This document discusses organized crime and drug trafficking in Latin America. It provides an overview of the cocaine market, including production in the Andean region and demand in North America and Europe. It then examines the impacts of drug trafficking, including increased addiction, crime, homicides, and slowed economic growth. Politically, drug trafficking has undermined stability and democracy while fostering corruption. The conclusion searches for alternatives such as legalization and decriminalization, as well as holistic approaches combining multiple strategies.

1. Organised Crime and Drugs
Trade in Latin America
Armend MUJA
Corvinus University of Budapest

2. Table of content
• 1. Overview of Cocaine Market
• 2. Impact of drug trafficking
• 3. Economic impact of drug trafficking
• 4. Political impact of drug trafficking
• 5. Conclusion: in search for alternatives

3. I.OVERVIEW OF COCAINE SUPPLY
AND DEMAND MARKET
3

4. 1. Cocaine market supply and demand
• Demand for cocaine- cocaine demand stems from North America
(41%), Europe (32%), South-America (20%). Other regions Africa, Asia
and Oceania consumption is less than 10%. World has an estimated
16 million regular cocaine users (UNODC, 2017)
• Cocaine Supply – Andean Region (Colombia, Peru and Bolivia)
account for above 90 % of cocaine production. Changing patterns of
supply. Bolivia and Peru are considered main suppliers in recent years
of coca leafs. About 850 metric tons of cocaine produced in 2016
(UNODC)
• Routes- Mexico, Guatemala, Honduras and El Salvador main cocaine
trading routes

7. 6.2
4.6
2.7
1.3
0.7
0.4
Global Cocaine Consumption 2017 (UNODC) in
million users
North America
Europe
South America
Africa
Asia
Oceania

8. 121,300
142,300
163,300
68,000
50,300
46,850
43,400
59,900
40,100
27,350
14,600
30,900
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
1990 2000 2010 2017
Coca Production in hectares 1990-2017 (UNODC,
2018)
Columbia Peru Bolivia

9. 46.2
48.6 48.8 49.8
39.2
35.1 34.7
36.1
38.5 37.7
0
10
20
30
40
50
60
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
North America Coicaine Market in billion USD 1998-2016 (UNODC)
USA Total

10. 24.2
5.3
13
0.4 0.5
Distribution of gross profits in billion USD of
North American Market 2017 (UNODC)
USA Mid-level dealers
USA Wholesalers
International trafficers
Andean trafficers
Andea farmers

11. 0
100
200
300
400
500
600
700
800
1990 2000 2010 2017
Global Cocaine Sizures 1990-2017 (UNODC, 2017)
Total South America North America Europe

12. II. IMPACT OF DRUG TRAFFICING
12

13. 2. Impact of drug trafficking
• Increased drug addiction– increased death rate and drug addiction
(WHO, 2017)
• Increased crime rates and homicides– social pandemic of the last
century. Severe direct human costs in terms of homicides
• Slowed growth – cocaine producers and transition routes facing slow
growth and poverty
• Slowed democratization– producers and transition states faced with weak
progress in democratization, corruption and rule of law (vicious circle)

14. 6.2
5.3 5.3
23.2
22.5 22.3
0
5
10
15
20
25
2012 2014 2016
Intentional Homicides per 100,000 people (World Bank,
2017)
World European Union Latin America & Caribbean Middle East & North Africa East Asia & Pacific

15. 0
20
40
60
80
100
120
140
160
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Intentional Homicides per 100,000 people (World Bank
1995-2015)
Colombia Guatemala Honduras El Salvador Mexico Bolivia Peru

16. III. ECONOMIC IMPACT OF DRUG
TRAFFICKING
16

17. 3. Economic impact of drug trafficking
• Low per capita incomes compared to world average– growth among
cocaine producers is low compared to world average. Cocaine transition of
Honduras, Guatemala and El Salvador severely affected
• Missed opportunity – Latin America is falling behind the World
Average in per capita levels. GDP per capita could have been 25%
higher if not for crime levels (Inter-American Bank, 2016). Strong
correlation between crime and low growth (World Bank, 2012).

18. 18
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
GDP per Capita PPP 1990-2016 (World Bank, 2017)
Colombia Bolivia Guatemala Mexico Honduras Peru World El Salvador

19. IV. POLITICAL IMPACT OF DRUG
TRAFFICKING
19

20. 4. Political impact of drug trafficking
• Struggling with Political Instability and democratization- Majority of
cocaine producing and transition states ranked as not free of partly
free countries (Freedom House 2016).
• Corruption is rife - Majority countries failing on Government
Effectiveness Index – overall low quality of public services, rule of law
and regulation. Corruption endemic (Transparency International)
• Low trust in democracy and criminal inertia– support for democracy
has fallen to lowest levels (UN, 2016). Significant percentage of
people percept that government, police and courts serve drug cartels
(Pew Research, 2014). Criminality persists even after the root causes
have disappeared.

21. 21
-3.00
-2.50
-2.00
-1.50
-1.00
-0.50
0.00
0.50
1996 1998 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Political Stability and Absence of Violence Index
1990-2016 ( World Bank, 2017)
Bolivia Colombia Guatemala Honduras Mexico Peru El Salvador

22. 22
-1.20
-1.00
-0.80
-0.60
-0.40
-0.20
0.00
1996 1998 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Control of Corruption Index (-2.5/2.5) in Latin
America (World Bank, 2017)
Colombia Bolivia Honduras Guatemala Mexico Peru El Salvador

23. V. CONCLUSION: SEACHING FOR
ALTERNATIVES
23

24. 5. Conclusion: Searching for Alternatives
• Legalization – drug legalization in Latin America and USA would lower
drug-related crimes (Honduras, Zelaya, 2008)
• Decriminalisation- personal drug use decriminalized in Mexico (2009).
Drug personal use is not a crime but a health concern (Ecuador, 2008;
Mexico, 2009; Argentina, 2009). Peru remains opposed
• US CARSI – US provides support to countries in eradicating coca
plantation. Plan Columbia, Merida Initiative.
• Holistic approach – combine legalization, decriminalization with
assistance and support for state reforms.