Drug-Pharma Monday | The True Cost of the War on Drugs

March 24, 2008

The illegal drug market is one of the most profitable in the world. It is extremely difficult to know the global value of the drug trade since it is a business that is illegal, underground, and hard to trace. The United Nations Drug Control Program estimates that it is worth $400 billion per year, equivalent to 8% of world trade. In the United States, alone, the drug trade is worth upwards of $100 billion per year. It is now close to 20 years since the U.S. government has been fighting the “War On Drugs,” but despite the billions of dollars spent, an enormous amount of drugs continues to flow into the country.

The drug trade in the United States has had extremely negative consequences in terms of violence and corruption. But its effect on Latin American countries has been even more severe. It has led to violence, corruption, and social dislocation on such a scale that in many cases the very viability of the state as an institution has been threatened. Domestic drug consumption in Latin America is relatively low. The vast majority of the drugs produced in Latin America are intended for the U.S. market. When talking about the negative effect of drugs, it is important to look at the overall effect throughout the continent, not just in the United States.

This article examines changes in the narcotics industry over the past 20 years. It focuses particularly on the negative effects of the drug trade on the countries of Latin America. Finally, the article explores some of the implications of the drug trade for our border community here in El Paso/Ciudad Juarez and forms an argument for the legalization of the production and sale of drugs.

Developments in the Drug Trade During the 1980s

One of the most significant trends in the drug trade during the 1980s was the growth in the trafficking of cocaine and its synthetic derivatives. This development led to the infamous appearance of crack cocaine on the streets of U.S. cities, which enormously affected the drug market for users as and fueled violent gang wars between the suppliers. Although Bolivia and Peru were the largest coca and cocaine base producers, it was Colombia that dominated the actual processing of the drug. By the 1980s, Colombian trafficking organizations were supplying approximately 50% of the cocaine to the U.S. market, primarily by way of maritime and air routes through the Bahamas and other parts of the Caribbean. During this time, Colombian drug organizations were firmly entrenched in the South Florida area.

Also during the 1980s, Colombia was the primary source of foreign-produced marijuana in the United States, supplying approximately 80% of the market. Mexico and Jamaica were responsible for a further 10%, while domestic production supplied the rest. During the same decade, Southwest Asia was the primary source (60%) of heroin to the United States. The other 40% was Mexican-produced heroin, which supplied the western half of the United States.

The 1980s was the first time that the power of drug trafficking organizations to seriously disrupt civil society was witnessed. The 1980 coup in Bolivia, led by Garcia Meza and apparently backed by one of the country’s drug organizations, undermined drug control policies in that country. In 1981, the Colombian M-19 guerilla group kidnapped the sister of the head of the Medellin drug cartel. The cartel responded by organizing death squads that systematically killed guerillas and their families until the sister was released. These death squads went on to intimidate and murder journalists and politicians in an effort to repeal Colombia’s extradition treaty with the United States.

It was also during the 1980s that the drug trade was first perceived as a threat to the national security of the United States. As a response, the resources of the CIA and the military were put at the disposal of the anti-drug effort that was to become known as the War on Drugs.

Emergence of Mexico’s Role During the 1990s

The 1990s saw a significant shift in where drugs were produced and how they were brought into the United States. Because of increased surveillance of the Caribbean area by the Drug Enforcement Agency (DEA), Colombian drug traffickers began to rely upon Mexican organizations to smuggle cocaine into the United States, making Mexico the main transshipment point for U.S.-bound drugs. Central America was also increasingly used as an arrival destination for Colombian cocaine. Colombian organizations paid Mexican drug cartels with portions of the smuggled cocaine, sometimes up to half of the load. Usually small, twin-engine planes were used to transport drugs from Colombia as far as northern Mexico, but there were occasions when large, ex-service commercial jets brought in multi-ton quantities.

Drug-related violence continued unabated in South America. Over 150 groups loosely organized into cartels dominated the cocaine trade in Colombia. Guerilla groups such as the FARC and the ELN became more powerful and wealthy as they taxed drug producers, while right-wing paramilitary groups, often funded by the drug cartels, carried out murders and kidnappings in support of the drug cartels’ objectives.

Mexican heroin continued to supply the western half of the United States during the 1990s, while Colombian heroin replaced the supply from Southeast Asia. Colombian heroin was of an extremely high quality and could be snorted, avoiding the stigma of injecting Southeast Asian heroin with a needle.

Partly due to the success of marijuana eradication programs in Colombia, production there was severely disrupted, so Mexico stepped in as the major supplier to the United States. According to U.S. government figures, the number of marijuana users in the United States declined sharply between 1980 and 1990, but it was still extremely attractive to Mexican traffickers because of the high profit margin. The 1990s also saw the beginning of production in Mexico of synthetic drugs such as methamphetamine, which until then had been produced mainly inside the United States.

Mexico’s development as the main transshipment point for Colombian cocaine entering the United States, and largest supplier of marijuana to the U.S. market, led to an enormous increase in wealth and power for the Mexican drug cartels. This growth has had serious consequences for Mexican society. In 1994, the Mexican Attorney General’s office estimated that the drug trade contributed around $30 billion annually to the Mexican economy. Only $7 billion was generated that year by oil earnings. The amount of money laundered in Mexico from drug trade was thought to represent between 4% and 20% of the GDP. The drug trade directly employed directly approximately 360,000 Mexicans and occupied as many as 20,000 soldiers in drug eradication efforts on a daily basis.

The enormous income generated from the drug trade is used to build and buy houses, cars, and ranches, and is invested in legitimate businesses such as hotels, factories, and stores. Much of the large tourist development in states such as Jalisco and Yucatan is funded in part with proceeds from the drug industry. Analysts have argued that drugs are Mexico’s most successful export. They also assert that the drug industry has softened the blow of economic restructuring programs and financial crises experienced by Mexico and other Latin American countries over the past 20 years. In the face of an agricultural crisis brought on by the import of cheap foreign food imports, Mexican farmers are turning to the cultivation of poppies or marijuana as alternative cash crops. Many involved in the drug trade are poor people with limited economic opportunities, tempted by the ease with which large amounts of money. This is not to excuse their participation in what is an illegal and dangerous occupation. But the widespread poverty and deprivation that exists in Mexico and the rest of Latin America cannot be discounted as a factor in the growth of the drug trade.

Drug Trade and the Border

Today, the southwest border has become the main entry point for illegal drugs into the United States. The long, rugged, and in many places, isolated, 2,000 mile border is an ideal place to smuggle narcotics. Seventy-two percent of the cocaine consumed in the United States is brought across it. Colombian organizations continue to use the Mexico-Central America corridor to transship cocaine into the United States. Increasingly, they use the Pacific Ocean as the preferred maritime route as it is much larger than the Caribbean and an easier place to evade detection. Fishing boats and speedboats transport multi-ton quantities of cocaine to southern Mexico, where it is broken down into smaller loads and transported through Mexico and into the United States. Nonetheless, the Caribbean continues to be an important transit point for cocaine, by way of countries such as Puerto Rico, the Dominican Republic, and Haiti.

After almost 20 years since the initiation of the War on Drugs, and despite a current annual budget of $20 billion, an enormous amount of narcotics continues to enter the United States. In 1996, 120 tons of cocaine a month was being brought into the country from Chihuahua, Mexico, alone—1,440 tons a year (El Diario de Juárez, March 2004). In the same year, according to DEA statistics, almost 45 tons of cocaine was seized nationwide. Officially, the DEA estimates that it seizes between 20% and 25% of drugs brought into the country. Unofficially, the figure is put at 1% to 2%. Only 13 truckloads are required to supply the United States with cocaine for a year. With almost 20,000 kilometers of coastline, 300 ports of entry, and 7,500 kilometers of land border, stopping illegal drugs from entering the United States has been compared to looking for a needle in a haystack.

According to the DEA, southern New Mexico plays a major role in the laundering of drug revenue. Much of this money passes through Native American casinos that are unregulated by the state. The DEA also points to the large number of banking institutions in Las Cruces, New Mexico as evidence of the economic benefits of the drug trade. A city of Las Cruces’ side would typically have five to six banking institutions, but the city actually has over 200. El Paso also reaps considerable benefit from the trade in drugs. The Federal government estimates that $3.5 billion of drug money is laundered through the El Paso economy each year—more than twice the $1.7 billion budget of the military base at Fort Bliss, which itself represents 10% to 15% of the local economy.

Negative Effects of the Drug Trade

Anti-Drug Laws in the United States

A distinction can be made between negative effects caused by government policy to combat drugs, and negative effects caused by the actual trafficking of the drugs. In the United States, one of the government responses to the drug trade has been increasingly harsher sentences for those convicted of drug offenses. These measures, however, are generally seen as having failed since they have not led to a noticeable decrease in drug use and are extremely expensive. In 2001 it was estimated that the 55% of prisoners convicted for drug offenses were costing the taxpayer $3 billion per year. Some of these prisoners are untreated drug addicts stuck in a cycle of constant re-imprisonment in the criminal justice system. Others are people who have been convicted for minor offenses, such as possession of small amounts of narcotics. In 2002, over 45% of arrests for drug offenses involved marijuana, the vast majority for possession. The decision to introduce mandatory minimum sentences for the possession, sale, and use of drugs has made the U.S. prison population balloon to two million people. On a per capita basis, that is the largest prison population in the world. Many people argue that harsher drug sentences have had little effect on drug use.

One of the most controversial aspects of the War on Drugs is how anti-drug laws have disproportionately impacted the minority population. Almost 77% of prisoners are from minority populations (56.7% African-American and 19% Latino). In the early 1990s, there were more young African-American men in prison than in college. According to the federal Household Survey, 72% of illicit drug users are white, a slight over-representation given that they make up 69% of the population. Yet 52% of prisoners convicted of drug-related offenses in state prisons are African- Americans. African-American and Latino populations are more likely to be arrested for drug offenses than whites, and much more likely to receive prison sentences.

Drug-Related Violence

Another negative effect of the drug trade is the enormous amount of violence that accompanies it. It is difficult to estimate, but the majority of murders and other types of violence in Mexico are linked to the trade in narcotics. It is estimated that in Sinaloa, a state in western Mexico where a large amount of marijuana and poppies are grown, close to 16,000 people have died over the past 20 years as a result of drug-related violence. The vast majority of the violence is between and within the cartels, sometimes between cartels as they struggle for control of a share of the drug trade. In other cases, factions within a cartel dispute control of a particular area, theft of drugs, or other conflicts. Occasionally, drug-related violence spills over and innocent people are targeted or affected. The mere existence of such a high level of violence, even when it doesn’t affect the average citizen, is extremely detrimental to the overall well being of the society.

Much of the drug-related violence in the U.S. occurs in poor, inner city areas. Although these areas have average drug use rates, they are often used as drug distribution points because of their lack of social capital, and thus become battle grounds for gangs and factions that seek to control the drug market. Indeed, the majority of gang violence in U.S. cities is related to the drug trade. Inner cities areas subsequently experience a higher level of violence and crime than they otherwise would.

Economic Effects and Government Corruption

Although the drug trade in Latin America does create a large influx of money into generally unstable and impoverished economies, many analysts argue that the overall economic effects are negative. For example, taxes are often not paid on the income generated by the drug trade. Also, businesses funded by drug money are able to operate at a loss, which undercuts legitimate businesses selling the same products.

The trade in drugs in Mexico and the United States also causes enormous amounts of corruption and lawlessness. Mexican sociologist Luis Astorga argues that since the beginning of the drug trade in his country, drug traffickers have had a very close relationship with the political elite. It is not an exaggeration to say that many politicians in Mexico are directly benefiting from the drug trade. Probably the most famous example is General Jesus Gutierrez Rebollo, who in 1996 was installed as the equivalent of the Mexican Drug Czar with great fanfare. It was felt at the time that the military was Mexico’s most uncorrupted institution. By early 1997, however, General Rebollo had been arrested and charged with actually being a paid employee of the Carrillo Fuentes, or Juárez drug cartel.

This does mean that all politicians are corrupt. But it does mean that political institutions are so intertwined with and compromised by drug cartels that they are incapable of bringing them under control. In Mexico, organizations that produce and traffic drugs have penetrated the political, law enforcement, and judicial institutions to such an extent that they are able to carry out their business with a minimal amount of interference from the authorities. Many drug cartels actually employ police officers and soldiers, both active and retired. There are numerous cases in which the soldiers or police officers that are supposed to be fighting the drug trade are actually working with the drug traffickers themselves. President Fox has a reputation as an honest politician. But the fact that cocaine seizures by Mexican authorities were down from 33.5 tons in 1999 to 12.5 tons in 2002 suggests that as a whole, the Mexican government is unwilling or unable to stem the flow of illegal drugs in to the United States.

Despite changes in government, the production and trafficking of drugs is relentless. From 1986 to 2004, three governors from different political parties were in power in Chihuahua, Mexico. During their respective administrations, the cultivation and trafficking of drugs in Chihuahua was constant. In 1984, 11,000 tons of marijuana was seized from El Bufulo, a plantation in Jimenez, Chihuahua covering 200 hectares and employing 12,000 men. Obviously, the existence of a plantation of this size employing so many people was not a total surprise. El Bufulo was “discovered” by the Mexican authorities after it was revealed by DEA agent Enrique Camarena. According to a government report, the plantation was run not only by the Juárez drug cartel, but also by Mexican police organizations that offered protection and safe passage up to the northern border. During the early 1990s, the Juárez drug cartel would regularly fly into Chihuahua and other northern states multi-ton loads of cocaine aboard large ex-commercial planes. The Carrillo Fuentes cartel alone is alleged to have operated 22 ex-service Boeing 727 jets.

In 1994, two more large marijuana plantations were “discovered” in Chihuahua, one of 90 hectares and the other of 103 hectares. In 2004, Jesus Solis Silva, Chihuahua’s attorney general resigned, partly because of accusations that he was directly benefiting from the trafficking of drugs. There are allegations that the governors of Chihuahua were directly benefiting form the drug trade. Either way, the scale of drug trafficking in Chihuahua, and the fact that it continued despite changes in the government, are astounding.

In January, 2004, police in Juarez uncovered the bodies of 12 men in the small back yard of a house in a middle class area of the city. The men were all victims of the drug trade and all involved in trafficking. The extent of police involvement in the murders in Juárez is incredible. Many of the murders were carried out by a unit of the Chihuahua state police while their were on duty, in uniform, and using police vehicles. They would identify their victims, stop them, kidnap them, torture them, and then murder them. In El Diario of Juárez there are photographs of the state police commandante at the scene of murder investigations. He is standing with other police officers purportedly investigating murders that he himself committed. This unit of the Chihuahua state police was not an isolated rogue unit. Such actions by law enforcement are terrifyingly common. Some of the people who were murdered at this site had gone to a federal police unit, the Agencia Federal de Investigaciones (AFI), the equivalent of the FBI. They had gone to denounce a drug safe house, then found themselves detained and eventually murdered. Reporting crime in Mexico can be dangerous. Being a police officer in Mexico can be deadly. Police are faced with a stark choice: la plata o el plomo—silver (money) or lead (bullets). Many times even turning a blind eye is not an option.

Obviously the drug trade cannot be blamed for causing corruption nor the smuggling of contraband products. These are structural problems that have existed in all societies since the beginning of time. Eradicating them is a process that requires much time and effort. Many people argue that if it weren’t drugs that were being trafficked, another illicit product would take its place. But a strong argument can be made that drugs are a special case because of the ease with which they are cultivated and transported and the enormous profit margin that can be obtained with them. Officials estimate that a drug smuggler can lose 90% of his or her load and still make a profit. Additionally, one of the factors that make the drug trade so powerful in Latin America is that it is such an extremely lucrative and powerful industry, taking place in fragile societies where there are huge disparities of wealth and severe lack of economic opportunities. From the highlands of Peru and Bolivia to the shantytowns that skirt the cities of the U.S./Mexico border, the poverty is fertile ground for the growth and development of an illegal narcotics industry.

Although the United States is the richest society in the world, and by and large its institutions are well run and respected, the enormous wealth generated by the drug trade means that even here there is corruption involving law enforcement officials. Although U.S. customs agents are well paid (earning on average $40,000-$50,000 per year, the amount of money offered by the drug cartels is often too much of a temptation to resist. The immigration and customs agencies of the United States investigate about one case of corruption per week. It is hard to understand how such large quantities of drugs are able to enter the United States without some collusion by customs, immigration, and other law enforcement officials on the U.S. side.

Destructive Effects of Violence and Corruption

Probably the most destructive impact of the drug trade in Mexico and Latin America is the general destabilizing effect that the violence and corruption has on the society. Of the almost 400 murders of women in Juárez since 1993, it is estimated that around 25% were directly related to the drug trade.

When such a high level of drug-related violence is experienced by a society, violence and crime in general start to be tolerated and accepted; so, when other crimes are committed, there is less outrage and less expectation that the crimes will be solved. Also, when there is a general understanding that police officers are to some extent complicit in the trafficking of drugs and other illegal activities, law enforcement is not trusted. In Juárez, it is estimated that 95% of crimes go unsolved and unpunished. There are widely held perceptions that crimes can be committed with no consequences, and that if someone is inclined to report a crime, the police is the last place to go. At best, nothing will be done about it; at worse, you could pay for it with your life. People are often scared of reporting even mundane crimes, fearful of where it may lead. All this has extremely negative consequences for the smooth and orderly functioning of any society. The trade in drugs has simply become far too powerful, and far too lucrative, to be brought under control by the Mexican government and other governments in Latin America.

The power of the drug cartels and the influence that they exert on countries such as Mexico has never been greater. The Mexican drug cartels now exist as institutions more powerful than the state itself. This has had an enormous impact on our border region. The former director of the DEA, Thomas Constantine, has publicly stated that Mexico is in danger of becoming a narco-democracia, where the drug cartels are in control and lawlessness and violence are the norm. Mexican soldiers are patrolling the streets of Nuevo Laredo in northern Mexico. In Juárez, a unit of the state police has been accused of operating as a hit squad for the local drug cartel.

Examples like this show how the drug trade is destabilizing the countries of Latin America to such an extent that the very fabric of their society is seriously threatened. The vast majority of the violence and corruption that these societies experience is directly caused by the drug trade. The United States as a society bears great responsibility for this situation since it is our fellow citizens who are consuming the products of the drug trade. One of the reasons that the drug trade is so entrenched in Latin America is because there is simply not a viable economic alternative to it. Until there is, it seems likely that the trade in illegal drugs will continue to act as a subsidy to the legal economy. Mexico has struggled in the ten years since the signing of the North American Free Trade Agreement (NAFTA). Its agricultural sector is devastated, and its manufacturing sector is subject to the whims of the U.S. consumer. The United States is currently attempting to create a similar free trade zone throughout Latin America. These free trade agreements are structured to benefit the wealthy in both the United States and Latin America. Unless there is a serious effort to restructure trade and to reorient the current economic model so that society as a whole benefits, the drug trade will continue to flourish, to the detriment of the entire continent.

The Case for the Legalization of Drugs

In the meantime, there is a strong case for the legalization of the drug trade. The benefits are that the drug trade would be taken out of the hands of the powerful criminal organizations responsible for so much violence and corruption. It would be regulated by the government and subject to taxation. In the United States, legalization is still very much a fringe issue, but in Europe and Latin America it is starting to become part of public debate.

There are many arguments about the best way to legalize the drug trade. The most popular public perception of legalization is a free market distribution of all drugs. Some people advocate the legalization of soft drugs such as marijuana; hard drugs such as cocaine and heroin would have restrictions put on them, much like alcohol and tobacco. Others advocate a regulated distribution of drugs through public health facilities, where they would be legal but monitored and where addicts would be in regular contact with health professionals.

The actual form that legalization would take would be the product of extensive discussion and negotiation. But it is at least time to start to have a public debate about the legalization of drugs. To do otherwise is to ignore the grave injustice that the drug trade is inflicting on all of the American continent, but especially in Latin America.

In the fall of 2003, Maria arrived at Casa Peregrina in Juárez with her two small boys. She had been referred by a local domestic abuse organization. Maria was different from most of the guests we receive at Casa Peregrina. She had money, her children were well educated, and she had traveled widely in both Mexico and the United States. Maria had been subjected to serious domestic abuse and was seeking a separation from her husband. The problem was that her husband was a member of the Juárez drug cartel. Maria could not go to the authorities to report what had happened to her because the police regularly visited her husband at home and could not be trusted. Maria’s only option was to go to the international bridge and request political asylum. She did this and is presently in hiding in the United States.

In the spring of 2004, Rosa Emma Carbajal was given a parking ticket in the small town of Palomas, Chihuahua for double parking. Because of this she attempted to run over the police officer and was subsequently charged with resisting arrest. Shortly after being released on bond, she returned to the police station with between 30 and 40 people. The mob assaulted the police station, smashing windows and destroying equipment. Fearing for their lives, the police commander, along with six colleagues managed to flee. They dispersed the crowd by firing into the air and managed to reach the US Border where they immediately requested political asylum. The day after the incident we received the police commander’s wife and child at Annunciation House where they stayed for a few days until family members in the US could be contacted.


2 Responses to “Drug-Pharma Monday | The True Cost of the War on Drugs”

  1. tyrone Says:

    Hi im realy interested in what you are taliking about in your blog about the women murdres in Juarez I am writing a similar blog on the same topic. if you have time you should go check it out at http://queparenya.blogspot.com/

  2. morganwrites Says:

    Tyrone – Thanks for the comment and I’ll be happy to visit your site.

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