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ANDEAN COUNTRIES
High-risk businesses
Cecilia Remón
4/21/2005
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Drug trafficking reorganizes and takes on a new face.

Drug traffickers are not the same as they used to be. Now they look the same as other businessmen, they no longer have big estates, or flashy cars with polarized windows, they do not wear thick chains or gold bracelets. Today’s drug traffickers are "yuppies," young businessmen, educated in the best universities, perhaps children of the big drug kingpins, dedicated to "high-risk businesses."

According to Ricardo Soberón, a Peruvian analyst on drugs and security in the Andean countries, "we no longer talk about the old cartels (like Cali, Medellín, Sonora, or Tijuana). Now, the activities of the criminal organizations have diffused in an imperceptible manner and, as in private business, specialists are contracted for collection (of raw material), security, financial operations, transport and distribution of drugs."

Soberón and other experts maintain that since the mid-1990s, drug trafficking has substantially changed the way it presents itself.

"In the area of production, there is a wide dispersion of the areas planted, an increase in technology that permits higher profit and productivity levels, plus the concurrence of a series of small organizations on the local level whose speciality is collection, storage and provision of the raw material," Soberón said.

In transport, the free market has permitted the appearance of organizations of multiple make-up and uses, whose specialty is to provide the mechanisms to allow the drugs to enter the markets of the United States, Europe and other Latin American countries.

Now the participation of any local or transnational groups —small, medium or large— is accepted and they have various levels of participation, Soberón said. "There is an absolute diversification of markets and productive diversification."

Modernization of the processes

In contrast with the old cartels —which assumed all of the links of the circuit— these criminal organizations currently use mechanisms like "outsourcing," or contracting specialized services of third parties. They have been able to lower costs by including a larger quantity of the poor population —migrant, unemployed, informal, undocumented— in the circuit of drug trafficking.

Soberón explained that the current circuit is "campesino producer-unemployed young person-women tourist-informal currency changer, and finally, illegal migrant abroad. These five people can be aware they are participating in something illegal but because the circuit is divided up, each one looks after only a part of this responsibility. The business is compartmentalized."

On the international level, a territorial redistribution has also occurred. The destination of the cocaine produced in Bolivia and southern Peru is Argentina and Brazil and from there Europe, while that produced in central-northern Peru and Colombia goes to north (Mexico and the US).

The total annual production of cocaine in Bolivia, Colombia and Peru is between 650 and 800 metric tonnes. Experts calculate that a third remains in the country, either seized in anti-drug operations or consumed internally, and the rest is exported.

Between 1988 and 2002, the area cultivated in the three countries remained between 200,000 and 220,000 hectares (around 500,000 and 525,000 acres). Since 2003, the area has been reduced to around 180,000 hectares (around 450,000 acres). Nevertheless, the area cultivated is no longer an optimum indicator for measuring the amount of cocaine produced.

The response of drug traffickers, explained Peruvian economist Hugo Cabieses, is to "increase the profitability of the producing area. More is produced in a smaller area."

Soberón and Cabieses agree that anti-drug policies, based on the control of supply and imposed by the United States on the Andean countries for the last 25 years, has not made an impact on the quantity, quality and price of the drug.

"The basic principle is that by reducing the area cultivated, the quantity of drug produced will be reduced, the price will go up, and consumption patterns will decrease. This is not occurring," Soberón said.

Impact in the United States

Nevertheless, Alejandro Vassilaqui, director of the Lima-based Center of Information and Education for the Prevention of Drug Abuse (CEDRO), believes that the control of supply has had an effect in the reduction of the cocaine consumption in the United States.

"Reports by the United Nations speak of the gradual reduction of cocaine-based drugs in the United States, a process that is not unlikely to be reversed," said Vassilaqui.

Although the United States continues to be the main market for these substances, cities like Buenos Aires, Caracas, Mexico City, Rio de Janeiro, Santiago, Sao Paulo, Quito, have been inundated with cocaine. Brazil is the second largest consumer of cocaine after the United States, Vassilaqui said.

The recent report of the Washington Office on Latin America (WOLA), "Are We There Yet? Measuring Progress in the US War on Drugs in Latin America," says: "Here the record is dismally clear: Since the early 1980s, US cocaine and heroin prices have actually fallen dramatically, while purity levels have risen and then remained fairly stable."

According to the US government’s National Office of Drug Control Policy, the price of a gram of cocaine on US streets —about US$50— is a fifth of the value it sold for in 1981.

Authorities in US and Andean countries "tout their achievements, but the indicators themselves, and the discourse they promote, divert attention from the cold reality that past successes have rearranged the drug trade, but not broken it," the WOLA study said.

"The United States has already sunk nearly $45 billion into worldwide overseas supply control programs since 1981, but plainly failed to drive up drug prices as intended," WOLA concluded.


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