Press
Release No.2002-78
THE SOCIAL AND
ECONOMIC IMPACT OF DRUG TRAFFICKING
Paris, October 14 - The Mexican
drug cartels, as major suppliers of the North American market,
rake in annual profits of between 10 and 30 billion dollars. When
Mexico was deep in financial crisis in 1995, the drug money laundered
was equal to what the country earned from its oil exports. These
two estimates illustrate the enormous industry that drug trafficking
had become during the 1980s and 1990s. But this is only the tip
of the iceberg. Little is known about the profound impact such
trafficking has on economies and societies or its political implications.
A lot of studies have been done
of the drug phenomenon but governments have focused on the dangers
it posed to health, or on stamping it out. In 1996, UNESCO's Management
of Social Transformations Programme (MOST) launched a research
project to study the economic and social transformations connected
to international drug trafficking. It was started and supervised
by the late anthropologist Christian Geffray (who died in 2001),
China expert Guilhem Fabre and economist Michel Schiray, and carried
out by a team of sociologists, ethnologists, anthropologists and
economists, with support from the UN Office for Drug Control and
Crime Prevention.
The results of the project, which
mainly involved four large countries with broad-based economies
- Brazil, China, India and Mexico - have just been released on
CD-Rom and on the MOST website under the title of Globalisation,
Drugs and Criminalisation*. The researchers, mostly natives of
the regions studied, met and talked with drug dealers and consumers,
judges and police, lawyers and government officials. They went
through years of press articles and court decisions concerning
drugs, studied the movement of capital and funds and the operation
of tax havens. Completion of the project shows that social and
economic research can be done even in the very closed world of
economic crime.
The project's main conclusion
is that drug trafficking - and the money-laundering that goes
with it - is directly tied to a whole range of other criminal
activities and that the general growth of these activities over
the past 20 years stems largely from the greater opportunities
that financial deregulation and globalisation provide. Some of
the studies are revealing about the use of offshore banks, which
are termed "legal illegality." The important and harmful
role of tax havens is clearly shown, especially the murky handling
of the money of the very rich.
The report says the impunity the
drug lords enjoy is due to their skill in neutralising or undermining
the work of the police through systematic corruption and, in some
cases, by infiltrating government forces. For the authors "the
form of corruption prevailing in a given country is strictly dependent
upon the nature of the State and the balance of power […]
between State institutions and drug trafficking networks […]
In this regard, the case of Mexico, where the civil service remained
for a long time under the de facto tutelage of a single party,
may show greater similarity to the case of China than, for example,
to that of Brazil or Colombia. "
The study on the Brazilian state
of Rondonia provides striking examples of drug lords elected as
mayors, parliamentary deputies and senators. Mexico - with its
corrido, popular songs that once celebrated revolutionary heroes
like Pancho Villa and Emilio Zapata and now praise the deeds of
drug lords -- illustrates the "social embellishment"
of the image of some of these criminals, who have become heroes
of their neighbourhoods and hometowns.
The political influence of criminal
networks, seen locally but also at regional and national level,
obviously poses the question of the gap between the law on paper
and its enforcement. Only the small-time traffickers seem to be
targeted by the police who, along with the courts, seem unable
to move against certain political and economic interests. This
happens to such an extent that it sometimes threatens the whole
legitimacy of such institutions. Situations where "the rule
of law is perverted," with summary executions by police under
cover of arrests that supposedly go wrong, do not augur well for
the future of such societies.
The report also says that "if
the illegal traffic of drugs represents only a small percentage
of economic activity in comparison to the formal legal economy,
nevertheless the money laundering of the profits from the totality
of the illegal activities controlled by the criminal networks
can have an effect on financial crises.
This theory was proved by the Mexican
financial crises (1994-1995), and also in Thailand (1997) and
Japan (since 1990)." What economists have called "the
tequila effect" - the artificial prosperity that preceded
the financial crisis in Mexico - probably had something to do
with "the cocaine effect." According to the researchers,
future studies will perhaps show this has happened in other countries,
such as Turkey, Argentina and Nigeria, in 2000 and 2001.
The report affirms the permeability
between different economies, and focuses on the "grey economy"
- the twilight zone between the legal economy and the "black"
economy of smuggling and illegality. A striking example is provided
by Operation Casablanca, the biggest ever investigation of money-laundering,
done in 1998 by North American investigators, which resulted in
the arrest of 25 top officials from 12 of Mexico's 19 biggest
banks.
Before it ends up in banks, drug
money can travel different routes - through the coffee trade,
for example, the film industry or trade in gold or precious stones
- depending on the country. This link between criminal networks
and national economies can no longer be ignored, either at national
or international level, by the authorities in charge of working
out how best to fight drug trafficking. And other studies like
the present one are clearly needed.
During its six years, from 1996
to 2002, the MOST project combined the efforts of drug experts
and investigators in various parts of the world, who have now
formed a network of their own. Other practical results include
the setting up in France of the "Cluny Group," a drug
research association which has extended its brief to other kinds
of crime, and the
creation of two university chairs on drugs for 2002-2004, one
at Mexico's National Autonomous University and the other in Brazil
(shared between three universities, two in Rio de Janeiro and
one in Belem). The holders of these chairs are among the authors
of this report.
****
* Globalisation, Drugs and Criminalisation can be consulted and
downloaded at: www.unesco.org/most/drugs.htm
Contact:
Monique Perrot-Lanaud,
Bureau of Public Information, Editorial Section
m.perrot@unesco.org
Tel. 33 (0)1 45 68 17 14
