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

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

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

4. 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)

5. * 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

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

7. 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

8. 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)
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.) ,000

9. DIMENSIONS OF U.S. DEMAND
% Reporting Past Month Usage,
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 Estimates based on the new survey series are not comparable to previous years.
Source: SAMHSA, National Household Survey on Drug Abuse.

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

11. Drug Use by Drug Type

12. 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: National Household Survey on Drug Abuse

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

14. 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

15. 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

16. Cocaine and Heroin Prices: 1981-2010

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

18. 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)

20. Cultivation (Mexico): 2000-2009

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

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

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

25. 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?

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