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5.3. The International Curse: The Supply and Demand of the Coca Trade PDF Print E-mail
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Grey Literature - DPF: The Great Issues of Drug Policy 1990
Written by Susan Hamilton Saavedra   


Cocaine, with its derivative crack, is a favored drug of choice in the industrialized developed countries. 65 percent of the world's consumption of cocaine is purchased in the United States with 35 percent going to West European countries and elsewhere. The production and use of this drug has proven to have extensive adverse consequences on the social, political and economic institutions of both the producing and consuming nations involved. This paper will discuss the role of the producing countries (Bolivia, Peru, Colombia) and the effect of production on them and the United States, the leading consumer of drugs. The Inter-American response to this consumption will also be evaluated.


Peru is the third largest country in South America but only 15 percent of its land is arable. It is divided into three natural regions consisting of the western coastal region, the Andes mountains, and the inland tropical forest. 50 percent of the Peruvian population resides in the coastal area though it is the smallest segment of the three regions and occupies only 11 percent of the country. 39 percent of the population lives in the Andean highlands (or "las sierras") with the Andes mountains taking up one-fourth of the nation's land space. East of the Andes mountains lies the immense tropical forest which covers almost two-thirds of Peru but supports only 11 percent of the population of 21 million.

Throughout the 1980s and into the 1990s Peru has been experiencing economic, political, and social instability. The nation's difficulties are aggravated by the increasing strength of the indigenous terrorist movement Sendero Luminoso'1 or the "Shining Path"; rampant inflation along with decreased wage earnings; an increase in the cultivation, processing and sale of the coca plant along with the influx of "narco-dollars" from the coca and cocaine profits; and the violence connected with the drug war that has resulted. All these issues threaten the basic structure for stability, growth, and development in Peru.

The guerillas of Sendero Luminoso (led by Abimael Guzman, a former philosophy professor at the University of Huamanga in Ayacucho) are a Marxist-Maoist revolutionary group that is shunned by the world's other Marxist-Leninist Communists. Several future leaders of Sendero visited China during the cultural revolution but the group was independent of and hostile to any world centres of international communism. The Senderistas would not allow themselves to be controlled by or dependent on such centers, even as they admitted their influence. To illustrate their independence, the Senderistas claim to have reformulated Marxist doctrine in what is called Pensamiento Gonzalo (Gonzalo's Thought; "Gonzalo" is the nom de guerre of Abimael Guzman). The full name of the movement's political party is the Peruvian Communist Party — for the Shining Path of Jose Marietegui. This party was formed in 1970 out of the Ayacucho regional committee and other fractions of Bandera Roja 2 (the red flag). The Bandera Roja party whose roots go back to the the Soviet-Sino split of 1964 when the Moaist sympathizing campesino and youth sections of the Partido Comunista Peruano (PCP) split from Patria Roja, the orthodox pro-Peking Maoist party.

The Shining Path insurgency movement is also described as Maoist because of its identification with Mao and the Long March. From them, Sendero derived the strategy of a prolonged popular war in the countryside that eventually engulfed the cities. Sendero Luminoso hopes to seize power by overthrowing the Peruvian government in order to create the "Republic of the New Democracy", a peasant-worker republic to be headed by President Gonzalo.

"Shining Path" uses "selective annihilation" as means of gaining control. This is a euphemism for the execution of local politicians, reluctant peasants and foreign aid workers. One of the insurgency's chief slogans is "Destroy in order to construct".3 Sendero began its violent effort to take power with an attack on a rural voting station in the 1980 elections that brought a civilian president to office after 12 years of military rule.4 By January of 1989, seventeen thousand five hundred people have been killed by means of "selective annihilation", leaving one-quarter of Peru's towns without municipal leadership.

The followers of Sendero fall into two groups; recruited Peruvian university students and peasant farmers (campesinos). Many university students from the valleys are Quechua speaking sons and daughters of richer campesinos and small traders. The movement is especially appealing to them in regard to racial discrimination and the protest against racism plays a definite role in the insurgency movement. In Peru, race is a delicate issue inherent in the caste system which is based on color and cultural identification. Sociologist Carlos Ivan Degregori says: "It is clear that the spinal column of Sendero is drawn from one group. They are young men and women, from the provinces instead of the capital, from the mountains instead of the coast, 'mestizo' (mixed Indian/white blood) or `cholo' (dark skinned), and more educated than the ordinary population."5 The Shining Path uses Peru's ethnic divisions and racism to its advantage, proclaiming itself as the protector of the disadvantaged Indian millions, long ignored or oppressed by Lima's Spanish origin elite. The young people of the countryside who are surrounded by poverty and suffer from the indifference of the white power structure in Lima willingly become followers of the Shining Path.6

The other followers of Sendero are the campesinos (peasants). They live in abject poverty, are marginalized by society, victimized by the nationally faltering economy, and protected by the Sendero Luminoso. The rebels focus on representing the interests of the impoverished campesinos. Although the group's methods are brutal, their sense of purpose and discipline appeals to its members. Sendero is respected because there is a method and purpose to its violence. "The Maoist rebels don't kill indiscriminately and exploit the people like the police and the military do."7

Those who live under the power and protection of the guerrillas are intimidated into submission and subjected to forced indoctrination in the ideology of Mao Zedong and information about the Sendero leader, Abimael Guzman. Those who do not obey the rules are judged and executed in public trials in which the observers are sometimes expected to help kill the offenders. Grave offenses include "squealing", exploitation, stealing, and adultery.

In the early 1980s, army repression of civilians 8 helped Sendero gain support in various parts of the country, but most notably in the Upper Huallaga Valley, where the world's most fertile ground for growing the coca plant is found and where the Peruvian cocaine drug-trafficking center is located. This area is now a major stronghold for the Maoist rebels. Though the Shining Path imposes an ascetic personal code on members that forbids the use of drugs,9 the rebels are establishing themselves as the defenders of thousands of coca growing peasants who have been exploited by drug traffickers and corrupt local police.10 Sendero guarantees that the farmers are paid by the traffickers while simultaneously allowing the dealers freedom and protection to operate. In exchange for cooperating with drug interests and protecting the cocaine production network, Sendero charges a "protection tax" which finances the revolution and provides the rebels with their main source of income.11

An estimated 1.23 million acres in the Huallaga valley (where 65 percent of the world's coca is grown) are devoted to growing coca plants, with the area under cultivation expanding by 10 percent each year.12 At present, it is estimated that Sendero receives $30 million a year from coca production which enables it to acquire more political influence, sophisticated technology, and weaponry. Reports in the valley say that the rebels have indicated that up to 50 percent of this year's crop will go for the purchase of arms.

Sendero began expanding in the Highlands area around 1985. The guerrillas now control dozens of villages and small towns in the Huallaga Valley by means of a shrewd authoritarian system that capitalizes on lawlessness, fear, and lack of development alternatives combined with indoctrination and military tactics. It has managed to intimidate much of the population and virtually eliminate opposition from police and other authorities. In addition to the Senderistas, the army also prevents the police from operating in the Huallaga Valley. "The army fears that by disturbing the coca farmers such an act would drive them into the ranks of the guerrillas."13 However, lured by the prospect of as much as $40 million in U.S. military hardware for an anti-drug campaign, the army now contends that its war with the guerrillas is tantamount to fighting cocaine. In addition, it was noted in the U.S.S.R. Monitor that Moscow delivered 14 Soviet Mi-17 Hip H helicopters to the Peruvian Army in March 1990. During the 1980s Peru received several shipments of Mi-17's and according to the Peruvian government the helicopters will be used "in the struggle against extremism"14 (meaning the Shining Path) as logistical support for Army combat units and for the evacuation of casualties. (During the 1980s Peru was the third largest recipient of Soviet military hardware in the Western Hemisphere, after Cuba and Nicaragua).

Sendero's expansion into the Mantaro Valley, considered the third major front after Ayacaucho and the Huallaga Valley, has increased in the past year. This area supplies food and electricity to Lima, and is an important mining center.15 An indicator of Shining Path's growing strength was revealed and demonstrated in May 1981, when about 1 million people obeyed the group's demand for a 3 day 'armed strike' in the country's mining and farming heartland. This action cut off all supplies of food, electric power and export materials from the three Andean provinces to Lima on the Pacific coast.16

There is a growing sense among government leaders and city dwellers that the rebels are gaining ground and they are concerned that the battle for control could threaten Peru's fragile democracy. (The potent combination of revolution and drug trafficking that is flourishing in the Upper Huallaga Valley and surrounding regions threatens the stability of Peru's already beleaguered government).

The movement controls much of the Central Andean Highlands where 39 percent of the Peruvian population lives and has expanded into the region east of Lima. Many residents of the coastal capital fear encirclement by Sendero; some say that they believe that the movement will eventually take over Peru. An increase in fear due to terrorism and lack of official control is reflected by the emergence of right wing death squads in 1988. Facing threats from Sendero Luminoso, dozens of mayors and other civic authorities resigned in the Fall of 1989, leaving already-remote communities without administrative ties to the central government.

In addition to the insurgency, Peru's fragile democracy is already threatened by economic collapse and social disintegration. "Unless this decline can be halted, Peru is likely to be the first nation to reverse the democratic tide that has swept Latin America in the 1980s."17 Peru is burdened by a $17 billion foreign debt. Its gross national product shrank more than 10 percent in 1988, and 11 percent in 1989.18 Inflation reached almost 2,000 percent in 198819 and increased to 3,000 percent in 1989.20 A major economic concern is that of replacing coca cultivation with other highly profitable crops. Coca is the most lucrative crop in the world and no other agricultural product can compete with it. According to the Interior Ministry of Peru, the drug trade employs 1.1 million` Peruvians, directly or indirectly, and pumps about $800 million annually into the nation's economy. Peru's economic problems are heightened because United States and other developed countries are reducing the amount of tropical products they purchase, aggravating the economic situation and enhancing the attractiveness of coca production. In an attempt to alleviate this problem, Peru proposed to the United States and other developed countries that they give preferential treatment to Peru by adopting political measures regarding the price to be paid for tropical products such as coffee, tobacco, palm trees, cocoa (chocolate), and the anotto seed that can replace the coca-leaf production.21

In 1988 the government of Peru spent over $150 million dollars combatting the drug problem in the valley and eradicating more than 5,000 hectares of coca plantations. The United States also spent over $8 million in
support of coca-eradication programs in the region. However, the peasants who are faced with bare land after the coca is uprooted either engage in terrorist activities or are condemned to live in misery.

The enormous demand for cocaine has created a perverse problem for Peru with economic repercussions. The profits generated by the illegal planting of coca are greater than the revenue from Peru's main exportable goods such as copper, fishmeal and silver. The amount of land presently used for the production of coca leaves (almost 200,000 hectares) is greater than the area used for Peru's main agricultural crops, and occupies almost as much land as the rice plantations that feed the entire Peruvian population.22 The production of cocaine has increased and expanded not only because of the greater demand in the U.S. but because of lower market prices for products such as oil (which dropped from $25 to $9 a barrel in 1986) and coffee (which was reduced by half in 1989).

Peru's commodity based economy (cereals, potatoes, meat, citrus, maize, wheat, barley and native quinoa, copper, electricity etc.) 23 has been losing ground for 30 years but the decline has accelerated during the past five years. This economic deterioration has aided the growth of the Sendero insurgency for Peru's legal exports total $2.5 billion annually and the drug profits bring in an additional $1.2 billion. A national desire to preserve Peru's constitutional democracy through the next presidential election scheduled for April 1990 remains but as conditions worsen both civilian and military offices fear that the country will be ungovernable in the 1990s.24

In the nationwide municipal elections held Nov. 12, 1989 to select the presidential candidate between two primary contenders, Mario Vargas Llosa (political party) and Ricardo Belmont (political party), the Sendero insurgents increased terrorist activities. Sendero's violence transformed the elections from an issue of local concern, involving 9 million people residing in the Peruvian highlands, to a national demonstration of strength and a challenge to the government's ability to protect the people and preserve the fundamentals of democracy. The guerrillas hope-to make a "sham" of the municipal and presidential elections and provoke a military takeover in the expectation that repressive counterinsurgency tactics will drive peasants towards the Shining Path and create a genuine people's revolution.

To thwart the actions of Sendero, the police and the army (also accused of extensive human rights abuses), conducted raids throughout the country and arrested hundreds of people. This was done to retaliate for the killing of more than a dozen local officials, candidates, and the wives and children of officials before the elections. In addition, there were a series of explosions in the highland cities and towns. As part of this campaign, the guerrillas blew up power lines, leaving 30 percent of the capital and much of the coast without electricity. In addition, Sendero gathered 200 residents from an Andean village on Nov. 8, 1989, held an impromptu military court trial, and then executed 8 people. Enrique Bernales, Chairman of the Senate Committee on Violence and Pacification, said that the death of 123 mayors, other local officials, and political leaders in 1989 resulted in the withdrawal of approximately 500 municipal candidates from the race.25

During the fist week of November before the elections, the guerrillas ordered that Lima, the capital, be shut down for a day. In a show of solidarity, 30,000 people aided by the major mayoral candidates, defiantly marched through Lima chanting "Say yes to democracy".26 The presidential candidate, Mr. Belmont said, "I think the people want to vote because it's become open war, either democracy wins or the Shining Path takes control. We are losing our fear because we are almost losing our country."27

Despite the death threats and terrorism, the coalition of center-right parties led by Mario Vargas Llosa won the mayoral races nationwide, strengthening Vargas Llosa's bid for the presidency. In addition, Peruvians turned out in large numbers on Nov. 12 to elect mayors in nearly 2,000 municipalities.

A victorious Vargas Llosa said that "This has been the best demonstration before the world that Peru is not the Shining Path, is not crimes or kidnappings, but is a country that wants to live in peace and democracy."28


This land-locked South American nation ranks 5th in area and 8th in population.29 It is the poorest country in the region with a population of 6.9 million people and a per capita annual income of less than $600. The minimum monthly wage is $25. The cost of living in Bolivia, however, is one of the highest in South America with the prices of poultry and dairy products comparable to those in the United States and Europe. Bolivia receives about $100 million per year in U.S. aid. During the last few years, Bolivia has halted its 5 digit inflation rate of 26,000 percent and is presently laying a foundation for solid economic growth but it remains poor and its top cash crop is coca.30 Once a leading producer of tin, Bolivia now produces close to 50 percent of the paste used to make cocaine consumed in the United States. Its main legal export earned $214 million in 1988; mineral exports totaled $196 million.

During the 1970's, Bolivia was receiving high prices for its tin and natural gas. Both foreigners lending petro dollars and foreign investors were interested in Bolivia and its resources. "Although Bolivia was once the most important tin producer in the world, the collapse of international tin prices in 1985, coupled with Bolivia's expensive and inefficient production methods, have made it more expensive to operate those mines than to leave them idle."31 Prices plummeted precipitously and currently, Argentina, the chief buyer of Bolivian gas cannot afford to import it. World tin prices have been recovering slightly in 1989 but not enough to allow Bolivia to return to its former reliance on tin exports. In order to balance its accounts, Bolivia faces a constant scramble for low, interest loans and credit from multilaterial agencies, the U.S. and other foreign governments. Even the value of illegal cocaine exports is a fraction of what it once was due to a market glut in 1985 that began to push down cocaine prices.

Bolivia has grown coca for centuries but did not start processing cocaine until 1987. When the coca boom began in the 1970s, Bolivians learned to convert the leaf into paste for sale to Colombian traffickers who flew it to their own country to process into cocaine. Colombian traffickers seeking lower production costs found cheap and readily available labor in Bolivia. They sent capital and technicians to help Bolivian trafficking networks set up cocaine laboratories. The Bolivians sold the refined cocaine to the Colombians, who in turn marketed it in the United States which obtains 30 percent of its supply from the Bolivians.

Since 1987, Bolivia has established expensive and sophisticated cocaine laboratories. Recently, some of Bolivia's 30 trafficking organizations began breaking away from the Colombians, developing their own export routes through Brazil, Argentina, and Paraguay and opening markets in Europe. Drug traffickers are becoming stronger and more powerful because of the amount of money involved. According to police reports, there are cocaine laboratories in the Beni Department that are worth between $100,000 and $1 million. Bolivia's cocaine trafficking brings in an estimated $300 million to $600 million each year and provides a livelihood for about 300,000 Bolivians.32

Moreover, since the Colombian drug trafficking crackdown in Aug. of 1989, many of the Colombian traffickers have fled to Bolivia seeking refuge. There are now more Colombians and guns than ever in the Bolivian Beni, the vast region of swamps and jungles which hide hundreds of cocaine laboratories.

Drug experts said that because of the intensified war against traffickers in Colombia, Bolivian suppliers had temporarily lost their shipping contacts, causing the price of Bolivian paste to fall. They also expect that Colombia's drug cartels will soon be bidding up the price sharply as they seek to restore and resecure their links in Bolivia and Peru.

Because of the trafficking crackdown, the traffickers are looking to Europe as a faster growing market than the U.S. and are basing new supply routes on Brazilian, Argentinian and Chilean air or sea links across the Atlantic rather than on well-established routes through Colombia. At the same time, traffickers in Bolivia with close ties to the Medellin cocaine cartel are raising their prices to protect themselves from an expected assault on their strongholds and both the Bolivian and Colombian traffickers have purchased surface-to-air-missiles to combat U.S.- supplied helicopters. The source of this weaponry is not clear. A Latin American informant said "It is speculated that the weapons have been purchased from Israeli arms dealers". This opinion is supported in an article published in the Jan. 26 1990 issue of El Tiempo.33

The Chapare region is the main coca-producing region in Bolivia. The Government estimates that 1,250 tons of paste are made annually in the Chapare region, then transported and refined into 400 tons of cocaine. There are some 1,000 factories in the 6,000 square miles of the Chapare region that grow coca. Bolivian and U.S. governments have focused their efforts there to substitute coca planting and interdict the illicit flow of drugs. Military aerial photographs show that there are close to 100,000 acres of coca cultivation in the area. A United Nations official estimated that 30-40 percent of the Bolivian economy is coca related. Annual drug earnings are about half of the country's legitimate exports.

The campesinos process cocaine by stomping coca leaves that have been mixed with water, kerosene and sulfuric acid three different times with their bare feet. The process occurs in a plastic-lined pit measuring approximately 25 feet by 5 feet. As the stench of the rotting leaves ferment, the resulting liquid is poured out into a smaller pit where it is mixed with lime, more kerosene, and sulfuric acid to "purify" the liquid which gradually distills into a grayish paste. After the paste begins to coagulate, it is then poured through a cheesecloth and the resulting ball is wrapped in toilet paper to dry and sold. The paste sells for about $220 a kilogram (2.2 pounds). When the campesinos become tired making it, they smoke cigarettes laced with the paste, chew coca leaves or drink cheap alcohol mixed with Coca-Cola.34

Bolivia's resources for fighting this drug war are limited. "Four years after the Bolivian Government implemented austerity measures to halt hyper-inflation of 24,000 percent, the Bolivian economy remains fragile."35 Unemployment in 1989 was more than 60 percent. Although the inflation rate hovered at 12-15 percent economic growth remained low and foreign investment was almost nonexistent. Only coca was and is a booming crop. By the end of 1989, Bolivia eradicated only 3,200 of an estimated 123,000 acres of coca.

The eventual desired result of the struggle against drug trafficking is to disturb the coca market along with its derivatives and reduce profits through the resulting scarcity of the product. As this struggle gradually succeeds, those engaged in planting and harvesting coca will seek alternative sources of income, either by planting other products or seeking other jobs.

However, the high profits from cocaine have made the Bolivian and Peruvian governments reluctant to move against it and few farmers have been willing to switch to other crops. Some Bolivian farmers have taken United States and Bolivian money, offered as an inducement for destroying coca plots and cultivating other crops, and moved to remote fields to plant more coca. In the Upper Debacle in Latin America Huallaga Valley in Peru the farmers have virtually halted the cultivation of any other crop.

The election of Bolivian President Paz Zamora (Aug. 6, 1989) was the third consecutive such election without military intervention. But the 1982-85 government of Mr. Paz's predecessor, Herman Siles Zuazo, ended in a chaotic economic situation that threatened to incite the military to intervene again.

Mr. Paz, who heads the Movement of the Revolutionary Left, a Social Democratic group, pledged to maintain stability after taking office on Aug. 6th 1989 and continue the austerity measures of the previous government. These measures include a wage freeze and lower government spending to combat a 1985 annual inflation rate of 25,000 percent. The rate has since dropped to 12 percent and the economy is expected to grow by 2.5 percent in 1990 after years of decline. The inflation rate fell from 26,000 percent to 10 percent in 1988, and in 1987 the economy grew for the first time since 1980. Growth of the gross domestic product is estimated at 3.5 percent in 1989.36 Mr. Paz initiated a tough orthodox economic program that freed the exchange rate, initiated a successful tax collection system, promised to depend on free enterprise for development and set out to eliminate the immense fiscal deficit.37 This program brought Bolivia out of economic chaos in 1985.

At his inaugural address, President Paz Zamora said hé would "fight against the threat of drug trafficking" while preserving "the sovereignty, development and wellbeing of our people."38 He added that he would seek more financial aid from the United States and other cocaine consuming countries to help the peasants switch to crops other than coca. In his election campaign, Paz Zamora asserted that the U.S. put too much emphasis on the policing and interdiction of drug producing and trafficking and not enough on rural development and the opening of markets for legal agricultural products.39

Mr. Paz's approach is to place less emphasis on the growers submitting their crops to eradication. He emphasizes larger payments to encourage the farmers to destroy their own coca crops, change crops, or move. Shortly after his inauguration, however, Mr. Paz Zamora refrained from mentioning his policy involving the presence of several dozen Drug Enforcement Administration agents who help the Bolivian police in drug raids, nor did he mention whether assistance by the U.S. military forces would be accepted in the destruction of the drug laboratories.

In the past the U.S. had been providing money for eradication of the coca plants but had shied away from direct financing of crop substitution and relocation programs because it might seem to be bribing peasants not to plant coca. The U.S. provides other development aid to Bolivia ($593 million in the fiscal year of 1988) but condi tions it on progress in the eradication program.40 By 1989, 8,400 acres of coca had been eradicated since an eradication agreement was signed with the United States in 1987.

The Paz Government has proposed without success a program of road construction, electrification and other basic installations that would cost $350 million to $50 million. It also asked for preferential treatment in the U.S. for fresh products that might be produced in the coca areas. Unable to get U.S. support, Bolivia made plans to call an international donor conference to seek increased aid from Europe and international agencies.

The Bolivian newspaper "El Diario" reported on Jan. 11, 1990 that for the first time the United States had agreed to give the Bolivian idea of alternative development priority treatment during the high-level negotiations on drug traficking that was to be held Jan 10-14 41 in Santa Cruz and again at the presidential "summit" in Cartagena on the 15th of February 1990.

The Bolivian strategy is receiving serious international consideration as a solution to the problem. The Latin American countries which either produce the raw materials or serve as cocaine processing points have a great distaste and fear of any possible imposition of the traditional U.S. use of force. They are eager to find alternative economic and national enhancing solutions to the drug cultivation and trade in addition to the present means of repression and prevention.42


Medellin and Cali are the two major cities in Colombia where the world's largest cocaine trafficking organizations are located. More than a million hectares of land are in the hands of the drug traffickers which precipitated the new Colombian phrase: "los narcos estan comprando el pais" 43 (the drug traffickers are buying the country).

Numerous investigations concerning the influx of narco-dollars into the Colombian economy was headed by Oscar Borreo, president of the Fedelonjos Organization. The findings from these investigations revealed that for the last 10 years the narco-traffickers have invested money in real estate in both the urban sectors and the rural areas. Between 1979 and 1988, the purchase of real estate, urban lots and farms had amounted to about $5.500 million. The percentage of that money that was invested with narco-dollars is uncertain but the amount invested in real estate equaled one-third of Colombia's external debt.

Colombia is very concerned about the traffickers buying millions of acres of prime farm and ranch lands. Jorge Enrique Vargas, the deputy director of the Department of National Planning, portrays the cocaine money as an unwelcome factor that distorts the Colombian economy and threatens agrarian reform programs that have been implemented over the last 25 years. Factors adversely affecting the reforms include an increase of violence by dispossessed campesinos who without land have few possibilities for satisfying their basic needs and the return to the tradition of land being concentrated in the hands of the few. More than 1/2 million campesino families do not own land. In the last few years narco dollars have fostered an acceleration of land ownership that is concentrated in the hands of the few which is diametrically opposed to the goals of the reform.

In the last 5 years, millions of dollars in "hot money" was used to purchase a little over 1 million hectares in the virgin and most fertile regions of the country. That amount of land is greater than the 919 thousand hectares acquired over the past 25 years as part of Colombia's agrarian reform program. At the rate the land is being purchased, narco-traffickers will have purchased approximately 250 thousand hectares in 1989, doubling the amount of land targeted for distribution among the campesinos by Incora, the agrarian reform organization. The government could do nothing to counteract or prevent this trend towards the concentration of land in the hands of the few which now belong to the mafia.44

The traffickers are buying large tracts of land in the Colombian region called the "Red Zone" in the department Arauco. The guerrillas have their encampments there and political violence in the area has accelerated because of it. The soil is very fertile and the traffickers want it. However, this area had been previously designated or selected for agrarian reform because of its remote location and fecundity. To get this land, the traffickers will pay any price in money, cattle, or life. Approximately 20 massacres of peasants had been recorded in 1988 and were attributed to providing security services to the narcotrafficantes.

Guerrillas of the ELN (Ejercito de LiberaciOn Nacional) and of the FARC (Fuerzas Armadas Revolucionarias de Colombia) are a new indication of the ties between the insurgency movements and the drug traffickers.45 The ELN is a pro-Cuban National Liberation Army that began in the 1970s but did not gather strength until the 1980s. It has between 500 to 1,000 people and is the most violent, fanatical, and destructive guerrilla group in Colombia. It financed itself in the 1980s by blackmailing multinational companies that operated under association contracts with the state petroleum firm, Ecopetrol, in the oil-rich region of northern Colombia. However, in the last 3 years, ELN has launched a series of attacks on oil wells and the main oil pipeline causing enormous damage to the national economy. The ultra-militant ELN said that democracy is "not the revolutionary way"46 and that any deviation from the armed struggle is betrayal. They have assassinated community leaders, agrarian reform officials, schoolteachers, and anyone else associated with Pres. Barco's plans to develop and bring peace to Arauca.

During the first week of February 1990 the army bombed two Revolutionary Forces of Colombia (FARC) campsites near La Uribe region where they had been operating for more than 15 years. This area (prior to the bombings) was the bastion for their main headquarters which housed the chiefs of staff for FARC's eastern bloc. They had also been exploiting an emerald mine there for some time.

During this period, a military operation dismantled three camps shared by the ELN and FARC. 15 hectares of coca were found near the site of the three camps. It is believed that there are more coca plants camouflaged by dense vegetation in the area. Colonel Raman Santander, the commander of the military operation, said that during the fighting it was evident that a FARC column participated in the clashes in support of the ELN guerrilla fighters. Inside the rebels barracks were found five sets of field equipment, two Claymore bombs, six guided explosive charges, ELN and FARC bracelets, police uniforms, 77 copies of FARC bylaws, notebooks containing information on the structure of the combat cadres of the organization, and abundant ammunition.47 Twenty miles away from the camps, the army discovered a drug processing kitchen which contained 150 kg of coca paste, two bundles of permanganate, and three 55 gallon containers containing chopped-up coca leaves.

In Medellin the drug cartel has pursued a political strategy, too, through its public statements in the name of the "Extraditables". Following the effective retaliation by President Barco's officials against drug trafficking in August of 1989, the traffickers offered a deal: in exchange for abandoning their outlaw ways, the traffickers wanted "constitutional and legal guarantees." They sought to stop the government from trying to capture and extradite them to face narcotics charges in the U.S.

Because the traffickers have succeeded in intimidating the Colombian justice system with assassinations and bribes, the elimination of extradition would be tantamount to amnesty. Mr. Barco's government will not
negotiate with the extraditables because their members are gangsters responsible for selected assassinations; terrorist activities which include hostage taking; bombings of buildings and airplanes; and though they have never identified themselves as a specific group, members may be drug bosses. The extraditables are not clear about how much of the cocaine business they do control. In exchange for amnesty, the extraditables specifically mentioned giving up weapons, laboratories and secret air fields. They did not indicate, however, that they would identify middle-level traffickers who might later replace them nor did they reveal networks in the United States.

To demonstrate good faith, the traffickers turned over an immense laboratory complex on Feb. 11, 1990 to show their desire to quit the cocaine business and live in peace with their illicit fortunes. The complex, located near the Panamanian border, was shown to a group of 20 or more Colombian journalists. The laboratory produced 20 tons of cocaine a month or the equivalent of more than two-thirds of Colombia's estimated total production of 325 tons in 1989.

President Barco began the war against the major drug lords Gacha, Pablo Escobar Gaviria, and the three brothers of Medellin's Ochoa family in August 1989. His offensive was ignited when the cartel (mob) hit men assassinated the presidential candidate Luis Carlos Galdn. Since then, the leaders of Colombia's coke cartels have gone into hiding, forfeiting lush estates and bank accounts. Nevertheless, Gacha and the gang remained immensely powerful. Their drug operations and trafficking had only been slightly hampered and their profits were still enormous.

From mid August to December 1989 (sometimes referred to as the "season of terror"), the cartel members killed 187 civilians, set off 265 bombs and destroyed more than $500 million worth of property. To counteract the violence during that same period, the government made 497 arrests, 9 suspects were extradited to the U.S., and $250 million in property, weapons and drugs were confiscated:The Colombian police after 5 months of their campaign against the traffickers captured planes, hundreds of properties, fleets of cars, and in December of 1989 gunned down Jose Rodriguez Gacha, the most violent of the leaders of the Medellin cocaine organization.

The Colombian national police is the country's chief antidrug agency. A special unit within the agency, the "Elite Corps", has the task of capturing drug bosses. Another police group, involved with an operation called "Red Moon", seeks out and destroys jungle laboratories believed to produce more than 550 pounds of cocaine a week, that bring in about $800,000 from U.S. purchases.48 According to United States officials, despite the efforts of the police and special units, there has not been a reduction in the flow of cocaine to the U.S. An estimated 85 percent of the cocaine consumed in the U.S. is still coming from Colombia.49

Defying and retaliating against United State's involvement and cooperation with the Colombian "drug crackdown" (which included seizure of their aircrafts and properties in addition to the U.S./Colombian extradition agreement and recent U.S. death penalty for drug traffickers), Gacha's organization planned to introduce American drug users to basuco, a partly processed coca plant that is later mixed with ether to purify it into cocaine. Basuco, which is just as addictive as crack but also possesses the additional quality of causing brain damage, has long been used by poor Colombians and the coca stomping Bolivian and Peruvian campesinos. Prior to Gacha's death at the hands of the authorities in Dec. 1989 a cartel source said: "Gacha thinks basuco will be very popular among poor Americans. He blames America for the injury his business has suffered and wants to punish the U.S."50

Though the escalation of violence is intimidating and eroding Barco's popular support throughout the country, Colombian officials contend that the season of terror is proof that their battle is taking its toll against the intended targets. "'We are winning,' insists General Miguel Maza Marquez, who as head of the DAS (Department of Administrative Security) directsthe government's offensive against the traffickers. The chieftans no longer live comfortably. They are in the mountains. The best proof that they are cracking is the level of madness to which they have sunk."51

However, some factions in the gov rnment and some community leaders outside of it are aying that the traffickers' offer may be a real opportunity to explore ways to end the violence and that this in turn Might provide an opening for dealing with the drug trafficking problem.52 On Jan. 15, 1990, Alfonso López Michelsen, a former Colombian President issued a statement suggesting that the traffickers might be treated leniently if they freed their hostages and stopped drug trafficking, murdering, and bombing. The statement was also signed by two other former presidents, the leader of the leftist Patriotic Union Party and the Archbishop of Colombia. The following day, the Extraditables issued a statment suggesting they had been defeated, adding that they "only desired peace, tranquility and democracy for our fatherland and our people". A few days later they had released Mr. Alvaro Diego Montoya Escobar, son of the Secretary General of Colombia 53 and four other hostages, including Patricia Echavarria, a sister of the husband of one of Mr. Barco's daughters.

Barco's war is not primarily intended to keep the rest of the world safe from Colombian drugs. He views the narco-traffickers primarily as a threat to his country and thus devotes fewer resources to destroying the Cali clan than the other cartels. General Maza said, "In 1984 we didn't have a clear idea of the dimension of the problem We didn't realize that they had our society practically under control. They are killing Colombia. We have to resolve this problem first. Then we can take part in the world fight."54

The government holds Gacha and Escobar responsible for most of Colombia's recent violence. By contrast, Bogotd considers the Rodriquez Orejuela mob from Cali to be the whitecollar criminals who would rather make money than notoriety. While less prone to violence, the Cali organization does its share to sustain the drug networking system for it is the second major cartel in Colombia which controls the cocaine market in New York and other major American cities.

Cali, a tropical city of more than 1 million people, was founded 450 years ago. It's racial mix is comprised of blacks from the coast, Indians from the hills, whites descended from the Spanish conquistadores, and a large mestizo population that shares the heritage of all three groups. The Liberal Party machine has made Cali one of Colombia's more efficiently run cities. Its fortunes have always been linked to agriculture, especially sugar cane. However, the traditional pattern of campesinos tending small plots of family land has now become largely replaced by big agribusiness concerns that own huge chunks of the valley.

After Medellin, Cali is Colombia's most violent city. But there is none of the public chaos, bombings, kidnappings, and assassinations that characterize the Medellin cartel. It is here that the cocaine traffickers and the society at large have come to a profitable coexistence. The Colombian government's "total war" against the drug trade has barely touched the Cali cartel which is believed responsible for at least a third of the cocaine shipped to the United States.

Gilberto Rodriguez Orejuela, head of the Cali cartel and known as "the chess player", came from humble origins. He began his career as a messenger for a pharmaceutical company. Later he ran his own businesses which included a drug store and allegedly used his facilities to process cocaine on the side. Rodriguez Orejuela and his "associate" Jose Santacruz Londono were among the 11 remaining on the "most wanted" list for cocaine-related charges in the U.S. Santacurz is still listed. Both men were leaders of a broad-based trafficking pyramind, controlling supply and distribution routes for cocaine, contacts in the U.S., money-laundering operations and a complex infrastructure.55 Colombian and U.S. officials estimate that the Cali group produces up to 200 tons of cocaine a year for export to the U.S. Moreover, even after Barco's crackdown, Rodriguez Orejuela carried on business as usual without the authority's relentless pursuit as was carried out against the Medellian drug lords.

While the Cali traffickers have men under arms, they have not assembled the private armies that Medellin leaders Escobar and Gonzalo Rodriguez Gacha put together. They also have invested heavily in legitimate enterprises — drug stores, radio stations, real estate, the soccer team America, and a string of sleazy motels. "Whether the Cali establishment wants to live with the traffickers or not, it does. The traffickers are responsible for a lot of philanthropy and there are a lot of architects, doctors, dentists, engineers, and lawyers who work for them." said Alvaro Camacho, a Cali sociologist who has studied the cartel and written extensively on violence in Colombia.56

Over the last two years the Cali and Medellin cartels have been warring against each other. In one notorious incident, Cali operatives tried to kill Escobar by bombing his apartment building. Some observers believed that the conflict ended with the start of the government's anti-drug campaign in August 1989 but there are signs that the fight is still going on.

In a letter written to "El Tiempo" in mid January 1990, Escobar accused the Cali cartel of providing authorities with information that led them to the Medellin leader Rodriguez Gacha, who was killed in a shootout in Dec. 1989. He said the informant was "the navigator", who works for the Cali group. "They pretend not to be violent" Escobar wrote about the Cali cartel, "while at the same time they have slashed and kidnapped dozens of innocent [Medellin] citizens who happened to be visiting Cali." The letters written to the press from Rodruguez and Escobar indicate that with their recent offer to surrender their arms and get out of the cocaine trade, the Extraditables do not speak for the Cali Cartel.

While the Colombian military is active in the search for Escobar and Ochoa, it has played virtually no role in trying to find the Cali cartel leaders. However, a U.S. specialist said that the government's action has kept the Cali cartel from expanding significantly by picking up the slack created by the disruption of the Medellin operations. Other sources say the Cali group is busy refining its business operations. Faced with stricter controls on the chemicals used to process finished cocaine, the Cali cartel reportedly has pioneered the use of more easily obtained substitutes.

The narcotraffickers hate President Barco for they know that if he can catch them he will extradite them to face U.S. judges even though the government and economists estimate that $1.5 billion of drug trafficking profits circulated in the Colombian economy in 1989. That amount accounted for 20 percent of the country's total export earnings. The income from cocaine in 1989 was three times the $1.2 billion expected from the sale of Colombian coffee for that same year. The drug trade is highly lucrative and by some estimates as many as 300,000 of Colombia's 32 million people may be directly or indirectly employed in the cocaine business and as many as 1.2 million may benefit from the proceeds.

The Colombian government and some economists say that a sudden halt to the drug trade (which yielded $4 billion in 1989) would throw the country into a deep recession that might run four or five years. "If the narcotics trafficking stoppped suddenly" said Fernando Tenjo Galarza of the Department of Naitonal Planning "it would be like having a coffee crisis and oil crisis at the same time." An economist said "I think we would see a very deep recession. It could be disastrous if you don't manage it

In Colombia the law states that only the president may extradite suspects. Barco has proven to be a man of substance and determination from his adamant stance against the traffickers in addition to his successful economic policies. He has encouraged the import of "know-how," guaranteed flows of capital and profits, cut tariffs and generally liberalised the economy. The result has been a boom in oil wells, coal mines, and manufacturing industries. Colombia no longer depends primarily on exporting coffee. In 1984 exports were worth $3.5 billion, of which coffee contributed well over half. In 1988 coffee exports were slightly down, but total exports were worth more than $5 billion.58

However, Colombia says it needs better prices for its coffee and fewer restriction on its exports of freshly cut flowers and textiles to the United States. Under pressure from American coffee manufacturers for more advantageous prices and different mixes of beans, the United States has resisted reaching an international coffee agreement on price supports. World coffee prices have plunged and Colombia says it will lose about $500 million a year unless the agreement is restored. The breakdown in the International Coffee Agreement, signed by 74 producing and consuming countries to regulate coffee prices by controlling the quantity of exports, resulted from those demands made by the United States. The U.S.'s decision not to continue to negotiate caused the recent sharp drop in international coffee prices.

"The agreement, which had maintained order in the world market for the past 27 years, aimed at supporting a base price for coffee beans of $1.20 a pound. After suspension of the quotas, the world price toppled to 85 cents, and remains around these levels today."59 It is apparent that there is a contradiction in the manner in which the United States is trying to help Colombia fight a drug war. On one hand the U.S. is willing to give financial and military aid to combat trafficking yet at the same time the U.S. is penalizing Colombia with trade actions impeding their economic independence because of competing domestic American interests. American trade policies are squeezing Colombia's earnings and making its war against cocaine trafficking more difficult.
A preliminary decision to impose a U.S. Federal import surchage on Colombian flowers by the Commerce Department's International trade Administration could put a serious dent in Colombia's $200 million-a-year trade in cut flowers. Colombia was already selling the flowers to the United States at prices far below fair market value. If not overturned in the final determination during April 1990, the action proposed by the Commerce Department could mean the surcharge that would be imposed retroactively on importers would rise by 50 percent or up to $8 million weakening the competiveness of Colombian flowers. At present, Colombia is already trying to pay off its $16 billion foreign debt which is now devouring 42 percent of its export earnings.
Mr. Mosquera Chaux, Colombia's ambassador to the United States, said the trade policies could cut Colombia's foreign earnings by hundreds of millions of dollars a year at a time when his country has had to "earmark a good portion of national resources for that heroic fight" against drug trafficking, "which Colombia is waging on behalf of the whole of mankind.""
United States
In a pre-summit letter to Pres. Bush, Colombian Pres. Virgilio Barco complained about several U.S. policies that are undermining Colombia's war against the drug cartels. He expressed his concern about the U.S.'s failure to crack down on the illegal flow of American chemicals and assault weapons to Colombia's drug traffickers, as well as to curb the use of U.S. banks for laundering drug money.
Senator Joseph Biden of Delaware proposed that to assist the drug producing nations in reorganizing or bolstering their economies, a "debt for drugs" swap should be made. The United States would pay off the big foreign debts of the cocaine-producing countries under the plan in exchange for a program of coca-crop eradication and encouragement of alternate crops.61
Some have suggested that the U.S. or other consuming nations purchase coca for destruction but coca is a five generational plant, needing little or no care. The purchase of this agricultural product in large quantity by the United States or other consuming nations is impractical for it would result in a never-ending purchase of the product at an enormous financial loss to the purchasing country or countries, with the added consequnce of eliminating any incentives to stop production.
Another suggestion has been to escalate military activity against the brokers, dealers, growers and drug lords. This has some merit, but is impractical since the more dangerous the acquisition of the drug, the higher the price for it rises resulting in higher profits and sustaining the lure and attraction of coca consumption and production.
Pres. George Bush announced on Jan. 25, 1990 the amount of economic aid destined for Colombia, Peru and Bolivia. The amount, prior to the Cartagena Summit, was $206,000,000.62As part of the Andean/American agreement that amount was increased to $2 billion over a
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four year period which averages about $166 million a year for each of the countries. Mr. Garcia and Mar. Paz Zamora believe that even this amount is insufficient but $500 million a year more would be adequate.
Critics say that the Administration's efforts are disjointed. At least six U.S. Gov. agencies (among them the CIA, DEA, and State Department) are working against drugs in the three countries. Within the U.S. armed forces, opinion is divided over whether the military should be involved in the drug war in South America. Many officers, remembering the Vietnam War, worry that the military will be drawn into an unwinnable war but despite misgivings, the Defense Department has ordered stepped-up training, reconnaissance, intelligence sharing and logistical support in the three Andean countries.°
One of the President's National Drug Control Strategies announced in September 1989 was to reduce, and if possible eliminate, the flow of illegal drugs into the United States. Detecting and monitoring the production, trafficking, and use of illegal drugs is a high-priority national security mission of the Department of Defense. To address this problem the Defense Department has trained more than 250 U.S. government personnel and at least 500 foreign personnel. The DoD's international program includes staff training in interdiction procedures; eradication operations; jungle survival; individual combat training; operational planning; logistics; weapons handling; and teaching foreign languages.
Hundreds of millions of dollars worth of equipment including Navy E-2C aircraft; Blackhawk helicopters, command, control, and communications equipment; in addition to M-16 rifles have been loaned by the Department of Defense to various drug law enforcement agencies. "Under the President's National Drug Control Strategy and the Secretary of Defense's September 1989 DoD counternarcotics guidance, the Defense Department — in conjunction with the Dpt. of State and U.S. law enforcement agencies — is helping to lead the attack on the supply of illegal drugs from abroad. The Department of Defense's efforts will complement those of other U.S. agencies and foreign countries.""
Cartagena Drug Summit
On Feb. 15, 1990 the president Virgilio Barco of Colombia, Jaime Paz Zamora of Bolivia, Alan Garacia of Peru, and George Bush from the United States met in Cartagena, Colombia to discuss the drug trafficking problem. As a result of this meeting, the four presidents were to issue a joint communique that would outline some new measures to combat cocaine production and its export.
The leaders of the coca producing countries stressed the importance of halting cocaine production that has become a mainstay of their troubled economies and the need for economic alternatives. Presidents Alan Garcia of Peru and Jaime Paz Zamora of Bolivia argued that the solution to the drug problem lies not in force but in broad economic development — road building, electrification, agricultural services, the introduction of industry — accompanied by price supports to make other crops more attractive than coca. Alan Garcia stated that the measures discussed at the summit must "eradicate production, prevent consumption, and should include an effective commitment from the United States to limit the demand".65President Barco of Colombia clearly encapsulated the international drug problem eloquently in his opening speech at the summit saying that
Our struggle is against an international
criminal organization that has enormous
economic resources and manages a com-
plex multinational operation. There is a
chain of criminal organizations of various nationalities that flows from the areas
where the leaves are grown in Bolivia and Peru, passes through Colombia where
these are processed and shipped, and ends at their final destinations in the cities of
Europe and of the United States. These organizations are trying to destroy our
democracies and corrupt our youths for the sake of their illegal profits."
Garcia added that:
"We must break that chain. We
must offer economic and social alternatives for the peasants who grow coca. We must dismantle the cartels and their drug
processing and trafficking structures. We must stop the flow of chemical products
from the industrialized nations. We must control the sale of weapons that are later used by criminals to instigate violence.
Basically, we must do everything possible to reduce the demand for drugs in the large cities of the developed nations. On previous occasions, I have said that any tactic or
strategy is insignificant in the face of the tremendous need to reduce drug consumption. The only law that the narcotics
traffickers do not violate is the law of
supply and demand."66
The U.S. participated at the summit primarily to demonstrate personal support for Pres. Barco of Colombia and to show that the U.S., as the major cocaine-consumer nation, recognized and accepted the fact that efforts to reduce supply must be accompanied by a significant reduction in demand. However, the U.S. participation at the drug summit represented a great deal more, for this
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was the first time the United States had negotiated as an equal with the Latin American countries in a multilateral way.
There were also points of disagreement between the nations. Colombia, Peru and Bolivia rejected the U.S. favored solution of expanding the use of its military to help stop cocaine smuggling from South America. In the spirit of cooperation, the United States agreed to 1) increase its economic aid to the coca producing countries ($2.2 billion, 5 year regional aid for the "Andean anti-drug program");67 2) direct more activity by Federal drug agents towards stopping the flow of the U.S. chemicals (ether, acetone and other industrial solvents) that are needed for the processing of cocaine and 3) engage in tracking shipments of automatic weapons going to or coming from South America.
The Andean leaders stressed the need for additional economic aid above the amount that the United States was willing and able to provide. All the leaders agreed that the coca farmers needed to find substitute crops, a market that would buy them and economic assistance that would help in this effort. The European countries and Japan will also be called upon to offer assistance. In addition, Mr. Bush pledged to find ways to expand U.S. markets for substitute crops like coffee and cut flowers. The summit leaders also took note of the Andean trade initiative proposed by President Bush on Nov. 1, 1989, which constituted an important step toward opening trade, and they agreed to explore broader possibilites. All the leaders agreed that the problem of illegal drugs must be faced by the international community in its different stages of production, trafficking, and consumption.
The summit marked the appearance of what could be described as the Cartagena cartel to fight the power of the Cali and Medellin cartels, which began to flood U.S. cities with marijuana and cocaine in the late 1970s. The cooperative strategy involves: 1) the reduction of demand, consumption, and supply, 2) economic cooperation between the U.S. and the coca producing countries, 3) the need to obtain economic support from other sources, 4) mutual support for development and alternate development programs, 5) stimulus for commerce and investment, 6) joint negotiations with multi-lateral financial institutions, 7) expansion of anti-drug prevention and education programs and 8) reinforcement measures to stop the flow of illicit drugs.
The leaders recognized that the repression of drug trafficking is essentially a police matter but one in which the Armed Forces can participate within the legal provisions of each country. In support of such activity, the countries promise to increase the exchange of intelligence information to reinforce the action of the proper organization; to identify, follow up, freeze, and confiscate bank accounts and apply other legal procedures to deal with the financial aspects of trafficking in illegal drugs.
They also agreed to adopt a system to confiscate and distribute earnings and properties of drug traffickers that had been seized in the U.S. The U.S. promised to transfer the confiscated properties to the Latin American governmet (Peru, Bolivian or Colombia) that assisted in the operation.
President Bush promised to request authorization from the U.S. Congress to increase cooperation funds for the Andean countries from 1991 to 1994. Also, the U.S. was willing to cooperate with the Andean countries "in a broad number of initiatives for development, trade, and investment to reinforce and maintain" the coca producing countries' long-term economic growth.
On a short-term basis, the U.S. will engage in establishing or reinforcing emergency social programs and will support the balance of payments to counteract the social and economic costs derived from the substitution of the plantings. On a short-term and mid-term basis, the U.S. will engage in establishing investment programs and measures to create the economic conditions that will lead to the final substitution of the coca economy in countries where it exists and the economic sector affected by the drug traffic. Washington will support the measures intended to stimulate a broad-based rural development; encourage nontraditional exports; lift or reinforce the production infrastructure; and is willing to finance activities of this kind with fresh loans. It will also increase its cooperation in outfitting and training the police organizations of the Andean countries; intensify control over the smuggling of chemicals used in the production of drugs, as well as arms smuggling, and register aircraft and ships used for drug trafficking.°
The final document issued by the conference included few specific economic, military or law enforcement agreements. It did not discuss extradition of cocaine traffickers to the U.S. and the use of the U.S. military to monitor and interdict cocaine traffic from South America.
A major change of attitude in the "war against drugs" for the Andean countries of Bolivia and Peru was evident in the final document which states that "...narcotics control is essentially a law-enforcement matter. The armed forces of each of the countries, within their own territory and national jurisdiction, may also participate."° This was a compromise and a major concession, by Bolivia and Peru, toward the U.S.'s favored strategy of engaging the three Andean armies in the drug war.
Prior to the Cartagena summit, both Bolivia and Peru continued to equivocate on waging any kind of warfare on an industry that provides an income for hundreds of thousands of peasants. These countries' military forces have traditionally insisted that drug trafficking is a
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criminal matter for the police to confront and not a military issue. In addition, Peru and Bolivia have had a history of separation betwen the forces due to
longstanding friction between them and so they have seldom worked together.
Only Colombia, of the three countries, has been willing to mount a real armed offensive of its own. However, Bolivia, Colombia, and Peru are all nationalistic and very sensitive to any outside military force intervening in their internal affairs. This sensitivity is especially pronounced towards the United States. Their distrust of U.S. intervention was evident in the meeting by the absence of references in the agreement to the general principle of armed forces of one country operating in another.
Bilateral agreements were also made at the summit meeting. Peru and the U.S. agreed to exchange financial information, bank records, and "other information" that would facilitate the detection of money illicitly obtained from drug trafficking and money laundering operations. The U.S. and Peru reconfirmed an extradition agreement that the two countries had signed in 1889. The agreement states their "mutual desire" to support legal cooperation mechanisms that guarantee the return of fugitives to be tried where required by law. Drug trafficking and "other" crimes related to it, such as the investigation of tax evasion as an effective means of arresting and imprisoniong drug dealers and distrubutors, are now accepted as being covered by the 1889 treaty. Their agreement also encourages the investigation of tax evasion as an effective means of arresting and imprisoning drug dealers and distributors. The document was signed by the Peruvian Foreign Minister Guillermo Larco Cox and U.S. Secretary of State James Baker.7°
Cocaine is a processed drug made from coca leaves grown in the fertile highlands of the Andes mountains.
The leaves are mixed with ether, sulfuric acid, acetone and other solvent chemicals produced in the United States.
The cocaine trade is not an isolated or singular problem for any of the countries involved. It is an interdependent problem based on need — both economic and social.
Economic need exists for the countries that grow and process the coca leaves. Social need, exhibited in the escalation of cocaine consumption and its derivatives exists primarily in the United States. Satisfying both these needs, through the supply and demand of the coca or cocaine trade, has had adverse internal and international political ramifications.
The coca producing countries of Peru, Bolivia, Colombia and the major consuming country of the United States have been the focus of this paper. The economic factors relating to each of the Latin American countries under discussion were examined and linked to their drug trafficking activities. The cultivation, processing, and sale of cocaine became an appealing and profitable alternative crop as the legal Andean export prices dropped on the
world market. In 1988/89 Bolivia's legal exports earned $400 million, coca profits yielded approximately $500 million; Peru's legal exports earned $2.5 billion, coca profits amounted to $1.2 billion; Colombia's legal exports earned approximately $7.5 billion; coca brought in an additional $4 billion.
Each of these Andean countries produces and processes coca leaves into cocaine. However, they operate as a conglomerate with each country playing its major role. Peru produces the bulk of the leaves which in turn are processed into coca paste by Bolivia. Colombia then refines this into cocaine. The mafia controlled cartels distribute the latter internationally.
Millions of people, from the poor peasant farmer to the wealthy, powerful drug lords, are involved in this highly profitable and illegal enterprise. To protect their interests, armed resistance and aggressive attacks with the use of automatic weapons, surface to air missles, and various explosives have become commonplace. Not only have the drug profits provided money for these weapons and explosives but they have also been directly or indirectly instrumental in financing insurgencies and guerrilla groups such as the Sendero Luminoso in Peru and the ELN and FARC factions in Colombia.
Before the Cartagena summit, the United States Government held the positon that the Andean countries were primarily responsible for the coca trade. From this perspective, the U.S. addressed the problem from a military point of view and termed its efforts the "drug war" or the "war on drugs". Through the Inter-American discussions held at preliminary meetings to the Cartagena Summit, the United States began to accept responsibility for the demand side of the drug trade equation and for furnishing the chemicals needed in processing cocaine.
The Cartagena Summit acknowledged that cocaine trafficking was not solely an Inter-American problem but a global economic one that needs to be addressed by the European, Inter-American, and Japanese markets. Legal Andean export products must be traded at higher prices on the world market. Investments in alternative development programs must be made by the international community in addition to providing economic aid. These efforts should not be considered gratuitous gifts or hand outs for they are in fact potential solutions for combatting the drug trade. It is hoped that through the agreements and initiatives established at the Cartagena Summit coca will no longer remain a preferred export product thus diminishing the supply of cocaine. The United States recognizes that it cannot single handedly
Debacle in Latin America    Page 157
fight the "war on drugs" but will continue its efforts to disrupt and dismantle the multinational criminal organizations that support the production, processing, transportation and distribution of cocaine.
The reasons for drug consumption were not addressed in this paper because it is complex and lies outside the boundaries of my discussion. Clearly, it is impossible
to offer any immediate or long term solutions. But what are the social ills that have created the demand for mind altering drugs that anesthetize the user to dull reality? For the United States, this is the most problematic aspect of the drug trade for it threatens the most elemental aspect of society - the individual. Throwing millions or even billions of dollars towards military strategies to combat drug trafficking will prove to be only somewhat effective. The use of military action is an aggressive reaction to the symptoms. Military strategies cannot eliminate the root cause of the problem which lies at home in the streets of America. My personal opinion is that the United States, in addition to complying with the agreements and trade incentives established at the Cartagena Summit, should reduce the amount of money targeted for military action in combatting drug trafficking and redirect that money towards drug education and rehabilitation at home.
Susan Hamilton Saavedra is the supervisor of the International,Studies Resource Center, University of Notre Dame Library, South Bend, Ind. 46556-5629.
Collett, Merrill. "The Cocaine Connection: Drug Trafficking and Inter-American Relations," Foreign Policy Association, Headline Series no. 290, (New York, N.Y., 1989).
La Cuestitk de las Drogas en America Latina: iota Visitk Global. Caracas, Venezuela: Comisian Nacional Contra el Uso 'licit° de las Drogas, 1987.
Degregori, Carlos Ivan. Sendero Luminoso. Lima, Peru: Instituto de Estudios Peruanos, 1985.
Degregori, Carlos Ivan. Sendero Luminoso: Lucha Armada y Utopia Autoritaria, II parte. Lima, Peru: Instituto de Estudios Peruanos, 1985.
Economic Survey of Latin America and the Carribbean 1988. Santiago: United Nations, 1989.
Encyclopedia Americana vol. 21 p. 778.
Londono Paredes, Julio. Memoria al Congreso Nacional 1988-1989. Bogota: Republica de Colombia Ministerio de Relaciones Exteriores, 1989.
Mandez, Juan E. A Certain Passivity: Failing to Curb Human Rights Abuses in Peru. New York, NY: Americas Watch Committee, 1987.
Reid, Michael. Peru, Paths to Poverty. London: Latin America Bureau (Research and Action), 1985.
Journals and Periodicals
Selected articles from:
Christian Science Monitor 1989.
Foreign Daily Broadcast Service 1990.
London Times 1989.
Le Monde 1990.
The New York Times 1989-90.
El Tiempo 1990.
Semana 1988.
Time 1989.
U.S. News & World Report 1989.
Washington Post 1989-90.
Washington Post National Weekly Edition 1990.
Slater, David, ed., "New Social Movements and the State in Latin America," CEDLA: Centro de Estudios y Documentacion Latinoamericanos, Latin America Studies no. 29, (Amsterdam, Netherlands, 1985).
Report of the Secretary of Defense to the President and the Congress, Counternarcotics Programs, Pt. IV Defense Components, Jan. 1990, pp. 54-56.
1 Michael Reid, Peru, Paths to Poverty (London: Latin America Bureau, 1985) p. 11.
"Formed in 1970 out of the Ayaucho regional committee and other fractions of the Bandera Raja (Red Flag) political party, Sendero's full name is Partido Comunista del Peru - For El Sendero Luminoso de Jose Carlos Mariategui'. After establishing a base in Ayachucho's university and the surrounding campesino communities, Sendero began armed action in 1980. Using a Maoist strategy of rural insurgency, combined with urban terrorism, Sendero was by 1984 waging a full-scale guerrilla war."
2 Michael Reid, Peru, Paths to Poverty (London: Latin America Bureau, 1985) p. 10.
"An orthodox pro-Peking Maoist party, Patria Roja's roots go back to the Sino-Soviet split of 1964, when the Maoist-sympathising campesino and youth sections of the PCP (Partido Comunista del Peru) split and formed the PCP Bandera Roja, under the leadershop of lawyer Saturnino Paredes. In a confused series of schisms between 1968 and 1970, a group calling itself the Comite Nacional Coordinadora left the by then pro Albanian Bandera Roja. The dissident group subsequently changing its name to Patria Roja" (or Red Country).
3 Kathryn Leger, "Peru's Leftist Rebels Gain Ground" Christian Science Monitor, 2 May 1989, p. 3.
4 Joseph B. Treaster, "Rebels Step Up Killings in Peru to Disrupt Election" New York Times, 26 Oct. 1989, p. A6
5 Eugene Robinson, "Economic Hardship Sharpens the Racial Schism in Peru: the Shining Path Guerrillas Reflect a Complex Struggle" The Washington Post National Weekly Edition 12-18 Feb. 1990, p. 19.
6 Degregori, Carlos Ivan. Sendero Luminoso: Lucha Armada y Utopia Autoritaria, H parte. Lima: Instituto de Estudios Peruanos, 1985, 22 p.
7 Kathryn Leger. "Peru Rebels Flourish in Drug Zone" Christian Science Monitor, 12 May 1989, p. 3.
8 Michael Reid, Peru, Paths to Poverty (London: Latin America Bureau, 1985) p. 111.
Between 1980 and 1982 Sendero carried out hundreds of dynamite attacks in the Ayacucho area, and elsewhere in the
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sierra and in Lima. At the same time Sendero staged selective assasinations of village mayors and officials. "Rural traders, larger landowners and rustlers were executed after 'popular trials', their goods and lands being divided up among the poorer campesinos.."
"The government's counter-insurgency policy hardened after the first Senderista assault on a police post in 1981. A state of emergency was declared. At the time a detachment of the `SinchisVthose who could do anything' in Quechua), the counter insurgency battalion of the Civil Guard, was sent to Ayacucho. The Sinchis proved to be effective recruiting sergeants for Sendero. The poorer sections of the peasantry were initially not greatly troubled by the guerrillas, who restricted their killings to the campesinos' traditional enemies. By contrast, the well-armed Sinchis stole, raped and killed indiscriminately, and failed to prevent further attacks on police posts."
9 Joseph B. Treaster, "Rebels Step Up Killings in Peru to Disrupt Election," New York Times, 26 Oct. 1989, p. A6.
10 Kathryn Leger, "Peru Rebels Flourish in Drug Zone", Christian Science Monitor, 12 May 1989, p. 3.
11 Cynthia McClintock and Abraham F. Lowenthal, "Peru's Harvest of Instability and Terrorism" Christian Science Montor, 16 March 1989, p. 19
12 Kathryn Leger, "Peru Rebels Flourish in Drug Zone", Christian Science Monitor, 12 May 1989. p. 3.
13 New York Times 1 Jan 1990 p. 3
14 "U.S.S.R. Monitor: Tracking Moscow's Activity Around the Globe", National Security Record 9, (April 1990)
15 Kathryn Leger, "Peru's Leftist Rebels Gain Ground", Christian Science Monitor, 2 May 1989, p. 3.
16 Joseph B. Treaster. "Rebels Step Up Killings in Peru to Disrupt Election" New York Times 26 Oct. 1989, p. A6.
17 Cynthia McClintock and Abraham F. Lowenthal "Peru's harvest of Instability and Terrorism" Christian Science Monitor, 16 March 1989, p. 19.
18 James Brooke, "Peru's President Seeks Military Trials for Rebels" New York Times 29 July 1989, p.3
19 Cynthia McClintoch and Abraham F. Lowenthal, "Peru's Harvest of Instability and Terrorism" The Christian Science Monitor 16 March 1989, p. 19.
20 Associated Press. "Novelist's Party is Winner in Peruvians Vote" Washington Post 14 Nov. 1989, p. 33
21 FBI's Jan. 23, 1990 p. 52
22 President Alan Garcia, "Garcia Seeks Proposals for Cartagena Drug Talks" (text). Lima Television Peruana in Spanish (6 Feb. 1990). Translated by Foreign Broadcast Information Service. FBIS Daily Report — Latin America 6 Feb. 1990, p. 38.
23 Encyclopedia Americana vol. 21 p. 778
24 Cynthia McLintock and Abraham F. Lowenthal "Peru's Harvest of Instability and Terrorism" The Christian Science Monitor 16 March 1989, p. 19.
25 Joseph B. Treast,er, "Despite Guerrillas' Threats, Elections Go On in Peru" New York Times 12 Nov. 1989, p.3
26 Ibid.
27 Ibid.
28 "Novelist's Party is Winner in Peruvian Vote" Washington Post, 14 Nov. 1989, p. 33
29 Encyclopedia Americana vol 4
30 "In Andes, Small Gifts Bear Watching" New York Times, 18 Feb. 1990, sec. A
31 Shirley Christian, "Bolivian Race: Ex-Dictator is Out Front" New York Times 15 March 1989, p. 9
32 "Bush, Latins Vow to Press Anti-Drug Fight" Washington Post 16 Feb. 1990, p.1.
33 "Hallado Muerto Israeli Buscado per el DAS" El Tiempo 26 Jan. 1990, p. 1. "The police stated that an Israeli business leader connected to mercenaries that trained gangsters from the Medellin Cartel was found dead in the Miami airport.
The body of Arik Afek was discovered by the Metropoli-
tan police". "Arik is the vice president of a company, based in Miami, that cultivates and markets flowers. After 3 years of conducting business in Colombia, the Israeli was (presumably) assassinated.
"During various interviews, Afek admitted to be a friend of the Lieutenant Colonel Yair Klein, accused of training gangsters from the Medellin Cartel. Arik said that he met him in the Hotel Country 85 in Bogota when Klein traveled for the first time to Colombia in October 1987.
"On the 18th of September last year, in the Court of Law of the Third Public Order [involucr61 Klein y Afek in a law suit relating to the armed killings by squadrons financed by the mafia and the Court gave the order to capture them. Afek was sought by the Department of Administrative Security (DAS).
"For reasons of his own well being - he would say - its better to shut up. He asserted that 'those people', the ones that he never identified, were able to assassinate him. And he also said, that there is no place in the world to hide from 'them".
34 Douglas Farah, 'Colombian Drive Said to Trigger Shift to Bolivia" Washington Post 5 Sept. 1989, p. 16
35 Corinne Schmidt, "Aid Fails to Oust Cocaine as Bolivia's Manistay" London Times 21 Nov. 1989, p. 12
36 Douglas Farah, "Bolivia Right, Left Break Election Logjam" Washington Post, 3 Aug. 1989, p. 24.
37 Shirley Christian, "Bolivian Race: Ex-Dictator is Out Front" New York Times, 15 March 1989, p. 9
38 Shirley Christian, "Bolivia Installs an Ex-Revolutionary as President" New York Times, 7 Aug. 1989, p. 3
39 Shirley Christian, "Bolivia to Seek Anti-Cocaine Money' New York Times, 9 Aug. 1989, p. 12
40 Ibid.
41 "Definida Nueva Estategia Global Contra los Drogas" El Tiempo, 15 Jan. 1990, p. 12A.
42 FBIS LAT-90-014 January 22, 1990. p. 52. Bolivia "US Position Expected to Be 'More Flexible' PY 1901234490 La Paz El Diario in Spanish 11 Jan 90p. 1
43 "El Narcho-Agro", Sema na 29 de nov. - 5 de dic. 1988 edicion #343 p. 34-37.
44 "El Narco-Agro" Semana 5 Dec. 1988, p. 34.
45 "ELN y FARC se Unen en Arauca" El Tiempo 19 Feb. 1990, p. 11B.
46 London Times 1 Nov. 1989, p. 8.
47 Ibid.
48 Joseph B. Treaster, "Drug Bosses' Peace Offer Divides Colombians, but Doubting Leaders Keep Up Fight" New York Times 9 Feb. 1990, p. Al2.
49 "M. Bush Veut Relacer la Lutte Contre le Trafic de Drogue" Le Monde 16 Feb. 1990, p. 1.
50 John Moody, "Noble Battle, Terrible Toll" Time 18 Dec. 1989, p.34.
51 Ibid.
52 Joseph Treaster "Drug Bosses' Peace Offer Divides Colombians, but Doubting Leaders Keep Up Fight" New York Times 9 Feb. 1990, p. Al2.
53 "Les 'Prafiquanteg ont Libéré un Cinquiene Otage" Le Monde 25 Jan. 1990, p. 7.
54 John Moody, "Noble Battle, Terrible Toll" Time 18 Dec. 1989, p. 34.
55 Eugene Robinson "Colombia's Other Cartel" Washington Post 28 Jan. 1990, p. 23.
56 Ibid.
57 Joseph B. Treaster "Colombians Fear for the Economy" New York Times, 11 Sept. 1989.
58 "The Shyness of Colombia" The Economist 13 Jan. 1990, p. 39.
59 Farnsworth, Clyde. "Colombia Envoy Angry about U.S. Tirade Policy" New York Times 24 Jan. 1990, p. A13.
60 Clyde Farnsworth, "Colombia Envoy Angry About U.S. Trade Policy" 24, Jan. 1990, p. A13.
61 NYT Jan 1, 1990 "Battle Against Drug Trafficing is Languish-
Debacle in Latin America    Page 159
ing in South America p. 9.
62 "Pena de Muert,e para los Narcotraficantes: Bush" ("Death Penalty for the Narcotic Traffickers: Bush") El Tiempo 26 Jan. 1990, p. 1.
63 NYT Jan 1, p. 9 "Battle Against Drug Trafficking..."
64 Report of the Secretary of Defense to the President and the Congress, Counternarcotics Programs, Pt. IV Defense Components, Jan. 1990, pp. 54-56.
65 "Peruvian President Arrives" (excerpt). Madrid EFE in Spanish (16 February 1990). Translation by the Foreign Broadcast Information Service. FBIS Daily Report — Latin America Vol. 90:033; Februrary 1990 (FBIS-LAT-90-033; p. 1).
66 Barco, Virgilio, Pres., 13arco Welcomes Visitors" (Speech except). Bogota Domestic Service in Spanish (15, Februray 1990). Translation by the Foreign Broadcast Information Service. FBIS Daily report — Latin America 16 Februrary 1990 (PrEx FBISLAT-90-033; p.2)
67 Andrew Rosenthal, "3 Andean Leaders and Bush Pledge Drug Cooperation" New York Times, Feb. 16, 1990, p. 1.
68 Puertas, Jose Antonio, "Report on Agreement" (excerpt). Paris AFP in Spanish (15 February 1990). Translation by the Foreign Broadcast Information Service. FBIS Daily Report — Latin America 16 February 1990(FBIS — LAT-90-033;p.7).
69 Andrew Rosenthal, "3 Andean Leaders and Bush Pledge Drug Cooperation" New York Times, 16 Feb. 1990, sec. A, p. 1.
70 "U.S., Peru Sign Documents" (excerpt). Madrid EFE in Spanish (16 Februrary 1990). Translation by the Foreign Broadcast Information Service. FBIS Daily Report 16 Februrary 1990 (PfEx FBIS-LAT-90-033; p. 8).
U.S. Drug Policy and Andean
Narcoeconomic Realities
Peter Andreas
Ever since Richard Nixon declared the first official "war on drugs" in 1969, U.S. drug policy has been driven by the assumption that the best method to curb drug consumption at home is through repression of the supply at "the source" of production abroad. As a former U.S. ambassador to Bolivia once put it, "the closer you get to where it comes from, the more bang you get for your buck." (Quoted in Iyer et al., p.35) Echoing this sentiment, George Bush has proclaimed, "The logic is simple. The cheapest and safest way to eradicate narcotics is to destroy them at their source...we need to wipe out crops wherever they are grown and take out labs wherever they exist." (Quoted in Hoffman).
Following this logic, funding for supply reduction efforts has steadily grown. But while federal anti-drug spending increased by over 300 percent between 1980 and 1988, the cocaine supply grew tenfold and cocaine prices dropped by as much as 80 percent. By the end of the decade, the failure of the policy was painfully clear: more drugs were available at cheaper prices in more places than ever before.
Yet as we enter the 1990s the Bush administration remains firmly committed to the supply-side strategy, interpreting past failure as merely a problem of inadequate funding and political will. This has created a dangerous logic of escalation: the consistent response to failure has been to escalate the drug war abroad. Thus, the greater the policy failure, the greater the escalation. Yet the supply-side strategy's poor performance is not simply the result of mismanagement or lack of adequate resources. As economist Peter Reuter has noted, it is inherent in the very structure of the problem itself. (Reuter, p.
This has been especially true in Peru and Bolivia, the source of most of the world's supply of coca used to make cocaine. U.S. efforts to repress the coca trade have ignored both the market logic of the illicit trade and the economic realities of coca dependency in the two crisis-stricken countries. Moreover, even as the United States attacks the coca economy, it promotes harsh economic austerity programs which actually fuel the coca trade. Consequently, U.S. economic and anti-narcotics strategies end up being both contradictory and counterproductive.


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