-effective but not very effective”, points out UCLA professor Mark Kleiman, author of the recently published Drugs and Drug Policy: What Everyone Needs to Know. The legalisation debate is bogged down by legitimate fears about the risk of increased addiction rates; it will take years of study before this is better understood.
One promising, and cheap, alternative would be to slow the flow of arms south from the US. Colombian president Juan Manuel Santos recently lamented the fact that disassembled hand guns can be dispatched by Federal Express to his country, where they are pieced back together. In Mexico, as much as 70 per cent of guns seized come from America.
Yet this debate never gets off the ground because of the sensitivity of the issue for many Americans who assert their constitutional right to bear arms. As President Calderón said on a March visit to Washington: “I respect the Second Amendment, but we are requesting: don’t sell weapons to Mexican criminals.”
Some in the region believe that, while they take steps to deal with the problem, the west appears less willing to make sacrifices. Mexico, for example, has embarked on police reforms that will require constitutional change to come into effect, while a US ban on domestic sales of semi-automatic rifles that expired in 2004 is yet to be reinstated. Many believe the west has also failed to tackle money laundering. As Carlos Slim, the Mexican telecoms magnate who is the world’s richest man, has observed: “It is unfair that the drug-producing countries get to keep all the problems, and the consumer nations all of the profits”.
There is no silver bullet that can solve the drugs problem. But many in the region feel that the longer western consumer countries fail to take a meaningful role in reducing the extreme violence associated with attempts to curb their citizens’ desire to take illicit drugs, the more it will become apparent that they have blood on their hands. Security forces and traffickers have become embroiled in a kind of “arms race”, as the GCDP report put it. “Break the taboo on debate and reform. The time for action is now.”
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