Updated excerpts from "U.S. Drug Policy and the Andean Cocaine Industry" in World Policy Journal, Summer 1989. Thanks!
The Bush Administration's National Drug Control Strategy Report, released on Sept. 5, presages a dramatic shift in U.S.-Andean relations. The strategy includes unprecedented levels of military assistance to the Andean nations and bolsters the role of the U.S. military in anti-narcotics operations overseas. For the Andean nations, the U.S. war on drugs is increasingly resembling a real war.
Washington has expanded the role of the Defense Department in drug control programs overseas, deployed U.S. troops, and pushed Latin American military forces to become involved in antinarcotics efforts. Military aid has been increased to those countries involved in U.S. antinarcotics units of South American police forces, waiving a 1974 ban on aid to foreign police.
Meanwhile, the State Department's Bureau of International Narcotics Matters (INM), which coordinates drug-control activities overseas, and the Drug Enforcement Administration (DEA) have taken on a paramilitary role in the Andes. The INM's helicopters and planes that engage in drug control operations in Latin America and Asia are serviced and usually flown by U.S. personnel. The DEA's cocaine control program in the Andes involves more than 60 permanent agents who participate directly in strike operations.
But the militarization of U.S. backed antinarcotics programs has steep costs. It entangles the United States in the region's internal political conflicts, giving rise to increased anti-American sentiment and fueling support for guerrilla movements. It leads to U.S. support for and even direct involvement in brutal counterinsurgency campaigns, and creates an impression of U.S. complicity in human rights violations. Moreover, it strengthens the hand of the military in the Andean countries and undermines the very civilian governments the United States claims to support.
The U.S. presence in Peru's Upper Huallaga Valley shows the dangers of militarized antinarcotics programs. Here, the DEA is training and equipping antinarcotics police in an area where a virtual civil war is raging. This war is being won by the Shining Path guerrillas, who have gained the support of local coca farmers, in part by exploiting popular resentment of the U.S. antinarcotics personnel and of eradication programs. Peruvian military leaders have argued that coca eradication projects make it impossible for them to gain the peasant support required for successful counterinsurgency efforts.
At the same time, U.S. resources intended to fight the drug trade may in fact be going to aid the Peruvian military's counterinsurgency campaign-thus contributing to some of the worst human rights violations in the hemisphere. With conditions in the Upper Huallaga what they are, security forces receiving U.S. aid may not be able to limit their activities to antinarcotics efforts. The top priority of the Peruvian government in the area is the guerrilla insurgency, not narcotics production.
The INM has failed to account for funds spent in some Andean antinarcotics operations. While local corruption is probably partly draining the pool of antinarcotics funds, local security forces may be diverting some U.S. money and equipment to counterinsurgency operations.
The police forces receiving aid are trained and equipped for jungle warfare, and often receive counterinsurgency training and carry automatic weapons. Given past U.S. experience with such organizations, there is little assurance that U.S. aid will not simply reinforce old patterns of abuse against domestic opposition groups.
In Colombia, wages in the cocaine industry are thought to be about 10 times higher than earnings for comparable work in the legal economy. Cocaine wealth has created a new elite that identifies with dominant class interests and feels deeply threatened by the growing strength of the Colombian left. Colombian cocaine capitalists have become the largest landholders in the country. Members of the Colombian military-who receive U.S. aid for antinarcotics activities-are joining together with cocaine traffickers to suppress guerrilla organizations as well as legal leftist opposition forces.
The U.S. is arming and training local security forces to fight the drug war when many of the members of these forces are themselves on the payroll of the cocaine traffickers. Through bribery or intimation, narco-entrepreneurs have won the collaboration of antinarcotics police and military forces. Some Latin American militaries often cite the potential for further corruption as one reason for their reluctance to get involved in the drug war, despite pressure from the United States to do so.
Antinarcotics programs that enhance the power of the military are undermining support for elected governments by depriving peasants of their livelihood, damaging the environment, and exacerbating conflict between populations and security forces. In Peru and Bolivia, civilian governments have only recently returned to power after years of military rule; the grip of civilian political institutions on these countries is tenuous at best. In Colombia, more than 40 years under a state of siege have led to increasing military control over all aspects of civilian life. Civilian rule in these countries may not be able to withstand the pressures created by the U.S. drug war.
Thus, the ultimate irony of U.S. antinarcotics policy is that it has not only failed to stem the flow of cocaine from the Andes, but may actually help to undermine the region's fragile political institutions. The war on drugs is part of the problem rather than the solution.
Debt and Drugs
Today's cocaine boom is the latest manifestation of an old phenomenon-the Andean countries' dependence on exporting commodities for foreign consumption. The rise and fall of world demand for primary commodities --first silver, then rubber, cotton, tin, and sugar-- has determined the fate of millions of South Americans.
By 1988, Peru's scarce foreign exchange reserves had led the country to near bankruptcy, forcing the government to adopt austerity measures that cut real wages in half in just four months. A $16-billion foreign debt, four-digit inflation, accelerating capital flight, low prices for petroleum and mineral exports, a shortage of new aid and investment, economic mismanagement, and an inability to finance key imports are among the factors that have combined to create the country's worst economic crisis since the Great Depression.
Coca dollars soften the impact of this grim economic situation, by alleviating the balance-of-payments problems and partially compensating for the lack of new loans and investment.
The source of most of these coca earnings is Peru's 150-square-mile Upper Huallaga Valley, the world's largest coca-growing region. Every day, small Columbian planes land on remote runways in the valley to purchase coca paste with dollars. Then the paste-sellers convert these dollars into local currency either through the official banking system or in Peru's paral lel foreign exchange market in Lima. Money-changers from Lima also travel to the Upper Huallaga to purchase coca dollars, which are then resold in Lima for a slight profit. An estimated $3 million a day is exchanged on the parallel market, most of it coca dollars. Without this critical influx of drug revenues, the price of dollars in Peru would skyrocket because of the high demand for dollars brought on by inflation and the repeated devaluation of Peru's national currency.
A fundamental problem that must be resolved is the inherently contradictory nature of U.S. policy toward the Andes, which simultaneously encourages and discourages cocaine production. While the DEA pressures Andean countries to eradicate drugs, the Treasury Department pressures them to pay their debts-which can only be repaid with the help of cocaine reserves.
The two policies end up working against each other, putting producer countries in an impossible situation. Andean countries need economic relief, not punishment, to loosen their dependency on cocaine reserves.
This dependency is exacerbated by the intimate link between debt and drugs. The importance of cocaine revenues to the Andean countries increases in direct proportion to how tightly the international banking community squeezes them to repay their loans. To finance these debts, the countries of the region have little choice but to accept revenues from any source-legal or illegal. Thus, the debt crisis leads to official tolerance for the drug trade.
Ironically, by accepting drug dollars the Andean countries are in a sense simply adopting the prescription of the International Monetary Fund (IMF) and many U.S. development experts for debtor nations: generate foreign exchange through economic liberalization and promotion of exports. The Andean countries have done that by instituting loose bank disclosure policies to attract drug money and by engaging in domestic belt-tightening to meet foreign debt payments. This has generated growing unemployment, further fueling the cocaine industry.
Washington must be sensitive to the region's need for both major debt relief and new development strategies that promote equitable growth and provide an alternative to dependency on the drug trade. Rather than strategizing on how to suppress drugs "at the source," policy makers should be asking more fundamental questions: How can cocaine production be discouraged in favor of other kinds of economic activity? What can be done to loosen the region's dependency on the foreign exchange generated by the lucrative trade? And, above all, what economic force can ultimately replace cocaine? While these are difficult questions with no quick answers, Washington would do better to focus on them rather than to continue aggressive policies that only exacerbate the drug problem.