Thursday, January 03, 2008

Most drug profits go to smuggling organizations, not producers

Who profits from the drug war? Smuggling organizations. That's where all the money is. Eleonora Maria Pani at breaks down the revenue for cocaine at different stages of the production and distribution chain:
  • 2% goes to those that provide for the cultivation of coca leaves;
  • 0.7% belongs to those working to transform coca leaves into coca paste and the same amount belongs to those who further the refinement of the drug, transforming it into hydrochloric cocaine, also known as pure cocaine;
  • those whose focus is the transportation and wholesale of the product, with an additional 10% of additives, absorb 5.2% of the income;
  • what remains, about 91%, is absorbed by the various organizations that provide, in successive phases, for the arrival of the product to consumers.
Imagine: With all the money floating around in the cocaine trade, just 2.7% goes to those who cultivate and process the leaves in their home countries! Yet according to Pani and many others, many regions have become utterly reliant economically on profits from growing coca, poppy, marijuana, and other illegal plants.

How much cheaper might it be to pay for alternative employment at higher wages for poor folks in Latin America than to spend billions attempting to destroy their main source of sustenance? With the stick having failed, perhaps the use of the carrot is in order? Of course, that's not what President Bush wants to do with the $1.4 billion he wants to spend playing cops and robbers in Mexico. But maybe it should be.


Anonymous said...

GFB what in the hell is the matter with you? How dare you to suggest intelligent fiscal policy that might even help improve the quality of life for thousands of people. Also you would be cutting into the cash flow of government officials who take bribes to look the other way or other wise protect the drug pipe line. Since about 90% of the criminal activity in the US is drug related you would cause a major crash in the law enforcement - corrections industry. Thousands of US citizens would be out of work due to the serious reduction in drug trafficking. How many related industries would be negatively impacted causing severe economic depression for workers. GFB think of how many of the people in Texas would be out of work.

I have said it before and I will say it again: Follow the money! Most often you will follow the money to some politician’s pocket.


Anonymous said...

Drug makers - legal ones - don't often research and bring to market drugs that will actually cure a desease. It is far more profitable to create drugs that treat symptoms and keep the customer alive to continue buying drugs in the future.

In the same way, the illegal drug business - fought by politicians elected with contributions from legal drug makers - will never go away. Legal drug makers will not contribute to politicians that won't fight illegal drugs and politicians won't win the war on drugs because that would eliminate their "job".

The whole thing is a boondoggle designed to give both the drug users and the justice system something to do. The portion of the population that isn't involved with drugs - legal or illegal - will just have to make do with computer games!

The remaining 10% is actually getting something done to improve the human condition. Cynical - yes - however, I do hope that at least 10% of what I do is worthwhile.