Like Mark, I attended the Yale Globalization Center conference on drug policy organized by President Ernesto Zedillo and Professor Jody Sindelar. The most interesting thing I learned from the panels and participants is that the attention of the U.S. public regarding drugs is focused on debates that don’t matter much for our friends south of the border (i.e., what should we do about marijuana?). Meanwhile cocaine, which has dropped off the public’s radar, is absolutely central to what is occurring in Mexico and Central America.
Mexican gangs grow marijuana and ship it north, no muss no fuss, but to control the cocaine trade they need to look to South American suppliers and the land trade route through which the drug flows. Recently the gangs have established a substantially greater presence — with attendant violence and corruption — in places such as Guatamala, Nicauragua and El Salvador. Whether U.S. policy on marijuana gets tighter, looser or stays the same makes little difference to these Central American countries, but our policies toward cocaine have huge consequences for them.
More generally, the financial import of marijuana to the Mexican gangs seem to be declining. The gangs are diversifying into a range of other criminal and legitimate businesses, making drugs a smaller part of their revenue stream. The U.S. marijuana market is perhaps one sixth of that shrinking slice of the pie. In contrast, despite the increasing diversification of the gangs into non-drug businesses, cocaine remains massively important to them, likely accounting for more revenue than all the other drugs put together. With cocaine’s almost one hundred fold markup from Bogota to Laredo and its incredible weight to value ratio, even a shrinking U.S. cocaine market is extraordinarily lucrative.