REVISED SCHEDULE• February 2: Drug Trafficking

• February 9: Migration

• February 16: Mexico’s War on Drugs

• March 02: War on Terror

• March 09: Obama and Latin America 1

PAPER ASSIGNMENT

2

• Topic: Any subject related to U.S.-Latin American relations (whether or not covered in class)—proposed by student and approved by TA

• Examples: Sports (e.g. baseball), film (depictions of Latina women), music (lyrics, popularity of stars, etc.), advertising (Corona beer)

• In-class examples: Content of Latin American nationalism, impacts of drug war (e.g., Plan Colombia or Plan Mérida), reactions to 9/11, Bush/Obama relationship with Latin leaders, Hugo Chávez phenomenon, evaluations of NAFTA

• Length: 8-12 double-spaced pages (plus notes or bibliography)

• Due: Wednesday, March 2

FORMAT FOR PAPER

3

• Introduce topic (and its importance)

• Present a central question

• Describe sources and methods (how will you answer your question?)

• Analyze information and data

• Conclusion:– Respond to your central question(s)– Suggest avenues for further research (optional)

4

THE POLITICAL ECONOMY OF

DRUG TRAFFICKING INTRODUCTION

1. Pervasiveness of issue

2. Typicality? Or an extreme case?

3. Categorizing “illicit drugs”—

• Marijuana

• Heroin

• Cocaine

• Designer drugs

4. Note: Dangerous prescription drugs

5

READING

• Smith, Talons, ch. 8 [review]• CR Selection 5: Astorga and Shirk, “Drug

Trafficking Organizations and Counter-Drug Strategies”

• DFC, Contemporary, chs. 2 and 9 (Mexico + Colombia)

6

OUTLINE• The Global Market• The Structure of Profits• Patterns in U.S, Consumption• U.S. Policy: The Drug Wars• Implications for Latin America• Drug Wars in Mexico

• Questions of Public Policy: What Are the Alternatives?

7

THE GLOBAL MARKET:

STRUCTURE AND SCALE

1. Worldwide flows, variations by drug

2. Consumption around the world

3. Roles for Latin America: the rise of “cartels”

4. The U.S. market: magnitudes, profits and costs

8

0

200

400

600

800

1000

1996 1997 1998 1999 2000

Bolivia

Peru

Colombia

Global Production and Trafficking

Amphetamine Type Stimulants

Cocaine

MDMA

Pot

enti

al C

ocai

ne P

rodu

ctio

n (m

t)

0

1000

2000

3000

4000

5000

6000

1996 1997 1998 1999 2000

Pot

enti

al O

pium

Pro

duct

ion

(mt)

MexicoColombiaSE AsiaSWAsia

Heroin

Sources of Heroin

0

1,000

2,000

3,000

4,000

5,000

6,000

91 92 93 94 95 96 97 98 99 00 01*

Colombia

Mexico

Pakistan

Thailand

Vietnam

Laos

Afghanistan

Burma

* Values for Latin America are projected

3,441 3,3893,671

3,302

4,068

5,106 5,000

4,452 4,263

5,082

1,264

Metric Tons

ONDCP/FEB02

10

Users of Heroin by World Region

0

1

2

3

4

5

6

7

8

9

10

Americas Europe Asia Africa Oceania Total

Region

Num

ber o

f peo

ple

(in m

illio

ns)

11

54 percent

Mexico/CentralAmerican Corridor

Estimated Cocaine Flows

43 percentCaribbean Corridor

3 percentDirect to U.S.

12

Users of Cocaine by World Region

0

2

4

6

8

10

12

14

16

NorthAmerica

SouthAmerica

Europe Asia Africa Oceania Total

Region

Num

ber

of p

eopl

e (in

mill

ions

)

13

Perspectives on Cocaine

U.S. Portion of Worldwide Consumption

Declining 1990 = 400 MT 2000 = 300

MT

Worldwide Consumption Increasing

1990 = 500 MT 2000 = 600 MT

All coca grown in theAndean Region

14

ONDCP/FEB02

EUROPE 92%

AFRICA < 1%

CANADA 7%

ASIA < 1%

Cocaine Flows to Non-U.S. Markets

15

• Where are the profits?

• Price structure of one kilo of pure cocaine, mid-1990s:

Coca leaf (e.g., farmgate in Peru) $ 370Export of finished product (Colombia) $1,200Import of finished product (Miami)

$20,500Wholesale by kilo (in Chicago)

$31,000Wholesale in one-ounce packets (Chicago)

$62,000Final retail value (Chicago) $ 148,000

Who Are the Winners…?

16

Trends in Drug Consumption, 1985-2000

Percent Reporting Past Month Use of Any Illicit Drug

0

5

10

15

1985 1988 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Source: SAMHSA, National Household Survey on Drug Abuse.

*The survey methodology was changed in 1999. Estimates based on the new survey series are not comparable to previous years.

New surveyseries*

17

Current Usage by Drug, 2000

3.8

0.13

0.4

0.62

0.97

0.265

1.2

10.7

14

0 2 4 6 8 10 12 14 16

Nonmedical Use

Heroin

LSD

Inhalants

Hallucinogens

Crack

Cocaine

Marijuana

Any Illicit Drug

(incl. crack)

Past Month Users (in Millions)

(any psychotherapeutic)

Source: 2000 National Household Survey on Drug Abuse

U.S. DRUG USERS

• 2000 = 14.0 million (6.3%)

• 2004 = 19.1 million (7.9%)

• 2007 = 19.9 million (P 8%)

18

19

17%59%

24%

Marijuana only

Marijuana and some

other drug

Only a drug other than marijuana

Percent Reporting Past Month Use of Illicit Drugs, 2000

Source: 2000 National Household Survey on Drug Abuse

Usage of Marijuana

20

Percent Reporting Past Month Use of an Illicit Drug

3

9.8

16.4

19.6

13.2

7.8 75.3

6.54.8

2.40.3

0

5

10

15

20

25

12-13Yearsof age

14-15 16-17 18-20 21-25 26-29 30-34 35-39 40-44 45-49 50-64 65+

Drug Abuse by Age Cohort

Prime example of an aging cohort of drug users -- this group began use in 1970s.

Source: 2000 National Household Survey on Drug Abuse

21

Drug usage among High-School Seniors

Percent Reporting Use of “Any Illicit Drug”

Source: Monitoring the Future Study

26.8

45.6

53.9

19.5

37.2

41.4

11.7

22.7

25.7

0 10 20 30 40 50 60

8th

10th

12th

30-DayAnnualLifetime

22

Consumer Expenditures on Illicit Drugs, 2000

U.S. Users Spend $63.2 Billion Annually

Billions of Dollars (Projections for 1999)

2.31.6

10.411.9

37.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Cocaine Heroin Marijuana Meth Other

Source: ONDCP Paper, What America’s Users Spend on

Illegal Drugs

23

Economic Costs of Drug Abuse

Dol

lars

, in

Bil

lion

s

$44.1$58.3 $66.9

$102.2 $109.8

$143.4

$0

$20

$40

$60

$80

$100

$120

$140

$160

1985 1988 1990 1992 1995 1998

Source: Office of National Drug Control Policy, 2001.

24

$98.5

$32.1$12.9

Health Care

Lost Earnings

Other Impacts

Calculation of Economic Costs of Drug Abuse

(Billions of dollars)

Source: Office of National Drug Control Policy, 2001.

25

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….

• Criteria for evaluation

26

0

5

10

15

20

Federal Expenditures on Drug Control,1980-2000

Dollars, in Billions

FY 2003: President’s Request

FY 2002: Enacted Level

All Other Year: Actual Expenditures

27

0

5

10

15

20

InterdictionInternationalDomestic Law EnforcementDemand Reduction

Composition of Federal Expenditures, 2000

Fiscal Year 1986 -2003Dollars, in Billions

28

Challenges to Interdiction

0

50

100

150

200

250

CO

CA

INE

SE

IZE

D (

MT

)

1996 1997 1998 1999 2000

Source Zone Transit Zone Arrival Zone

1990 2000CHANGES IN THREAT

• World consumption dominated by US•Transit movement via aircraft•Cultivation primarily from Peru and Bolivia

• Increasing European consumption•Transit movement via maritime vessels•Cultivation primarily from Colombia

TRANSIT ZONE

SOURCEZONE

ARRIVAL ZONE

50%

3% direct

16%

21% 10%

SOURCE: Annual Interagency Assessment of Cocaine Movement, April 2001ONDCP/FEB02

29

Interdiction of Cocaine, 1999

512Metric Tons

DepartSouth

Americafor U.S.

Arrival Zone Seizures

Transit Zone Seizures

MEXICO /CENTRAL

AMERICANCORRIDOR

-60 MT -37 MT

3% 15 MT

43%220 MT

54%277 MT

75 METRIC TONS DETECTED

DEPARTING FOR NON-US MARKETS

-14 MT -7 MT

-12 MTDIRECT TO CONTINENTAL U.S.

CARIBBEANCORRIDOR

382 MTPotentially

Arrives in the U.S.

30

0

350

700

1,050

1,400

1,750

2,100

1985 1987 1989 1991 1993 1995 1997 1998 1999 2000

U.S. Prison Population, 1985-2000

Source: Bureau of Justice Statistics, 2001

State Prisons1,236,476

Local Jails621,149

Federal Prisons145,416

Nu

mb

er o

f In

mat

es, i

n M

illi

ons

31

0

50,000

100,000

150,000

200,000

250,000

300,000

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99

Imprisonment of Drug Offenders, 1980-2000

Source: Bureau of Justice Statistics

251,200 Drug Offenders in State Prisons in 1999

68,360 Drug Offendersin Federal Prison in 1999

32

Arrests for Drug Abuse Violations, 2000

9.3%

5.6%

4.1%

40.9%

24.2%

15.8%

Sale/ManufactureHeroin/Cocaine

Sale/ManufactureMarijuana

Sale/ManufactureOther Drugs

Possession Marijuana

PossessionHeroin/Cocaine

Possession otherDangerous Drugs

Reasons for Drug Arrests, 2000

Source: Uniform Crime Reports, FBI.

33

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

6. Challenges to sovereignty—e.g., invasion of Panama 1989

7. Process of “certification” (now modified)

34

35

36

QUESTIONS OF PUBLIC POLICY: WHAT ARE THE ALTERNATIVES?

INTRODUCTION

1. What might be desirable? Or feasible?

2.    What are the prospects? 

 

37

ARE THERE ALTERNATIVES?

1. Continuation (or acceleration) of current policy:

         Increased budgets

         Establish coherence

         Long-term durability

 

38

2.      Legalization:

        Regulation, not legalization

        Decriminalization?

        Partial or complete?

39

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

        What about certification?

 

 

40

Availability of Treatment

6.3

1.20.6

0

1

2

3

4

5

6

7

Current DrugUser

Drug Dependent ReceivedTreatment

Percent of Population 12 or Older

.

41

Average Price of Cocaine in the United States, 1981-2000

(retail price per pure gram)

0

50

100

150

200

250

300

350

400

450

500

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999

Year

42

Average Price of Heroin in the United States, 1981-2000

(retail price per pure gram)

0

500

1000

1500

2000

2500

3000

3500

4000

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999

Year

43

$2,051

$3,813$2,895

$4,160

$7,630

$13,902

$7,954

$5,259

$2,547$2,575

$0

$3,000

$6,000

$9,000

$12,000

$15,000

AmbulatoryOutpatient

Long-TermResidential

Short-TermResidential

OutpatientMethadone

Short-TermHospital

Cost

Benefit

Costs and Benefits of Drug Treatment

Source: CSAT, National Evaluation Data Services Report

ENLIGHTENMENT IN LATIN AMERICA!

• Marijuana personal use is decriminalized in :– Argentina– Brazil (depenalized)– Colombia– Costa Rica– Mexico– Peru– Uruguay– Venezuela 44

45

AND NOW, THE WAR ON TERRORISM…