Peru and Bolivia both produce some refined cocaine for sale in international markets, but their main role in the international drug industry is as producers of coca leaf, the raw material used to make cocaine, and of coca paste, which is further processed, usually in Colombian labs, into finished cocaine hydrochloride. Until the late 1990s, when large-scale coca production began in Colombia, these two Andean nations were the world’s only significant producers of coca leaf used to make cocaine.[1] Total coca production has dropped precipitously in both countries over the last few years, mostly as a result of U.S.-funded eradication programs.[2]
- At the peak of coca production in the 1980s, Peru was reported to be earning some $600 million dollars a year from the illegal drug trade. “Coca dollars” were said to be equivalent to about 20% of the income from Peru’s diverse legal exports—probably about equal to the income from what was then its most important export, oil. Bolivia’s was thought to be generating about equal numbers of coca dollars, but these loomed much larger in Bolivia’s smaller and far less diversified economy: Through the 1980s and into the 1990s, coca was considered to be, without a doubt, Bolivia’s single most valuable product.[3]
- Several hundred thousand Peruvians, and a nearly equal number of Bolivians, were reported to be working as coca farmers during the boom. At least half a million more jobs were said to have been generated as coca dollars “trickled up” through the two economies.[4]
The recent coca “bust” has apparently reduced interest in such statistics, and comparable current numbers are unavailable. Local economies are certainly suffering, however, and this has had evident political repercussions: In Bolivia, the eradication program has fueled violent protests in the Chapare coca-growing zone—and the surprise second-place finish of a coca grower leader in the recent presidential election. In Peru, it has led to a continued Shining Path presence in the main coca growing zone, the Huallaga Valley, even though the guerrillas have all but disappeared almost everywhere else.
At the same time, coca production is reported to be slowly creeping up again in both countries, with much of this increase occurring in new areas. In Peru, farmers are experimenting with opium poppy production, reportedly under the tutelage of Colombian buyers. And, as drug controllers shut down old distribution routes, like the air route between Peru’s Huallaga Valley and the Colombian refining labs, traffickers have opened a plethora of new air, sea, and river routes along both countries’ borders, in the process turning Brazil and other neighboring countries into new transit countries.
Coca leaves—in their raw form—have been consumed in Peru and Bolivia for millenia; they are a mild stimulant, and the leaves have deep cultural and religious meaning for many Andeans. Coca production was a mainstay of many local Andean economies even before the arrival of the Spanish; coca continued to be a staple of the colonial economy. In the nineteenth century, the governments of newly independent Peru and Bolivia depended on the crop as a source of reliable tax revenues. Cocaine was not “invented” until 1859; it was not widely used in medicine until the 1880s. At the end of the century the Peruvian government successfully encouraged the development of an entirely legal Peruvian cocaine industry to supply the international pharmaceutical trade. In the early twentieth century, however, international drug controllers, led by the United States, began targeting Peruvian and Bolivian coca crops, and the Peruvian cocaine industry, for destruction, arguing that these were the source of the non-Andean world’s cocaine “problem.”
Despite continuing drug control efforts, by 1980 cocaine use was booming in the United States, and illegal industries had developed in both Peru and Bolivia to supply the demand. These were vertically integrated, with Peruvian and Bolivian nationals taking part in every stage from coca growing to refining to world distribution. In the 1980s, however, Colombian groups began to dominate the international distribution networks and they largely, if not entirely, replaced the Peruvians and Bolivians.
Already in 1980, a government official was describing Peru’s cocaine income as “as kind of spring which absorbed at least some of the worst effects” of the financial crisis then underway.[5] That same year, General Luis García Meza toppled Bolivia’s civilian government in what was referred to as the “Cocaine Coup,” and the following year a respected newsletter on Bolivian politics and economics declared that cocaine had become the most important business in the country, accounting for more foreign exchange than the rest of the economy combined.[6]
ABOUT THE AUTHOR
JoAnn Kawell is the editor of the NACLA Report
NOTES
1. With the exception of the Dutch colony of Java, which in the early twentieth century produced coca for the legal cocaine industry, these plantatiions were destroyed in World War II.
2. For the figures, see INCSR 2001
3 For discussion of these estimates and related figures, see JoAnn Kawell, “The Addict Economies,” NACLA Report , Vol. XXII, No.6, online at http://www.nacla.org/art_display.php?art=1373 On the current situation in Bolivia, Ben Kohl and Linda Farthing, “The Price of Success: Bolivia’s War Against Drugs and the Poor,” NACLA Report, Vol. XXXV, No. 1, July/August 2001 available online at http://www.nacla.org/art_display.php?art=456
4. The biblical roundness of such figures is certainly noteable, as is the fact that Mexican and Colombian observers have cited nearly identical numbers of jobs in their drug crop industries. But see Ethan Nadelmann, “Latinoamérica: economía política del comercio de cocaína,” Texto y Contexto, Bogotá, No.9, (September-December 1986) for an early discussion of how such numbers might be calculated.
5. “Who’s doing better with coke?” The Andean Report, April, 1980, p. 71.
6. Informacíon Política y Económica (IPE), No. 927, La Paz, November 30, 1981.
