CHALLENGES 2006-2007:
Narcos Doing Brisk Business in Latin America
Diana Cariboni *

MONTEVIDEO,  (IPS) - Coca continues to flourish in the Andean region, with production reduced somewhat in one country while increasing in another. Meanwhile, the drug business is no longer concentrated in just a few hands in Latin America, drug routes, players and products have diversified, and there is no sign that efforts to combat the phenomenon are enjoying any long-term success.

The 1995 arrest of the heads of Colombia's powerful Cali Cartel, the Gilberto and Miguel Rodríguez Orejuela brothers -- now in prison in the United States -- triggered celebrations among coca farmers in the southern Colombian town of Calamar in the province of Guaviare, at the time the country's leading coca-producing region.

The arrests marked the end of the cartel's monopoly over the purchase of coca paste (the raw material for cocaine) produced in the area, U.S. journalist Alan Weisman, who witnessed the celebrations, told IPS.

With the dismantling of the big drug mafias, "many low-profile ‘cartelitos' (little cartels) emerged," Francisco Thoumi, who holds a PhD. in economy from the University of Minnesota and is director of the Centre for Studies and Observatory of Drugs and Crime (CEODD) at the University of Rosario in Bogotá, told IPS.

"The industry was democratised to a certain point, and the internal violence increased. The cartelitos found it difficult to maintain their own armed wings. So they began to subcontract" out protection of drug crops, labs and routes to whatever armed group was in power in a given area, he explained.

The leftwing guerrillas and the ultra-right paramilitary militias realised that they were more powerful than the drug traffickers who were hiring them, and "the FARC (Revolutionary Armed Forces of Colombia) and paramilitaries both ended up eliminating the middlemen" and "have become key elements in the drug business," said Thoumi.

But to judge by the CEODD's assessment of the situation, cocaleros (coca farmers) in Calamar have little to celebrate now. "Wholesale prices of cocaine in the United States have dropped 90 percent from 1980s levels," said Thoumi.

The plunge in prices is a consequence of the rise in production, "which has gone up much more than demand," he said. He pointed out that the United States absorbs "between 35 and 40 percent of the cocaine consumed in the world."

The United Nations Office on Drugs and Crime (UNODC) estimates that 86,000 hectares are planted in illicit drug crops in Colombia, generating around 450 million dollars a year.

"That is divided between narcos ‘paras', guerrillas, bribes, campesinos (peasants), raw materials and chemical precursors," Thoumi pointed out. "Taking that into consideration, you can't say that drugs are the main source of financing for Colombia's armed conflict."

In September 2006, authorities in Uruguay intercepted a 340-kg shipment of cocaine from Bolivia that a group headed by Colombians and made up of Uruguayans and people from several other countries was preparing to ship to Europe. The delivery was the biggest ever seized in the history of Uruguay.

"We were also able to dismantle the operation at all levels, from production and transport to the laundering of money," inspector Julio Guarteche, head of the national anti-drug trafficking office, told IPS. Authorities assume that similar shipments have already made it through the country in the past.

"Uruguay is a target of Colombian groups. Local drug traffickers are hooking up with transnational mafias from Colombia, Peru, Bolivia, Paraguay, Brazil, Russia, Nigeria," added Guarteche.

This small country of 3.2 million people does not produce drugs. But it is a strategic site for overseas shipments, and its banking centre plays a role in money laundering to an extent that has never been clearly assessed.

"In 2004, Austria's biggest drug operation ever was organised in Uruguay, and we monitored it. We passed the information on to colleagues from other countries, which enabled them to block the shipment of cocaine from Peru, through the United States, and on to Austria," said the inspector.

According to his figures, the price of cocaine has remained steady here: top quality cocaine costs between 6,000 and 7,000 dollars per kg, and sells in Europe for 30,000 euros.

In Argentina and Uruguay, the recent widespread use of cocaine sulfate -- known locally as "pasta base" and obtained by macerating coca leaves, which are mixed with water and sulfuric acid, or a solvent like benzene, ether or kerosene -- is destroying young people in slum neighbourhoods.

Lawyer Alejandro Córdoba, with the Civil Association for the Study and Care of Drug-Related Problems, told IPS that the phenomenon is linked to the expansion of the drug trade at all levels -- production, transport and consumption -- in the Southern Cone region.

The production of cocaine from coca grown in Colombia, Peru and Bolivia involves several stages. The maceration of coca leaves to produce basic coca paste is generally done in the areas where the crop is grown, while the refining of the paste into cocaine hydrochloride takes place in drug labs, which used to be mainly concentrated in Colombia, said Córdoba.

But the Washington-driven "war on drugs" has led to the division of the process into a greater number of steps and procedure that have generated a range of new subproducts that feed local markets for cheap drugs in producer countries as the cocaine makes its way to consumers in the rich world.

Since 2000, an increasing number of cocaine labs have cropped up in Argentina, for instance, which sell their subproduct -- pasta base or "paco" -- on the local market.

In Uruguay, Guarteche said the soaring use of pasta base was linked to the severe economic crisis of 2002, which affected drug trafficking, "just as it affected any other economic activity."

"Many people who had bought cocaine found themselves in debt without any way to pay it off. So they began to bring in pasta base, which is cheaper," he said. "The economic crisis on one hand came together with access by the poor for the first time to a drug that packs a strong punch."

But he said "the peak of the wave of pasta base has passed."

Lawyer Cristiano Maronna with the Brazilian Institute of Criminal Sciences, based in Sao Paulo, said his country remains "an obligatory transit point" between the producer countries in the Andean region and consumer markets in Europe and the United States..

But it is also "the leading consumer market in Latin America." In addition, marijuana and synthetic drugs are produced in Brazil.

Maronna said anti-drug operations are merely focused on small-scale dealers in the "favelas" or shantytowns around the big cities, where the police intercept ever-growing quantities of drugs without making a dent in the offer.

A major problem in Brazil is that drug users are treated as dealers or traffickers, leading to an inflated prison population -- one of the causes of overcrowding in the country's prisons, said Maronna. And sentences have become even stiffer: a new law passed in August raised the penalty for trafficking from three to five years in prison.

In the view of Hernán Peñafiel, chief attorney in the anti-drug trafficking division of the Chilean State Defence Council (which represents the interests of the state in the country's courts), the "academic" categories of producer, transit and consumer countries are still applicable, because they allow a clear-cut definition of a country in terms of its predominant characteristic.

Chile is a transit country, he said, where organised criminal groups from producer nations have been taking advantage of its strong export structures, which are subject to much less scrutiny from abroad than the ones in their own countries.

However, "Chile also plays an important role in the question of chemical precursors, which are easily produced and are still hardly monitored or controlled," added Peñafiel.

Consumption in Chile is still relatively low, although it varies, he said. For example, slum areas around the capital are vulnerable to pasta base from Peru, a phenomenon that peaked in the last few years and appears to be diminishing.

In Mexico, meanwhile, "consumption was low 15 or 20 years ago, and localised in cities along the U.S. border and tourist centres. Today is a different story," said José Luis Piñeyro, an expert on security issues at the Metropolitan Autonomous University.



Mexico is a growing drug power, with a strong influence "all along the chain," he said. Virtually no district is untouched by the drug trade, and consumption is much higher, of "natural" as well as synthetic drugs, than in the past, he noted.

The government blames the increased consumption on tighter controls along the border with the huge U.S. market to the north.

But that is only partly true, said Piñeyro. "Distribution networks have become more widespread, with thousands of ‘tienditas' (drug-dealing spots) run by families," for whom it is a form of survival.

The players are also multiplying. The alliances with South American cartels are "obvious," but "what isn't mentioned are the ties with mafias in the U.S.," said Piñeyro.

Everyone knows there is "narco-corruption" in the police and in some city governments, he said. "The curious thing is that they would appear to be the only ones with this problem, which I doubt. Drug trafficking is involved in the financial system and the spheres of power, but we almost never see anyone arrested in those circles."

For its part, Peru went from a provider of pasta base to a major producer of cocaine, said Rómulo Pizarro, chair of the National Commission for Development and Life Without Drugs, responsible for the implementation of anti-narcotics policies in the country.

"According to UNODC, 180 tons of cocaine were produced in Peru in 2005, of which only 13 tons were seized," he said.

Those 180 tons of cocaine are worth 4.14 billion dollars on the U.S. market. But the Financial Intelligence Unit has only detected 21 cases of laundering of drug money, involving 379 million dollars -- just nine percent of what the drug mafias move in a single year.

Pizarro pointed to the appearance of Peruvian organised crime groups that export drugs to the United States and Europe in association with Mexican or Colombian middlemen.

"The representatives of the foreign cartels ensure the financing, production, storage and transport of the drugs. Between 10 and 15 national groups are dismantled annually," he said, adding that "Members of Mexico's Tijuana cartel are now being tried in Peru."

Is the war being won or lost? "The engine is addiction. But that can't be fixed through a police or repression-based approach," argued Guarteche.

* Additional reporting by Marcela Valente (Argentina), Mario Osava (Brazil), Daniela Estrada (Chile), Constanza Vieira (Colombia), Diego Cevallos (Mexico) and Ángel Páez (Peru).