Why should we care about “El Chapo” escape?
Last week international newspapers published articles about the failure of the Mexican police to catch “El Chapo” Guzman, one of the most wanted lords of drug in the world. Very few comments have been spent on this issue, which seems to affect only some security problems of Central and Southern American regions, without touching any other reality.
Even if lords of drug mostly live beyond the ocean, we should not think that narcos issues do not affect the European society. The goal of this article has to do with the material impact in terms of economic and geopolitical dimensions, that the cocaine market has on the European society.
According to the UNODC (United Nations Office on Drugs and Crime), in 2009 the European market accounted for almost 40% of the total cocaine market. With 37 billion dollars that Central and Eastern Europe cover in this business cycle and are going to reach the first world market, the United States. It is important to underline that Europe and the U.S. represent the consuming part of the cocaine affair; in economic terms, the demand.
Everything begins in South America, where Colombia and Bolivia are the most fruitful countries and represent the supply side of this global market. In the Americas, many lords of drug became among the richest people in the world (see Pablo Escobar during the end of the 1980s) thanks to the great profits deriving from the cocaine trade system which cover South America, Caribbean, Mexico and consumer countries. The routes of cocaine involve many other regions such as Western African countries, which are crucial for bringing cocaine into the European market.
In economic terms, cocaine can be considered a “haven good” that never goes down. Cocaine market does not know scarcity or inflation. In many regions of the world lots of primary goods and services lack, but cocaine does not. According to the UN, the consume amount in Africa and Asia is significantly increasing. Paradoxically, in some extremely poor villages there are no hospitals but it is possible to find cocaine. Especially in high corrupt countries, delivering great amounts of cocaine is relatively easy for drug traders. Some experts said that selling cocaine is easier than selling gold and its profit margin is incredibly higher than any other legal good. There are no companies that make so many profits as the cocaine; even Apple or Facebook cannot compete with the profits deriving from this business. The results that can be achieved with cocaine in one year need decades to be achieved by the most important holdings in the world.
Cocaine is also a complex good, that involves the work of millions of people all over the world, but very few of them can become really rich. Who succeeds to manage the entire process of the cocaine business can achieve astonishing results in terms of money and power. This is why the escape of El Chapo Guzman should not be underrated. To become rich and powerful as he did, you must know everything about cocaine: from the Colombian coca leafs to the Mexican shippers until the German or Italian consumer, the cocaine journey is complex but easy at the same time.
It is important to understand that cocaine is not only a security issue: it is an economic one. It responds to the market laws but it is not subjected to the law as any other good. One kilo of cocaine is sold for 1.500$ in Colombia, 14.000 in Mexico, 27.000 in the U.S. and between 45.000 and 190.000 in Europe (depending on countries). Moreover, from one kilo of cocaine derives three kilos of cut cocaine, which most of the time is the result of various elements and toxic products like chalk. This implies greater profits and a higher ease to make single cocaine doses.
If we think that the cocaine affaire is only related with the big organized crime in South America and that Western countries are merely consumers, we would be totally wrong. The global dimension of this business would not be possible without the great complicity of European and American banks. According to Alejandro Gaviria and Daniel Mejìa, two Colombian economists, 97,4% of profits deriving from the drug business is punctually laundered by American and European banks. It is a complex circuit which involves several countries and make money clean. New York and London are the biggest money laundry in the world; not all the pieces of the cocaine puzzle belong to illegal contexts, like terrorism and violence. There is a huge part of this market that needs hidden complicity in the Northern world. Mexican and Colombian cartels could never make so much profit without the strict collaboration of Swiss banks and many other financial institutions which deal with the drug money all over the world.
The introits deriving from the cocaine business end up with funding political campaigns and pressuring politicians and business men in order to protect that business. From many perspectives, the cocaine system seems unstoppable, especially because it involves every layer of society. It is also because of this that we should care when a lord of drug from the other side of the world escapes from police.