Mohan Guruswamy
December 31, 2004

In terms of turnover, the illicit drugs trade could now be the world's single largest business. According to the Report of the International Narcotics Control Board this is now a US$500 billion business. Like in other commodities the USA is the worlds single greatest narcotics importing country spending over US$100 billion on doing drugs. Since the narcotics trade is mostly conducted in top dollar, this becomes a major contributing to keeping the dollar as king worldwide. The choice as the world's preferred currency is made more on the world's streets than in the world's central banks.

While cocaine is the preferred recreational drug of the western upper classes and the small imitative upper classes of the developing world, it is heroin that is truly the common man's narcotic the world over. The Bayer pharmaceutical company of Germany first manufactured heroin in 1879, and derived the word from the Greek word heros, meaning half god, half man. It was so named because those who took the drug suffered delusions of heroism. But whether it is cocaine or heroin or any of the new synthesized drugs like amphetamines, almost the entire conversion of the primary commodity whether it is coca leaves or opium poppy is located in some of the poorest and least governed countries of the world. Unfortunately little of the great wealth generated by this business flows down to the primary producers, for unlike most commodity businesses, the narcotics business has a very high value addition factor at every stage of the business and production is the earliest and easiest part of it. Even so drugs have become a major reason why countries like Burma, Afghanistan, Peru, Columbia and even Pakistan remain financially afloat.

The world's major cocaine production centers are all located in South America. Three quarters of the USA's total annual consumption of almost US$ 45 billion worth of cocaine comes from Columbia. According to Britain's National Crime Intelligence Service, the street retail price of a gram of cocaine in December 2001 was US$96 while that of heroin was a little over US$100. The good news or bad news depending on how you see this problem is that there has been a declining trend evident in street prices since 1990 when the equivalent prices of cocaine and heroin were almost 50% more than the present prices. This is only reflective of the greater availability made possible by superior and more efficient production and not due to any reduction in demand. The consumption is estimated to be growing at an unhealthy 12%.

As the single biggest consumer of narcotics the USA has a great vested interest in being the world's most proactive drug policeman. It has an active interdiction program in South America, which consists not only of military assistance but large dollops of cash to several Latin American governments. Its proactive measures include drumming out of office of political leaders involved in drug trafficking either directly or indirectly. While the seizure of Manuel Noreiga in Panama was well publicized, the US has gone to the extent of "certifying" that the President of Columbia in 1998, Ernesto Samper, was linked to the Cali cartel, one of that country's two top drug cartels. Out of the US$ 948 million the USA gave as assistance for International Narcotics Control, as much as US$762 million was earmarked for South America. In addition to this the Pentagon spends US$ 1 billion on military assistance. In all the US spends US$19 billion annually on narcotics control.

Evidently the USA's efforts are more skewed towards interdicting cocaine and controlling its production. There seems to be a reason for this. A survey of 800-COCAINE hotline callers reveals that the average caller was "a 31 year old, white, middle class male with some college education" and an annual salary well above the median. The most alarming trend was the increase in adolescent usage, especially among high school students. President George Bush's niece's, the daughter of Florida Governor Jeb Bush, has been having well publicized troubles with drug addiction.

Heroin on the other hand is the poor mans preferred drug. A study of heroin users by Stanford University's Professor John Kaplan reveals that 75% were male, 55% were black, 44% were Hispanic, 36% were less than 30 years, 61% had less than 11 years of education, and 81% were unemployed. This is quite clearly the underclass and the resultant lack of emphasis and urgency in the USA's international efforts clearly reflect the bias of the US Administrations.

There also seems to be another reason for this. Within the US the distribution of cocaine is the near exclusive domain of the Columbian gangs who are so violent and severe in their retribution that even the Italian mafia have kept out of it. The Italian mafia, the La Cosa Nostra, on the other hand still is largely in control of the traditional rackets and this includes heroin. The Italian mafia is relatively more affable and actively seeks good newspaper copy. They are also very well connected politically and are known to be still able to bring out the vote. Al Capone was known to exhort the Italian population to "vote early and vote again and again!" There is this widely written about incident when Franklin Roosevelt as Governor of New York called on Charles 'Lucky' Luciano then in Sing-Sing prison to collect a sizable campaign donation and vital pledge of support.

Though heroin, which is refined from opium, is also produced in South America (mainly Mexico), the bulk of the production has shifted to Asia. Today the two major production centers are the Golden Triangle and Golden Crescent. The Golden Triangle refers to the secluded opium poppy producing and heroin processing badlands of northern Burma, Thailand and Laos, while the Golden Crescent refers to the rugged borderlands of Pakistan and Afghanistan. With India sandwiched in between the two "golden" areas it is not surprising that many Indians are seeking some of that gold. It is a major disembarkation point.

This strategic location has also enabled it to become a major producer of acetic anhydride, which is central to the process of turning morphine base into pure heroin. Acetic anhydride also figures in the synthesis of N-acetylanthranilic acid and therefore of methaqualone. It is also used in the synthesis of 1-phenyl-2-propanone and therefore of methaampetamine and ampetamine. Over 80% of the acetic anhydride produced in India comes from Uttar Pradesh. While there are about a dozen companies producing it, Vam Organics in Gajraula linked with the owners of Hindustan Times and Ester India (Chemicals) in Ghaziabad said to be owned by Samajwadi Party leader Amar Singh are the big producers. The US DEA and the UN NCB explain in some detail how acetic anhydride is routed by a network of bogus distributors and manufacturers for illegal use in the manufacture of narcotics. It is well known that India's production of acetic anhydride far exceeds the requirement for legitimate use.

It takes more than ten tons of opium to process one ton of heroin. According to the UNDCP, in 1997 2.65 lakh hectares were under opium cultivation in Asia producing 4861 tons of opium. Last year Afghanistan alone produced 5600 tons of opium and with the US intent of capturing Osama bin Laden or killing him, the Karzai government can hardly afford to curb opium production lest it lose its critical warlord allies. Still the US and its Afghan puppet government try to make believe that they are making efforts to reduce the poppyisation of the Afghan economy. Every hectare of opium yields an Afghan grower about US$ 16000 as profits. On the other hand an Afghan farmer is now being offered US$1250 a hectare to destroy his crop. Afghans are better businessmen than that.

Afghanistan and Burma now account for 80% of illicit opium poppy cultivation and 90% of global production. According to the US government, Burma is responsible for 60% of the world's production of heroin, which is twice as much as what Afghanistan now produces. There is much irony in this, for the concentration of heroin production in these two areas is a direct consequence of the CIA's single-minded pursuit of "containing" communism.

Ever since the Arabs introduced opium to India in the initial years of the last millennium, the use of opium and its derivatives has driven economies and history with an intensity that proselytizers of religions and ideologies would envy. In the sixteenth century the Portuguese introduced it to indentured Chinese labor in Java. It then spread to China. The East India Company stole the business from the Portuguese and by 1838 Bengal was exporting 2400 tons annually to China. When China attempted to close the trade, the British waged the First Opium War (1839-41) to defend the principles of "free trade" and "diplomatic equality". China then tried to beat imports by allowing opium to be grown in Yunnan. It succeeded. But when the Communists came to power in 1949, production moved to Burma with the KMT generals driven out of southern China. In 1950 the CIA began regrouping the KMT forces in Shan State for a projected invasion of South China. This trade then expanded to include the generals in Thailand. Drugs, CIA supplied arms and the dense forests have spawned many insurgencies in Burma. Out of the 387 known terrorist and insurgent groups in the world Burma accounts for over 40.

While there was always some opium poppy production in Afghanistan and Northwestern Pakistan, its production got a major impetus in 1978 when the CIA arrived on the scene to foment a jihad to contain communism. President Jimmy Carter described the Soviet occupation of Afghanistan as "a deliberate effort by a powerful atheistic government to subjugate an independent Islamic people." His less sanctimonious National Security Advisor, Zbigniew Brzezinski was more honest when he wrote, "We now have a chance to give the Soviet Union its Vietnam." And they did. According to Alfred McCoy a leading researcher of the drug trade: "within two years of the CIA intervention in Afghanistan, the Pakistan-Afghanistan borderlands became the world's top heroin producer, supplying 60% of US demand." And also got Osama bin Laden in the blowback!

This heroin business now earns Pakistan over US$ 2 billion a year. Cheap heroin flooding Pakistan has resulted in the number of addicts zooming from near zero in 1979 to about 3 million now Inevitably heroin (smack) has made inroads in India and we had over 3 lakhs registered as addicts in 1998 and the number of addicts may even be twenty times that. The CIA's Charles Cogan who was a major player in the Afghan operation has this to say: "I don't think we need to apologize for this. Every situation has its fallout." That second part is true. And now rather than religion being the opiate of the masses, it seems it is the other way round!