U.S. DEPARTMENT OF STATE
INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT, MARCH 1996

United States Department of State

Bureau for International Narcotics and Law Enforcement Affairs

EXECUTIVE SUMMARY

Policy and Program Overview for 1995

Drug Trade Still Strong. Yet 1995 offered no grounds for complacency. The international drug trade remains a powerful, sophisticated, and adaptable force. Despite our collective effort, in 1995, trafficking organizations managed to produce and move tons of cocaine and heroin to nearly every country in the world. They nurtured new markets in Eastern Europe, the countries of the former Soviet Union, Africa and the Middle East. They flaunted their undeniable capacity to corrupt governments. And they showed that often, far from crippling an organization, the arrest of a drug baron may only create a temporary job opening.

The drug trade always seeks new opportunities. To offset potential losses in the Western Hemisphere, the cocaine syndicates have set their sights on new markets throughout the world. In Europe, where a combination of new affluence and social discontent provides the ideal conditions for drug consumption, cocaine was seized in nearly every country between Denmark and Turkey, traditional markets for Southwest Asian heroin. Eastern Europe was a prime target. For example, shipyard workers in Gdansk found over 200 kg of cocaine aboard a Greek freighter in dry-dock; Czech authorities in August arrested a Venezuelan courier smuggling cocaine; Turkish police stopped a Bulgarian courier carrying cocaine intended for sale in Istanbul's bars; Romanian police confiscated liquid cocaine shipped from Colombia. Brazil became a hub for Nigerians moving cocaine to Africa and Europe. And Nigerian traffickers can be found in nearly every prison population in the world.

But cocaine only supplemented the already robust heroin trade. Heroin trafficking rings in Southeast and Southwest Asia respectively poured drugs into the Western Hemisphere, Europe, the Middle East, and Africa. In 1995, Southwest Asian heroin became especially plentiful in Europe, with traffickers splitting and expanding the traditional Balkan smuggling route northward into Romania, Hungary, and the Czech and Slovak Republics, and southward through former Yugoslavia, Croatia, Slovenia, the Former Yugoslav Republic of Macedonia, Greece and Albania. Illegal drugs unfortunately remain a growth industry.

The Rise Of Synthetics. A disturbing development in 1995 has been the astonishing spread of synthetic drugs, especially methamphetamine, on the illicit world drug market. Synthetics, which have been growing in popularity over the last few years, may become the drug control nightmare of the next century. As the INCSR country chapters report, the demand for methamphetamine has been increasing not only in the industrialized nations, but in most of the countries of the developing world. From the United States to Europe, from the countries of the former Soviet Union to Africa the appetite for methamphetamine and MDMA ("Ecstasy") has been on the rise. Synthetics allow trafficking organizations to control the whole process, from manufacture to sale on the street. They free traffickers from reliance upon potentially vulnerable drug crops like coca or opium poppy and can be manufactured relatively cheaply from easily obtainable chemicals. With a pool of under- or unemployed Eastern European chemists to draw from, the drug mafias are making synthetics a third "drug pillar" to rival the mainstays of drug trade, cocaine, and heroin. There were already signs in 1995 that Mexican trafficking organizations that dominate the cocaine pipeline are aiming to control the US methamphetamine trade.

Accomplishments. In 1995, it was the cocaine trade that suffered most as Colombian forces arrested many of the key leaders of the Cali drug mafia, until now the most powerful of the cocaine trafficking syndicates. While the subsequent escape of Jose Santacruz Londono--who drove away in January from a Bogota prison--took some of the luster off the triumph, it was nonetheless a major achievement. Coming two years after the fragmentation of the Medellin drug cartel in 1993, the Colombian government's attack on the Cali drug cartel has sown disarray in the Colombian cocaine trade, at least for the time being.

The cocaine trade suffered other losses elsewhere in Latin America. Colombian and Peruvian military forces, supported by the USG, severely constricted the "airbridge" carrying semi-finished cocaine products from Peru to Colombia for refining and distribution. The bottlenecks briefly caused the price of coca in Peru to plummet, since traffickers were unable to move perishable commodities to market.

There were notable achievements in other parts of the world. Pakistani authorities reported seizing nearly 17 metric tons of heroin. If pure, this quantity alone would be enough to satisfy demand for the year in most of Western Europe. Pakistan also extradited to the United States three leading heroin traffickers, Iqbal Baig and two of his deputies, key figures long sought by USG authorities. In Southeast Asia, Thailand began extradition proceedings against the ten major drug traffickers associated with the region's most notorious drug warlord, Khun Sa (Chiang Chi-Fu). The ten were arrested in late 1994 in Operation Tiger Trap, as Thai military and security forces shut off major roads and trafficking routes close to insurgent-held areas of Burma. An eleventh associate was arrested in 1995 and also is facing extradition to the US to stand trial on federal drug trafficking charges.

Drug Cultivation. Drug crop data were less encouraging: both coca and opium poppy enjoyed a bumper year in 1995. Hectarage and potential yield estimates set a new record for each crop. Good weather was primarily to blame, though government inaction was also a boon to the growers. In the Western Hemisphere, coca cultivation spread in all three major coca-growing countries, for an annual total of 214,800 hectares, beating the 1992 record of 211,700 hectares. The largest expansion--six percent--occurred in Peru, where the government has yet to forced eradication of mature coca, fearing it would stir social unrest. Peru did, however, carry out an aggressive eradication of coca seedbeds, which could have produced over 16,000 hectares of mature coca. In February 1996, the Government of Peru issued a decree initiating a limited coca eradication program.) In Colombia and Bolivia, the second and third ranking coca producers, eradication campaigns removed important hectarage from cultivation, though new planting during the year offset any net gains. The Bolivian eradication effort in 1995 was particularly significant. By removing nearly 5,500 hectares of mature, fully productive coca, potential leaf production fell by five percent, despite the slight net increase in overall cultivation (from 48,100 hectares in 1994 to 48,600 hectares in 1995). Unless the government eradicates the new coca soon, potential leaf yield will rise again in two years when the new plants come "on-line."

Opium. Aided by improved weather conditions, opium poppy cultivation enjoyed a banner year in 1995. Southeast Asian cultivation rose five percent in Burma and six percent in Laos, while dropping markedly in China (down 35 percent) and Thailand (down 17 percent). Overall, Southeast Asian poppy cultivation grew by slightly over four percent. In Southwest Asia, total hectarage climbed by approximately nine percent, most of it in Afghanistan. Afghan poppy cultivation leapt up by one third to 38,740 hectares, making it the world's second greatest opium source country. Pakistan's cultivation declined by four percent (to 6,950 hectares). Western Hemisphere opium figures were lower in 1995 for two reasons. First, until 1995, we had no actual survey data on Colombian opium, which had been reported at 20,000 hectares. The revised estimate, based on imagery, is 6,540 hectares, assuming three crops per year. Second, Mexico's opium poppy crop fell from 5,795 hectares in 1994 to 5,050 hectares in 1995.

Opium gum yield estimates for 1995 set a new record. Potential opium gum production soared by 16 percent to a new high of over 4,000 metric tons, with Burma alone responsible for nearly 70 percent of the total. With a potential capacity for producing 2,400 metric tons of opium (i.e., 240 metric tons of heroin), Burma by itself could supply most of the world's heroin needs. Ideal weather conditions in Laos more than doubled the country's potential opium gum production, jumping from 85 metric tons in 1994 to 180 metric tons in 1995. In Southwest Asia, overall potential production rose by 18 percent, despite a three percent drop in Pakistan's estimate. Afghanistan's 32 percent increase (1,250 metric tons in 1995 versus 950 metric tons in 1994) accounts for most of the rise. Western Hemisphere potential yields were 65 metric tons of opium gum for Colombia and 53 metric tons for Mexico, leaving Colombia for the second successive year as the Hemisphere's major potential opium producer, despite an aggressive poppy eradication campaign.

The Elements of Controlling Supply: Simple Concept, Difficult Application. The goal of significantly reducing the supply of illegal drugs is attainable, but not without a sustained commitment. The basic principles of supply reduction are straightforward. A five-stage grower-to-user chain links the drug producer in a foreign land with the consumer in the United States. These stages are: cultivation, processing, transit, wholesale distribution, and finally retail sales on the street. The USG's international drug control programs target the first three links of this chain, cultivation, processing, and transit. Severing the chain at the source is the most cost-effective means of cutting the flow; the drugs never enter the system at all. It is analogous to removing a tumor before it metastasizes. For example, current research suggests that roughly every 200 hectares of coca eradicated potentially deprives the system of about a metric ton of finished cocaine. Given current aerial spraying capability, it would not take long to make a major dent in the cocaine supply. Aerially applied, environmentally approved herbicides could eradicate a large portion of the coca crop in a period of months. Moreover, it would take two years to replace this lost production, given the growth cycle of coca.

The Importance of Eradication. USG drug control policy over the past three years consequently has stressed the importance of eradication, without underplaying the need for interdiction. Except for Colombia and Panama, however, most coca-producing countries are reluctant to apply such products to drug crops, even when they are using significantly stronger, more toxic herbicides for weed control in legitimate food crops. Bolivia uses manual eradication which helps but is slow, less permanent, and exposes eradication personnel to greater danger from growers.

Eradication has gained greater acceptance in the past few years. Eradication campaigns in Bolivia and Colombia have shown that it is possible to restrict significant expansion of the coca crop. Both governments now acknowledge crop control as a critical element in eliminating illegal coca, though only Colombia will permit the use of aerially applied chemicals. Peru, the largest cultivator, is still wavering. Its government will destroy seedbeds, but is reluctant to face the political and economic consequences of spraying without long- term compensation from abroad. In 1995, Peru, which did not eradicate, was the only country to show a significant increase in coca cultivation. If all the governments in the region would aerially eradicate illegal crops at the same time as they make serious inroads into the trafficking organizations, we could expect to see a real drop in supply over the next few years.

The Determining Factor: Political Will. The cornerstone of any successful antidrug strategy is political will. A country can have state-of-the-art antidrug hardware and enforcement units and still not cripple the drug trade--unless its government is willing to weather the short-term political backlash that effective antidrug measures inevitably trigger. Except in those rare cases where governments lack physical control of national territory, the ground that antidrug forces gain one year is often lost the following year when governments lack the political courage to stand by their decisions. The effects of flagging political will are visible to all, especially the major drug organizations. And they make the most of it. The drug trade learned long ago that where political will is weak it can establish a modus vivendi with a government. Trafficking organizations as a matter of course will absorb losses in a given area if their overall operations in other areas are profitable. That is the cost of doing business. Most governments, in turn, tend to concentrate their antidrug operations in sectors least likely to trigger a political backlash from drug interests.

In a typical pattern, a major drug cultivation country concentrates on interdiction, when what is necessary is eradication; a major drug refining country eradicates crops while major trafficking organizations operate profitably by manipulating corrupt enforcement and weak judicial systems; or a major banking country actively pursues trafficking organizations, while guarding bank secrecy and avoiding effective money laundering reforms. Once a modus vivendi takes hold, the drug problem becomes endemic. The short-term political peace that the politicians enjoy only allows drug interests to dig in for the long term. One of the basic tenets of USG antidrug policy has been to expose and where possible prevent such capitulation by encouraging political will in the principal drug producing and transit countries. For once a drug problem becomes endemic, corruption inevitably thrives; and where there is large-scale corruption, democratic government is in jeopardy.

A Gauge of Will. Measuring political will is not easy, but one useful gauge is crop eradication, particularly in the coca-growing countries. Coca cultivation is finite and concentrated in three countries in the Western Hemisphere. Our technical skills allow us to locate and measure the extent of coca cultivation, while our modern spray aircraft and environmentally safe herbicides provide a tested means of eliminating cultivation. Since we share survey results with--and will provide eradication assistance to--the governments concerned, we can judge political will by the amount of crop reduction a government is willing to carry out. Granted, this is only one measure of political will, but it is a critical one, since large-scale, methodical eradication could in one growing season remove half the crop that yields the cocaine feeding the world's drug habit.

In the decade since the USG first refined its crop estimating techniques, the size of the world's illicit drug crops has fluctuated within certain parameters. Though supply varies depending on weather patterns and sporadic efforts by various governments to cut back cultivation, we know that even in bad years there is more than enough coca and opium poppy available to assure a market surplus. Since we also know that reducing drug crops is both feasible and effective, a serious antidrug effort will only succeed as we force down total drug cultivation below the point where the drug trade feels the pinch. And we must do this more every year. Otherwise, we will be caught in an endless annual ritual of thrust-and-parry that allows weak governments to demonstrate activity without accomplishment. That is a prescription for a status quo that only favors the drug trade and the corruption that follows in its wake.

Corruption. At the core of the struggle against the drug trade is a battle against corruption. Drugs are primarily a means to make vast sums of money. Gram for gram there is no more lucrative commodity than drugs. Substances that are relatively cheap to produce generate criminal revenues on a scale that has no historical precedent. At an average of one hundred dollars a gram on the streets of the US, a metric ton of cocaine is worth $100 million if pure, double that amount if the cocaine is cut. The USG typically seizes more than 100 metric tons annually, or a quantity of drugs exceeding $10 billion to the drug trade, as much as the gross domestic product of many countries. To put these numbers in perspective, the USG in fiscal year 1995 spent a little over $810 million on all its international drug control activities. In quantities of cocaine, that translates into approximately eight metric tons of cocaine. Large jets flying into Mexico have carried in as much or more in one shipment.

With such resources at their command, large trafficking organizations have an almost unlimited capacity to corrupt. The more entrenched the drug organization, the better its chances to corrupt. For example, in this hemisphere the two countries that have struggled the longest against the drug trade--Mexico and Colombia--are also those that have had to face the drug corruption that has crept into the uppermost reaches of government. The nightmare scenario, of course, is that one day traffickers could simply control governments through elected officials who actually owe their office to drug syndicates. While this has not happened in recent times, there have been some disturbing near misses. We can expect the drug trade to keep pressing at every opportunity, since its survival depends upon the right combination of government impotence, neglect, and complicity that corruption feasts upon.

Certification: a Spotlight on Cooperation. One way to help keep governments honest is through periodic public scrutiny. Drug corruption, like any other form of subversion, can only flourish in the shadows. Thanks to a provision in the Foreign Assistance Act, the United States Government has the equivalent of an international spotlight to focus on the major drug-related countries: the drug certification process. Every year the President must certify whether each major drug producing or transit country has cooperated fully or has taken adequate steps on its own to meet the goals and objectives of the 1988 UN Convention, including rooting out public corruption. The certification process gives the President an international platform for a candid, public evaluation of the performance of the major drug- affected countries.

Though denial of certification carries important foreign assistance sanctions, as well as a mandatory negative US vote against lending by six multilateral development banks, the potential material losses are often less important than the public opprobrium of failing the standard. The last thing any government wants impugned before its international peers is its honor or integrity, especially when it must publicly confront objective, if often damaging evidence that it has not cooperated fully in countering the drug trade. Most governments now realize that every year the President of United States is legally bound to make such a public assessment. And most know that the nature of that assessment depends largely on their efforts during the year.

A Useful Process. The drug certification process has been very effective in recent years. By working with the principal countries concerned to establish realistic benchmarks through periodic demarches, we have been able to provide honest assessments of cooperation. Where appropriate, we have recognized achievement, criticized poor cooperation, or granted national interest certifications. The remarkable improvement in cooperation levels over the past three years underscores the importance of holding countries publicly responsible for their actions before their international peers. Such public diplomacy makes it impossible for the drug trade to hide behind the polite formalities of traditional bilateral diplomacy. As uncomfortable or embarrassing as some countries may find this process in the short term, we believe that over time such openness will severely curtail the influence of the drug trade by eliminating the corruption that nourishes it.