Cocaine 2011

Cocaine 2011

The meteoric rise of global cocaine use since it’s commercialisation in 1883 has seen it extolled as the wonder drug and cure all of the late 19th century, demonised as a drug of addiction responsible for a host of social ills by the turn of the 20th century and after a brief period in the spotlight as the champagne drug of Hollywood in the 1920’s, its possession, cultivation, and distribution became illegal in virtually all parts of the world.

A second epidemic grew out of the 60’s drug culture and by the 1970’s cocaine was the glamorous high life drug of the disco scene, expensive and associated with celebrity and high energy party lifestyles. By the mid 1980’s, the cheaper derivative of cocaine, “crack” made its appearance felt, at first through emergency room admissions, and progressively as a cheaper alternative to powder cocaine, drawing in a whole new class of middle to low income users.  Considered by many as the most dangerous and addictive drug of the era, its use peaked in 1986, when legislation imposed harsher penalties for the use of crack than for powdered cocaine. Cocaine use sharply declined, until 1992 when its use began to rise again, becoming a symbol of high powered western affluence through its association with the bankers of Wall Street while simultaneously, it found new markets in new generations and in different places throughout the world. The biggest growth area for cocaine in the early 21st century is Europe, Britain, Asia and Australia, although the US is still the biggest single market.

These cyclic fluctuations in cocaine are intricately connected with the web of factors which drive use, production and control, and we look at some of these more closely in “drivers”. One of the closely linked cyclic drivers is that of “substitution” or other drugs which come and go in the merry go round of changing fashion, lifestyles, prices, availabilities, adulteration and generational shifts in use and in the last 100 years, this list is mind boggling. From amphetamines, synthetic designer stimulants and hallucinogens like MDMA (ecstasy), methamphetamine, known as the “poor man’s cocaine” and the growing trend of speedballing (mixing of cocaine and heroin or morphine), there is an endless choice of psychoactive options that contribute to the shorter term fluctuations in cocaine use.

Looking at the big picture, however, it’s hard to describe the global cocaine industry in the modern era as anything but huge. Its association extends far beyond the stimulating psychoactive properties of euphoria enjoyed in moderation by millions of people around the world. Even the dark side of addiction and dangers of abuse are often overshadowed by the consequences of the illicit use and trade of the drug which involves corruption, trafficking, money laundering, organised crime, prostitution and human trafficking, the spread of HIV/Aids, health of social costs of addiction and abuse, and the human and financial cost of incarceration, amongst other things.

2009 Estimates Cocaine Usage Globally, By Region


Economics

There are many indicators used to estimate the value of the global cocaine industry. With an annual production of around 900 metric tonnes of powdered cocaine, the retail value of the global trade (2008) is estimated at around 88-100 billion dollars. This is about half the value of the trade in 1995, however, even taking into account pricing fluctuations, this still represents an industry whose retail (or street) value alone is still higher than the GDP of 123 out of 184 countries for which the World Bank provides estimates in the corresponding year. (x)

There are several economic layers from growth of the leaf by farmers in the Andes, to the mirror and banknote of the consumer.

Coca Industry, Bolivia

  • Farmer sells coca leaves to cocaine base laboratory
  • Cocaine base is sold to trafficking organisation
  • Cocaine onsold to transnational trafficking organisation
  • Product is contracted to another group who does the shipping to intermediaries who organise its distribution across borders to wholesalers
  • Wholesalers sell to street dealers
  • Street dealers sell to consumers

In the supply of cocaine to markets in North America, distribution goes from the farmers of Colombia, Bolivia and Peru, through the hands of the Mexican cartels and eventually to the wholesalers and street dealers. In the case of Europe, shipments are usually trafficked through Spain or West Africa. Cocaine reaches Australia often via West Africa, or through couriers, parcel post and international mail delivery. (y)

Global Trafficking Ruutes 2006

Because cocaine is an illicit drug, we can only calculate the economic value of the business by looking at things like drug seizures, and comparative trends of arrests, incarcerations, emergency room admissions and drug related crime and deaths. We can’t obtain accurate production figures, and the fluctuations in price, which are quite volatile and depend on currency values and other external factors, mean that all financial infomation regarding cocaine or any illicit drug is just an estimate. That said, there are always ongoing social surveys and other data to add to the economic data from which an estimate can be drawn.

Economic Trends, Cocaine

The money laundering business associated with cocaine trafficking is estimated to be worth more than the 100 billion dollar cocaine trade, with Wall Street and major banks  implicated in high level complicity. And when we extend this to discussions about surveillance, shipping and other steps in the distribution networks, we can see that the production of the consumer item of cocaine is actually just one small part of a massive global network of associated businesses.

It is not really within the scope of this discussion to explore the hugely complicated and interlinked economic factors which continue to drive this huge global industry, except to say perhaps the obvious, that there are too many organisations throughout the world with very strong interests in keeping this lucrative industry thriving. Many of the actors along the way would be eliminated from the supply chain should cocaine ever become a legal or regulated drug.

On the control side, because this is an illegal industry, governments raise no direct revenue through excise from the cocaine trade, but incur the huge costs of the social and health consequences of drug abuse, the costs of combatting trafficking and distribution at street level, law enforcement of use and the costs of incarceration of offenders at every level are just some examples of the cost to societies of regulation of cocaine through prohibition.

Economics of Prohibition (all drugs)


State Control

Cocaine was originally classified (incorrectly) as a narcotic drug. For regulatory purposes, it is now classed as a “Schedule 2”  (USA) substance (high abuse, medical utility, high dependency risk) or in Britain as a Class A and in Australia as a Schedule 8 substance. In most countries it has the same legal status, prohibited except for some medicinal use.

Every nation has slightly different laws regulating the sale and use of drugs, and penalties for breaking these laws. Most countries, however, are part of a global drug control system which has been in place since the early 20th century. Current international agreements attempt to regulate drug production, trade and use.  This global system provides an overarching regulatory framework and agencies which assist national governments in meeting their requirements under the treaties administered by the United Nations. There are currently 170 nations who are signatories to the current convention.

There are 3 treaties which make up the current regulatory framework:

The 1961 UN Single Convention on Narcotic Drugs which draws together previous drug control legislation and combats drug trafficking through international cooperation to deter and discourage drug traffickers.

The 1971 UN Convention on Psychotropic Drugs; and

The 1988 UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances . This Convention provides comprehensive measures against drug trafficking, including provisions against money laundering and the diversion of precursor chemicals. It provides for international cooperation through, for example, extradition of drug traffickers, controlled deliveries and transfer of proceedings.

The overall objective of the conventions remains as it was specified a century ago – to limit the production, distribution and use of drugs to scientific and medical purposes.

Cocaine Seizure, Mexico

Only a few governments have not signed up to the treaties underpinning the global drug control system, and some countries who are signatories have slightly different applications of it. (zt)

In 2003, a European Parliament committee recommended repealing the 1988 Convention, finding that

“Despite massive deployment of police and other resources to implement the UN Conventions, production and consumption of, and trafficking in, prohibited substances have increased exponentially over the past 30 years, representing what can only be described as a failure, which the police and judicial authorities also recognise as such . . . The policy of prohibiting drugs, based on the UN Conventions of 1961, 1971 and 1988, is the true cause of the increasing damage that the production of, trafficking in, and sale and use of illegal substances are inflicting on whole sectors of society, on the economy and on public institutions, eroding the health, freedom and life of individuals” (zu)

Colombia: Coca Erradication

Some countries have chosen to change their approach to this policy, while still remaining signatory to the conventions.

The prohibition view is that recreational drugs are detrimental to society, and therefore, their use should be outlawed. But countries like the Netherlands believe that if a problem has proved to be unsolvable, it is better to try controlling it and reducing harm instead of continuing to enforce laws with mixed results.

The current policies of the Netherlands, which have decriminalised “soft drugs” and invested in rehabilitation treatment programs,

  1. aim to prevent recreational drug use
  2. treat and rehabilitate recreational drug users
  3. reduce harm to users
  4. diminish public nuisance by drug users (the disturbance of public order and safety in the neighbourhood). (zu)

Australia has introduced more lenient application of laws relating to cannabis possession, decriminalising the possession of small amounts of the drug. The needle exchange program in some states is also perceived as a move away from the strict regime of prohibition towards harm reduction.

Portugal, in response to rising HIV infection rates, has also adopted a different approach based on harm reduction by decriminalising the possession of small quantities of many drugs and encouraging substitution treatments and needle exchange.

Global Cocaine Use

Bolivia is seeking to withdraw from the UN conventions which make it illegal to use coca leaves for traditional uses. According to the The 1961 UN Single Convention on Narcotic Drugs, Bolivians who chew the leaf are violating international law. The Bolivian government is seeking to  have coca leaves removed from the UN’s list of prohibited or illicit drugs and substances, yet will  honour its international obligations in the fight against drug trafficking . Bolivia argues that coca in its natural state is not an illicit drug. The plant is legally grown in the country for medicinal and traditional purposes. An international attempt to remove its chewing from the UN list failed in early 2011, so the government now wants to withdraw from the convention altogether. The government says that the convention contravenes the Bolivian constitution, which states that the country is obliged to preserve and protect the chewing of coca leaves as a cultural heritage and ancestral practice. (zr)

Bolivian Woman Drying Coca Leaves

There is increasing pressure to end the prohibition in its current form and seek other means of dealing with the cocaine and other drug “problem”. In an often quoted letter written by Economics Nobel Prize Laureate, Milton Friedman on the war on drugs:  “Drugs are a tragedy for addicts. But criminalizing their use converts that tragedy into a disaster for society, for users and non-users alike”


Technology

Technology impacts at several levels in the production, distribution and use of cocaine.

The various forms of cocaine and the methods for their use have changed since the cocaine alkaloid was first biosynthesised. The coca leaf is still used in its native situation where it is mixed with an alkali substance, such as lime, to release the active substance, before being chewed in the mouth and sucked of its juices. Taken orally in this way, the cocaine takes about 30 minutes to enter the bloodstream through the stomach, and the maximum effects are felt about 60 minutes after ingestion.

In comparison, insufflation, or snorting the cocaine powder through the nose, (most commonly in the west this is achieved through making sure the powder is of a fine consistency, then inhaling it through a rolled up bank note) achieves the maximum effect within about 20 minutes, and contrary to popular belief, is sustained at the level and for the same time as when taken orally. Injection delivers the blood levels of cocaine in the shortest amount of time, with a rush of physical effects, and a shorter duration of euphoria. Crack and freebase cocaine are commonly smoked through a pipe, and the effects are felt immediately, more powerfully and although this method produces an intense euphoria, it is short lived. The development of the use of smoking cocaine has also led to other drugs being added to the mixture.

It has been the development of crack and freebase cocaine and the different modes of getting the drug into the system that has led to the most recent increases in use by a widening group of users.  While casual recreational users may be more comfortable with the powdered form of the drug, smoking and injection are the tendencies of more “committed” cocaine users, and hence the increases observed with addiction and abuse within this group.

Little has changed in the methods of production of cocaine from the coca leaf. The method of acid-base extraction used today is essentially unchanged in since the early 20th century.

Most of the world’s cocaine is produced in Colombia, from coca grown in Colombia, Peru and Bolivia. After the leaves are picked, they are left to dry, then chopped into small pieces and sprinkled with cement powder. This mixture is then soaked in petrol for a day, the leaves discarded, then battery acid (or weak sulphuric acid) is added to the mixture to create a phase separation. The layer containing the cocaine free base is separated and then caustic soda is added to precipitate the cocaine which is removed by filtering through a cloth.

This crude process is usually carried out by the farmers before the mixture is sent to laboratories for further purification to create crystalline cocaine.

In the distribution of cocaine, technology is a powerful driving force in evading detection and in the planning and execution of covert activities required for trafficking. High tech operations include surveillance techniques to avoid detection on shipping routes, the use of sophisticated packaging, fleets of small submarines and light aircraft and technical infrastructures that would rival those of high tech transnational corporations of the legal variety.

Drug Smuggling Submarines

The main impact of technology as a driving force in the cocaine industry in the present day is more about maintaining an illegal industry and further spreading distribution on a global scale, than bringing changes to the ways in which the drugs are used.


Social

The US and most of western society loves stimulants. Particularly cocaine. It promises a short cut to the goals of capitalism: the ability to work without tiring, to remain alert and cheerful, to stay up late to follow international markets, and to party into the morning when the deal is done… faster, more, longer, funner.

Alexis de Tocqueville noted this American trait in the 1830s, decades before cocaine arrived as the first powerful stimulant. “It is odd to watch,” he wrote, “with what feverish ardor the Americans pursue prosperity, and how they are ever tormented by the shadowy suspicion that they may not have chosen the shortest route to get it.” (zs)

For many people, in all levels of business and work, that short cut has meant using stimulants like cocaine. The goal oriented, those who work long hours or labour hard are often tempted to find relief or the leading edge with a bit of chemical assistance. Millions of people around the world use cocaine for exactly this purpose, and for many more, the heightened sense of sociability, excitement and euphoria makes any health risks worth it.

Yet in the relatively short history of cocaine use, it’s image has taken on many faces, from that of a widely accepted, lauded, gift to medicine, general good health and social intercourse to a dark and evil menace capable of plunging those who chance to use it just once, to the depths of addiction and despair. Its prohibition and almost century long association with underworld crime enhances its image to some, yet confirms it as a despicable cause of social vice for others.

The cyclic nature of changing drug use toward the end of the 20th century has impacted on many aspects of societal attitudes towards cocaine, and its use has swung on the pendulum of increase and decline in response to the emergence of other drugs, price, law enforcement regimes, purity of the drugs in circulation and sometimes, things as simple as fashion.

Cocaine Glamour Image

In mainstream media, reports of cocaine are often associated with the cult of celebrity, lavish lifestyle, glamour, luxury and wealth, the caviar of street drugs. In other circles, it is recognised as the powerhouse of Wall Street, with power hungry traders, young and old, driven with unbridled lust and determination, working hard and playing harder. It is cocaine’s association with status and success that has guided its smooth passage into middle class professional circles where the image of cool allure and edgy, risk taking behaviour might be otherwise unattainable. Use of cocaine by professionals has only aided the perception of its relative safety.

Cocaine: Not so glamorous

The flip side view presents images of a dangerous drug of addiction, its association with crack abuse, prostitution and unreliable women, unfit mothers who will do anything to support their habit. Perceptions like this grew from the crack epidemic of the 1980’s and fears of a generation of “crack babies” born to addicts, predicted to become a generation of either superpredator criminals or disabled welfare recipients, unable to care for themselves. This view echoes degenerationism of the late 19th century and research ultimately showed that crack exposure for the unborn child didn’t cause significant problems, and in fact, the crack generation were less likely to use drugs and committed less crime than their parents.

Despite media generated views of cocaine, which do have bearing on community attitudes if only in the short term, it continues to be seen as a social drug, relatively safe and clean, easy to use in powdered form and because its short lived euphoria does not alter perception, it can be used to enhance lively social interactions with the advantage of a quick recovery, and the ability to drive home.  It is seen as a superior alternative to methamphetamine, which is viewed as a more addictive and sexually oriented stimulant associated with risky behaviour. Despite its use being spread across a wide demographic, cocaine’s relatively high price ensures many people will use it infrequently, and it remains the favoured party drug with the glamorous image.