Transcript The Political Economy of Drug Trafficking

THE POLITICAL ECONOMY OF
DRUG TRAFFICKING
INTRODUCTION
1.
2.
3.
4.
Pervasiveness of issue
Challenges for research
Categorizing “illicit drugs”—
•
Marijuana
•
Heroin
•
Cocaine
•
ATS/designer drugs
Note: Dangerous prescription drugs
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READING
• SSG, Modern Latin America, chs. 15-16
2
THE GLOBAL MARKET:
SOURCES OF SUPPLY
1. Worldwide flows, variations by drug
2. Consumption around the world
* 149-272 million users
* 15-20 million “addicts” or problem users
* $320 billion per year (est.)
3
Global Production and Trafficking
MDMA
1000
Cocaine
800
Bolivia
600
Peru
400
Colombia
200
0
1996
1997 1998 1999
2000
Potential Opium Production (mt)
Potential Cocaine Production (mt)
Amphetamine Type
Stimulants
6000
Heroin
5000
4000
Mexico
Colombia
SE Asia
SWAsia
3000
2000
1000
0
1996
1997
1998
1999
2000
4
Estimated Cocaine Flows ca. 2000
3 percent
Direct to U.S.
43 percent
Caribbean
Corridor
54 percent
Mexico/Central
American Corridor
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Interdiction of Cocaine, 1999
75 METRIC TONS
DETECTED
DEPARTING FOR
NON-US MARKETS
512
Metric
Tons
Depart
South
America
for U.S.
54%
277 MT
43%
220 MT
3%
15 MT
Transit Zone Arrival Zone
Seizures
Seizures
MEXICO /
CENTRAL
AMERICAN
CORRIDOR
CARIBBEAN
CORRIDOR
DIRECT TO
CONTINENTAL
U.S.
-60 MT
-14 MT
-37 MT
-7 MT
382 MT
Potentially
Arrives in
the U.S.
-12 MT
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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)
Coca base (farmgate)
Cocaine hydrochloride (export/Colombia)
Cocaine hydrochloride (import/Miami)
Cocaine (67% pure/dealer U.S.)
Cocaine (67% pure (retail/U.S.)
$ 300
900
1,500
15,000
40,000
150,000
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DIMENSIONS OF U.S. DEMAND
% Reporting Past Month Usage, 1985-2000
15
New survey
series*
10
5
*The survey methodology was changed in 1999.
Estimates based on the new survey series are not
comparable to previous years.
0
1985 1988 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Source: SAMHSA, National Household Survey on Drug Abuse.
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U.S. DRUG USERS, 1990-2010
• 1990
= 13.5 million (6.7%)
• 2000
= 14.0 million (6.3%) ($63.2 bn)
• 2007
= 19.9 million (̴ 8%)
• 2010
= 22.6 million (8.9%)
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Drug Use by Drug Type
10
Drug Abuse by Age Cohort
Percent Reporting Past Month Use of any Illicit Drug
25
Prime example of an aging
cohort of drug users -- this
group began use in 1970s.
19.6
20
16.4
15
13.2
9.8
10
7.8
7
5.3
5
6.5
3
4.8
2.4
0.3
0
12-13 14-15 16-17 18-20 21-25 26-29 30-34 35-39 40-44 45-49 50-64
Years
of age
Source: 2000 National Household Survey on Drug Abuse
65+
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Drug Usage among Students, 2000
Percent Reporting Use of “Any Illicit Drug”
25.7
12th
41.4
53.9
30-Day
Annual
Lifetime
22.7
10th
37.2
45.6
11.7
8th
19.5
26.8
0
10
20
30
40
Source: Monitoring the Future Study
50
60
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Consumer Expenditures on Illicit Drugs,
2000
U.S. Users Spend $63.2 Billion Annually
Billions of Dollars
(Projections for 1999)
45.0
40.0
37.1
Source: ONDCP Paper,
What America’s Users Spend on
Illegal Drugs
35.0
30.0
25.0
20.0
11.9
15.0
10.4
10.0
5.0
1.6
2.3
Meth
Other
0.0
Cocaine
Heroin
Marijuana
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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
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Cocaine and Heroin Prices: 1981-2010
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Reasons for Drug Arrests, 2000
Arrests for Drug Abuse Violations, 2000
15.8%
9.3%
5.6%
4.1%
Sale/Manufacture
Heroin/Cocaine
Sale/Manufacture
Marijuana
Sale/Manufacture
Other Drugs
Possession Marijuana
24.2%
40.9%
Source: Uniform Crime Reports, FBI.
Possession
Heroin/Cocaine
Possession other
Dangerous Drugs
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IMPLICATIONS FOR LATIN AMERICA
1.
2.
3.
4.
5.
6.
7.
Economic costs and benefits
Violence (and “drug wars” in multiple forms)
Corruption
Growth in consumption
Threats to governability
Challenges to sovereignty—e.g., invasion of
Panama 1989
Process of “certification” (now modified)
17
18
QUESTIONS OF PUBLIC POLICY:
WHAT ARE THE ALTERNATIVES?
INTRODUCTION
1. What might be desirable? Or feasible?
2. What are the prospects?
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ARE THERE ALTERNATIVES?
1. Continuation (or acceleration) of
current policy:



Increased budgets
Establish coherence
Long-term durability
20
2.
Legalization:



Regulation, not legalization
Decriminalization?
Partial or complete?
21
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?
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ENLIGHTENMENT IN
LATIN AMERICA!
• Marijuana personal use is decriminalized in :
–
–
–
–
–
–
–
–
Argentina
Brazil (depenalized)
Colombia
Costa Rica
Mexico
Peru
Uruguay (now broadly legalized)
Venezuela
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