As more governments in the region reject the drug war and prohibition model pushed by the United States, 2023 will see a marked increase in cocaine production and the continued proliferation of synthetic drugs in the region. The criminal ramifications could be far-reaching.
Since President Richard Nixon declared “drug abuse … public enemy number one” in 1971, the region’s leaders have sought to comply with or appease the US government’s hardline counterdrug policies. That era appears to have ended, at least for the current crop of Latin American leaders. This has profound ramifications for the drug trade in the region. Colombia, one of Washington’s most dedicated allies in this war, has definitively broken ranks, cementing the trend.
“It’s time for a new international convention that accepts that the war on drugs has failed,” President Gustavo Petro said in his inauguration speech in August 2022.
He built on this during a visit to the United Nations in New York a month later.
“The opinion of power has ordered that cocaine is poison and must be persecuted, while it only causes minimal deaths from overdoses … but instead, coal and oil must be protected, even when it can extinguish all humanity,” he said.
Petro is not alone in pushing back against Washington’s counter-narcotics policy and prohibition model. The other key US ally in the region, Mexico, has also criticized US policy and scaled back antinarcotics cooperation under President Andrés Manuel López Obrador, better known by his initials AMLO. AMLO has declared the drug war over, even as he continues a militarized approach to tackling the Mexican drug trafficking organizations (DTOs) amid rising levels of violence.
Without Mexico and Colombia’s cooperation, regional US antinarcotics efforts would be severely limited. And a quick glimpse at the map of US allies in Latin America and the Caribbean reveals that Washington has lost a great deal of influence over the last decade, hamstringing any regional efforts to coordinate strategy against drug trafficking.
On a positive note, this tendency is forcing a long overdue rethink of strategies to tackle the noxious effects of the narcotics trade, principally violence and corruption. Washington, while still pushing international law enforcement approaches, long ago realized that simply eradicating drug crops, notching up seizures, and capturing top-level drug lords have done little to stem the flow of narcotics. Instead, the “whole of state” approach is now widely recognized, though results are so far slow and patchy. With Colombia at the forefront, Latin American nations are looking increasingly at harm reduction, getting homicides and violence rates down while seeking to address their root causes.
The latest and most eager proponent of a new approach is President Petro. He has scaled back coca eradication, insisting it might even be stopped altogether in certain areas while alternative measures are implemented. Some of the response to the drug trade in Colombia is being framed in environmental terms, which is a positive development. There has been talk of the reforestation of coca-growing areas via subsidies for farmers. And the Colombian president has floated the notion of ultimately decriminalizing cocaine, although not unilaterally.
SEE ALSO: Colombia’s Risky Bet on Total Peace
All of this comes amid Petro’s ambitious “Total Peace” plan, which involves negotiating with the illegal armies that dominate the drug trade and attacking the roots of the Colombian civil conflict, now more than five decades of violence fueled by cocaine. The year 2023 will be crucial for the Colombian president’s plan and broader unorthodox approaches to one of Latin America’s most pressing issues.
Petro is negotiating with the last major Marxist guerrilla force in the Americas, the 4,000-strong National Liberation Army (Ejército de Liberación National – ELN) and a host of smaller criminal groups, all involved in the drug trade, all motors for violence and systematic human rights abuses. Past negotiations with armed actors in Colombia suggest that Petro does not have enough time. Previous, successful negotiations, like those with the right-wing paramilitary army of the United Self-Defense Forces of Colombia (Autodefensas Unidas de Colombia – AUC) and the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC) both took two presidential terms. But since 2015, presidents in Colombia have been limited to a single term in office. Petro must make huge strides towards peace during 2023, if he is to have any hope of success.
Yet even as changing attitudes and new approaches to the challenges presented by the drug trade take shape, perhaps the greatest threat comes from a huge increase in the production of cocaine and synthetic drugs in the region. Last year, before President Petro took office, Colombia registered a 43% increase in coca cultivation, the largest ever registered. The government of President Iván Duque (2018-2022) had won power on a security platform and put coca eradication at the heart of its security policy. However, coca crops proliferated, and cocaine production soared. With President Petro dialing back eradication while offering no quick fixes, the coca boom will inevitably continue and likely further expand.
Yet, the coca bonanza may achieve what eradication has not: a collapse in the local coca markets due to oversupply. In parts of two of the top coca-growing areas of Colombia, such as Norte de Santander and Cauca, prices for a kilo of coca base have fallen to around 1 million Colombian pesos (just over $200), a third of the standard price. All this while the price of gasoline, the main precursor for coca base production, has risen.
However, the cocaine market worldwide is still buoyant. DTOs are moving into new markets beyond the United States and Western Europe. Eastern Europe, Asia, and the Mecca of the cocaine world, Australia, where a kilo of cocaine sells for over $100,000, are now the target countries. Consumption in Latin America is also steadily rising, with per capita consumption in Brazil, for example, near that of the United States. The Colombian drug processing and supply chains have been unable to keep up with booming coca cultivation. The year 2023 will likely see Colombian organized crime adapt and expand further into these new markets.
Peru, the world’s second-largest cocaine producer, is also poised for a leap in production. This partly comes from its political chaos, pushing counter-narcotics strategy further down the list of government priorities. The imprisonment of President Pedro Castillo in December 2022 and the tumultuous start to his successor Dina Boluarte’s time in office leave the drug traffickers a clear field to develop their business.
Even Bolivia, long the only major producer that has been able to keep coca production under some semblance of control, cultivation is inching upwards.
The conservative estimates have world cocaine production at anything up to 2,500 tons. We expect that number to move up significantly during 2023.
Coca cultivation has also been migrating out of the three traditional producer nations. There are reports of industrial-scale coca plantations in Honduras and Venezuela. And even Mexico and Guatemala have seen signs of nascent coca cultivation. All of these nations are battling significant criminal dynamics and have limited ability, and in some cases political will, to uproot coca cultivation as it begins to spread. Once coca has taken root, it becomes harder and harder to eradicate.
But cocaine is not the only drug seeing surging production. Synthetic drug production is also increasing, especially in Mexico. The Mexican criminal organizations have seen their traditional earners — marijuana, heroin, and cocaine — battered: the first by legalization in several US states; the second due to the changing consumption of opioids and regulatory efforts, from injection towards counterfeit pills; the third by lower consumption of cocaine in the world’s largest cocaine market, the United States.
Mexican organized crime has quickly adapted to losses on these fronts, stepping up the production of methamphetamines and fentanyl. In Sinaloa, home to the cartel of the same name and once a focal point for marijuana and poppy cultivation, synthetic drug labs now abound. Methamphetamine users in the US now double the number of cocaine users. Mexican criminal organizations also moved quickly to fill the cravings for opioids. Yet problems with dosing have proven fatal, killing over 100,000 Americans over recent years, a cruel twist that illustrated that the “cure” of cracking down on prescription drugs has proven more fatal to date than the “disease.”
Mexican criminal organizations are not only targeting the United States. Sixty kilograms of Mexican-produced crystal methamphetamine turned up at Schipol airport in the Netherlands in December 2022. In November, German authorities seized 200 kilograms of Mexican methamphetamine, while Hong Kong seized 1.8 tons of liquid methamphetamine in October, a record for that country. There is also an increasing knowledge exchange over synthetic drug production between Mexican and European DTOs. This expansion of Mexican methamphetamine production, as well as the mass distribution of fentanyl via Mexico, means we will likely see Mexican synthetic drugs seized further afield as criminal networks seek to diversify and explore new markets.
So what effect will the increased drug production have on the criminal landscape in Latin America and the Caribbean during 2023?
Even as more drugs are produced and delivered, the number of identifiable DTOs has been shrinking, illustrating how organized crime, particularly in Colombia, is becoming more adept. The situation bolsters Petro’s’ argument for a shift in policy, highlighting the need to focus more on following the money and exposing corruption rather than concentrating on coca crops and those that manage them.
But this is no longer just a Colombia question. With drug trafficking to Europe, European DTOs are increasing their presence in Latin America. They are looking to maximize their profits by buying closer to the source while deepening their relationships with Latin American criminal structures involved in production and transport. European cocaine brokers, present for decades in Latin America, are now taking on an increasingly important role in the world cocaine trade. First, it was the Italians. Now, we see Dutch and Balkan brokers taking leadership roles in cocaine shipments across the globe. During 2023, we believe these relationships will expand to not only feed the flow of drugs to Europe but further afield. Some of the more sophisticated European criminal syndicates reach into Africa, Asia, and Oceania, which include places where risks of interdiction are lower and profits higher.
It is a business no-brainer: If 2023 sees an excess of 2,500 tons of cocaine produced, and prices remain stable at $30,000 per kilo, earnings could top $75 billion. Add billions in profits from synthetic-drug production and sales, and the criminal revenues in Latin America and beyond will get an enormous shot in the arm in 2023.
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