Narcostates
Oct 2023 - Alex Alejandre

While the Nixon Tapes showed the war on drugs was engineered to get Nixon reelected, drugs were a serious and growing issue. But politicized medicine made something worse emerge: Organized crime fused with states. The golden triangle featured many groups (most interestingly Chinese nationalist forces). Latin America saw many Narco states emerge. Belize had a coup financed by drug lords. North Korea exports narcotics for profit. Much of Syria’s revenues come from narcotic sales (particularly fenethylline.) Myanmar. Belize. Guinea-Bissau. Venezuela. Mexico. The legitimate economies are quickly controlled by the same cartels.

In terms of political economy, these are not quite failed states. There is a system, an oligarchy with clear centers of power. The primary stakeholders in these nations, that is the wealthy owners of the most economically productive segments of the economy (narcotics) assert their influence to improve the regulatory environment, leveraging state power to enforce conflict resolution mechanisms, guarantee property protection to enable longer term capital investments, both in production and transportation, while allowing cottage industries of legal, tax etc. professionals who make fertile ground for new illicit enterprises to sprout up in, a classical self reinforcing loop. Specializing further in these industries, they face Dutch disease. Politics center around controlling these revenue streams, people forego other opportunities and specialize in this industry digging them deeper and deeper and reducing economic complexity.

For sanctioned regimes like Syria and North Korea, their preexisting professional class' already prepared and experienced at smuggling, avoiding the law, secretly moving money around. While more typical impoverished countries do not enjoy this advantage of knowledge in related areas, the lack of other opportunities makes the opportunity cost of diversifying into narcotics relatively low.

If China et al. represent a valid intellectual threat to Popper’s “Open Society” (recently: the liberal “rules based order”, though a term easy to criticize) as political Islam, communism etc. have at different points alongside simpler temptations like military juntas etc., narcostates offer another possible state.

Transnistria represents another emanation of the concept: the mafia state, like Russia, wherein the holders of power assert dominance over all economic activity stunting growth and innovation.

I ask: How can we defend our own nations and friendly states from this? How can police, courts etc. be fortified against this?

The only success story I know is of Romania defeating corruption. Where a decade ago Victor Ponta openly stated his party lost a presidential election because they bought fewer votes, the National Anticorruption Directorate effectively cleaned up the country to the extent that the EU made the Romanian DNA agents instate the same structures as an EU institution, with ex DNA head Laura Codruta Kovesi now the European Chief Prosecutor.

In Brazil, PCC runs PT (the Workers' Party), Lula and the country. 2/7 Supreme Court justices were PCC layers. PCC funds education for lawyers who become prosecutors and judges. Although Western media used it to attack BolsonaroAmazon deforestation is PCC gold mining. They even built Hamas tunnels in Gaza. And yet traditional industry flourishes both through both public and private companies (although PCC is more competitive for mathematicians than big finance.)

What’s the nature of US security funding to other nations like Colombia? How effective is it?


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