ILLICIT DRUG MARKETS IN THE CARIBBEAN

Drug income, 1990-2000 (in 2000 U.S. dollars) 3500 Market size

1. The illegal drugs market in the 3000 Caribbean generates an estimated income of 3.3 billion U.S. dollars. This represents 3.1 percent of the registered 2500 Gross Domestic Product in the region.

2000 2. Given the significance of the hidden economy in many countries of the Caribbean, that accounts for between 20 1500 to 65 percent of the total economy million of U.S. dollars depending on the country and 1000 estimation methods, this share could be particularly lower for the overall economy – under 2.5 percent of the 500 joint registered and unregistered Gross

Domestic Product. 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

3. In the early 1990s, the size of the Marijuana Others illegal drugs market was, in 2000 constant prices, 3,5 billion U.S. dollars. with the notion that in global illicit drug Although in current dollars the illegal markets most income is not generated in drugs market has grown at an annual the production and transhipment pace of 2 percent during the past countries but within the consuming decade, it has recorded an annual developed countries. decrease of 0.2 percent in constant dollar value. This Caribbean decline, 5. Cocaine’s share in the drug market of nevertheless, has not been uniform the region increased during the past during the last decade; a reduction decade from the 72 percent of the during the first part of the decade was market in the early 1990s at marijuana’s followed by an expansion during the expense. late 1990s consolidated through the recovery of cocaine transhipment. 6. The marijuana market, which now only accounts for 13 percent of the 4. Cocaine is the most profitable illicit Caribbean’s illicit drug market in 2000 drug in the Caribbean. It accounts for has been almost halved during the past 85 percent of the drug market in the decade. and amphetamine-type region. The amount of 3 billion U.S drugs each represent 1 percent of the dollars cocaine generates in the region regional drug market. No represents 2 percent of the global transformation of coca leaves into cocaine market. This share is consistent cocaine takes place in the Caribbean. Security agencies of the region have

1 shut down a dozen of laboratories imports of Colombian marijuana to the engaged in transforming raw cocaine region for internal consumption or for into crack cocaine during the past transhipment outside the Caribbean. decade. Against this low-profile background in production and 8. Neither poppy cultivation nor heroin transformation, transportation of production takes place in the Caribbean. cocaine in the area is rampant – 435 MT Nevertheless, some 700 kilos of heroin of cocaine crossed the Caribbean Sea circulates through the region. The most and the mainland Caribbean in 2000. comes from Colombia en route to the This figure represents an increase of burgeoning U.S. market for heroin. The more than 100 metric tonnes in the Caribbean is the transhipment area for cocaine flow through the region during 10 percent of the total estimated the 1990s. According to the CCM, 435 production of heroin out of Colombia, MT is the total amount of cocaine which is the source of 5.5 percent of the transiting the Caribbean area, only 62 American heroin market. The U.S. is a percent of that cocaine, or 270 MT, minor market of opium derivatives in makes land fall somewhere in the comparison to European or Asian region. markets. Heroin is the most profitable illegal drug in the region in relative 7. Marijuana is the only natural drug terms – six times more profitable per that is produced in the Caribbean. Total kilo than cocaine and forty times more traffic of illegal derivatives of hemp in than marijuana. Nevertheless, it barely the Caribbean amounts to 375 MT. represents 50 million dollars after a Locally cultivated marijuana totals 330 constant, moderate rise during the MT, which is grown in 485 hectares. 1990s as a result of the renewed taste of Marijuana, therefore, covers 0.003 Americans for heroin. percent of the cultivated area in the region. Caribbean marijuana hardly 9. Although information has surfaced represents 4.2 percent of the global about the existence of amphetamine- production, an abrupt reduction from type drug production laboratories in the region’s share of 18 percent in the and Hispaniola Island, 1980s. In the year 1980 and there is not concrete evidence regarding Belize alone had an estimated area the manufacture of ecstasy tablets in the cultivated with marijuana that was five region. Apart from facing the rapidly times the present size – 2,650 hectares. growing local demand, now restricted to Some sources indeed point to Jamaica some islands, the ecstasy circuit of the as the top marijuana producer in the Caribbean is driven by the supply of world between 1968 and 1981; in 2000, European production to the under- Jamaica did not make the top ten list. In developed American market. Therefore, 2000, Colombia produced 13 times the region is used as a transhipment more marijuana than the whole point for the importation of European Caribbean region. Of the 330 metric ecstasy, primarily coming from the tonnes of locally grown marijuana, and , to the United hashish oil represents less than 15 States. However, the increased role of metric tonnes. The rest of the marijuana the Caribbean in this transatlantic trade flow in the region is attributable to the is insignificant – less than 1 percent of

2 the American demand is met by ecstasy metric tonnes of cocaine pass through transiting the region. The Dutch- the region en route to Europe. This speaking Caribbean has taken a long represents two thirds of the European lead in the positioning of the region as a imports of cocaine. In the late 1990s, transhipment route for ecstasy, which is however, the growing participation of partly a reflection of the powerful in the cocaine transatlantic flow ecstasy industry in the Netherlands. has slightly eroded the dominant role that the Caribbean region has in the Illicit drugs and the foreign sector flow of cocaine between South America and Europe. While insignificantly 10. Colombia is the origin of over 95 reducing its participation in the cocaine percent of the cocaine imports within trade to Europe, which has otherwise the region. Nevertheless, only 58 doubled during the last decade, the percent of the cocaine that arrives Caribbean has recovered its share of the annually in the Caribbean countries transhipment market for cocaine en comes directly from Colombia. route to the United States. In 2000, the is the source of an additional Caribbean corridor was the source of 47 29 percent of these cocaine imports; percent of the cocaine entering the Central America and , 8 percent; United States, leaving behind as and Brazil, 5 percent. More than 90 the main source of cocaine for the percent of the cocaine that enters the American market. Back in the early Caribbean countries, or 240 metric 1990s, the Caribbean was the tonnes, continues its passage in the transhipment area for less than 30 direction of other consuming markets. percent of the cocaine going to the Colombia and Central America are the American market. main sources of cocaine for the Western and Central Caribbean. Venezuela and, 12. There are big differences in the to a lesser extent, Brazil are the origin cocaine export areas within the of the cocaine flowing into the Eastern Caribbean. Generally speaking, the and mainland Caribbean (i.e. French Western and Central Caribbean are Guyana, Guyana, Suriname). inclined to service the American market and the Eastern and mainland Caribbean 11. The distribution of Caribbean are more prone to direct their cocaine cocaine exports has dramatically exports to Europe. Puerto Rico, Haiti, changed during the last decade. While the and the two thirds of the cocaine that enters the Bahamas re-export more than 90 Caribbean countries is consumed in the percent of the in-transit cocaine to the United States and Canada, which United States. The final destination of remain the major market for the 80 percent of the Jamaican and Belize region’s cocaine exports, Europe has cocaine is also the United States. Quite increased its share of transhipped the opposite, the cocaine trade of the cocaine from 10 percent in the early mainland Caribbean is directed towards 1990s to 32 percent, or 80 metric Europe, that is the destination of 80 tonnes, in 2000. If the amount of percent of the exports. Over half of the cocaine that flows through the cocaine that transits the Eastern Caribbean Sea without touching any Caribbean ends up in Europe. shore is taken into account, some 165

3 13. The Caribbean exports 100 metric 15. The participation of local illegal tonnes of marijuana for extra-regional transhipment firms in the drug business markets. Of these, 80 percent is is marginal. They are merely Jamaican marijuana and 15 percent is commissioned for transporting illegal Colombian hemp that is introduced in drugs from one place to another and for the region for re-export to North storing them. The organisation of the America. While large quantities of illegal trade within the Caribbean is Jamaican marijuana dominate the largely done through subsidiaries of participation of Caribbean marijuana in large, external groups with limited local the world market. The exports have connections. The exceptions to this plummeted since the 1980s, when model are the powerful Jamaican Jamaica and Belize were portrayed as groups, usually with political leverage, the second and the fourth largest that had been able to operate in retailing exporters of marijuana, respectively, to and distribution in the large consuming, the United States, then and now the developed drug markets (US, Canada, single most important market in the UK). But the participation of these world. organisations in other markets is largely marginal, under 5 per cent. On the other 14. The flow of other illegal drugs is hand, individuals of Dominican and quantitatively marginal. The most of the Puerto Rican descent play an important 700 kilograms of heroin that transit the role in drug retailing/distribution in the region are imported from Colombia, East Coast of the United States and, to a where opium poppy is grown and much lesser extent, in Europe, their transformed into heroin. Less than 5 connections to organisations engaged in percent of that amount is South Asian drug trafficking in their respective heroin that arrives from Europe. 95 homeland are limited. The traditional percent of the heroin is re-exported to inability of the Caribbean drug groups the United States for consumption. The to vertically integrate every step of the remaining 5 percent corresponds to drug business, specially in its most Colombian heroin that travels towards lucrative part – retailing/distribution in the European Union. In the case of developed countries – imposes a serious ecstasy, the transatlantic flow goes obstacle in the creation of a globally westwards, from Europe to the United oriented, Caribbean-based illicit States using the Caribbean to hinder trafficking organization in the short to detection of the drug. The ecstasy trade medium-term is segmented along linguistic lines. In one case, ecstasy travels from the Product and national markets Netherlands, considered the major single producer of the drug, to the 16. Cocaine is the most profitable Dutch Caribbean and then to the United product among the illicit drugs in every States. A parallel, although more country in the Caribbean region, but the limited, trade line goes from producing distribution among the different sorts of areas in Spain to the Dominican drugs is not the same. In Jamaica, the Republic or Puerto Rico en route to the local importance of marijuana reaches continental United States. 37 percent of the local market for illegal drugs, that is, three times the average of

4 the region. The Eastern Caribbean and 18. By territories, the illicit drug market Belize also have drug markets in which is relatively larger at the northern marijuana plays a role that is greater periphery of the region than in the than the Caribbean average. On the central area. The fact that the last hurdle other extreme, on both sides of the to the biggest consuming markets is the border on Hispaniola Island, marijuana most lucrative region implies that the accounts for less than 5 percent of the margins of the Caribbean are more illicit drug market. profitable than intra-Caribbean distribution of drugs. For example, the 17. Import-export services, with its drug trade in the Bahamas accounts for related operations, such as 9.5 percent of the registered economy, intermediation, transportation, or 370 million U.S. dollars. Meanwhile, protection and financing, are the largest in the mainland Caribbean (Central and income generators among the several South America), trade in illicit drugs is parts of the illegal drug business. 6.5 percent of the Gross Domestic Import-export services account for two Product – in absolute terms, 45 million thirds of the income drugs leave behind U.S. dollars for Belize and 130 million in the Caribbean – 70 percent for for South American (mainland) cocaine and barely 50 percent for Caribbean. At the lower end, for Cuba, marijuana. On the other hand, Puerto Rico and the Eastern Caribbean, production and transformation of the drugs trade represents less than 1.5 marijuana and crack cocaine barely percent of the registered economy. The represent 2 percent. Intra-national only exception to this general pattern is retailing and wholesale drug Jamaica, where the cocaine flows of the distribution accounts for only 10 per late 1990s and marijuana production cent of the drugs business in the makes drug money account for 7.6% of Caribbean, or 350 million U.S. dollars. the registered economy. Of that figure, 55 percent corresponds to marijuana, 40 percent to coca 19. In absolute terms, however, the derivatives and 3 percent to heroin and countries of the central area of the amphetamine-type drugs. Of the total Caribbean are those that have the largest income, tourists in the Caribbean, drug markets. In the Dominican account for 8 percent of the total Republic, the drug trade generates 850 retailing distribution market. The million U.S. dollars, or 5.3 percent of average Caribbean citizen spends 11 the Gross Domestic Product. Puerto U.S. dollars in illicit drugs, an amount Rico has a drug market that exceeds 650 that is much lower than the 300 U.S. million U.S. dollars, or 1.4 percent of dollars spent by the average American the local economy, while in Jamaica, adult or the 200 U.S. dollars spent by the drugs trade produces an income of the ordinary British citizen. In 560 million U.S. dollars. Including comparison, a Caribbean adult spends Trinidad and Tobago and the Virgin 30 percent more in marijuana than the Islands, the Eastern Caribbean American average adult, but just ten represents a drugs market with a money percent of the amount the American flow of 360 million U.S. dollars. In spends on cocaine. comparative terms, the U.S. consumers spent 65.7 billion U.S dollars in illegal

5 drugs in 2000, a figure that accounts for during the late 1990s. Although this 0.7 percent of the local Gross Domestic growth was bigger in Jamaica, the Product, and in the United Kingdom the public exposure of the close relationship drug trade generated an income of 10 between cocaine traffickers and some billion U.S. dollars, that is also a 0.7 security figures in 2000, with some percent of the local economy. large hauls in the Jamaica-Bahamas corridor, has meant a displacement in 20. Per capita income produced by the market concentration in the Caribbean. drug trade varies from country to The Bahamas, whose cocaine market is country. For example, in the Bahamas, closely associated to Jamaica, presents illegal drugs generate an average of the fifth largest corridor of cocaine in over 1,000 U.S. dollars per capita. In the Caribbean, with an annual traffic of Aruba and the Netherlands Antilles, over 40 MT. This figure is more than drugs contribute 500 U.S. dollars per double the Bahamas’ local flow of inhabitant, an amount that is almost cocaine in the early 1990s, but lower double the drug per capita income in of than the volume of traffic that took the Virgin Islands. Well over the place during the cocaine golden years in average of the Caribbean’s per capita the 1970s and 1980s. Haiti, the South income generated by the drug trade are American (mainland) Caribbean states Jamaica, Belize and Puerto Rico, with and Belize are medium-size markets 160 to 200 U.S. dollars of annual with 20-25 MT of cocaine imports each. income per capita. The Caribbean Cuba and the Netherlands Antilles, average corresponds to the Dominican meanwhile, record the lowest levels of Republic, the countries in the Eastern circulation of cocaine, with 15 MT. The Caribbean and the South American highest amount of per capita cocaine (mainland) Caribbean. On the opposite flow occurs in the Bahamas and the end of the spectrum, the drug trade Virgin Islands, with over 100 grams of yields a per capita income of 8 U.S. per capita annual transit. Belize, with 90 dollars in Cuba and 18 U.S. dollars in grams of cocaine per inhabitant, and the Haiti. Netherlands Antilles, 60 grams, also record high levels of cocaine transit. All 21. Quantitatively speaking, the those countries share the common jurisdiction that has the largest cocaine feature of largely uncontrolled coasts. market is Puerto Rico, which has an The Dominican Republic, Haiti and annual flow of 80 metric tonnes of Cuba, on the other hand, have a per cocaine. This figure indicates a capita cocaine flow under 20 grams. moderate decrease in the cocaine flow entering the island since the mid 1990s 22. The busiest route for cocaine when 8-9 metric tonnes flowed per trafficking in the Caribbean since the month. The Dominican Republic, late 1990s goes through the Western Jamaica and the Eastern Caribbean, Caribbean from Colombia to the United including Trinidad and Tobago and the States via Jamaica and the Bahamas. Virgin Islands, show an annual cocaine Under the control of the Jamaican flow of 60 metric tonnes. These three trafficking organizations and the regions have registered an increase in supervision of Colombian kingpins, their participation in the cocaine market almost 35 MT of cocaine travels

6 annually through this route. The percent of the registered Gross following two cocaine routes converge Domestic Product. In 2000, exports of in Puerto Rico – some 27 MT go Jamaican marijuana generated 160 directly from South America to the U.S. million U.S. dollars in revenues for the associated state, while 30 MT reach country, a figure that is much lower Puerto Rico via the Dominican than the estimated 1 billion of U.S. Republic. The Dominican Republic is dollars that entered Jamaica for also busy as a transhipment point for marijuana exports during the 1980s. cocaine going from South America Excluding the foreign re-export sector, straight to the United States – 18 MT. A the local consumption of marijuana similar amount of cocaine travels from generates a larger income for traffickers the Eastern Caribbean to Puerto Rico en in Puerto Rico, almost 80 million U.S. route to the continental United States. dollars, than in Jamaica. Other important marijuana markets, in relative 23. The cocaine routes toward Europe terms, are in the South Eastern are shaped by spheres of influence, Caribbean, Belize and the Eastern colonial and linguistic ties. For Spanish- Caribbean. Saint Vincent and the speaking countries, Spain is the Grenadines, that has been the largest destination of most cocaine exports to exporter in the Eastern Caribbean since Europe, either for natives or for the 1990s, is the origin of 55 percent of foreigners residing in the increasingly the marijuana consumed in that area. popular Mediterranean coast. Haiti and For that country, marijuana exports the French departments mainly direct provide some 10 millions U.S. dollars, their cocaine exports to France. Cocaine an income that represents 18 percent of in transit through the Dutch territories the Saint Vincent and the Grenadines’ and Suriname mainly reaches Europe legal exports and 3 percent of the local via the Netherlands. The United Gross Domestic Product. It also Kingdom is the major destination for generates an average income of 85 U.S. cocaine transiting the Anglo-Caribbean dollars for every Vincentian. states. These latter countries straddle the busiest route of cocaine with European 25. Jamaica produces 180 MT of destinations – 25 MT flow annually marijuana annually over a cultivated from the Eastern Caribbean to Europe, area of 265 hectares. This represents 55 mainly the United Kingdom. The South percent of the total Caribbean marijuana American (mainland) Caribbean production. The Eastern Caribbean, provides 17 MT of cocaine exports to including Trinidad and Tobago and the Europe, mainly the Netherlands. The Virgin Islands, produces 45 metric Dutch islands just off the Venezuelan tonnes of marijuana. Saint Vincent and coast and Cuba are the origin of over 10 the Grenadines has surpassed Trinidad MT of cocaine that are consumed in and Tobago as the first producer in the Europe. area, with an estimated total production of 25 MT of marijuana on an 24. The largest marijuana market in the approximate surface area totalling 20 Caribbean is Jamaica, which generates hectares. That is the highest ratio of some 210 million U.S. dollars, almost marijuana cultivation per total arable half of the regional market and 2.8 area in the region, 0.24 percent, well

7 over the Bahamas, with 0.12 percent, or production. Communications between Jamaica, 0.06 percent. the dominant groups in each area, drug corridors are almost non-existent. Market organisation Language seems to be a strong facilitator of the drug trade for every 26. There is no region-wide drug available in the Caribbean. organisation in the Caribbean drug market, not even one for any particular 27. Beyond this ethnic division, the drug. And there are no signs to indicate organisation of the drug trade in the the emergence of a regional Caribbean tends to be more like a free organisation that may aspire to claim a market than a monopoly or even an monopoly of the regional drug market. oligopoly. Business opportunities are The Colombian traffickers, who had widely available for any agent traditionally exerted a great influence expecting to participate in the market. over the cocaine market through their While arrests and disruption of existing ability to control the supply of cocaine networks made by local and available in the region and who have the international security agencies capacity to favour some organisations guarantee a continuos place for new- over others, seem to feel comfortable comers, the weakness and lack of under this framework of limited resources plaguing the forces in competition. Instead, there are several the Caribbean also inhibits the unconnected markets and organisations intentional or unintentional creation of operating in segmented markets. national monopolies by a discriminate National groups continue to be powerful behaviour with respect to different because they have better access to a organisations. Competition between valuable national resource – corruption. drug organisations has generated a Mexican nationals dominate the cocaine limited amount of violence, which had market in Belize; Jamaican groups been to a large extent concentrated in strictly control the Jamaica-Bahamas Puerto Rico and Jamaica. Nevertheless, corridor for cocaine. Dominican the easy and open entry to the drug organisations, in close collaboration market in the Caribbean does not mean with Colombian subsidiaries, have a it is costless. First, in a market that is prominent role in the cocaine trafficking inherently illegal the acquisition and in the area around Puerto Rico, as well access to relevant information for the as Hispaniola island and the Northern entrepreneurs is expensive. Second, islands of the Eastern Caribbean. participation in the drug market has Venezuelan, Brazilian and European required increased investments, groups, in collaboration with local including for corruption, which imposed traffickers and launderers, are high entry cost for new traffickers. prominent in the cocaine trade in the Southern islands of the Eastern 28. The increasingly higher entry costs Caribbean and the South American in the drug market have imposed a (mainland) Caribbean. For marijuana, pattern of organisation of the market the trade is even more fragmented with that is common to the Caribbean Jamaican traffickers exerting a great jurisdictions. Against the notion of a influence derived from their control of career in the illicit business that starts as

8 a street dealer and finishes as a national with drug consuming countries all make drug lord engaged in transnational transhipment of drugs a not-so-difficult trade, a pattern has emerged in which business in the Caribbean. Costs of drug businessmen tend to combine cocaine transhipment in the Caribbean illegal and legal activities. In 2000, an are substantially lower than in Mexico, Antigua-based businessman was the main competitor, where corruption arrested in the United Kingdom with had made transhipment a costly 500 kilos of cocaine; a Dominican business. This cost differential is, to a entrepreneur with interests in many great extent, the cause of the comeback legal sectors was later arrested and of Caribbean cocaine trafficking in the accused of introducing 30 MT of late 1990s. In the more mature market, cocaine in Puerto Rico. In 1999, two like marijuana, quality is at least as Spanish businessmen with interests in important as prices and costs. The Cuba were charged with using the average quality of local marijuana has island for cocaine smuggling. To developed more slowly than in other minimize risks, operations in legal areas of the world, especially in the activities provide a cover for the consuming markets. The marijuana movement of goods and money, but cultivation and transformation process also the connections to the political and in the Caribbean still uses mostly business elites that facilitate drug traditional methods that have been transit. Drug trade represents one of the replaced elsewhere to produce high- most lucrative methods in the Caribbean quality marijuana, particularly indoors. for diversifying a previously successful That is the underlying reason for the business career in legal activities. constant decrease of the Caribbean Therefore, the social origin of drug participation in the world market. The businessmen has moved beyond the taste for high-quality marijuana in the popular strata that largely monopolised consuming markets of North America the drug business in their early period to and Europe has not been met by a the ruling elite. Caribbean supply. Even in the local markets, Colombian marijuana has been 29. Competition in the drug business in gradually displacing locally grown the Caribbean is based on prices and hemp. costs rather than quality. For cocaine, location is the main competitive 30. The most popular transportation advantage of the geographically located means in the Caribbean for cocaine, at – being between producing and least in weight terms, is by ship. 82 consuming countries. The extent of the percent of the cocaine that travels cocaine trade within the Caribbean is through the Caribbean circulates by based on the ability of local traffickers, maritime transportation means. Of or a subsidiary of foreign traffickers, to these, 42 percent goes in speedboats, 11 minimise the risks of state interference percent in fishing and recreational ships and guarantee a constant flow of drugs. and 46 percent moves in sea containers. Weak states where corruption is easy, During the late 1980s, containers the availability of physical and financial experienced a remarkable growth as a infrastructures, and economic and way to conceal cocaine at the expense human networks connecting the region of speedboats, whose relative

9 importance has declined. Only 3 percent Caribbean, the sea containers are the of the cocaine flowing around in the most important way to take the cocaine Caribbean is transported through out of the region. 70 percent of the terrestrial means, an option that is cocaine leaving the Caribbean is mainly localised in the Dominican- concealed in ship-bound containers. Haitian border. Air transportation Only 7 percent of the total amount of accounts for only 15 percent of the the cocaine that goes from the cocaine circulating through the Caribbean to consumer countries in the Caribbean. Couriers, a large part of the developed world travels with human detainees in the Caribbean on drug couriers. For routes whose final trafficking charges, only transport 3 destination is Europe, these percentages percent of the cocaine in the region. are higher for both cases. Pleasure boats have a larger role than the average when 31. There are big differences in the use it comes to the United States. In the of transportation modalities depending intra-Caribbean movement of cocaine, on origin and destination. Maritime go-fast boats account for 62 percent of means are prevalent for both export and the traffic. importation, but are more often used for taking cocaine out of the Caribbean than for introducing it into the region or for intra-Caribbean exchanges. Speedboats take aboard almost 50 percent of the cocaine that arrives to the region, while containers represent over one quarter. A mere 17 percent of the cocaine entering the region comes through air transport and human couriers only account for 2 percent of the total cocaine available in the Caribbean. If fast boats dominate the scene for cocaine entering the

The busiest routes in the Caribbean whose final destination is the U.S were… 2000 Trend mt % South America-Jamaica-Bahamas-Continental USA 34 21 ? South America-Puerto Rico-Continental USA 27 16 ? South America-Dominican Republic-Puerto Rico-Continental 19 11 ? USA South America-Dominican Republic-Continental USA 18 11 ? South America-Eastern Caribbean-Puerto Rico-Continental 18 11 ? USA South America-Haiti-Dominican Republic- 13 8 ? Puerto Rico-Continental USA

10 32. Between 100,000 and 125,000 For more than 70 percent of the people individuals are directly involved in the who obtain an income from drugs, they production and the commercialisation also earn an income coming from legal of illegal drugs in the Caribbean. This activities. Therefore, the number of represent less than 1 percent of the total individuals whose income depends labour force in the region. Indirect exclusively on drugs is under 35,000. employment generated by the drug trade These are concentrated in the middle may quintuple that figure. Marijuana, levels of the drug business because both that accounts for two of the more high earners, businessmen, and low labour-intensive segments of the drug earners, producers and retailing production process – cultivation and distributors, usually combine their drug retailing distribution – generates almost income with other kinds of legal 60 percent of the total employment in incomes. In this sense, drug income the drug business. The cocaine business distribution is driven by inequality – the in the Caribbean, which is heavily highest 10 percent earners accumulate dependent on the capital-intensive more than 85 percent of the income. In transportation, hardly creates 45,000 other words, some 12,000 drug jobs. Drug retailing distribution is businessmen, including some public responsible of the 65 percent of the sector entrepreneurs, receive an annual employment created in the region while income that exceeds 200,000 U.S. production involves another 20 percent dollars. At the other end, 70 percent of of the jobs. Under the accepted notion the drug employees receive less than of the substitutability of legal and 2,900 U.S. dollars, that is the region’s illegal income, in the Caribbean drug per capita income. income seems to be largely a complement to other legal activities.

The busiest routes within the Caribbean countries to European countries… 2000 Trend mt % South America-South Eastern Caribbean-Europe 18 23 ? (The Netherlands, France) South America-Eastern Caribbean-Europe 15 19 ? (UK, France, The Netherlands) South America-Netherlands Antilles and Aruba-Europe 10 13 ? (The Netherlands) South America-Cuba-Europe (Spain) 10 13 ? South America-Trinidad and Tobago-Europe (UK) 9 11 ? South America-Dominican Republic-Europe 5 6 ? (Spain, The Netherlands)

11 Domestic demand consumption is on the rise in almost every country in the Caribbean. 33. Against the usual notion that producing and transit countries tend to 35. Marijuana is the drug of choice of emerge, sooner than later, as consuming the Caribbean. Nearly 700,000 adults markets, drug use in the Caribbean use it annually – an annual prevalence remains surprisingly low in spite of rate of 2.5 percent. The Caribbean three decades of heavy drug trafficking. accounts for a mere 0.5 percent of the With the caution of the statistical marijuana users around the world underreporting and fragmentation of the against a global annual prevalence rate region in drug matters, the annual drug of 3.4 percent. Unlike other parts of the use prevalence in the Caribbean is 3.7 world where hashish oil is more percent of the adult population. This prevalent, in the Caribbean marijuana is proportion is slightly lower than the normally smoked with little global average, 4.2 percent, and very transformation or, occasionally, well below the prevalence found in the consumed as a tea. Marijuana use, major markets – 8.2 percent in North nevertheless, is extremely diverse in the America and 10.0 in the European Caribbean. Jamaica and the Eastern Union. The lifetime prevalence is under Caribbean record use prevalence over 10 percent. Between 950,000 and 1 10 percent. In Jamaica, one survey million Caribbean residents consume reported a lifetime prevalence of 34 illicit drugs annually – a mere 0.7 percent. The English-speaking percent of the global supply of drug Caribbean has a marijuana annual consumers. About 75 percent of those prevalence rate of 8.8 percent, well over are heavy users, that is, they consume the region average. On the opposite end, drugs at least twice per week. Only less than two percent of the adult 150,000 individuals are users of more population in Cuba, Haiti and the than one drug. Dominican Republic used marijuana in the previous twelve months. In total, 34. This general percentage is unequally Caribbean residents consume about 185 distributed across the region as a MT of marijuana, while tourism barely response to very diverse cultural and adds 7 percent of that amount to the historical dynamics. The country with domestic demand. the highest annual prevalence of drug consumption is Jamaica, 12.8 percent 36. Cocaine use in the Caribbean is with the Eastern Caribbean at 10.5 per relatively higher than the world average cent. The Virgin Islands, the Bahamas but lower than the Western Hemisphere and Puerto Rico, as well as the and developed countries’ use Netherlands Antilles and Aruba, also prevalence. In fact, cocaine is the only show annual drug prevalence over 7 illicit drug whose consumption in the percent. At the opposite end, in Cuba, region is higher than the global average. the Dominican Republic and Haiti, that The most refined estimate of the annual incidentally are the most populated use prevalence is 0.6 percent of the countries in the region, less than 3 adult population, a figure that is double percent of the adult population used the global average of 0.3 but is far away illicit drugs during the past twelve from the 2.2 percent recorded in the months. According to the limited United States. Some 180,000 Caribbean available statistics and the perception of residents used cocaine in 2000, of demand reduction experts, drug which 65 percent were heavy users.

12 Nearly two thirds of the cocaine users in cocaine is concentrated among the the region consume crack cocaine, a higher social classes who can afford to highly addictive derivative of the coca pay the usually high price of the drug. leaves with powerful physical effects for the users. The new, younger users 38. The use of opium derivatives is very increasingly prefer sniffing cocaine low in the Caribbean with the powder. 75 percent of the total cocaine exception of Puerto Rico and the Dutch users live in Puerto Rico and Jamaica. Caribbean. Only 70,000 people used With the current local use patterns, 3.9 heroin during the past year – an annual MT of cocaine are consumed in the prevalence of 0.2 percent. In Puerto Caribbean, a mere 1.5 percent of the Rico the introduction of heroin is annual flow of cocaine through the attributed to veterans of the Vietnam region. The highest ratios of locally War. Its use, far from being eliminated, consumed to in-transit cocaine are in expanded to poor urban or semi-urban The Bahamas and mainland Caribbean. areas. In the Dutch Caribbean heroin Only 4 percent of the total amount of use is derived from the returnees of the local cocaine use is attributable to Netherlands. In some jurisdictions its tourists. use is simply unknown. There are certain components of the Caribbean

Drug income by drug and area . 2000 cultures that seem to be resistant to the 1000 expansion of heroin use. Especially 900 relevant for this pattern is the case of 800 the Dominican Republic, where 700 individuals and groups of Dominican 600 descent control a significant part of the 500 retailing/ distribution of heroin on the 400 East Coast of the United States, one 300

million of U.S. dollars third of this burgeoning market 200 according to some analysts, while 100

0 heroin use in the Dominican Republic is virtually absent. And this very low local Haiti Belize Cuba JamaicaBahamas Puerto Rico consumption takes place in an Virgin Islands Eastern Caribbean Dominican Republic Trinidad and Tobago environment where poverty and Netherlands' Caribbean South Eastern Caribbean frustration in urban neighbourhoods Cocaine Marijuana Others may be expected to be conductive to heroin use. It appears that Dominican 37. Social characteristics of cocaine dealers were driven by nationalist ideas consumers is highly polarised according that keep them away from the local to the type of cocaine derivative used. market, and it can be concluded that The average user of crack cocaine, certain features of Dominican society, (whose invention is attributed to a especially related to leisure activities, Bahamian dealer in 1982, two years prevents an increase of heroin use in before the first case appeared in the spite of the great potential for it. United States) lives in poor urban or semi-urban areas and shows high levels 39. Amphetamine-type use in the of or addition, mainly Caribbean is also very low, with an induced by the lack of psychological annual use prevalence of 0.2 percent – and economic alternatives to drug or 55,000 people in absolute terms. consumption. The use of powder Although ecstasy use has experienced a

13 rapid increase in the region during the On average, this amount is ten times past two years, its consumption is higher than the money invested in relatively new in comparison to the demand reduction. In general terms, United States and Western Europe and there is a positive relationship between much less prevalent. In these the money allocated to drug issues and sophisticated societies, the annual the level of development of the country. prevalence rate of ecstasy is well over However, the effectiveness of the 0.5 percent of the adult population. But supply side operations seems to be the gap between the Caribbean and limited in terms of reducing the use and those developed regions may be closing availability of illegal drugs in the local quickly. Similar perceptions about the markets. Between 70 to 90 percent of rise in ecstasy use may be found all the drug seizures were destined for over the region. Unlike users of crack consumption in foreign markets. cocaine, ecstasy users are more likely to Accordingly, the amount of drugs that is be concentrated among socially withdrawn from the local market is integrated young people who consume under 15 percent, a figure that has ecstasy as a weekend pastime associated almost no effect on the local price of with the dance scene while remaining drugs. This figure is far below the 60 active in their daily lives. This model of percent of seizures that has been proven consumption makes the region by some studies to be the effective potentially vulnerable to the same kind lower limit, which would have an of massive use of ecstasy among impact on the price of illegal drugs. teenagers that had been seen in Europe first and in the United States afterwards. 41. In 2000, the countries and territories Nevertheless, the unit prices in the that comprise the Caribbean region Caribbean, 30 U.S. dollars for one tablet seized 19 MT of cocaine from – compared to 20 to 25 dollars per traffickers. This represents 4.4 percent tablet in the United States and Europe, of the estimated amount of cocaine that as well as divergent consumption enters the region and an interception patterns in leisure time , seems to have rate of 7.7 percent if the estimated prevented a more massive use of ecstasy amount of cocaine that arrives into a in the region to the present day. Caribbean country is taken into account. The seizures in the Caribbean totalled Public regulation 5.3 percent of the global cocaine seizures. At any rate, 2000 showed the 40. In the Caribbean region, public lowest levels of effectiveness in terms activity to confront illegal drugs is of cocaine seized over the past decade. biased towards the supply control side, Only Cuba and the Hispaniola Island aimed at diminishing the amount of improved their records of cocaine illicit drugs available in the region, seizures in 2000. The total cocaine rather than on demand reduction. seizures fell by 33 percent over the Despite the limitation of the available previous year. Cocaine seizures were statistics and the difficulty to reduced to an annual interception rate of differentiate between drug control and 6.5 percent from its peak in 1994. policing activities in general, it is estimated that from 0.2 to 0.7 of the 42. While drug interception data are not public sector budget is dedicated to a reliable reflection of drug flows since interdiction and supply control in the they can be affected by both police Caribbean depending on the country. efficiency and the total amount of drugs

14 in circulation, they can reveal some Caribbean jurisdictions are divided major developments in the cocaine between dependant territories and market in recent years. With this in independent countries. The independent mind, the Caribbean Western corridor nations, that have 86 percent of the that goes from Colombia to the United Caribbean population, are responsible States via Jamaica and the Bahamas, for only 38 percent of the regional had 3 percent of the total cocaine cocaine seizures averaged over the seizures in 1994 as compared to 49 1994-2000 period. Nevertheless, their percent in 2000. Puerto Rico and participation in the Caribbean cocaine Hispaniola Island, which in 1995 had 78 seizures has doubled during that period percent of the cocaine seizures in the from a mere 25 percent in 1994 to 55 region, reduced their contribution to 40 percent in 2000. percent in 2000. The contribution of the Eastern Caribbean to the Caribbean 44. By countries, the highest cocaine seizures declined even more interception rates registered in 2000 are dramatically from 32 percent in 1994 to those of Cuba, with 23 percent, a mere 7 percent in 2000. followed by Puerto Rico – 13 percent. However, both jurisdictions are 43. The division of cocaine seizures favoured by their location and/or special according to linguistic groupings shows status: in the case of Cuba where the an even clearer evolution over the past majority of their seizures are made decade, reflecting to a large extent through the so-called recalos, that is, different models of police co-operation cocaine lost in the Jamaica-Bahamas and the changing dynamics of the corridor that is delivered to the Cuban cocaine flows. The English speaking beaches and seized by local authorities; Caribbean, which accounts for 16 Puerto Rico, meanwhile, is the base of percent of the total population, recorded the well equipped American drug an accelerated participation in the enforcement agencies that are active amount of cocaine seized in the region, throughout the Caribbean. The that rose from 15 percent in 1994 to 40 interception rates of Jamaica and the percent in 2000. Meanwhile, the Bahamas also exceed the regional Spanish-speaking Caribbean, with well average. For the rest of the Caribbean, over 60 percent of the population, interception rates are around 2 percent. reduced its contribution to the cocaine Belize showed the lowest interception seizures from 74 percent in 1995 to 52 rate for cocaine in 2000 – a mere 0.1 percent in 2000. The French-speaking percent. Caribbean did not present a consistent trend, but its participation in the 45. Marijuana seizures have recorded an seizures has always been under almost continuous decline in kilogram represented population-wise, which can terms during the last decade, a general be attributed to very low interception trend that was broken in 2000, when efficiency in Haiti. The Dutch-speaking total seizures of 91 MT increased by a Caribbean have never reached 6 percent third from a decade-low of 68 MT of the total cocaine seizures in spite of recorded during the previous year. The the increasing role played by Suriname, marijuana interception rate reached 20 Aruba and the Netherlands Antilles in percent, which is partly explained by the international cocaine trade. A more the ease of detection given by the non- marked trend appears when the mobility of the plants in connection with the eradication efforts and the large

15 bulk volumes involved in marijuana eradication is a much easier task than transportation in comparison to the low detection while being transhipped. The detection probabilities involved in marijuana interception rates in the cocaine transhipment. Marijuana Bahamas, the Eastern Caribbean and interception rates have risen three-fold Puerto Rico are about 15 percent. during the decade despite the falling Meanwhile, the mainland Caribbean levels of production and exportation. and Hispaniola Island present low Jamaica has been credited with 44 marijuana interception rates of less than percent of the marijuana seized in the 5percent. region during the 1994-2000 period, with a sudden peak in 2000 of 62 percent.

46. The geographical and language segmentation of marijuana seizures show almost the opposite picture of the cocaine interception scene. The Central

Caribbean route and the Spanish- speaking countries have gained ground at the expense of the English-speaking countries and the Western corridor centred in Jamaica. The Western

Caribbean accounted for 90 percent of the marijuana seizures in 1995, but its share fell to 58 percent in 1999. Marijuana interception plummeted in mainland Caribbean countries plummeted from 20 percent of the total seizures in 1994 and 1996 to 0.3 percent, (The English-speaking Caribbean, that almost monopolised marijuana seizures in 1995 with over 95 percent of total captures, dropped its contribution to 72 percent in 1999). Alternatively, Spanish-speaking countries increased their share of marijuana seizures during the same period from 4 to 27 percent. Marijuana seizures in the French and Dutch- speaking jurisdictions are almost non- existent. Cuba and Jamaica show the highest marijuana interception rates in the Caribbean, with 39 and 30 percent, respectively. In the case of Cuba, a large part of the seizures correspond to effortless recalos and for Jamaica, eradication is a much easier task than detection while being transhipped.

16 Cocaine seizures in the Caribbean region, 1996 -2000 (figures in kilos)

JURISDICTIONS 1996 1997 1998 1999 2000 NORTH SECTOR Bahamas 115 2,565 3,347 1,860 2,779 Turks and Cai cos Islands (UK) 393 1 2,075 1 303 WEST SECTOR Belize 470 2,691 1,221 38 13 CENTRAL-WEST SECTOR Cayman Islands (UK) 2,219 1,054 1,213 1,401 1,812 Cuba 7,905 1,444 956 2,444 3,144 Jamaica 254 414 1,143 2,455 1,655 CENTRAL-LEFT SECTOR Haiti 956 2,100 1,272 380 n/a Dominican Republic 1341 1,225 2,337 1,071 1,306 CENTRAL-RIGHT SECTOR Puerto Rico (US) 11072 15,153 10,344 9,977 n/a U.S. Virgin Islands (US) n/a n/a n/a n/a .0.1 CENTRAL-RIGHT SECTOR Aruba (NL) 203 408 794 464 346 Netherlands Antilles (NL) 710 1,302 639 18 n/a EAST SECTOR British Virgin Islands (UK) 1765 838 75 10 534 Anguilla (UK) 289 0 0 0 n/a St. Kitts and Nevis 0 150 1 1 0.052 Antigua and Barbuda 6 126 1 25 24 Montserrat (UK) 0 1 0 0 n/a Guadeloupe (FR) 1224 21 44 593 292 Dominica 3 101 29 83 10 Martinique (FR) 17 37 46 36 14 St. Lucia 20 8 58 121 110 Barbados 36 88 35 141 179 St. Vincent and the Grenadines 2 1 13 15 50 Grenada 9 213 3 42 101 Trinidad and Tobago 180 31 79 137 303 SOUTH-EAST SECTOR Guyana 91 66 3,222 38 163 Suriname 1,413 117 283 180 213 Guyane (FR) 45 167 175 446 25 NORTH-EAST SECTOR Bermuda (UK) 23 4 11 392 13 Source: Caribbean Coordination Mechanism (CCM) & Police Forces

17

Marijuana seizures in the Caribbean region, 1996 -2000 (figures in kilos)

JURISDICTIONS 1996 1997 1998 1999 2000 NORTH SECTOR Bahamas 2,606 3,763 2,598 3,500 4,134 Turks and Caicos Islands 17 22 8 10 2 WEST(UK) SECTOR Belize 202 263 1,557 392 249 CENTRAL-WEST SECTOR Cayman Islands (UK) 3,188 3,423 4,063 5,100 6,621 Cuba 5,369 6,023 4,610 5,559 8,801 Jamaica 31,587 24,729 35,911 22,740 55,869 CENTRAL-LEFT SECTOR Haiti n/a 9,000 9,255 31 Dominican Republic 246 788 650 184 2,934 CENTRAL-RIGHT SECTORPuerto Rico (US) 8635 1,337 1,285 12,605 n/a U.S. Virgin Islands (US) n/a n/a n/a n/a 27 CENTRAL-RIGHT ArubaSECTOR (NL) 77 13 n/a 141 12 Netherlands Antilles (NL) 650 n/a 541 112 n/a EAST SECTOR British Virgin Islands(UK) 119 85 84 26 103 Anguilla (UK) 1 1 0 8 n/a St. Kitts and Nevi s 5 67 31 16 120 Antigua and Barbuda 1,485 628 105 94 66 Montserrat (UK) 1 3 0 2,677 n/a Guadeloupe (FR) 667 1,057 688 515 1,016 Dominica 136 405 361 192 467 Martinique (FR) 166 355 136 199 749 St. Lucia 326 622 352 352 1,803 Barbados 3,083 1,092 96 745 6,500 St. Vincent and the 1,227 527 1,321 7,188 1,708 GrenadaGrenadines 191 123 127 218 194 Trinidad and Tobago 1,1,408 3,120 1,850 1,558 1,546 SOUTH-EAST SECTOR Guyana 52,377 20,179 8,860 3,954 123 Suriname 17 65 105 177 107 Guyane (FR) 99 40 51 134 59 NORTH-EAST SECTOR Bermuda (UK) 107 92 83 n/a n/a Source: Caribbean Coordination Mechanism (CCM) & Police Forces

18 47. Police co-operation within the corruption, internal operational inertia region remains at very low levels, partly and cultural stereotypes also play a role due to legal constraints but very much in preventing increased co-operation. influenced by corporate police The Caribbean Spanish-speaking behaviour. Only European countries countries are unable to co-operate to with territorial interests in the region their benefit with coca producing and the United States have permanent countries or their English-speaking on-going co-operation. Linguistic neighbours in the Caribbean. Cuba’s barriers impose an insuperable barrier isolation also affects potential co- for close co-operation. Perception of operation between the largest country of the Caribbean and its Cayman Islands, the Bahamas, closest neighbours. Bermuda, Suriname and the Netherlands Antilles, are in the top ten 48. In this context, the only of the world incarceration rate list, with information-sharing process that works rates well over 450 people per 100,000 takes places between almost all residents. Every jurisdiction in the Caribbean jurisdiction and the United Caribbean with the exception of Haiti States, that acts as the regional hub for has higher incarceration rates than the law enforcement co-operation or, to a most punitive minded country in the limited extent, as the general supervisor European Union. This readiness to send and facilitator of the drug enforcement people to prison for minor drug crimes activities in the region. Under these sharply contrasts with the reluctance to conditions and in light of much needed sentence big drug entrepreneurs co-operation against a largely accordingly. transnational crime, the drug flows for internal consumption or trafficking to 50. Treatment and rehabilitation efforts Europe remains relatively under for drug addicts in the Caribbean face supervised in contrast to the pressure serious adversities, including the lack of imposed on drug networks that export public resources invested in the area of illicit drugs to the United States. demand reduction, the limited and not- so-well co-ordinated participation of 49. The justice systems in the Caribbean non governmental organisations, the in respect to drug trafficking and existence of especially punitive penal consumption present strong differences, systems to deal with drug use and but the severity of the laws and prison abuse, and a prison system in which the sentences for drug use are common reintegration of individuals into society features. In Cuba, capital punishment is is very much subordinated to its within the repertoire of available punitive role. The conditions of the sentences in the legal codes to deter prisons in the Caribbean are particularly drug trafficking. As a result, more than contradictory to the rehabilitation 25 percent of the inmates in the region principles. The average occupancy rate, are imprisoned on drug use or that is, the ratio between the real trafficking charges in every country. occupancy rate and the official capacity Incarceration rates in the region are in Caribbean prisons is 160 percent. In among the highest in the world. In the Grenada, the Dominican Republic, Caribbean 85,000 people, or 0.3 percent Saint Lucia, Belize and Haiti, the of the adult population, are in prison. number of inmates is double the official Five countries of the region, the prison capacity.

19 51. Beyond official policies, the only gives 4.4 percent of the value- public and private sectors have added to civil servants. another opportunity to influence the 52. The agreement between drug drug market – corruption, which entrepreneurs and public and private facilitates drug production, services always involves a circulation and distribution. In 2000, negotiation process whose results illegal drugs generated an income of are very much dependant on the 320 million U.S. dollars for the particular bargaining power of the public and private sector employees agents. Accordingly, the outcome in the Caribbean – 0.3 percent of the may be the subordination of the region’s Gross Domestic Product or public and private sector employees 9.4 percent of the income produced to the economic power of the drug by illegal drugs. This percentage traffickers – associated with almost perfectly assimilates to the powerless states – an egalitarian average official fiscal pressure in relationship between independent the region. Nevertheless, the public actors – the Colombian model –, or sector employees as well as the a kind of agreement in which the business enterprises participation in public sector regulates the market to the drug business varies according maximise the profits of the public products, phases of the productive servants – the traditional Mexican process, and geographic areas. model. With a couple of exceptions Cocaine is concentrated on the most found within the biggest state capital-intensive part of the drug structures of the region which have business and accordingly it needs the ability and the power to govern more money in corruption terms in the drug market in their respective order to guarantee a safe transit. countries, the most usual corruptive Therefore, cocaine leaves a trail of association in the Caribbean is 290 million U.S. dollars in the shaped by a combination of the first Caribbean civil servants’ pockets, or and second models, in which the 10 percent of the total income traffickers have, at least, the same generated by cocaine in the region. bargaining power as their public Public participation in the marijuana counterparts to construct a long- business is much lower and the standing relationship. In weak and payment to civil servants is only 4.5 poor states with a small economic percent of the total income. base, scarce endogenous resources Accordingly, 92 percent of the drug and limited means to exert income pocketed by civil servants legitimate authority, an external or comes from the cocaine business, internal agent with enormous with marijuana contributing a scarce economic power, such as a drug 6.5 percent. In terms of the steps businessman, can exert tremendous involved in marketing drugs, trans- pressure that eventually can border transportation is the most jeopardise the survival of the vulnerable activity and so more government or, at least, its investment in corruption of customs legitimacy. The most fragrant case and law enforcement personnel is of this kind of unequal relationship needed – 12 percent of the total between drug traffickers and public income is earned in this phase. On the other hand, retailing/distribution

20 officials took place in Saint Kitts state) are associated with high and Nevis, where a notorious drug degrees of public sector businessman was able to effectively participation in the drug business, challenge the state authority through their relation to drug markets is intimidation or violence for years completely different. Under an until the public authorities were able authoritarian-type regime, the to extradite the individual. A involvement of public servants in regional military operation was the drug market is an absolute needed in the process of gaining requirement if the industry aspires back the state authority against the power of the trafficker.

53. There are at least two sets of R 1percent = 5.47 + 2.02 * factors that seem to influence the 25,0 freedom participation of the public sector in the drug business in the Caribbean – 20,0 economic and political freedom. R

Although both concepts are difficult 15,0 R R to measure in practice and R R R incorporate moral biases by 10,0 R R definition, both seem to be R R negatively related with larger scale 5,0 R participation of public servants in R the illegal drug market. Taking the 1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00 9,00 10,0 public sector participation in drug business (%) 0 Freedom Index developed by the Freedom Index organisation Freedom House, in which political rights and civil liberties are measured on a one-to- to survive because the presence of ten scale, with one representing the the public sector is everywhere. In a highest degree of freedom and ten failed state, the degree of the lowest, the participation of the uncertainty for doing business, public servants in the drug sector whether legal or illegal, is so large grows 2 percent for each percentage that businessmen need to bribe a lot point of political freedom with a of public agents in order to protect degree of public sector participation property rights in the medium run. of 7.5 percent for the highest level The lack of controls over the public of political freedom. Low levels of sector activities (law enforcement) political freedom are associated to that are associated with the authoritarian or totalitarian regimes weakness in the protection of civil in which the state is involved in liberties and political rights are particular issues with the consent or universally conducive to corruption, the non-consent of the individuals including drug-related corruption. In or, alternatively, with a weak state the Caribbean context, low levels of apparatus to guarantee human rights political freedom may be facilitated and political liberties for the by an inequitable income individual living within its territory. distribution, small population size, Although both kinds of non-liberal or the lack of democratic traditions. regimes (authoritarian or police

21

R

1percent = -3.26 + 3.03 25,0 54. Similar conclusions can be drawn if the participation of the 20,0 public servants in the drug business R in the Caribbean is correlated with 15,0 R R R the level of economic freedom as is R R measured by the Heritage 10,0 R R Foundation on a one-to-ten scale, R R with one representing the highest 5,0 R degree of freedom and ten the R lowest. In this case, each point of 2,00 3,00 4,00 5,00 6,00 7,00 8,00 9,00 public sector participation in the drug market (%) economic un-freedom increases in 3 Economic Freedom Index percentage points the participation of public servants in drug business, with of 0 percent in those to illegitimate, selfish manipulation jurisdictions with the highest levels by ruling elites within the Caribbean of economic freedom. The same countries to maintain the existing degree of intervention in the legal internal power distribution. Firstly, markets is usually associated with drug use has been used to stigmatise the interference of public servants in the poor people in the region. the drug business. Economic Instead of focusing drug policy on freedom does not mean a mere rehabilitation to help drug users, reduction of the public sector some politicians, in close participation in the economy; collaboration with mass media and instead, it means a public sector that many in the civil society, have has the ability to guarantee tended to criminalize and demonise economic rights to every individual every aspect of the poor people’s or firms whatever the state cultural or political manifestations, contribution to the economy is. The especially if they are young people, correlation between the public as a form of drug-influenced sector’s participation in drug criminal behaviour. Since drugs are business and an interception rate is illegal, people who coexist with statistically insignificant. A possible drugs are also considered “illegal”, explanation is that, in some or evil at best. The demonizers instances of corruption, the express this biased linkage between agreement between protected drug poverty and drugs even if drug use traffickers and public servants is also frequent among the power usually involves the arrest of elites. By articulating opinions that independent drug entrepreneurs and are driven by a dichotomy between planned seizures in order to exhibit good and evil, in which evil is an apparent efficiency in the official identified with drugs, they have drug fight. In the same way, when tended to marginalize drug use all other variables are controlled, among poor people, to stigmatise there is no correlation between these consumers and, in general corruption and legal tradition – terms, to torpedo the ultimate aim of Common Law or Civil Law. the drug policy – reducing the number of drug users. Instead, these 55. The actual drug policies being views, which are uncritically implemented have not been immune associating poverty with drugs, are

22 functional because they are used by industries in many Caribbean the ruling elite to justify countries have been brought disempowering the poor and to together in these areas. For example, condemning any social protests. In 80 percent of the Dominican exports an official explanation that has not move through the free-trade zones. been unusual in the region, high- In an effort to minimise the obstacle ranking state officials accused the to economic activities in these rioters that rallied against the power special development zones, some blackouts in the Dominican governments have tended to mistake Republic in 2001 of being financed tax-free with control-free by drug trafficking interests and jurisdictions. As an unintended acting under the influence of drugs. consequence of this lack of customs Widespread accusations about drug controls, free-trade areas have often involvement in politics that appear been the subject of discussion around the region have been used, in among law enforcement agencies some cases, with the intention of for their vulnerability to be used as illegitimately altering public policy transhipment points in the drug or the existing power distribution trade. An estimated 40 to 50 percent without checking the accuracy of of the cocaine that circulates the charges involved. These through the Caribbean in ship practices of defamation have been containers goes through these used as a unsubstantiated weapon virtually uncontrolled free-trade not only in internal politics but have areas. In some countries, where the also been a component of the controls over the entry and exit flow relationships among Caribbean of goods are almost non-existent, states and between regional this proportion reaches 70 percent. jurisdictions and extra-regional countries. 57. Caribbean offshore banking system and its assumed connection 56. Some public policies to have been in implemented by Caribbean the centre of the debate on anti- governments in their legitimate money laundering practices even pursuit of their people’s economic before the Financial Action Task well being have been Force issued its list of uncooperative counterproductive for the general jurisdictions. Four Caribbean effectiveness of the drug control offshore centres were placed on list efforts. This contradiction between at the beginning. At the core of this an effective drug policy and other discussion have been the apparent public policies has manifested itself conflicting interests of the national in at least two instances – free-trade governments to diversify their areas and offshore financial centres. economies under the increased Free-trade areas were established by pressures of globalisation, often many Caribbean government since asserted in a strongly nationalistic the 1970s with the purpose of manner, and the equally legitimate attracting foreign investment and concern of the developed countries offering better opportunities for to restrict the flow of illicit money local industry. In 2000, a large in their economies. By presenting proportion of import and export the debate as a nationalist fight

23 between rich and poor countries, the difficult to differentiate between room for a real cost-benefit analysis Caribbean countries or offshore for Caribbean countries has been centres, this declining reputation, closed. In this sense, the profits of that has reached an all-time low as the offshore financial centres for the the international mass-media Caribbean population have been focused on the high profile cases rather small. The Caribbean and the black lists, has universally countries themselves with offshore affected the possibilities of banking services represent only 3.8 economic development of all percent of the total regional Caribbean countries, even if there population. With the exception of are strong differences in money the Cayman Islands, Bermuda, the laundering regulations among Bahamas, and Anguila, offshore regional offshore centres. banking generates less than 10 Additionally, corruption and its percent of the Gross Domestic negative influence on local politics Product, of the local employment have been usually associated with and an even inferior proportion of offshore financial centres. the public sector revenues. In fact, the good jobs provided in the 58. Offshore banking has not been offshore financial centres are almost the only institution of the local universally monopolised by regulation that has attracted foreigners. Moreover, the international criminal organizations, possibilities for developing a including drug traffickers, to the successful offshore centre have region. Criminals, given the general diminished during the 1990s as lack of controls – the economic onshore and offshore banking citizenship programmes, have services have tended to converge illegitimately used another public and many offshore centres have policy that was established with the emerged outside this region, aim of increasing local public including some in the developed revenues. The facilities given under countries. Against this background these programmes to change names of diminished profits, almost every and identities have proven offshore financial centre in the especially attractive for international region has been involved in penal criminals. Although the number of cases of fraud or money laundering, criminals buying these passports has as well as having to defend not exceeded 200 for the entire themselves against FATF Caribbean, these legal accusations and establishing a instrumentalities have had at least regulatory system. Although less two unintended consequences: one, than 1 percent of the funds flowing becoming a source of conflict with into the Caribbean offshore centres those developed countries where correspond to drug money, these these criminals are sought and two, penal cases have dangerously increasing the regional pool of weakened a very fragile but highly criminals that eventually try to marketable asset in an increasingly apply their economic power to exert globalised economy, specially in the a corruptive influence in the banking sector – reputation. Given countries that provide them refuge. that for the general public it is rather

24 Drug income, 1990-2000 (in 2000 U.S. dollars) among the general public. From this 3500 perspective, the official discourse should look for more rational and 3000 pragmatic arguments to support the illegal nature of drugs than simply

2500 stressing the intrinsic evil of drugs. 60. Accordingly, the region may 2000 find a more scientific, and less visceral, way of addressing the 1500 question of the legal/illegal nature of drugs by analysing both the pros million of U.S. dollars 1000 and cons of the available public policies to apply to drugs. An 500 essential trail to be explored would be the quantification of the probable

0 increase in drug use that may be 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 expected under legalisation and if Cocaine Marijuana Others society can economically and socially afford the consequences of this expansion in drug addiction. 59. In recent years, the debate on the Some recent economic studies have legal status of the currently illicit proven that demand for drugs is drug marijuana has been rife in the more price-sensitive than it was Caribbean, especially in the previously believed in the light of English-speaking countries. In 2001, the addictive nature of the demand. a government-backed National Substitutability among legal and Commission on Ganja in Jamaica illegal drugs has not received recommended to the executive and enough attention. Marijuana as a legislative branches to amend the “buffer” or gateway drug has also laws so that marijuana would be been insufficiently examined decriminalised for the private, whether the damages associated personal use of small quantities by with the illegal nature of drugs, such adults and consumption for religious as organised crime or corruption, purposes. The requested move has will be significantly reduced under a already been implemented in some licit trade or whether European Union countries during decriminalisation would be the last decade. The petition for counterproductive in crime terms. partial or complete legalisation or Corruption associated with the decriminalisation has been based on previous may be religious, moral, political and not necessarily be eliminated under economic reasons. Support for these a new legal status because bribing is proposals remains a minority far from being an unknown business position in the Caribbean according even for licit firms in the Caribbean. to the limited surveys available. However, the official government Political consequences positions about drugs in favour of keeping them illegal has not been 61. Differences in law, economic neutral by spreading drug fears circumstances, and social traditions

25 among countries in the Caribbean kilograms of drugs per kilometre of are substantial. However, there are border, but still less than 0.1 percent some features that are common – of the licit traffic of goods in the the major being an almost universal Caribbean. States can present an state weakness. In spite of the insignificant rate of success in progress achieved in previous implementing their own laws decades by states to acquire against the importation of drugs – resources and legitimisation, some only 7 percent of the total trans- deficiencies remain unaltered. border flow. This percentage is four Under these circumstances, drug use times higher for human couriers and and trade implies an additional is less for ship containers. The low challenge to the governance of the interception ratio erodes the states’ individual political systems. It claim to control its own territory, erodes the notion of national while at the same time powerful sovereignty; it hinders the drug trafficking cartels contribute to construction of national and the establishment of illegitimate regional identities; it interferes in networks that are able to introduce the process of consolidation of a other unwanted goods and people. political culture; it confuses the distinction between legal and 63. The erosion of the sovereignty illegal; it promotes an anomalous notion among local populations in functioning of the legislative, the Caribbean has also been affected executive and judiciary branches; by unilateral actions implemented and it is a source of expensive by extra-regional countries that see international conflicts. Most of these the weakness of the local effects are derived from the illegal governments. Although in some nature of drugs rather than an cases these undesired inferences intrinsic effect of the drugs, have been exploited by although it is difficult to separate unscrupulous local politicians to both components. exhibit nationalistic postures aimed at gaining an electoral base or for 62. National sovereignty is the basic hiding their own limitations, these foundation of political structures actions have given wide ground to and the international relations the notion that drug policy is not the system, and continues to play an result of the local consensus on the important role in spite of the issue but a foreign imposition. Drug economic and social globalisation policy is thus considered as progress. Drug trafficking poses a epitomising the lack of autonomy of great challenge to the state claim to the local politics. completely control its borders, and the entry of goods and people into 64. Linked to the widespread view the country. If the only law that of the drug policy as an imposed drug entrepreneurs recognize is the policy is the idea that the origin of law of supply and demand, there is Caribbean drug problems is the no reason to think that frontiers pose European and American demand. If a threat to their operations. Some one follows this argument, there is 1,2000 MT of illegal drugs cross a no need to devote scarce local Caribbean border annually – 50 public resources to face other people’s problems. Without denying

26 the reality of the supply and Jamaican trafficking group was demand, this perspective ignores the judged for fourteen times, benefits of some international but was always acquitted because relationships that are, by their witnesses disappeared or were nature, complex and mutually murdered. Juries have also been profitable. Unfortunately, these influenced by corruption or simplistic approaches do not favour intimidation. the formulation of indigenous national drug policies and mask a 66. Although drugs generate an cover of hypocrisy where private income of 320 million of U.S. thoughts do not match with public dollars annually for civil servants in performance. the Caribbean, they were already being corrupted before drugs arrived 65. The most evident effect that the to the region. The Caribbean drug trade has on Caribbean politics countries that appear in the is corruption and state involvement Corruption Perception Index in illegal activities. The corruption elaborated by Transparency pressures have affected all state International obtain very low marks. branches in the Caribbean whatever In 2001 the Dominican Republic the size of the country or the power received a 3.1, on a scale that ranges of the state. In 1989 a popular between ten (highly clean) and zero Cuban division general was (highly corrupt), while Trinidad and sentenced and executed for Tobago obtained a 5.3. In 1999, organising a drug trafficking ring Jamaica was qualified with a 3.8. with fellow military officials. In Therefore, drug-generated 1985, the Prime Minister of the corruption in most countries falls in Turks and Caicos was imprisoned a business environment in which for introducing cocaine into the corruption is the rule rather than the United States. The direct exception. Its main effect is that involvement of high officials in drugs increase the size of the drug trafficking has tended to be corruption market in the region and substituted by co-operative models can help to institutionalise where drug entrepreneurs manage corruptive relationships. And drugs the business while politicians introduce corruption in the law protect the business to mutual enforcement area, which is benefit. The existence of especially sensitive to public presidential regimes or parliaments perception of delegitimization and that are widely subordinated to the reinforces the obstacles to the executive branch in most Caribbean emergence of a real rule of law. jurisdictions weakens the opportunities of the legislative 67. Drug consumption and trade branches to be involved in drug- also has strong implications on related corruption schemes. The political culture, the set of attitudes cases of influencing the normal that inform the political activity and functioning of the justice system participation of the citizens. The through bribing or intimidation for quantitatively limited but more the benefit of the drug entrepreneurs manifest consequence is that it are not unusual. One leader of a effects political thinking and the participation in politics among drug

27 abusers (opiate of the masses). This concentration, and very limited effect, nevertheless, should not be upward mobility, in poor areas overstated in the Caribbean – only where access to basic resources is 0.2 percent of the adult population scarce, drug dealing has become the may be categorised as compulsive only chance of escaping poverty for abusers. Of those, between 65 to 75 many people. Apart from the percent correspond to lower class general idea that money provides strata whose participation in politics prestige for those who have it, some is limited everywhere. The majority traffickers grant social assistance in of the users consume drugs in a the poor neighbourhoods that the recreational way that has no public sector cannot provide. significant consequences in the Jamaican drug lords have become formation of the political activity, at heroes in their communities and, least in the short run. when security agencies try to arrest them, the population protects them. 68. Illicit drug production and Therefore, for many there is a real commerce also affects the contradiction between what is Caribbean political culture by lawful and real opportunity, blurring the line that separates legal between a political system that and illegal acts on which the rule of many perceive as unfair and the law is based. First, drug-induced chance of obtaining prestige and corruption leads many citizens to money through drug business. think that money rather than ideas and commitment determine politics 69. The citizenship’s trust deficit in and government, thus generating a existing institutions, organisational great deal of distrust between cleavages created by drug dealers politicians and their electorate. and the sympathy that drug Second, drug trafficking creates traffickers generate among some deviant rules for upward social people produces an individualisation mobility in which legality is seen of social and political relationships not a common framework for social that is extremely dangerous for the cohesion but an obstacle for governance of complex societies. individual advancement. For the Although strong leadership have 125,000 or so, or 0.8 of the labour been an almost universal feature of force, who extract a direct income Caribbean politics during the past from their involvement in drugs in half-century, drug trafficking the region, there is a radical produces alternative loyalties that contradiction between the rule of are not institutionally based but are law and their way of living. But the individualistic in nature. Even when concentration of the income drug-related loyalties are not extracted from drug trade creates established for the purpose of tens of thousands of people who challenging the state, their accumulate an incredible wealth foundation on inter-personal trust is and, with their flashy way of life, in direct confrontation with the may become a role model for young notions of merit and the rule of law. people. With Caribbean Political parties and loyalty are unemployment rate over 17 percent based almost exclusively on patron- of the labour force, a high-income client relations. When notorious

28 Jamaican politicians attend the blamed by Eastern Caribbean’s funeral of notorious drug traffickers, neighbours for being the source of a situation that has not been unusual the marijuana problem in their during the past two decades, social countries. In the Dominican legitimisation of drug trafficking Republic, allegations against Haiti and its alternative deviant culture is and the Haitian migrants for being honoured. the origin of the local drug problem has been used for the 70. Drug trafficking interferes with implementation of some other relationships between countries policies against Haiti. Dominican within the Caribbean. Some areas immigrants are, in turn, censured as and jurisdictions are stigmatised drug traffickers in Puerto Rico. And and, in some cases, punished on the deportees are almost universally basis of an allegedly intense drug blamed in the Caribbean for their trafficking. Even if some situations role in increasing and providing are real, some conflicts have been sophistication to local crime. Illegal intentionally fired up by politicians drugs, therefore, effect the

Drug employment by drug type and production step . 2000 (percentage)

Retailing distribution 65% Production 23%

Marijuana 56%

Cocaine 42% Whole sale distribution Transport 11% Others 1% 2%

who opt for externalising the relationships between states and problem and so avoiding Caribbean peoples and also damage accountability for the problems in the reputation of migrant their own countries. For instance, communities. Saint Vincent and the Grenadines is

29 71. Drug entrepreneurs, beyond In Suriname, a kilogram of cocaine trying to influence the state’s is the price for a AK-47 rifle. In judicial system, have an interest in general, about 60-80 percent of the creating their own justice system in weapons illegally held in the order to enforce contracts and Caribbean come from the United eventually achieve a monopoly over States, where most of them are the criminal activity that make profit legally acquired and then exported maximisation and risk minimisation to the region. Therefore, drug possible. Without the constraints of trafficking did not only increase the the state justice, violence is a demand for weaponry but also common recourse in this private stimulates the availability in the justice system. Under these extra Caribbean by providing petty crime legal conditions, drug-related and private violence with a lethal are not unusual in the capacity that was not previously Caribbean. Drug trafficking is said known. to be the cause of 80 percent of the 73. Drug-induced firearms over 800 violent deaths that take availability has expanded place annually in Puerto Rico. 40 governance problems in the percent of murders in Jamaica are Caribbean societies. This problem attributed to territorial turf wars has particularly altered the between drug gangs. Jamaican functioning of national security traffickers were accused of 5,000 agencies. First, the establishment of violent deaths in the United States impunity sanctuaries in poor during the 1985-1992 period. The neighbourhoods in Puerto Rico, the drug dealers’ recurrent use of Dominican Republic, Jamaica and violence is conductive to more some other countries have almost private violence by non drug tainted removed state presence and control individuals (potential murderers and in these areas. Second, better- robbers) who lose the confidence in equipped criminals have provoked the state’s judicial system and can an even more violent reaction in plainly see how avoiding state security agencies. These, lacking punishment is not only possible but other investigation and legal usual. powers, have turned to massive 72. Illicit drug production and trade violence as an allegedly effective has contributed to increase the level method to control poor of violence in Caribbean societies neighbourhoods. In some cases, through the enforcement of their these actions have the sympathy of a internal justice code. But it also population that is fed up with makes private violence in general criminal violence. In the Dominican more lethal by increasing the Republic and Jamaica, annual number of firearms available in the killings by police agents are in region. An illicit market in which three-digits figures. drugs and firearms, as well as stolen goods, are exchanged is functioning in the Eastern Caribbean.

30 Both countries lead the Western Therefore, rather than being the Hemisphere in state crime. Third, recipient or major base of the widespread private violence political violence, the Caribbean has combined with human and more often been used as a place for equipment shortages has driven the acquisition of weaponry and police agencies to categorize many money laundering by organisations killings, specially those considered acting by violent means in some as politically irrelevant, as drug other parts of the world. murder settlings of scores without 76. The lax state controls in the further investigation. Caribbean have been used by 74. The planning and terrorist organisations. In 1989, ten implementation of public policies tons of firearms were seized in has been made more difficult and Jamaica whose destination was the confused by illegal drugs. On the Colombian Revolutionary Armed one hand, the collection and Forces. This group has also compilation of information has exploited Surname’s interior areas become a more difficult task to carry out arms-for-drugs deals. because a large part of the economic Many elements of the Caribbean’s and socially beneficial activities are political, economic and social illegal and implicitly hidden to structure that had been preyed upon official statistics. On the other hand, by criminal elements in the past, the implementation of public such as the offshore financial sector, policies is unclear when relevant the economic citizenship data about the recipients of those programme or the weakness of the policies are largely unknown. In state, are also attractive for terrorist some cases, public policies may groups. involuntarily become a piece of the drug traffickers’ strategy to keep the social environment under their control. 75. Drug users and traders, although made illegal by a public decision, ordinarily do not have an anti- establishment political programme.

The overwhelming majority of drug entrepreneurs and users try to maximise their utility within the existing political environment and have no an interest in subverting it. In the Caribbean, the weaknesses of the existing states, which provide widespread opportunities for coexistence and mutual profit, also are a disincentive to confrontation

31 Economic effects 79. Drug use and trade favours the already large concentration of the total 77. Drug trade and production is a income in the Caribbean. On the source of income for the Caribbean trafficking side, the benefits concentrate region. But it also has a price. First, into a few hands – about 12,000 people while the costs are borne by the entire obtain 75 percent of the total drug society, the number of beneficiaries of income. Social origin of these the drug income is very limited – individuals is often the ruling elites 125,000 people in the region. Second, rather than the poor, making this no as it has been noted above, this has been contribution to open upward social an income with an enormous costs for mobility. On the drug abuse side, the the social fabric of the Caribbean consumption promotes an income societies. Using a methodology transfer from the usually poor users to previously applied for the United States, the better-off dealers. This situation the direct costs in terms of violence and ultimately contributes to the creation of health cost would reach 300 to 325 above ground and black markets and an million U.S. dollars, that is, 0.3 percent increase in the prices of some goods and of the Gross Domestic Product. This services for everybody, thus decreasing figure ranges from the 1.1 percent of the the relative income of the poor people. Gross Domestic Product in Jamaica and 0.8 percent in Puerto Rico to less than 80. Drug-induced violence tends to be a 0.1 in Cuba. Comparatively, illicit drugs disincentive for foreign and local cost the American economy 98 billion investment. Violence increases the fixed U.S. dollars – 1.1 percent of the Gross and variable costs of locally established Domestic Product. Indirect costs, firms, that have to pay a premium for nevertheless, are hardly measurable, security and higher taxes to strengthen especially when considering the the state law enforcement agencies. But opportunity costs of using the available the main effect of violence is resources for drug use and trade. introducing a higher degree of uncertainty in making business. 78. The most visible effect of illicit Although it is difficult to measure the drugs is the productivity losses that real effect of this intangible on the drug abuse produce and the violence Caribbean economies, there is ample associated with drug dealing. The fact evidence in the media regarding specific that young people are the main victims cases in which foreign and local firms of drug abuse and drug-related violence have said that violence was a major cost increases this productivity loss effect, for them. Additionally, drug while the fact that drug abuse and investments are chiefly made with the violence is concentrated on low-skilled aim of money laundering and not for young people would tend to dismiss the productive and long-term return strength of the effect. In any of the reasons. Therefore, the participation of gross estimations used for this analysis, companies that are fronts for money drug-induced productivity losses are laundering often allow these firms to marginal, ranging from 0.1 to 0.4 sell their goods or services under the percent of the total Gross Domestic cost price, which means that legal Product. businesses are pushed out of the market unable to compete in these unfair competitive circumstances.

32 81. Drug trafficking also has a price people who have the dream of on the main industry of the region – escaping poverty do not see tourism. First, except for the education and entrepreneurship as a marginal drug tourism, the image of major avenue in their upward the Caribbean in the international mobility career, (those elements mass media as a heaven for drug being the main catalysts for trafficking constitutes bad publicity endogenous development of for the region as a whole. That Caribbean societies), but as a mere image has a negative effect on the loss of a time that would be more highly volatile preferences of the profitably spent in drug business in tourists, especially sensitive to the short run. public security concerns. Second, the violence indirectly generated by illegal drugs inhibits the spreading of the positive effects of tourism to local merchants by encouraging “all-inclusive tourism” in which only the foreign firms and the local workers directly employed in these resorts benefit from tourism and not the adjacent services and industries. In the construction sector that is often used for money laundering purposes a limited but positive effect for the construction firms appears to be evident. But this laundering does not seem to result in a general increase in the price of real estate in the region. 82. The most important consequence of illicit drug trade in the Caribbean comes from the disincentive to business entrepreneurship. Facing high returns for investment in drug trade, the opportunity costs of legal entrepreneurship, with more limited, long run profits are disadvantaged. From this perspective, the opportunity costs of human capital investment are very high for the young people, especially those who are living in a poor neighbourhood where the wealth effects of drug trafficking are clearly visible. As a consequence, in many poor areas of the region, children and young

33