From WolfWikis

Introduction And The History Of The Drug Trade

While Mexico was not originally a drug running country, immigration to Mexico helped start the initial drug trade with the substance of opium."Chinese immigrants to Mexico in the 1910s and the 1920s were the first opium growers."^[1]The Chinese brought opium with them to start a growing market in the Western Hemisphere. "Mexican sociologist Luis Astorga notes that 'drug trafficking in Mexico began about sixty years before the Colombians got an important share of the [U.S.] drug market.' Opium poppy has been cultivated in Sinaloa since the 1880s, with exports to the United States soon occurring through Mexicali and Tijuana."^[2] While Columbia gets most of the publicity in the drug trade, Mexico had the market cornered long before the Columbians were in the picture.

Events happening outside of Mexico also had a profound effect on how much the drug trade was to grow over time. "Geographically distant events, including the ban on opium production imposed by Turkey at the end of the 1960’s, together with the dislocation in the early 1970’s of the “French Connection” (a Turkish-French network smuggling heroin from Marseilles into the United States), resulted in the development of new production sites and export platforms seeking to take advantage of the proximity to the buoyant market in the United States."^[1] When Turkey put their ban in place, it opened the door for Mexico to become the leader in drug trade. Another point that is of high importance is the proximity from Mexico to America. With Mexico being so close to the American border, it made transporting the goods cheaper as well as much safer.

Mexico continues to compete with other places such as Columbia, Panama, and other Southeast Asian countries in the effort to corner the American drug market."Mexico is, according to the U.S. State Department, 'a major supplier of heroin, methamphetamine and marijuana" for the U.S. market and the transit point for more than one half of the cocaine sold in the U.S. It is also a major money laundering site."^[2] Not only are drugs being brought into America, but likewise, money is being brought into Mexico to be laundered so as to not get taxed. Mexico's political system has been accommodating to the system with which the drug runners work. "Mexican presidents have successfully strengthened their office over the course of the last 70 years and now enjoy tremendous power. There are few legitimate internal checks and balances to the Mexican presidential power at present. As suggested, the Mexican political system has evolved into a benevolent autocratic model." ^[3] With this lack of checks and balances, the potential for corruption is much higher. With how much the drug dealers make off of their trade, a pay off here or there is not economically unreasonable.

The amount of drugs that come into America from Mexico has grown vastly. "It appears that as much as 70-80 percent of the cocaine, 80 percent of the foreign-grown marijuana, 25 percent of the heroin, and 80 percent of the raw methamphetamine ingredients consumed in the United States enter by land from Mexico"^[3] Anyone can see by those numbers that a lot of drugs are coming into the country, but the real problem here is that not only are there a lot of different types of drugs coming into America. If the government was trying to control one dangerous substance, it would be easier to target and to stop. However, it is the multitude of types of drugs that make the targeting difficult. Another difficulty is stopping all of the different drug runners and cartels. "There are probably a dozen Mexican syndicates that are involved in the drug trade. The five primary Mexican syndicates with international capabilities operating in 1999 were: the Gulf cartel, the Hand family, the Herrera family, the Juarez cartel, and the Tijuana cartel."^[3]

The drug trade has created many problems for the Mexican people. Corruption and violence are two negative problems that are associated with the rise of the drug trade. However, one must look at both sides of the situation. If the illegal drug trade is to be taken out of the system, the Mexican economy might take a huge hit.

Corruption

One of the major factors in keeping the drug trade going is corruption within the government as well as governmental organizations such as the police. By passing money under the table, the drug traffickers are able to stay off of the governments radar."Corruption has been present in the Mexican government during the past two decades and has been a source of friction between Mexico and the United States. The most notorious case was that of General Jesus Gutierrez-Robello, the head of the national institute for the combat of drugs, arrested in 1997 for collaborating with the Juarez Cartel."^[4] When the head of the organization that is supposed to be combating the drug trade, is collaborating with a known dangerous drug running group such as the Juarez Cartel, a red flag should be sent up to see where else corruption is taking place.Examples of corruption can be seen throughout the government."One example of the corrupting ability of drug traffickers is the escape from a high security prison of the Mexican drug lord Joaquin “Chapo” Guzman in January 2001. This event shows the degree of corruption that has pervaded the Mexican government, as was acknowledged by Under Secretary of public security Jorge Tello Peon."^[4] When a drug lord can escape jail time with the acknowledgment of a high ranking official without recourse, a problem is thus evident.

In some cases, communities are based on the drug trade."In Mexico, a similar perception of drug trafficking as a somehow violent but self-contained world, with its own laws lingered. Illegal cultivation and trade in the 1940’s and 50’s was largely located in the northern states (Sinaloa, Baja California, Durango, and Chihuahua), and developed in collusion with state police and local politicians."^[1] These drug running communities started with payoffs of local police and politicians so that there would be no outside interference from the government. Some officials are bought off, but some accept the large amounts of money they offer because of the inherent risk of going after the higher up officials in the cartels.. "Mexico's Juarez cartel in January offered to pay anyone who kills an American agent $200,000. Its goal: to scare off law enforcers, who have begun arresting more higher-ups in the cartels."^[5] With that substantial amount of money being put on the heads of the agents trying to combat the drug trade, it is hard to believe that anyone would want to take on the cartels. 200,000 dollars is about the same amount of money these officials work for and while they are working, someone is offered that amount to kill them. That figure brings up another reason why corruption is so easy within the drug empire."Peter Smith reckons that traffickers in Mexico have been able to “afford to spend as much as US 500 million dollars per year on bribery---more than twice the total budget of the attorney general office."^[1] With a budget like the drug traffickers have, it seems almost impossible to avoid corruption. They spend double what the attorney general's office is alloted to spend, just on bribes. 200,000 dollars as a price to put on someone's head to avoid being targeted is a minor expense.

By consolidating the market in many cases, the traffickers have an even greater ability to corner the market. "The most prominent traffickers were families, a factor that managed to consolidate police or military protection as well as to spread solid bonds with local politics and society. In Mexico, “marketing groups” would develop and maintain close ties with producers at local levels, while being relatively circumspect in their political connections."^[1] Similar to the mafia in America, these drug runners make close ties with those working under them, in a family type atmosphere and stay out of public political connections.

The justice system in Mexico is very susceptible to corruption. The amount of people punished for crimes, not just drug related, is staggeringly low."Thus of the total reported crimes in 1996, only 2.4 percent had been subjected to an effective judicial process, in other words, arrested."^[1] Only 2.4 percent of crimes reported even ended up in arrest. It is one thing not to get convictions, but it is another whole greater issue when these people are not even arrested. However, strides are being taken to combat the situation. "Between 1983 and 1996, 2000 police officers were dismissed from the judicial police of the capital city, and some observers claim that as many as 7000 police officers could have also been fired in the period between 1986 and 1996."^[1] The government started cracking down on these police officials who were corrupting the system, but as mentioned, many others escaped being discharged for the same offenses.

Is there corruption within any government? There is most likely corruption within all governments. However, when cartels are able to throw around cash like it was nothing to high up officials, who were in fact in charge with stopping the drug trade, an end to the problem appears no where in sight.

Violence

With the drug trade comes high levels of violence. Much of that violence takes place within the cartels themselves, but also, a high level of violence comes to those who combat it. "In Tijuana, right on the U.S. border, eight senior law enforcement officials have been assassinated since early 1996."^[6] As was mentioned earlier the corruption of officials was being predicated by violence. If the officials were to not comply, their fate might be seen along with those eight law officials being assassinated between 1996 and the date this article was written in April of 1997. These were not just low level agents either, they were senior officials who were important in combating the drug trade."Among these cases are the killing of Police Chief Frederico Benitez Lopez in April 1994; the assassination of formal federal prosecutor Arturo Ochoa Palacio in 1996; the killing of Ernesto Ibarra Santes, the newly named head of federal police operations in Baja California in 1996; and the murder of Baja California State Prosecutor Hudin Gutierrez in 1997."^[4] Not only were officials from Mexico being targeted, but officials such as Ernesto Santes, who was working within America, were being murdered."In recent years, threats against law enforcement officers have escalated dramatically. A former U.S. Customs agent at San Ysidro, south of here, remembers $20,000 bounties on drug-sniffing dogs and "almost daily" physical assaults by drug smugglers. "They're always saying, 'We know where you live'--and I say, 'Yeah, yeah, take a number,' " says Vince Rice, a 10-year DEA veteran."^[5]Threats against officials even ranged to drug dogs. When 20,000 dollars is offered to kill an animal, it would be hard to feel safe as a human. However, as agent Rice says, threats come almost naturally to these agents."Bad as it is, the pressure on the American side is nothing compared with what's going on in Mexico. In February, Tijuana's police chief was shot and killed. In April, two Mexican attorneys and a Mexican Army captain, who had been working closely with the DEA and the FBI, were kidnapped on their way to Tijuana and murdered. And last November, in Matamoros, a DEA agent and an FBI agent were surrounded and threatened by a Mexican drug trafficker and 15 bodyguards brandishing automatic weapons. The agents eventually talked their way out.""^[5]

Land disputes are one of the central causes of violence that does not involve the targeting of government officials."The Mexico City daily La Jornada quoted Oaxaca's Secretary of Public Protection as saying "There is an obstinate attitude about clearly defining the land boundary [between the two villages], according to our investigative sources in order to protect an area dedicated to drug trafficking."^[7]With land disputes occurring between rival groups and without the government not being able to control the groups, violence is bound to erupt.

Another violent outcome of the drug trade is the high levels of kidnappings taking place in Mexico. As a way to circumvent the political arena, drug runners take hostages to gain capital or be exempt from governmental targeting. "The drug industry has indeed been identified as one of the main engines of rising kidnapping rates, particularly with poor, would-be criminals resorting to ransoms to raise capital in order to enter the business. Equally important has been the use of targeted kidnapping waves as a powerful tactic to persuade business and government agencies into criminal cooperation."^[1]By creating fear among all of the Mexican people, the drug cartels are able to circumvent authority. People are more concerned with protecting their loved ones than combating the drug trade. "The kidnappings reported in 1994 were 800 in Mexico…900 in 1997, and 450 in the first three months of 1998 alone."^[1]

Economic Factors

Thus far, only negative factors to the drug trade have been mentioned. However, one must look at both sides and look at how the economy has greatly benefited from the drug trade.

"U.S. drug comsuption: $50 billion (estimate)

Mexico's 1995 GDP: $190 billion (estimate)

Mexican drug exports to the U.S.: $35 billion (estimate)^[6]

35 billion dollars is 18 percent of the national G.D.P. for Mexico. Mexico represents seven tenths of the drug money consumed in America. Those numbers are astronomical. It would be hard to imagine finding another source of money that would affect a country as greatly. "But the size of the Mexican drug trade is surprisingly hard to pin down. Forbes' estimate: some $35 billion, about 18% of Mexico's gross domestic product . This is higher than other estimates because we adjust for the peso's halving in value in 1994-95, which dramatically increased the drug smugglers' power, since their product sells for U.S. dollars. Arguably, however, the trade could be as much as ten percentage points higher. What does it mean to have the equivalent of 18% GDP in criminal hands? Some perspective: Pemex, the Mexican state oil company, has revenues of only about 15% of GDP. Indeed, total Mexican government spending is only about 27% of GDP. Put it another way: 18% of U.S. GDP is $1.4 trillion. Since the Mexican smugglers' gross margin has been reported at a very impressive 40%, the U.S. equivalent would be some $560 billion available for bribes. Enough to tempt even an American politician or policeman?"^[6]

The numbers put forth by Brimelow might even be skewed down based on the conversion of the Peso. Because the drug runners are using American currency in their transactions, the value changes when converting to Pesos. The drug cartels are making even more money than the all powerful oil companies."The Mexican attorney general's office estimated that the gross annual income of Mexican traffickers was about $30 billion dollars a year in 1994. Analyst Andrew Reding points out that "even if that sum is exaggerated by a factor of two, [it] vastly outstrip[ped]oil earnings"--some $7 billion for the same year."^[2] Jobs provided to Mexicans also becomes one of the benefits of the drug trade."According to researcher Carlos Loret de Mola, the drug industry directly employs some 360,000 Mexicans. Nor should the work-generating capacity of the drug control forces be underestimated: The DEA reports that 20,000 Mexican soldiers take part in poppy eradication operations on any given day."^[2] The drug trade employs 360,000 Mexicans. Without the drug trade, these Mexicans would be out of work, further complicating the economy of the country.

With the drug trade also comes the laundering of money. This money helps to avert economic crisis in the country. "The amount of money laundered in Mexico is so great--estimates range from 4% to 20% of GDP--that if laundering were successfully stopped, it could touch off an economic crisis worse than that sparked by the 1994 peso devaluation."^[2] While money laundering, as well as the drug trade for that matter, are not good things for any society, the economic scare completely eliminating these wrongs would cause might ultimately prove worse.

References

Annotated Bibliography

  1. Monica Serrano and Maria Celia Toro, "From Drug Trafficking to Transnational Organized Crime in Latin America" from Transnational Organized Crime & International Security: Business as Usual,2002 Lynne Rienner Publishers, Colorado.

This book takes a look at how drugs go from affecting small areas and how their effects travel trans nationally. It looks at many different case studies on how drugs affect and are affected by certain situations and areas. It specifically looks at globalization and the economic impacts of the drug trade.

2. Chris Eskridge and Brittawni Olson, "The Mexican Cartels and their Challenge to Popular Sovereignty," from Transnational Organized Crime: Myth, Power, and Profit,Carolina Academic Press,Durham NC,2003

This book shows patterns in crime based on technological advances, communication advancements, travel and the use of the internet. The authors of this article do a great job in conveying how the cartels have much control over the Mexican government.

  3. Jorge Chabat, "Mexico's War On Drugs: No Margin For Maneuver," Annals of the American Academy of Political and Social Science, Vol. 582, Cross-National Drug Policy. (Jul., 2002).

This article does a fantastic job of showing the political aspects behind the drug trade. It also shows specific examples of how deep the roots of corruption run within the Mexican government and the fear behind that corruption.

  4. Tharp, Mike U.S. News & World Report; 05/29/2000, Vol. 128 Issue 21, p21, 1p, 1c

Tharp does a great job of giving case studies of the violence taking place within Mexico because of the drug trade. He also shows how the violence spreads into America.

5. Brimelow, Peter,"A Dirty Shade of Green," Forbes,4/7/97, Vol. 159, Issue 7

Brimelow effectively shows how much money Mexico makes because of the drug running from Mexico to America, and the money that is laundered behind it.