Cocaine: A Changing Landscape - Part Three

Latin America Correspondent Jon Bonfiglio digs into the history of cocaine.

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Transcript

Hi everyone. Firstly an apology that the final episode in this series has taken so long to see the light of day, but the second episode went live on 2nd January, in what I had assumed would be an especially quiet period, one in which focusing on a non time-specific topic like the changing landscape of cocaine would find a happy home, but then of course January 3rd and Venezuela and the United States and Maduro happened, and everything changed, so this final episode got shunted to one side, or - in the language of faceless middle managers everywhere - deprioritized.

But it was not forgotten, so here we are again, with a wrap up on the fascinating evolution of cocaine, and in this final missive, a look at what we don’t know.

It may seem a curious way to look at the topic, because implicit in what you don’t know is that you don’t know it, but it is important, I think, because all too often what we know about organized crime, the drugs trade and ancillary matters either comes by surprise - a leak, or an event - or it comes through studies which almost always have a delay time. So what we think we know now is basically what was happening a few years ago. Nobody can really say what is happening now, but - equally - identifying what we don’t know is actually also a really interesting point which helps towards highlighting the gaps in the narrative. 

Before we get there, though, a simple, and altogether staggering, fact: Cocaine production, use and demand has never been higher. But even more stark is that this is not simply in its traditional western markets, but markets which historically have been blissfully unaware of cocaine - the likes of Africa, Asia and Eastern Europe - are also now experiencing record demand. There is simply nowhere on earth where the use of cocaine is in decline. A lot of reports, in fact, refer to the current period as the "Golden Age" of Trafficking. 

Now, we certainly don’t fully know what the current state of trafficking routes is, or who is managing them, but what we do know is that there has over the last few years been a trend of fracturing supply chains. Think of it in parallel to ageing electrical grids, where the processes and infrastructure of a generation or two ago, whilst critical at the time to be able to service users across territories, are now vulnerable precisely because of the interconnectivity of the system. If someone knows how it works, they can target a point in the chain, and it affects the entire system. The very belief in an economy of scale generates points of weakness. The same is true of cocaine trafficking. In the 1980s and 1990s, as cocaine went global, system interconnectivity was key. But now, that interconnectivity is a flaw. If all cocaine destined for Europe, for instance, flowed through the Azores and Portugal, it would be very easy to intercept, and the supply chain would have to be entirely rebuilt from scratch. So the preference for electrical grids now, to go back to the clarifying example, is for small, autonomous grids which are totally independent of wider systems. Again, the same is true of cocaine. Additionally, it’s not simply the systems which are fractured, but the organizations are too. If we go back a couple of generations, the different moving parts needed to trust each other, but that trust is now a liability, so you increasingly have professional, disconnected actors involved, that can very simply be replaced, much like a lego brick. 

I said before that we didn’t know who was running the show - I mean, we really do - it’s the single, overbearing cartel we have spoken of before, alongside affiliates, but they are running it and outsourcing it all in a fractured way. So you now have this highly unusual dichotomy in which at one and the same time organized crime has never been more centralized and stable, whereas its supply chain operations have never been more fragmented, and replaceable. 

There are a few other things we don’t know.

We absolutely do not know the level of engagement and coercion that these organizations have among the corridors of power. Given the level of operations that they oversee, it would be incredibly naive to assume that they simply leave the variable of political power - and to a lesser extent policing power - undiscussed, untouched and unapproached - so we can probably assume that their level of leverage is significant. Think of it as lobbying. It’s pretty well accepted these days that major corporations and industrial sectors and going to have their people, on the inside, massaging the processes and the people, so why would it be any different when it comes to the wide-ranging interests - legal and outside the law - which form part of the portfolio of organized crime. 

The other things that we don’t know are specific events which are to follow in a few months, namely presidential elections in Peru and Colombia, the two biggest producers of coca in the world, and the policy positions that the new governments and presidents take. Ultimately, they have little autonomy over affecting production of coca, and cocaine, but they do have some, and the other pretty significant factor in all of this is how US President Donald Trump involves himself in the elections, which - given recent history - he is likely to do, with both stick and carrot, so you could readily assume that this will likely mean a successful candidate emerging on the back of coca eradication policies, tried and failed, many times over, but it’s a headline. 

What we have learned above all, through all this, is that cocaine is an incredibly resilient product, almost uniquely so. As other drugs have come and gone, fallen out of fashion, or been replaced by others, cocaine has remained the global, aspirational drug of choice, and its demand is only going in one direction. 

If you could legally invest in cocaine in the futures market, you’d be looking at a pretty significant return.