1998 International Narcotics Control Strategy Report

Bureau for International Narcotics and Law Enforcement Affairs
United States Department of State
February 26, 1999

POLICY AND PROGRAM DEVELOPMENTS

Policy and Program Overview for 1998

The United States and its allies made solid gains at the drug trade's expense in 1998. There was progress in key areas of drug control, including crop reduction, drug interdiction, attacking trafficking syndicates, bolstering law enforcement and judicial systems, and curbing drug money laundering. The most encouraging news this year was the continuing downward trend in illicit coca cultivation. The total coca crop remains at its lowest level in 10 years, even factoring in a sharp rise in cultivation in Colombia. In 1998, overall coca cultivation in the Andean countries fell 17 percent to 190,800 hectares. The most dramatic decline was evident in Peru, once the world's largest coca producer. Peruvian coca cultivation in 1998 fell 26 percent from the year before, and is now approximately 60 percent below the peak level of 1990. Four years of sustained disruption of the "air bridge" out of Peru to Colombia have made coca cultivation virtually unprofitable in many formerly active production areas of Peru. It has provoked economic emigration and a shift to licit crops. The exodus continued in 1998, as farmers sought new occupations elsewhere in the country. Though not as dramatic a change as in Peru, Bolivia saw its largest one-year drop ever in 1998. Forced eradication by Bolivian government agencies brought coca cultivation down 17 percent to a ten-year low of 38,000 hectares. In all, the 29,420 hectares taken out of cultivation in Peru and Bolivia represent a potential 150 metric tons of cocaine HCl that did not enter the market.

Over the past four years, interdiction, crop reduction, and alternative development activities in Peru and Bolivia have radically altered illicit coca cultivation patterns in the Andean region. Once in third place, Colombia has become the premier coca cultivating country, displacing Peru and Bolivia, respectively, in the hierarchy. The concentration of coca cultivation in Colombia appears to be part of a long-term strategy on the part of the Colombian drug syndicates. Rather than rely on a vulnerable supply of coca products from the other Andean growers, the Colombian organizations have gradually moved toward a vertically integrated cocaine industry. Since they already refine 80 percent of the cocaine feeding world markets, the syndicates apparently want a reliable source of coca leaf. This goal has been somewhat thwarted, however, by the Colombian government's effective aerial eradication campaign in the traditional growing areas. The destruction of important plantations has forced the drug syndicates increasingly to seek the protection of insurgent groups in southwestern Colombia. Coca cultivation has increased in Caqueta and Putumayo provinces, rebel strongholds where, for both security and political reasons, government spray aircraft have not been able to operate effectively. Further hedging their bets, the drug syndicates may be planting a higher yield variety of coca, while also improving refining techniques. Nonetheless, even with the sharp spike in growth in Colombia, total Andean coca cultivation was the lowest since 1998. Clearly, we are moving in the right direction.

Controlling opium poppy--the source of heroin--is a more difficult proposition. Whereas coca cultivation is essentially limited to three Andean countries, opium poppy is widely dispersed around the world. Coca is a perennial bush that requires two years to become fully productive, so any eradication can slow down production. Opium poppy, on the other hand, is an annual plant with a growth cycle of approximately 120 days. In some climates, growers can produce as many as three harvests a year. Opium is therefore more difficult to control. A further complication is that the 79 percent of the world's opium poppy that yields 90 percent of the world's opium gum is cultivated in Burma and Afghanistan, countries where the USG has very limited influence.

Nevertheless, USG programs have been effective, especially in the Western Hemisphere. Although less than four percent of the world total, most of the opium that currently supplies heroin to the U.S. market originates in Colombia and Mexico. Eradication operations in those countries directly benefit the United States. For example the 9,500 hectares of poppy destroyed by the Mexican government in 1998 deprived the U.S. market of a potential 90 metric tons of opium, or nine tons of heroin.

Other Areas of Cooperation. The drug trade survives in part by locating and exploiting the vulnerable points of a broad range of national institutions. Therefore, a long-standing element of U.S. international drug control policy has been to encourage and help other governments to strengthen their law enforcement, justice, and financial systems in order to minimize their penetration and manipulation by drug trafficking organizations. The judicial sector in particular has often been the weakest link in the chain of institutions fighting the drug trade. The situation is improving, however. Though there continue to be instances of important traffickers being captured and incarcerated, only to be set free by the seemingly capricious decisions of a single judge, there are fewer such cases. In 1998, we helped a number of countries to modernize their laws, as well as to professionalize and streamline their court systems in order to eliminate the inefficiency that often breeds corruption. This assistance ranged from installing more modern equipment and improving court administrative and operating procedures to reforms in the appointment and compensation of judges. Since these practices are usually deeply rooted in legal systems, we cannot expect changes to take place quickly.

Extradition. The penalty that drug bosses still fear most is extradition to the United States. The strictness of our laws, the long sentences given to drug kingpins in the past, and the knowledge that they cannot control the conditions of their imprisonment are strong incentives to resist extradition by any means possible. In many countries, tradition and the law work in their favor, since many governments do not extradite their nationals. Several of the major international drug syndicates of the 1980's and '90's might have been broken up sooner had their leaders been extradited to the United States. We are aware of the national sensitivity of many legislatures to altering traditional limits on the extradition of their citizens. But we also believe that extradition treaties can be made palatable to national legislatures, if the provisions are balanced and reciprocal. For example, Thailand extradited 17 defendants--most of them Thai nationals--to the U.S. for prosecution. And the U.S. and Paraguay signed a new bilateral extradition treaty that mandates the extradition of nationals.

Money Laundering. In 1998, we continued a vigorous campaign to close the vast number of loopholes in national banking and financial systems that give drug criminals a safe haven for their profits. As the sums involved are enormous drug and other criminal profits are increasingly worthless until they can be moved into legitimate financial and commercial channels. And as country after country takes steps to limit the anonymous movement of large blocs of funds, criminal organizations are obliged to explore new ways of legitimizing their gains. To make it as difficult as possible for criminal funds to feed into the legitimate economy, we worked closely with our partners in the Financial Action Task Force (FATF) and the Caribbean Financial Action Task Force (CFATF) to narrow money laundering opportunities.

Although there are still major hurdles to be overcome in many areas such as offshore banking, issuance of bearer securities, and the varying degrees of bank secrecy in many countries, we saw definite progress in 1998. Such varied countries as Aruba, Brazil, Costa Rica, the Netherlands Antilles, Panama, and Uruguay enacted or amended laws that criminalize money laundering or strengthened their country's anti-money laundering regime.

The Threat Persists. As one of the pillars of international organized crime, the drug trade is a formidable enemy. It remains one of the principal post- Cold War threats to international stability. It is well organized, adaptable, ruthless, and has access to wealth on a scale without historical precedent. A decade before international crime was recognized as a serious threat to governments, the drug syndicates had already established a sophisticated array of supply and distribution networks, money laundering mechanisms, and, perhaps most important, influential government contacts in many of the drug source and transit countries. They developed and perfected many of today's ingenious money laundering techniques, by hiring the best lawyers and accountants and using the most advanced technology available. Successful law enforcement actions have also served to some degree as a form of natural selection, winnowing out the less efficient organizations and leaving the most resourceful ones to dominate the field. Like any global organization, the drug syndicates have acquired the necessary expertise wherever it is most easily available. Following the break-up of the former Soviet Union, the drug syndicates were quick to recruit Eastern European chemists and other technicians left jobless by political upheavals. Similarly, when the Colombian syndicates decided to diversify into heroin production, they hired the best Southwest and Southeast Asian opium and heroin technicians to advise on cultivation and refining techniques. In many cases, the drug trade's organization, power, and wealth are comparable to or surpass those of many of the countries in which it operates.

The drug trade's power is evident from the continuing flow of cocaine out of South America and heroin out of Southwest and Southeast Asia. In spite of our combined efforts to disrupt supply through a broad spectrum of crop control and interdiction measures, in 1998, the drug syndicates exported hundreds of tons of cocaine and heroin around the world. Colombian syndicates have established cocaine distribution centers on every continent, with a heavy emphasis on operations in Western and Eastern Europe. Mexican organizations are responsible for large methamphetamine shipments to the U.S. Drug trafficking has become the province of a host of successful criminal multinational organizations. They share the lucrative drug trade with Russian, Turkish, Italian, Nigerian, Chinese, Lebanese, and Pakistani heroin trafficking syndicates. The relatively simple charts of drug flows of the early 1990's now resemble schematic drawings of intricate communications networks tying nearly every country in the world to the main drug production and trafficking countries.

Changing Drug Patterns. Drug trafficking at the end of the 1990s reflects the changing nature of global drug use itself. Over the past few years, we have witnessed the blurring of the once clear line between cocaine- and heroin-consuming countries. We no longer see the earlier multiyear cycles where demand for depressants like heroin alternated with periods of demand for stimulants like cocaine or amphetamines. Dual drug use is no longer uncommon, especially as national tastes change. While cocaine in its various forms is still the hard drug of choice in North America, heroin continues to gain a following. The reverse is true in Europe where cocaine is making enormous inroads into what were once primarily heroin markets.

The drug trade is nothing if not adaptable, quickly exploiting--and often creating--a change in drug consuming habits. Eastern Europe provides an open market for Colombian heroin. Even severe economic problems appear to have little impact on drug sales. For example, in Russia, with all of the country's economic woes, cocaine reportedly still sells for up to $300 a gram, three times the average retail price for the same drug in the United States. By the same token, North America has seen a rise in demand for heroin use at a time when overall cocaine use has dropped dramatically. (Between 1985, at the height of the cocaine boom, and 1996, the number of cocaine users has dropped 70 percent, from 5.7 million to 1.7 million estimated users.) While heroin consumption has not yet risen proportionately, the Colombian and Mexican drug syndicates obviously expect the demand for heroin in the U.S. to grow. That is a warning sign we ignore at our peril.

The Continuing Rise of Synthetics. To escape exclusive reliance on plant- derived drugs such as cocaine, the drug trade has been working for years to develop easily manufactured, synthetic stimulants. The fruits of this initiative are methamphetamine and MDMA ("Ecstasy"). The demand for these drugs has been skyrocketing not only in the industrialized nations, but also in most of the countries of the developing world. Methamphetamine, a turbo-charged cousin of the "speed" of the 1960s and '70s, has challenged cocaine as the stimulant of choice in regions as diverse as Asia, Europe, and North America. Methamphetamine's great advantage is its relative ease of manufacture from readily available chemicals. Like other synthetics, methamphetamine appeals to large and small criminal enterprises alike, as it frees them from dependence on vulnerable source crops such as coca or opium poppy. Even a small organization can control the whole process, from manufacture to sale on the street. The drugs can be made almost anywhere and generate large profit margins. And demand for methamphetamine is growing everywhere.

In the Western Hemisphere, criminal organizations based in Mexico and operating on both sides of the border are the principal methamphetamine manufacturers and the source of most of the "meth" consumed in the United States. But methamphetamine use has become common throughout the world. It is the stimulant of choice in much of Asia and Europe, with significant methamphetamine laboratories detected in countries as different as Burma, Japan, North Korea the Philippines, Poland, and Vietnam. There is also extensive methamphetamine production in the United States. Out of 1, 674 illicit drug laboratories seized in 1998, 1,619--98 percent-- were methamphetamine laboratories. Though the greatest methamphetamine use has been concentrated in the Southwestern United States, the presence of "meth" laboratories in other regions suggests that demand for methamphetamine is growing.

Amphetamines and "Ecstasy". There continues to be a strong demand in Europe for amphetamines and the related drug MDMA (known as "Ecstasy" for the euphoria that it apparently induces). As the relevant INCSR chapters indicate, the greatest demand for amphetamines, produced for the most part in the Netherlands and Poland, is in England and Nordic Countries. Ecstasy, however, has a much larger following throughout the European continent and the UK, since it fuels the all-night discotheque dances known as "raves." Ecstasy has an international cult following, with Internet sites that provide details on how to make MDMA "safely." Though the so-called Rave Culture may be just a dangerous passing fad, it has now lasted long enough to have developed a steady demand for MDMA. And there is the greater danger that once a large enough body of Ecstasy abusers has been created, the market for the drug may continue long after the dance craze has become a memory. Methamphetamine and MDMA may become the twin drug-control menaces of the twenty-first century.

Precursor Chemical Control. Yet synthetics, too, have their Achilles' heel. While their manufacture may not depend on plant alkaloids, it does call for large amounts of special precursor chemicals. Where cocaine and opiate production requires widely available and relatively substitutable "essential" chemicals, amphetamine and methamphetamine creation needs specific "precursor" chemicals such as ephedrine, pseudoephedrine, and phenylpropylanamine. Though these chemicals have important legitimate pharmaceutical and commercial uses, they are easier to track than essential chemicals since they are traded in smaller quantities to discrete users. For this reason, an important element of the USG's international drug control policy is to see that all countries have in place an effective, flexible system that regulates the flow of precursor chemicals without jeopardizing legitimate commerce. The USG-formulated, internationally accepted Multilateral Chemical Reporting Initiative completed its first year in 1998. This program, coordinated with the European Commission and the UN's International Narcotics Control Board, is designed to encourage governments to exchange chemical control information on a voluntary basis in order to identify suspicious orders of designated chemicals. The U.S. Drug Enforcement Administration is now sending interested governments 200 to 300 notifications monthly of U.S. transactions in regulated chemicals and other governments are gradually following suit.

Drug-Control Progress. Though remarkably adaptable, the drug trade is not invincible. On the contrary, it is remarkably vulnerable in many areas. It requires raw materials and chemicals to produce drugs, complex logistical arrangements to circumvent interdiction efforts en route to the drugs' destination, cadres of specialists and technicians to handle everything from improving drug yields to carrying out complicated financial transactions and a means of legitimizing its profits. It needs a reliable body of corrupt officials at every point in the production and distribution chain. Repeated attacks over time at each of these vulnerable points are gradually changing the nature of drug production and trafficking operations in the Western Hemisphere. Sustained crop control programs have brought down the principal drug crops to near-record lows. International law enforcement operations have broken up the most notorious of the Colombian and Mexican drug cartels and have forced traffickers to seek out more circuitous drug transit routes. Arrests of corrupt officials have increased significantly, including high-ranking military officers in critical drug control positions.

Controlling Supply. Since we are charged with the task of stemming the flow of illegal drugs from abroad, our success depends on how vigorously and effectively we target drug supply beyond the borders of the United States. For those drugs that pose the greatest immediate threat--cocaine and heroin- -we treat the process as a five-part, grower-to-user chain connecting the drug producer abroad with the consumer in the United States. At one end of the chain is the "farmer" cultivating coca or opium poppy in South America or Asia; at the other is the cocaine or heroin user in the U.S. In between are the processing (drug refining), transit (shipping), and wholesale distribution stages. Unless we break this supply chain--at the same time as we keep the drug trade from banking its profits--we cannot expect to limit the flow of illegal drugs to the United States.

The closer we can strike to the beginning of the supply chain, the better the odds of cutting off the flow. Our principal targets, therefore, are the first three links of the chain: cultivation, processing, and transit. For plant-derived drugs, we stand our best chance if we eliminate the first stage, cultivation, altogether. When crops are destroyed or abandoned, no drugs can enter the system. The medical analogy would be excising a dangerous tumor before it can metastasize. For reasons of cost- effectiveness, complete eradication of the crop is the ideal option. But eradication is not a panacea. In certain countries, it is not politically or culturally feasible. Therefore we have had to work closely with the governments of certain key countries to develop interdiction and alternative development programs tailored to the political realities of specific situations.

Coca Reduction. Our best target for lasting reductions is the coca crop. At this time, there are only three countries that cultivate coca on a significant scale, Bolivia, Colombia, and Peru. Because alkaloid content is high in Bolivian and Peruvian coca, every two hundred hectares of coca bushes taken out of production deprives drug traffickers of approximately one metric ton of finished cocaine. (For Colombia, where the type of coca grown has a lower alkaloid content, the ratio is higher, though yields may be increasing.) Thus even manual destruction of the bush can have a lasting impact. With the high-speed spray planes currently operating in Colombia, it is possible to destroy thousands of hectares of coca in a relatively short time. And since, on average, it takes two years for a newly planted coca bush to become productive, intensive aerial eradication campaigns could put a serious crimp in future cocaine supplies.

Political, economic, and cultural factors, however, rule out destruction of the entire coca crop in some Andean countries. Peru and Bolivia, both of which have a long tradition of coca leaf chewing in the highlands, continue to grow legal coca both for traditional reasons and for commercial export to pharmaceutical companies. Peru only permits eradication of tended coca away from population centers. Bolivia also permits manual eradication of illegal coca, but has legislative restrictions against herbicide spraying. Only Colombia permits and conducts an extensive aerial eradication program. We have therefore developed with each of the Andean governments crop control plans that correspond to the exigencies of local conditions. The success of the sustained disruption of airborne drug traffic (the "air bridge" strategy) has shown that eradication by itself is not the only way to reduce or make crops disappear. It has demonstrated in Peru that a multi-faceted strategy combining interdiction, eradication, and alternative development offers the encouraging possibility that world levels of coca will actually be brought down to the minimum necessary for legitimate pharmaceutical purposes and for local chewing.

Political Will. The key to implementing such a strategy is political will. It is the intangible but indispensable factor that determines success or failure. The best-trained and equipped police and military anti-drug forces are useless, if drug control policy does not have the full confidence and support of the country's political leadership. Where political leaders have had the courage and foresight to weather short-term criticism in favor of long-term results, there has been progress. Where they have vacillated, the drug trade has simply grown stronger. A salient example of the importance of political will is the shrinking of the coca crop. Without the readiness on the part of the political leaders concerned to face strong protest from the coca interests, there would have been no reductions. More than likely we would have seen the crop continue to increase in all three coca-growing countries, as it did in the early 1990s.

Political will, backed by integrity, is also a powerful weapon against the drug trade. Drug organizations prosper when they can establish a modus vivendi with complacent or weak governments. They are adept at exploiting the natural reluctance of politicians to change the status quo, especially if it means having to deal with problems such as demonstrations by unemployed coca farmers or violent reprisals from drug organizations being pressed by law enforcement authorities. Governments at times have appeared to be forcefully attacking the drug syndicates, when in fact they have only targeted those areas of least importance. For example, a government of a major drug cultivating country can focus on interdiction rather than crop control. A government in a money laundering country can stress drug seizures, or a government can arrest major drug figures, knowing that a timid or corrupt judicial system will soon nullify the arrest. Such compromises have allowed governments merely to buy short-term tranquility at the price of long-term entrenchment by criminal interests. Over time, this puts both democratic government and the rule of law at risk. Therefore, a key objective of U.S. antidrug policy has been to help strengthen political will in the principal source and transit countries.

The Fight Against Corruption. By strengthening political will, we are also attacking political corruption. Like an opportunistic disease attacking a weakened immune system, the drug trade draws strength from the conditions of economic, social, and moral decay that corruption fosters. Drug syndicates can accelerate corruption with their most powerful weapon, money. In terms of weight and availability, there is still no commodity more lucrative than illegal drugs. They cost relatively little to produce and offer increasingly large profit margins to everyone along the grower-to- user chain, except the consumer. They generate revenues on a scale without historical precedent. At an average street price of $100 per gram in the United States, a metric ton of pure cocaine HCl is worth $100 million. Reducing the purity with adulterants can double or triple the value. By this measure, the 100 metric tons or so that the USG typically seizes in a given year are potentially worth $10 billion to the drug trade--a sum that exceeds the gross domestic product of many small countries. Though in reality only a portion of those sales goes back to the drug syndicates, we are still speaking of hundreds of millions of dollars. To put these amounts into perspective, in FY 1999 the overseas component of the USG's budget for international drug control operations is approximately one and a half billion dollars. Translated into drug quantities at street value, that equates to 15 metric tons of cocaine. The cartels have lost that much in a shipment or two and have scarcely felt the pinch.

The Power to Corrupt. Their enormous wealth gives the large drug organizations a nearly open-ended capacity to corrupt. This power makes them as dangerous to democratic government as any insurgent movement; more so, perhaps, since the results of their efforts are not often evident until irreparable damage has been done. While insurgent armies seek to overturn governments by overt violence, drug syndicates seek to undermine governments from within by co-opting key individuals. There is always the danger that some day drug interests will achieve de facto control of a government by putting the most important elected officials, including the president, on their payroll. Fortunately, this has yet to occur on a significant scale. But we have seen instances in the recent past where the most senior officials charged with destroying major drug syndicates were in fact in the syndicates' employ. By focusing world attention on the need to eliminate corruption, we can prevent this fate from befalling an entire elected government.

The Certification Process and Corruption. Drug corruption works best in the shadows. The lower the visibility of a drug organization's subversive operations, the greater its chance for success. It cannot withstand for long the spotlight of public scrutiny. The drug certification process offers an effective way of attacking such corruption, since it is the legislative equivalent of an international spotlight that we can focus on corruption. Section 490 of the Foreign Assistance Act requires the President to certify annually that each major drug producing or transit country has cooperated fully or has taken adequate steps on its own to meet the standards of the 1988 UN Convention, including exposing public corruption. Governments that do not meet the standard lose their eligibility for most forms of U.S. military and development assistance. They also face an obligatory "no" vote by the USG on loans in six multilateral development banks.

A Controversial But Effective Mechanism. The certification process, which has been in effect for over twelve years, is an unusually effective instrument of public diplomacy. It is a means of promoting openness and transparency on the part of all governments concerned, including the USG. That quality also makes it very controversial. Most governments naturally prefer the confidentiality inherent in traditional diplomacy when dealing with a sensitive issue such as national anti-drug performance. By now, however, the affected governments have grown accustomed to the public nature of certification, though many are still uncomfortable with the process. They know that U.S. law requires the President to provide an annual assessment of anti-drug cooperation based on solid, verifiable information. To minimize misunderstandings on all sides, we work closely with all governments concerned to develop a set of mutually agreeable goals for certification evaluation purposes. This is a two-way process, since it also makes the USG publicly accountable for its actions. The certification process promotes transparency, revealing strengths and weaknesses. Although we obviously cannot certify ourselves, it should be evident to most governments that the President of the United States cannot make so important a public declaration without being certain of and accountable for his facts. There is also abundant evidence of the continuing strong commitment of the United States to attack all aspects of the drug problem vigorously. So by the certification determinations, the United States is presenting itself to the same international public scrutiny it visits on the rest of the international community.

The purpose of the certification process is not to punish; it is to hold all countries to a minimum acceptable international standard of cooperation in meeting the goals of an international convention to which all but a minority of countries are parties. In making the certification determination, we take into account the fact that some countries face much greater obstacles than others.

Next Steps

We can take pride in our progress to date. We have come this far because we and our partners have been willing to maintain sustained pressure on the drug trade for over a decade. This, in turn, has required a substantial commitment of resources, persistence, and the patience to absorb temporary setbacks in the interest of achieving our long-term goal. In the coming year, we will consolidate and build upon our gains by further limiting the drug trade's opportunities for expansion. We will keep striking at every vulnerable point by further reducing drug cultivation, pursuing trafficking syndicates, interdicting drug shipments, disrupting essential and precursor chemical flows, and reducing the options for making illegal drug profits legitimate.

We will continue to concentrate our major efforts on cutting off drug supplies at the source, simultaneously making it difficult for the drug syndicates to bank their profits. The drug syndicates need a steady flow of drugs to generate the cash required to stay in business. Since the drug trade, like any legitimate enterprise, partially finances its growth by borrowing against future earnings, every metric ton of cocaine or heroin taken off the market deprives it of millions of dollars in operating revenue. And when the syndicate makes its profits, that income is worthless unless it can be plowed back into new drug crops, weaponry, transportation, and bribes necessary for the drug syndicates to stay in business.

We will therefore persevere with measures to deny the drug trade access to legitimate financial systems. Though drug syndicates may be quasi- omnipotent in the criminal underworld, they lose their advantage when they enter the legitimate commercial world. The drug trade's power to generate rivers of cash is also its potential weakness. Hundreds of millions of dollars that cannot enter the global banking and financial system are simply an encumbrance. And it is not easy to convert hard cash into electronic currency. It requires sophisticated logistic and financial operations. Criminal enterprises become vulnerable to law enforcement as soon they try to bank their profits.

We must therefore improve mechanisms to identify and seize drug money before it can blend anonymously into the trillions of dollars that move through electronic clearinghouses every day. In the United States, we have required banks and depository institutions to impose increasingly strict standards to identify suspect transactions. Within the framework of the Financial Action Task Force, other governments have been implementing comparable safeguards. We are working with them to strengthen their oversight mechanisms, tighten regulations, and strictly enforce anti-money laundering laws. There are still countries, many of them hosts to offshore banking interests, which have resisted taking definitive measures to limit money laundering. We will work with our international partners to persuade these hesitant governments to follow suit. Until they do, we can expect drug trafficking and other international criminal organizations to take maximum advantage of the existing money laundering opportunities still available to them.

The United States will continue to provide necessary leadership and assistance to our partners in the global antidrug effort. As one of the countries most affected by illegal drugs, we cannot afford to give up any of the ground gained in the last decade. The success of this effort, however, depends not on one country but on the cooperation and commitment of our allies in the worldwide drug control effort. Our partners must themselves lay the political and economic groundwork for development programs to provide legitimate alternatives to farmers now raising illegal crops. They must strengthen their prevention and demand reduction programs to avoid the risk of losing the next generation to drug addiction. Above all, they must continue to demonstrate the necessary political will to defend their national sovereignty from drug corruption by reforming and strengthening their political, legislative, judicial, law enforcement, and financial institutions. The drug trade lives by "divide and conquer" tactics. In democratic nations, it can only thrive when it is able to divide populations, corrupt national institutions, and drive a wedge between the members in the international antidrug effort. It cannot prevail against a partnership of determined governments committed to its destruction.

Coca And Cocaine

Although cocaine use has fallen dramatically in the last decade and a half, cocaine is still our most serious drug threat. Hundreds of tons enter the United States each year, supplying a core body of cocaine users and distributors always looking for new market possibilities in the next generation of young adults. Cocaine remains one of the most rapidly addictive drugs known. Because of the drug's addictive properties, a new wave of cocaine addiction can develop very quickly. Crack, the smokable form of cocaine, still drives much of the violence in America's cities, as rival gangs feud over control of the lucrative sales territory. For the drug trade, crack is almost an ideal drug. It is cheap, potent, and addictive. More importantly, it is widely available, easily distributed, and immensely profitable.

The United States has long been the cocaine syndicates' strongest and most reliable market. Yet, while we are probably still the largest single market for the drug, Europe is running a close second. After U.S. demand for cocaine peaked in the late 1980s, the Colombian drug syndicates opened up new sales territory. They began actively promoting cocaine to a Europe-wide clientele. Consequently, cocaine use is now on the increase throughout the Continent, including in Russia and the countries of the former Soviet Union. In many countries of Eastern and Central Europe cocaine has the cachet that made the drug attractive to American athletes, media stars, and Wall Street traders in the 1980s. It attracts would-be overachievers. The atmosphere of excess and conspicuous consumption of the immediate post- Soviet era created ideal conditions for a surge in cocaine use. The combination of overnight millionaires anxious to consume cocaine and well organized criminal syndicates facilitating drug sales has made the country an attractive drug market. Amidst reports that cocaine sells in Russia for up to $300 per gram, three times the going price in the U.S. it is easy to understand why the Latin American drug syndicates have gone to considerable lengths to set up distribution centers throughout Europe.

Europe is not the only continent experiencing a major influx of cocaine. As the various country chapters indicate this year, cocaine is available virtually everywhere. It is now common in Asia and the Middle East, as it is in Africa, though not in the same quantities as in Europe. Based on our own experience in the last decade and a half, the demand for cocaine in the rest of the world will continue to grow. If governments want to spare themselves the economic and social consequences of a cocaine--or worse, a crack epidemic, they must strengthen the whole ranges of prevention, demand reduction, and enforcement programs that are the best barriers to drug trafficking.

Source and Transit Country Highlights. We have longstanding cooperative programs with the principal cocaine source and transit countries in the Western Hemisphere. One result of this cooperation has been the dramatic reduction in the overall coca crop. The immediate consequence of successful programs in Peru and Bolivia has been to increase pressure on the Colombian syndicates to compensate for losses by expanding cultivation into guerrilla strongholds in the southeast of the country. In 1998, Colombia saw a 28 percent net increase in coca cultivation with virtually all of the new growth occurring outside of the areas where spray operations are concentrated. Within the spray zones, cultivation decreased, continuing a trend from 1997. This is the third consecutive year of significant increase in the Colombian coca crop size.

The shift and expansion in Colombian coca ups the ante by adding urgency and risk to US-Colombian eradication efforts. The trafficker-guerrilla alliance has begun protecting these new fields with tighter security measures, including better weaponry for bringing down aircraft. This year, the Thrush and OV-10 spray aircraft again took frequent hits from small arms fire. The change in the threat has brought about changes in tactics and in herbicide mixes to make eradication more effective without endangering personnel or the environment. Antidrug tactics have been adjusted accordingly. Bolivia, which only permits manual destruction of coca, eradicated 11,620 hectares of coca, 66 percent more than in 1997. In contrast to previous years, where most of the decline came from a now discontinued program of compensated reductions, in 1998 most of the eradication was involuntary. At the end of the year there were an estimated 38,000 hectares under cultivation, a 17 percent drop from 1997. Bolivia's crop is now the smallest in a decade. The government's crop control program has moved it within reach of its goal of ridding the country of all illicit coca by the year 2002.

Geographically, Central America and the Caribbean are the natural transit areas for drugs moving to the United States. The drug trade exploits both regions to its advantage, shifting trafficking routes according to law enforcement and interdiction pressures. In the past few years, the pendulum has swung toward the Central American route. Drug flows have been steadily increasing through the countries of Central America, with signs that this corridor is becoming the preferred transit point for drugs going to the United States. For this reason, in December 1998, President Clinton designated Costa Rica, El Salvador, Honduras, and Nicaragua as countries of drug "concern."

In 1998, Central American governments stepped up anti-drug operations in response to increasing drug flows northward through the region. Though the ravages of Hurricane Mitch left the area especially vulnerable to exploitation by the drug syndicates, several Central American governments made impressive seizures. During the first eleven months of 1998, counternarcotics authorities in Costa Rica seized record amounts of cocaine- -over eight metric tons--as well as eighteen kilograms of heroin. Counternarcotics authorities in Guatemala seized over 9.2 metric tons of cocaine. In Panama, law enforcement agencies seized nearly 12 metric tons of cocaine, slightly more than last year's record of 11.3 metric tons. While cocaine seizures in Honduras dropped slightly (1.8 metric tons as of November 1998; 2.2 metric tons in 1997), largely as a result of Hurricane Mitch, in Nicaragua, government authorities seized a record 4.4 metric tons of cocaine through November 13, 1998. Between them, Costa Rica, Nicaragua, and Panama seized as much cocaine in 1998 as Mexico.

As the main transit and distribution hub for drugs moving to the United States, Mexico now rivals Colombia for dominance of the Western Hemisphere drug trade. Powerful Mexican drug syndicates control most of the cocaine traffic bound for the United States. The Mexican government intensified its investigations of these major narcotrafficking organizations, particularly the Juarez Cartel, the Tijuana Cartel, the Gulf Cartel, and the Caro Quintero Organization. Though drug-related arrests remained steady in 1998, cocaine seizures (22.6 metric tons) were down a third from the previous year's high, but matched seizure rates in 1995 and 1996.

Although drug movements through Central America have been increasing for the past few years, the Caribbean remains an important transshipment area for the drug trade. Cocaine seizures in the Bahamas, increased markedly over 1997 levels, which had been the highest since 1992. Working with the USG, Bahamian authorities seized nearly four metric tons of cocaine in 1998. The Dominican Republic seized 2.3 metric tons. Though less than the 1.3 metric tons of cocaine seized by Haiti in 1998, the 1.2 metric tons of cocaine seized in Jamaica in 1998 constitute the largest annual total to date for that country.

Heroin And Opiates

Meanwhile, the United States still faces another potentially serious drug threat from heroin. Though cocaine dominates the U.S. drug scene, heroin is lurking conspicuously in the wings. Used by itself, heroin can provide a mellow euphoria. Taken along with cocaine, it can offset cocaine's stimulating effects. But heroin has a special property that appeals to the drug trade's long range planners: as an opiate, it allows many addicts to develop a long-term tolerance to the drug. Where constant cocaine or crack use may kill a regular user in five years, a heroin addiction can last for a decade or more, as long as the addict has access to a regular maintenance "fix." Some can even maintain a facade of normality for many years. This pernicious property of tolerance potentially assures the heroin trade of a long-term customer base of hard-core addicts.

The drug trade seems to be counting on a new generation's ignorance of heroin's devastating consequences in order to develop a secure and lucrative market in the Western Hemisphere. In some quarters in the United States and Canada, heroin has gained an upscale image, the so-called "heroin chic" emaciated look of certain entertainment icons. The high purity of today's Colombian heroin allows it to be sniffed, like cocaine. It also spares potential users from syringes and the fear of contracting AIDS. Estimates of the U.S. heroin addict population, which had remained stable at about 500,000 for nearly two decades, have been revised upward. A disturbing trend of multiple drug use suggests that more of America's 2.1 million hard-core cocaine addicts are using heroin to cushion the "crash" that follows the euphoria of crack use.

Elsewhere in the world, heroin's position as the drug of choice remains secure. Abundant opium poppy crops in Afghanistan assure an uninterrupted flow of heroin to markets throughout Europe. This year's INCSR chapters report ready availability of heroin in much of Europe and countries of the former Soviet Union. The northern branch of the Balkan Route is moving large quantities of heroin to markets in the Czech Republic, Hungary, and other countries in Eastern and Central Europe, as less restrictive borders facilitate transit of the drug. Heroin seizures are commonplace in Africa, where Nigeria remains a planning and distribution hub for the groups that move much of the heroin destined for Europe and other African countries. In Southeast Asia, heroin continues to challenge traditional opium use. China faces growing addiction problems, with teenagers making up the bulk of registered addicts. In Thailand, heroin has displaced opium as the drug of choice among the hilltribes. This, in turn, has allowed heroin trafficking organizations to expand their networks throughout northern Thailand. In short, the combination of increasing demand, greater availability, and more sophisticated trafficking methods all but assures that heroin will continue to pose a threat to all countries over the next few years.

Source and Transit Country Highlights. Unfavorable growing conditions in 1998 reduced opium cultivation in the Golden Triangle region of Southeast Asia by 15 percent to 157,750 hectares, the lowest level since 1988. The decline was greatest in Burma, which produces approximately 60 percent of the world's illegal opium. Burma's crop fell by 16 percent to 130,300 hectares, the smallest crop since the explosion of poppy cultivation in 1988. Burma's crop could potentially yield 1,750 metric tons of opium, convertible to 175 metric tons of heroin, enough to supply most of the world's demand. In 1998, opium poppy cultivation in Laos fell by seven percent to 26,100 hectares, potentially yielding 140 metric tons of opium, or 14 metric tons of heroin. That is approximately seven percent of the region's estimated output. Already marginal production in Thailand further dropped to 1,350 hectares, capable of yielding 16 metric tons of opium or a little over one and half tons of heroin, less than one percent of Southeast Asian potential production. In Vietnam, poppy cultivation dropped by more than 50 percent to an estimate 3,000 hectares, a new low for the country. Potential yields were 20 metric tons of opium or two metric tons of heroin.

In Southwest Asia, total poppy cultivation rose by a little over three percent in 1998 to 44,750 hectares. All of the increase occurred in Afghanistan, the world's second greatest source of illicit opium. The Afghan crop was at an all-time high of 41,720 hectares. In contrast, opium poppy cultivation in Pakistan was at an all-time low of 3,030 hectares. In 1998, the Pakistani government, which seeks to eliminate all illegal opium poppies by the year 2000, reduced opium poppy cultivation by 26 percent. This decrease was especially impressive because it was accomplished despite favorable weather and the fact that opium gum was being bought from farmers at double the price paid the previous year, when poppy cultivation increased by 13 percent.

Any increase in Southwest Asian heroin production is bad news for Europe, since the region furnishes most of the heroin that has been flooding European cities for years. Heroin moves to Europe along the so-called Balkan Route. This supply line originates in Afghanistan and Pakistan and, after passing through Turkey, splits into branches. The northern route carries heroin to Romania, Hungary, the Czech and Slovak Republics, and points north. The southern branch crosses through Croatia, Slovenia, the Former Yugoslav Republic of Macedonia, Greece and Albania to the countries of Western Europe. Every country along the route now faces serious domestic drug problems. Turkish drug syndicates, with distributors in ethnic enclaves in a large number of European cities, dominate most of the Balkan Route commerce.

Russian criminal organizations, however, are playing an increasingly evident role in drug trafficking in Europe and Central Asia. Many of these gangs--often controlled by Russian ethnic minorities from the Caucasus-- survived even under the Soviet regime. Thus they entered post-Soviet Europe with the advantage of criminal expertise, contacts, and established smuggling and distribution networks. With the head start of heroin sources developed during the Soviet Union's war with Afghanistan, the Russian gangs are now a major factor in the European drug trade. They use their networks to transport Southwest Asian heroin through Central Asia to Russia, as well as onward to the Baltics and Western Europe.

Russia itself is now suffering serious addiction problems. Government authorities put the number of addicts at about two million, although the figure could well be higher. According to the Russian press sources, the Interior Ministry has noted a ten-fold increase in the growth rate of hard drug addiction in the past year. Opium, heroin, cocaine, and synthetic drugs are taking the place of crude traditional narcotics such as poppy straw extract.

Geography and history make Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, formerly important poppy growing regions for the Soviet Union, natural conduits for much of the drug traffic in Russia. Kazakhstan provides a bridge for Southeast Asian heroin to move to Europe and Russia from Asia. The other countries offer profitable access routes for Southwest Asian, especially Afghan, heroin into Russia, the NIS and Europe. Heroin, which fetches high prices in Russia and Europe, has been a tempting source of cash to finance the civil wars in Afghanistan and Tajikistan.

Just as Colombian and Mexican traffickers dominate the cocaine trade, Nigerian criminal organizations control a large part of the world's heroin traffic. Nigeria continues to be Africa's most important heroin distribution hub. Internationally, Nigerian drug couriers are the principal vehicle for smuggling heroin into the United States. There is a hardly a country in the world that does not report arrests of Nigerians for heroin trafficking. They surface in Brazil, Ecuador, Ethiopia, India, Indonesia, Pakistan, Russia, Saudi Arabia, Thailand, and in every country in Europe. Because of corruption at nearly all levels of government in Nigeria, combined with the country's political turbulence, it is likely that Nigerian trafficking organizations will remain strong for the foreseeable future.

With a poppy crop responsible for less than two percent of the world's opium production, Colombia is nonetheless the Western Hemisphere's largest grower of opium poppies. High purity Colombian heroin now accounts for the bulk of the heroin in the eastern United States. For 1998, USG estimates showed Colombian opium poppy cultivation at 6,100 hectares and capable of yielding an estimated 61 metric tons of opium gum, or 6.1 tons of heroin, assuming no losses. Venezuela's border with Colombia has made it a potential poppy growing country. The Venezuelan military continued an aggressive campaign against small-scale opium cultivation that occurs in the Serranía de Perijá region along the northern part of the border with Colombia. So far, however, USG-assisted eradication efforts have kept growth to insignificant levels. Eradication operations reduced opium cultivation to less than 50 hectares in 1998. Over the past four years, the eradication program has destroyed over 3,000 hectares of opium poppy.

After Colombia, Mexico is the largest opium producer in the Western Hemisphere. It currently supplies the bulk of the heroin flowing to states west of the Mississippi. The USG estimates that after eradication in 1998, there were 5,500 hectares of opium poppy cultivation in Mexico, up from 4, 000 hectares in 1997. The 1998 crop potentially could have yielded 60 metric tons of opium gum or 6 metric tons of heroin, up from 4.6 metric tons in 1997. The increase was largely attributable to poor weather conditions that limited aerial eradication operations in the remote mountain regions where opium poppy is cultivated.

International Organizations

International organizational efforts continue to be a key component of the overall U.S. counternarcotics strategy. Through multilateral organizations the United States has the opportunity to multiply contributions from other donors and decrease the perception that drugs are exclusively a U.S. problem. The U.S. participation in multilateral programs also supports indigenous capabilities in regions where the U.S. is unable to operate bilaterally for political or logistical reasons. Moreover, the U.S. contributions to UNDCP have had significant impact on the operations and expansion of UN counternarcotics programs and policy. In 1998, Georgia, Iraq, Lithuania, Mozambique, the Republic of Korea, and South Africa became parties to the 1988 UN Convention.

In October 1998, the OAS/CICAD Experts Group on Money Laundering proposed wide-ranging amendments to the OAS/CICAD Model Regulations Concerning Money Laundering. The proposed revisions will bring the Model Regulations into conformity with the FATF Forty Recommendations and the Buenos Aires Summit of the Americas Plan of Action.

Demand Reduction

The term "demand reduction" refers to efforts to reduce worldwide use and abuse of, and demand for narcotic drugs and psychotropic substances. The need for demand reduction is obvious. Escalating drug use and abuse continue to take a devastating toll on the health, welfare, safety, security, and economic stability of all nations. Shifting patterns of drug abuse, supply, and distribution compound the problem, at the same time as international drug syndicates and allied criminal organizations are carrying out ever more ruthless, vigorous. and sophisticated marketing techniques and strategies. Our response has been a comprehensive, balanced, and coordinated approach in which supply control and demand reduction reinforce each other.

Our demand reduction strategy integrates a broad spectrum of initiatives. These include efforts to prevent the onset of use, intervention at "critical decision points" in the lives of vulnerable populations to prevent both first use and further use, and effective treatment programs for the afflicted and addicted. Other aspects include education and media campaigns to increase public awareness of the devastating consequences of drug use/abuse and to promote community coalition-building. Coalitions are necessary in order to mobilize public and private social institutions, the faith community, and law enforcement entities in targeted campaigns against drugs. The strategy also provides for evaluations of the effectiveness of these efforts and for research studies to find better ways of reducing demand.

In 1998, INL focused on these kinds of activities to reduce the worldwide demand for drugs, mobilize public opinion against the drug trade, and encourage governments to develop and implement strong counternarcotics policies and programs. In FY 1999, INL plans to continue these efforts, as well as to launch the first-ever International Drug Abuse Prevention Coalition.

Chemical Control

Chemical diversion control is a straightforward counternarcotics strategy. Its purpose is to regulate trade in the chemicals most necessary for drug manufacture. It seeks to prevent the diversion of required chemicals from licit trade to illicit drug manufacture so that only transactions with established legitimate end-uses can go forward.

Chemical control is complicated by the nature of the chemicals involved and the widespread international commerce in them. Most of the chemicals required for drug manufacture have extensive commercial applications and are available from alternative source countries. National control systems alone cannot prevent diversion.

This is also a strategy to prevent a crime. It requires the examination of proposed commercial transactions, the bulk of which are legitimate. Such an examination requires chemical traders and manufacturers to provide commercial information to the exporting country authorities. And at least a portion of this information must be shared with other governments to ascertain the legitimacy of the proposed end-use, and to prevent traffickers from turning to alternative chemical source countries when transactions in one country are denied.

The challenge is to develop multilateral mechanisms for the exchange of the information necessary for the effective implementation of national chemical control regimes, taking into account the commercial interests involved and the varying commercial and law enforcement practices of the many governments that must cooperate.

The second challenge is to promote the establishment of effective national chemical control regimes that are consistent with and reinforce these multilateral cooperative mechanisms.

In 1998, concerns over the sharing of information required for international chemical control receded, but did not disappear, as experience demonstrated that the multilateral exchange of the information required for effective chemical control, properly done, does not jeopardize legitimate commercial interests. Improved procedures for information sharing have continued to be developed.

Implementation of chemical control regimes, however, remains a problem. While many governments have established the legal and regulatory structures required for national chemical control regimes, and accepted the need for information sharing, they lack the financial resources, the administrative infrastructure and the trained personnel required for effective implementation.

Methodology For Estimating Illegal Drug Production

How Much Do We Know? The INCSR contains tables showing a variety of illicit narcotics-related data. These numbers represent the USG's best effort to sketch the dimensions of the international drug problem at this time, but the image is less precise than we would like it to be. The numbers range from cultivation figures, relatively hard data derived by proven means, to crop production and drug yield estimates, figures that become softer as more variables come into play. As in previous years, we publish these data with an important caveat: the yield figures are potential, not final numbers. Although they are useful for determining trends, they are ultimately approximations.

Each year, as we get better data through field research, we revise our estimates. This type of field research is far from easy. The secretive and violent nature of the illegal drug trade makes it difficult to develop precise information. At the same time, the harsh terrain on which many drugs are cultivated is not always easily accessible This is particularly relevant given the tremendous geographic areas that must be covered, and the difficulty of collecting reliable information in diverse and treacherous terrain.

What We Know With Reasonable Certainty. The most reliable information we have on illicit drugs is how many hectares are under cultivation during any given year. For more than a decade, the USG has estimated the extent of illicit cultivation in a dozen nations using proven statistical methods similar to those used to estimate the size of licit crops at home and abroad. We can therefore estimate the area under cultivation with reasonable accuracy.

What We Know With Less Certainty. Where crop yields are concerned, the picture is less clear. How much of a finished product a given area will produce is difficult to estimate. Small changes in such factors as soil fertility, weather, farming techniques, and disease can produce widely varying results from year to year and place to place. In addition, most illicit drug crop areas are not easily accessible to the USG, making scientific information difficult to obtain. Again, we are estimating potential crop available for harvest. Not all of these estimates allow for losses, which could represent up to a third or more of a crop in some areas for some harvests. The value in estimating the size of the potential crop is to provide a consistent basis for a comparative analysis from year to year.

Since cocaine remains at the top of the USG's drug-control priority list, we have gradually improved our yield estimates. Our confidence in coca leaf yield estimates, as well as in the finished product, has risen in the past few years, based upon the results of field studies conducted in Latin America. Seven years ago, after completing preliminary research, the USG for the first time began to make its own estimate of dry coca leaf yields for Bolivia and Peru instead of relying solely on reports from the governments of those countries. We are improving our ability to estimate coca yields in Colombia. Additional research and field studies have helped refine these estimates and make similar improvements possible in estimates of other drug crops. In all cases, multiplying average yields times available hectarage indicates only the potential, not the actual final drug crop available for harvest.

Harvest Estimates. Estimating the quantities of coca leaf, opium gum, and cannabis actually harvested and available for processing into finished narcotics remains a major challenge. Although we are improving our techniques, at this time we cannot accurately estimate this amount with precision for any illicit crop in any nation.

While farmers naturally have strong incentives to maximize their harvests of what is almost always their most profitable cash crop, the harvest depends upon the efficiency of farming practices and the wastage caused by poor practices or difficult weather conditions during and after harvest. Up to a third or more of a crop may be lost in some areas during harvests.

In addition, mature coca (three to six years old), is more productive than immature or aging coca. Variations such as these can dramatically affect potential yield and production. Additional information and analysis is allowing us to make adjustments for these factors. Similar deductions for local consumption of unprocessed coca leaf and opium may be possible as well through the accumulation of additional information and research.

Processing Estimates. The wide variation in processing efficiency achieved by traffickers complicates the task of estimating the quantity of cocaine or heroin that could be refined from a crop. These variations occur because of differences in the origin and quality of the raw material used, the technical processing method employed, the size and sophistication of laboratories, the skill and experience of local workers and chemists, and decisions made in response to enforcement pressures. (See Yield Estimates below.)

Figures Change as Techniques and Data Quality Improve. Each year, research produces revisions to USG estimates of potential drug production. This is typical of annualized figures for most other areas of statistical tracking-- whether it be the size of the U.S. wheat crop, population figures, or the unemployment rate--that must be revised year to year. For the present, however, these statistics represent the state of the art. As new information becomes available and as the art improves, so will the precision of the estimates.

Status of Potential Worldwide Production

In evaluating the figures below, one must bear in mind that they are theoretical. They represent estimates of potential production--the amounts that the USG estimates could have been produced if, and only if, all available crops were to be converted into finished drugs. Since these estimates do not always make allowance for losses, actual production is probably lower than our estimates. The figures shown are mean points in a statistical range.

Potential Opium Production. In Southeast Asia, for the second year in row, estimated opium cultivation and production in the Golden Triangle countries fell in 1998, in this case by 15 percent. According to USG estimates, in 1998, growers in Burma, Laos, and Thailand cultivated an estimated 157,750 hectares of opium poppy, potentially producing 1,906 metric tons of opium. Burma's production accounts for 92 percent of this amount. In addition to the 15 percent drop in estimated cultivation, there was a 27 percent decline in production, from the 1997 estimate of 2,600 metric tons of opium gum to 1,906 metric tons. In Burma, estimated opium poppy cultivation fell by 16 percent to 130,000 hectares from the 155, 150 hectares reported for 1997. Estimated yield fell to 1,750 metric tons of opium gum for 1998, a 26 percent drop from 2,365 metric tons in 1997. Weather conditions were largely responsible for the decrease in the crop. In Laos, a seven percent drop in estimated cultivation brought the estimated crop down to 26,100 hectares, down from the 28,150 hectare figure for 1997; estimated production dropped by 33 percent to 140 metric tons from the 1997 figure of 210 metric tons. Estimated opium poppy cultivation in Thailand again fell dramatically by approximately 18 percent to 1,350 hectares from the 1,650 hectares observed last year. Thailand had an estimated potential production of 16 metric tons--36 percent less than the 25 metric tons estimated in 1997. In 1998, the USG's third survey of Vietnam found that the crop had fallen by 51 percent to 3, 000 hectares with a potential yield of 20 metric tons from last year's high of 6,150 hectares of opium poppy cultivation yielding a potential 45 metric tons. The USG found no significant opium cultivation in China's Yunnan Province in 1998.

Opium poppy cultivation in Southwest Asia again increased in 1998 as a result of greater cultivation in Afghanistan, which is now vying with Burma for the role of leading producer of illicit opium. The increase occurred despite a 26 percent drop in Pakistan's opium crop. Total hectarage for Afghanistan and Pakistan rose from 43,250 hectares in 1997 to 44,750 hectares in 1998. Total potential production for both countries rose from 1, 350 metric tons to 1,415 metric tons. Afghan hectarage rose from 39,150 hectares in 1997 to 41,720 hectares in 1998. The estimated yield rose by three percent from 1,265 metric tons in 1997 to 1,350 metric tons in 1998. Pakistan's hectarage decreased from 4,100 hectares in 1997 to 3,030 hectares in 1998. Estimated yield dropped 24 percent from 85 metric tons in 1997 to 65 metric tons in 1998. The U.S. conducted a survey of Iran and found no significant cultivation in the country's former traditional growing areas.

The USG is still examining the illicit drug crop situation in Russia and the Central Asian countries formerly part of the Soviet Union. While some of these countries may be able to produce significant opium poppy harvests, the USG still lacks sufficient data to identify and measure all suspected cultivation areas.

In the Western Hemisphere, the opium poppy growing countries have maintained active crop control efforts despite continuing campaigns by criminal organizations to expand the areas under cultivation. In Colombia, USG estimates showed Colombian opium poppy cultivation at 6,100 hectares, eight percent less than last year, enough to yield an estimated 61metric tons of opium gum, or a little over six tons of heroin, assuming no losses. In Mexico, the 1998 opium poppy crop was 37 percent larger than the previous year's, largely as a result of weather conditions that hindered spraying operations. After Mexican government eradication operations destroyed 9,500 hectares of poppy, there were 5,500 hectares of opium poppy available for exploitation by the drug syndicates. Assuming no losses, the estimated potential yield was 60 metric tons of opium gum, or six metric tons of heroin. Guatemala's poppy cultivation remains at minimal levels after government efforts.

Coca Cultivation. Worldwide coca cultivation dropped two percent from last year's 194,100 hectares to 190,800 hectares in 1998. Despite an active eradication program, Colombia experienced an increase in coca cultivation to 101,800 hectares at the end of 1998. In Bolivia, government forces reduced cultivation from 45,800 hectares in 1997 to 38,000 hectares in 1998. Some coca is cultivated in inaccessible areas of Brazil, but its extent is unknown. Ecuador has only negligible amounts of coca.

Cocaine Yield Estimates

The cocaine yield figure is offered with the same caveat as the crop harvest yield data: it is a figure representing potential production. It is a theoretical number. It does not in every case allow for losses or the many other variables that one would encounter in a "real world" conversion from plant to finished drug. In fact, the amount of cocaine HCl actually produced is probably lower. A USG team that studied cocaine processing in Bolivia's Chapare region in 1993 found that in the laboratories under observation processing efficiency was lower than previously thought. The estimate for Bolivia was reduced accordingly and the figure published as a point estimate rather than as a range.

In 1998, taking into account estimates of local consumption and local seizures, the USG calculates that if virtually every coca leaf were converted into cocaine HCl, and there were no losses because of inefficiency, bad weather, disease, or the deterrent effects of law enforcement, 555 metric tons of cocaine HCl theoretically could have been available from Colombia, Bolivia, and Peru for worldwide export. This figure includes 240 metric tons potentially available from Peru, 150 metric tons potentially available from Bolivia, and approximately 165 metric tons potentially available from Colombia. In publishing these numbers, we repeat our caveat that these are theoretical numbers, useful for examining trends. Though every year research moves us closer to a more precise cocaine yield estimate for Latin America, we do not yet know for certain the actual amount available for distribution.

Consumption Data

Most of the chapters in this report contain some user or consumption data. For the most part, these are estimates provided by foreign governments or informal estimates by USG agencies. There is no way to vouch for their reliability. They are included because they are the only data available and give an approximation of how governments view their own drug abuse problems. They should not be considered as a source of data to develop any reliable consumption estimates.

Marijuana Production

Cannabis cultivation continued to decline in Mexico in 1998 to 4,600 hectares with a potential yield of 2,300 metric tons. Mexican law enforcement agencies eradicated, 9,500 hectares of cannabis in 1998. In Colombia's traditional cannabis growing zones, where intensive eradication in previous years had virtually destroyed the crop, there was a resurgence of cultivation in 1993 to an estimated 5,000 hectares. That estimate did not change in 1998. The size of Jamaica's cannabis crop in 1998 is still under review. We recognize that there may be considerable undetected cannabis cultivation in Central and East Asia, and on the African continent, though there is no evidence that any of this cannabis significantly affects the United States. As we gather more accurate information, we will report significant findings in future INCSRs.

Chart: Worldwide Illicit Drug Cultivation Totals

Chart: Illicit Drug Net Production 1987-1998