Cartel Tales

Pablo Escobar, el Robin Hood for the poor of Columbia and notorious drug lord “King of Cocaine” for the authorities, often regarded as the wealthiest criminal in history, has his story being told by various TV shows and movies (trending at the moment is Narcos). The head of the Medellin Cartel, he used his tiny taxi company as a front for the million dollar drug business he ran. With a net worth of $ 30 million, this small town man single-handedly created the most widespread and complex cocaine drug routes. At the peak of his power, 80% of the cocaine in the world was being supplied by him.

Drug cartels have created a niche for themselves in the world economy, enjoying billions of dollars in profit.  More than merely politically motivated outfits grabbing the spotlight for violence, cartels are a form of exceedingly sophisticated businesses –inclusive of all the processes; from production, processing and distribution of their product. In a more or less capitalist framework, every cartel aims to maximise profits, but unlike ordinary businesses, they do so at any cost –often meaning life.

Drug cartel

United Nations Office on Drugs and Crime (UNODC) and Europol data (2013) reported that the global drugs trade was worth $435 billion annually, of which $84 million was attributed by cocaine trade. The cocoa plant from which cocaine is extracted is grown in only Columbia, Peru and Bolivia. The Colombian National Police stated that the street value of cocaine can range from $2,200 in the jungles of Columbia to more than $200,000 in Australia.

Presently, in the drug business there is a man supposedly more powerful than Pablo –El Chapo. Guzman today sells more drugs than Pablo at the height of his career. Headquartered in the state of Sinaloa, the Sinaloa Cartel is one of the world’s largest drug suppliers, with the United States being the geographically convenient buyer (largest). Accounting for what could be 60% of the total market share, his annual earnings may very well amount to $3billion.

Ever since the late 90s, drug cartels have engineered new and innovative ways to transport their goods. The Sinaloa Cartel was transporting three tonnes of cocaine each month by 1990 via small private aircrafts, baggage compartments of commercial airlines, self owned 747 aircrafts, shipping vessels, submarines etc.  One of El Chapo’s most innovative ideas was the construction of an underground passage from Agua Prieta (border town of Mexico) to the United States.

“What appeared to be a water faucet outside the home of a cartel attorney in the border town of Agua Prieta was in fact a secret lever that, when twisted, activated a hydraulic system that opened a hidden trapdoor underneath a pool table inside the house. The passage ran more than 200 feet, directly beneath the fortifications along the border, and emerged inside a warehouse the cartel owned in Douglas, Ariz.”

Like Pablo, Chapo also ensured ease in transportation, intelligence, alliance and silence through bribes. Cartels have not only the police, but also military, bureaucrats and prosecutors on their payroll. With almost everyone on their payroll, nothing seems impossible.

If they do, how does a government play a part in the cocaine trail?

Wall Street Journal article titled, “Saving Mexico” by David Luhnow states:

“Because governments make drugs illegal, the risk associated with transporting them translates to high rewards for those willing to take that risk; Governments also have a hard time stopping the drugs trade because, like any good business, trafficking organizations innovate and adapt.”

The perspective that follows is that, as the government restricts the supply of a good in the market, the profits derived from the same increase extensively. By legalizing the same, such a market situation would never arise. Potential customers would prefer legal channels of purchase and drug cartels would lose their appeal among the masses.

On the flip side, stringent restrictions can perhaps lead to low and/or reducing consumption patterns. A good example is Sweden (spends three times the European average on drug control), where “consistent and coherent drug control policies” have been maintained regardless of the political institution at play. This has helped it reduce drug use (to what is now) –one-third of the European average. Extensive care has been taken to sustain laws regarding prevention, treatment and rehabilitation.

Drug cartels and their processes are complex and ensuring that such cartels are controlled and gradually dismantled even more. While both perspectives have their pros and cons, solutions are subjective and specific to countries. For now however, drug cartels like Sinaloa continue their legacy of wealth.

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