The Caribbean narco-economy

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A third wave of globalization, following centuries of sugar monoculture and the postwar growth of island tourism, is washing across the Caribbean. It is the spreading global narco-economy, and it threatens the political and economic stability of the archipelago.

United States efforts in recent years to staunch the flow of Colombian drugs across the Mexican border have deflected trafficking eastward across the island chain from Bahamas to Aruba. Roughly a third of all cocaine and heroin consumed in the US crisscrosses the area, and money-laundering drug profits have infested several of the region's offshore financial centers.

The Caribbean narco-economy has been nourished by several factors: strategic location between southern producers and northern consumers, vast unguarded coastlines and inaccessible mountainous interiors, a long-standing trade network, plus the anonymity afforded by hordes of tourists.

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The common route is from the north coast of Colombia to remote Bahamian islands, where air-dropped drugs are loaded onto high-speed boats for a final run to the US mainland. More recently, the eastern Caribbean has provided another corridor for stockpiling contraband for later transit by sea or air to the US Virgin Islands and Puerto Rico. There they are repackaged as domestic freight and transported north by cargo or courier via busy airports with perfunctory customs checks.

Traffickers have displayed a remarkable resilience and ingenuity in keeping one step ahead of detection. Sophisticated satellite-positioning systems and the latest communication technology are often used to coordinate drops in the least policed waters. To elude US radar, they now use "stealth boats" made entirely from wood and fiberglass, as well as semi-submersible vessels.

During the past two decades the region's economy has been shocked by destructive hurricanes, declining sugar exports, the loss of textile investment and employment to Mexico via NAFTA, and the loss of banana export preferences.

In addition, since the demise of communism, the diplomatic downgrading of the Caribbean (the Cuban threat in particular) has resulted in an 80 percent cut in US aid. Some scholars also argue that the IMF and World Bank structural adjustment policies mandated for the larger debt-burdened countries such as Jamaica have resulted in declining living standards and social expenditure, especially in urban areas where the drug trade flourishes among an underclass of poor and unemployed youths.

Such ghetto subcultures are springing up across the islands, led by organized posses that surfaced in Jamaica in the 1970s. They originated as local ganja gangs but were also supported by political factionalism, as rival political parties began arming ghetto youth. By the 1980s these posses had graduated to exporting marijuana to the US. Today, in cooperation with Colombian cartels, they control much of the island cocaine traffic.

Evidence of the spreading narco-economy is mounting. Island police report sharp increases in property-related crimes. Most serious crimes are drug-related, involving violence and firearms and increasingly marginalized young addicts. Police note the rising prominence of home-grown posses in organized crime (trafficking, arms smuggling, money-laundering, prostitution) and the increasing menace of thousands of returning felons deported from the US, who are sophisticated drug and gun traffickers with substantial stateside narcotics experience.

Further evidence is the alarming rise in citizen gun purchases, the spread of private security agencies and high-tech alarm systems, and the proliferation of guard dogs, high-wire fencing, and grilled windows.

Few segments of island life have gone untouched. They include: growing addiction; active complicity by local police, customs, shipping officials, and airline workers; collusion among top law-enforcement and elected officials in at least 10 countries; and overflowing prisons and clogged courts due to drug-related offenders.

The economic impact is heavy. The value of drugs in transit dwarfs the gross domestic products and government budgets even of the larger islands. And it involves the steady payroll to various pilots, boat captains, baggage handlers, couriers, pushers, enforcers and public officials. Like an economic narcotic, this cash infusion sustains many local livelihoods and businesses.

In the long run, the large-scale scope of the traffic and associated money-laundering tarnish the investment climate, reduce the credibility of government through creeping corruption, and weaken respect for law and honest work among youths.

There must be more innovative efforts to reduce the demand for these drugs in the north. Joint US efforts with Caribbean and Latin American governments to reduce supply in the south should include eradication and crop substitution, enhanced airport and border security and surveillance, and relaxation of bank secrecy codes. The insular narco-economy otherwise will continue to flourish and threaten the future of tourism and offshore finance - the two pillars of many small island economies.

* Jerome L. McElroy is a professor of economics at Saint Mary's College, in Notre Dame, Ind. Klaus de Albuquerque, who taught at the College of Charleston, S.C., and collaborated on this article, passed away in December.

(c) Copyright 2000. The Christian Science Publishing Society

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