the dynamics of illicit drugs production: future sources and threats

Crime, Law & Social Change 27: 121–138, 1997. 121c 1997 Kluwer Academic Publishers. Printed in the Netherlands.

The dynamics of illicit drugs production: Future sources andthreats�

SHONA MORRISONOffice of Strategic Crime Assessments, Commonwealth Government of Australia

Abstract. This paper examines the opportunities for illicit drugs production which arise outof the economic, political and social conditions of some countries. These drivers can helpus to understand the geographical pattern of global drugs sources and assist in the processof identifying those parts of the world in which new production opportunities are arising. Itwas found that there is not a homogenous set of risks which contributes to drugs production.Instead, the particular contexts which are conductive to drug production activities varies fordifferent drug types. This has influenced the different patterns of drugs production for highlyrefined, organic drugs, such as cocaine and heroin, compared to synthetic drugs. The nature ofdevelopments which could trigger new areas of drug production are discussed.

Introduction: the need for a strategic approach

In the tradition of United States’ drugs policy, many consumer countries haveattempted to deal with their domestic drugs problems by trying to cut offthe flow of illicit substances at the, usually foreign, source.1 Strategies toachieve this have varied from direct interference (military force), to coercion(aid reduction), to assistance provision (crop substitution). The main barrierto success of all of these strategies is their ineffectiveness in addressing theconditions that led to the establishment of those regions as drug producingareas in the first place.

Many published reports and books tell us where drugs come from but fewexplain why those countries or regions have become major sources of illicitdrugs. Do some parts of the world have characteristics which attract illicitdrugs production? Can we recognise the pre-conditions for successful drugsupply? The context in which drugs production is able to take place mustyield opportunities which facilitate this activity and its associated processes.By studying the economic, political and social contexts in which drugs pro-duction take place, we will be able to identify parts of the world in whichnew production opportunities are arising and which are, therefore, at risk of

� The views presented here are those of the author and not of the Office of Strategic CrimeAssessments or the Commonwealth Government of Australia.

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becoming the “narco-states” of the 21st century. Thus, information about thedynamics of illicit drug production will provide useful data to policy-makerswho have been charged with the difficult task of developing appropriate pre-ventive strategies dealing with potential illicit drug sources.

The specific requirements of crops generally for sunshine, rainfall, and soilnutrients influence the range of locations in which they can be grown, and,of course, less than ideal conditions lead to diminishing quality of the end-products and lower yields. Illicit drug crops also thrive in sunny, wet climates,however, few further requirements have been documented.2 The range oflocations for crop cultivation has spread, furthermore, due to advances inagricultural technology (this is discussed in greater detail later). Overall, thecultivation of organic drugs would be possible, geographically, in a muchbroader range of regions than those in which it actually takes place. Thebarriers to production are generally legal and political ones, thus, the focus ofthe following discussion is not upon the climatic drivers of drug production,but the context in which that activity takes place.

The following discussion identifies the forces which appear to underpindrug production for each of the four main drug groups, cannabis, heroin,cocaine and synthetic drugs. The findings are used to develop a model ofdrug sources and to assess the relative risk of potential drug producing loca-tions. Finally, developments which could encourage drug production in thosecountries are discussed.

Driving forces of illicit drug production

Cannabis

The industries supplying herbal cannabis and more refined products, suchas hashish and oil, have separate and distinct patterns of production. Theherbal cannabis industry appears to have flourished in spite of prohibition inalmost every social, political, and economic climate. Hashish and cannabisoil industries, on the other hand, are more highly concentrated in certain partsof the world.

Few factors limit the cultivation of cannabis plants, although the quality canvary considerably from place to place. Larger outdoor plantations may haveparticular requirements for sun, irrigation and isolation (to avoid detection),but smaller intense plantations are now being grown indoors with the assis-tance of hydroponic technology. These developments have made the cannabisbusiness a highly flexible industry with few requirements beyond the initialraw materials. However, the fact that the production of refined cannabis resinor oil is less common suggests a need for additional requirements.

THE DYNAMICS OF ILLICIT DRUGS PRODUCTION 123

Some locations, presumably, possess some advantages which have assistedthe producers of cannabis resin and oil to establish their industries. Whilegeographical conditions and crop strains are some of the elements required toproduce high quality cannabis, other factors can also assist these industries todevelop. In the Lebanon, political instability and lack of government controlover some areas has been recognised as an important element behind theproduction of illicit cannabis and other dugs.3 In Morocco, cannabis is grownin remote northern mountains and is the main source of income for arounda quarter of the population. Corruption is believed to be an important factorin the Moroccan industry’s success.4 Pakistan and Thailand also producecannabis resin. These two countries possess various conditions which have inthe past provided vast opportunities for drugs production and, in particular,heroin refining. These conditions are discussed below.

Heroin

Until quite recently, little commercial heroin production took place outsideSouth East and South West Asia.5 Now, in addition to an increase in productionin these regions, new sources have emerged. This section identifies the factorswhich have traditionally corresponded with opium production and examineswhether the same conditions exist in new production areas.

In Burma, illicit opium cultivation and heroin refining is associated withthe independence movements of a number of ethnic minority groups whichdepend upon the lucrative drug trade to fund armed campaigns against thecountry’s military government, the State Law and Order Restoration Council(SLORC). Economic insecurity is the principal motivation for large scaleopium cultivation by the peoples living in areas controlled by the insurgentmovements, which are located mainly in the north of the country.

Significant quantities of opium poppies were not cultivated in Afghanistanbefore the war with Russia.6 The ensuing chaos after Russian withdrawal ledto a rapid rise in poppy cultivation, motivated by the country’s economic crisisand also, possibly, by the return of unemployed refugees to the region.7 As acash crop, poppies are exceptional value, providing seven times the economicreturn of wheat grown in the same area. There have also been reports of localrebel commanders lending their support to the poppy industry.8

Refining of Afghan raw opium into heroin along the Pakistan border devel-oped for a number of reasons: Pakistan is close to Indian sources of thenecessary precursor chemicals; tribal areas on the border have not been wellcontrolled by the central Pakistan Government (although this situation appearsto be changing, which is starting to push refining activities further north); andalternative locations have been disrupted (e.g. stricter narcotics law enforce-

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ment arose in Iran after the Khomeini revolution, and Afghanistan is unsafedue to the on-going war there.)9

The Central Asian Republics are playing an increasing role in the heroinindustry, in terms of both poppy cultivation and heroin refining. Since theend of the Cold War and the break-up of the Soviet Union, deterioratingeconomic conditions, weak law enforcement, and political conflict has led toan increase in opium poppy cultivation.10 “The possibility that the region’seconomies could come to depend largely on the production and export of nar-cotic substances seems a very real prospect.”11 The Central Asian Republicsmay also become a major refining region for Afghan heroin due, in part, tothe strengthening of drug legislation in tribal areas of Pakistan where refininghas traditionally taken place (as mentioned above).12

Fragile domestic political relations and rural poverty are also at the heart ofChina’s expanding opium poppy industry. In the past decade, China’s sporadicopium poppy cultivation has spread and crops have now been reported in 17of the country’s 30 provinces.13 Like other parts of Asia, these developmentsseem to have emerged in response to economic imperatives. In addition,China’s government in Beijing generally prefers not to provoke confrontationwith the ethnic minorities that inhabit the vast but strategically significantregions along the periphery of the country.14

The quantity of South American heroin seized in the United States hasalmost doubled every year since 1993 and it now accounts for 62 per centof the net weight of heroin profiled by the US Drug Enforcement Agency.15

This phenomenal increase has been described as a shrewd marketing decisionby Colombian drug traffickers who have capitalised upon the greater profitsderived from heroin trafficking. The knowledge and experience gained fromtwo decades of cocaine trafficking has undoubtedly assisted the traffickers incapturing so quickly such a large share of the heroin market in the UnitedStates. However, the extent to which these advantages will allow Colombiantraffickers to capture a significant share of other overseas markets is unclear.

Cocaine

The jungles of Peru, where most of the world’s coca crops are grown, arealso characterised by insurgency. As the US market for cocaine began toexpand in the late 1970s, entrepreneurial Colombian traffickers began tocommission Peruvian farmers to produce a surplus from their traditional cocacrops.16 Since around the mid-1980s, however, it has often been claimed thatthe insurgent movement, Sendero Luminoso (Shining Path), has controlledPeru’s main coca growing region, although, the exact nature of the relationshipbetween Sendero and the cocaine industry is still not clear.17 On balance, it isprobable that an unholy alliance exists between Sendero and the traffickers.


In attempting to be seen as the de facto government of the region, Senderomust look after the interests of the farmers, and it is in the economic interestsof the farmers to sell coca to Colombian drug groups.

Synthetic drugs

The demand for illicit synthetic substances (e.g. amphetamine, methylam-phetamine, ‘ecstacy’)18 is now second only to cannabis in most parts ofthe world, including Europe, Australia and parts of Asia. Correspondingly,increases in the rates of production of these drugs have surpassed the growthrates for heroin and cocaine production.19 A number of factors must haveassisted the phenomenal spread of synthetic drugs production.

Production may have spread, in part, because of ambiguous legislation.Even today, legislation covering synthetic substances is reactive, involvingconstant up-dating of the list of banned substances in response to the discoveryof new products by law enforcement.20 Also, a number of conditions havereduced the entry barriers for synthetic drugs production which will havefacilitated the industry’s spread to new locations. New technology and thespread of chemical industries have simplified the manufacture of syntheticsubstances, eased their chemical modification and increased access to a varietyof starting materials. Also, of course, the production of synthetic substancesis not dependent upon geographical or climatic conditions. Yields also tendto be higher for synthetics than for drugs of natural origin, so, even themanufacture of small quantities of synthetics can be a lucrative business.21

And, although these processes produce a wide variety of end-products, fromthe perspectives of the users, they are highly interchangeable.22

Despite the spread of sources of these drugs, it is important to note thatsupply is not always provided by a local source. Indeed, some countriesimport most of the synthetic drugs consumed there (e.g. South Korea) andmost countries import at least some amphetamines or amphetamine analogues(e.g. many countries in Europe import synthetic drugs which have been man-ufactured in the Netherlands). This suggests that, although the industry isquite diffuse, some areas must be more suited to synthetic drugs productionthan others. What conditions may attract production to some areas?

Licit pharmaceutical industries located in developed countries initially sup-plied the market for these drugs. By setting up alongside the licit industry,producers of synthetic drugs lowered their production costs through easyaccess to knowledge, equipment and chemicals (before the introduction ofstricter controls) and had a ready-made market for the drugs. Similarly, coun-tries with large chemical manufacturing industries today may manifest greaterconcentrations of illicit synthetic production. This may help to explain thepattern of increasing synthetic drugs production in many of the newly indus-

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trialising countries in the Asia-Pacific region and in Central Asia.23 In thelatter, it is believed that even university research institutes and governmentfactory facilities have become involved in illicit synthetic drugs manufacturesince the collapse of the old industrial order.24

A model of illicit drug sources

Sources of illicit drugs evolve in response to a changing array of global andlocal pressures and incentives. Factors such as economic insecurity and thecomparatively large financial gains made possible by the illegality of drugshave contributed to a changing landscape of drug producing regions.

To assist in the task of identifying which parts of the world may be at risk ofbecoming the “narco-states” of the 21st century, a framework grounded in thedriving forces of illicit drugs production is required. This framework shoulddifferentiate between different drug industries and the pattern of drug sourceswhich is evident for each type. It should also provide a set of measurablecriteria against which to compare different countries and to determine theirlevels of risk or vulnerability to developing into major drug sources. A “majordrug source” may be defined as one that consistently contributes significantquantities of illicit drugs to regional and international narcotics trade.25

Drug sources exist along a dimension from “concentrated” to “diffuse”.Those that are “concentrated” generate the bulk of global drug supplies froma small number of sources (which are often, but not always, geographical-ly co-located). Latin America’s cocaine industry is one example. “Diffuse”industries are characterised by a wide range of sources which supply mainlylocal or regional markets. Cannabis cultivation, for instance, is highly dis-persed and cannabis is grown in almost every country of the world. Thedifferent characteristics associated with concentrated and diffuse drug indus-tries create different types of problems for law enforcement which requiredifferent sorts of solutions. Figure 1 shows the characteristics of “concentrat-ed” and “diffuse” drug industries and locates each of the main illicit drugsalong this continuum.

The model of illicit drug sources provided in Figure 1 shows that certaincontextual conditions may give rise to vulnerability to illicit drugs production.Some areas attract organic drug industries (with the exception of herbalcannabis which is discussed separately below), due to the dynamics createdby rural economic insecurity and the disruption caused by active insurgentmovements or corruption. Under these circumstances, law enforcement isweakened or non-existent leaving whole regions open to the cultivation ofillicit crops by farmers motivated by poverty or coerced by “narco-insurgents”.For the farmers, these crops provide a higher income than other agricultural


Cocaine

Hashish and oilHeroin

SyntheticsCannabis

• weak law enforcement caused by eithercorruption or insurgency (either of whichmay help make drug issues a low nationalpriority)

• economic insecurity, especially in ruralareas

• isolated rural areas.

• accessible raw materials (contributingto low overhead costs and high yields)

• economic insecurity• end-products perceived to be ‘safe’

(contributing to high level of demand)• few specialist skills required• non-labour intensive

CONCENTRATEDSOURCES

DIFFUSESOURCES

Figure 1. The characteristics of concentrated and diffuse sources.

commodities and the drug itself is sometimes used for traditional therapeuticor religious purposes. For the insurgent groups who buy the crops from thefarmers or extract tax from the trafficking groups who do so, a lucrativesource of funding arises to further their campaigns. And, by looking afterthe financial interests of the local people, insurgent groups may be rewardedwith a degree of loyalty, thus furthering their principal goal of increasinglegitimacy. So, relationships between the insurgents, the traffickers and thelocal people are mutually beneficial. Rural isolation assists these dynamicsby reducing opportunities for surveillance and intervention.

The dynamics of cannabis and synthetic drugs production are determinednot so much by the political economy of the environment in which they exist,but by the nature of the manufacturing processes and the products themselves.This has prompted industries of a more flexible and diffuse nature to evolve.

Relatively simple means of production and strong demand combine tomake these industries more or less dependent upon the availability of willingsuppliers and raw materials. There is clearly no shortage of the former, partic-ularly in economically depressed areas. In addition, the precursors requiredfor cannabis cultivation (mainly seeds, light and water) can, it seems, beobtained without too much difficulty. The portability of cannabis seeds may

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have contributed to the range of countries in which that drug is grown (i.e.practically every country in the world).

On the other hand, the precursor chemicals required for the manufacture ofsignificant quantities of synthetic drugs should be less accessible now thanthey were before developed countries, and many newly industrialising nations,began strengthening legislation concerning the regulation of these chemicals.Yet, illicit synthetic substances continue to flood international drugs marketsfrom countries as diverse as North America, the Netherlands, Mexico, andmore recently from parts of Eastern Europe, the Central Asian Republicsand East Asia. It has been suggested that the introduction of a clandestinesynthetic drugs industry may have benefited from proximity to legitimatechemical industries. Precursor legislation, while it has made chemicals lessaccessible overall, will not have reduced this competitive advantage: apartfrom the reduction in costs (and risks) to drug producers with local access tochemicals, there are clearly benefits to be gained (and risks to be avoided)by the recipients in major consuming countries who choose to import thefinished products rather than the more bulky, unrefined precursor chemicals.

The model of the characteristics of drug sources (Figure 1) will assist usin the task of identifying potential new sources of illicit drugs, which is thepurpose of the analysis described in the next two sections. This informationmay subsequently be put to use as part of a narcotics early warning system ofemerging problems in those regions. Examples of the sorts of developmentswhich could trigger new drugs production are discussed in the followingsection.

Method

A country-by-country analysis of the factors which were identified by themodel of drug sources was conducted to determine; i) which countries areat risk of becoming major sources of refined organic drugs (such as heroinor cocaine), and ii) which countries could develop significant synthetic drugindustries. The analysis does not address the ‘potential’ sources for cannabisbecause so few countries remain untouched by this industry already.

The criteria used in the analysis are contained in Figure 2 and data sourcesare provided below.� Corruption. The Internet Corruption Ranking 1996, using a ten-point

scale, assesses the level of government corruption in countries throughoutthe world.26 For the current study, these scores were divided into “low”,“medium” and “high” categories.

� Armed conflict/insurgency. Jongman (1995) described world conflictsranging from serious disputes, through low intensity conflict to war.27


These ratings were placed on a four-point scale with a range from “nodispute”, “low” (serious dispute), “medium” (low intensity conflict) and“high” (war) conflict.

� As an indicator of rural economic insecurity, data on each country’sdependence on agricultural employment were used. The World Fact-book 1995, published by the USA’s Central Intelligence Agency, was thesource of these data.28 A “low” rating has been allocated when less that30 per cent of the population is employed in agriculture; when between 31and 50 per cent of the population is employed in agriculture, a “medium”rating has been applied, and; over 51 per cent led to a “high” rating.

� No clear criteria exist with which to measure whether a country hassufficient isolated rural areas in which to cultivate illicit crops. This isbecause extremely large areas are not necessary for the cultivation ofsignificant quantities of organic drugs. The Lebanon, for example, issmaller than Belgium yet is a significant producer of cannabis. Thus,even quite small countries such as Burundi and Haiti are presumed to beof sufficient geographical size to support significant drug cultivation. Inthe end, just seven countries were judged to lack sufficient rural territory;these are Singapore, Hong Kong, Macau, Jordan, Israel, Guinea andTogo.

� To measure the economic security of each country, data were collectedon levels of unemployment and on aid status (i.e. whether countriesreceive financial assistance from overseas governments). Both sets ofdata were obtained from the CIA World Factbook 1995. Unemploymentlevels have been rated “low” (if less than 10 per cent of the working-age population are not in employment) or ‘high’ (if unemployment,or underemployment, levels are 10 per cent or above). Countries havealso been divided into those which do, and those which do not, receiveoverseas aid.

� The CIA World Factbook 1995 also provides information on the nature ofthe industries that exist in each country. This allowed data to be collectedon the global locations of chemical industries.29

It has already been established that the production of synthetic drugs requireslittle in the way of specialist skills or labour, it is not dependent upon climate,and global demand for these drugs continues to grow. As these factors arenon-variable from country to country, there was no need to include them inthe analysis.

As a test of the observed validity of the methodology, known drug produc-ing countries (e.g. Afghanistan, Peru, Burma) were included in the analysis.It was found that, with very few exceptions, existing illicit drug producerswere identified as ‘potential’ sources. A few countries in which significant

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Potential New Producers(organic drugs)

Potential New Producers(synthetic drugs)

EssentialCriteria(must haveall)

• Armed conflict/insurgency = medium to highAND/OR weak government/corruption =medium to high

• Dependence on agricultural commodities =medium to high

• Isolated rural regions = yes

• Chemical industries = yes

SecondaryCriteria(must have one)

• Unemployment = high• aid recipient = yes

• unemployment = high• aid recipient = yes

Figure 2. Criteria used to select countries at risk of becoming significant new drug sources.

illicit production of synthetic drugs takes place (e.g. the United States, theNetherlands, and the United Kingdom) were not identified by the analysissuggesting that the test for potential sources of synthetic drugs is less validthan that for organic drug sources. The results may have been improved ifa comparable measure of the strength/weakness of each country’s precursorlegislation had been included. Research on the relative capacities of differentprecursor legislation would be required to develop such a variable. Compar-ative research on the legislative options for precursor regulation would alsoinform government and law enforcement policy regarding preventive drugstrategies.

Construct validity is the extent to which the measurement strategy is theo-retically sound and/or logical, and derived categories, conclusions and inter-pretations are congruent with previous theories or findings. Unfortunately,there has been little prior research or theory to guide the design of the datacollection for this study. However, discussion of the methodology and resultswith peers has led to the conclusion that there is a reasonable degree ofconsensus with the methodology and findings. It should also be noted thatthe purpose of this analysis was not to predict which countries will becomesignificant future sources of illicit drugs, but to identify those with prevailingconditions that render them at risk of developing these problems. Thus, anumber of false positives might be expected.

Results

Table 1 lists those regions at risk of becoming significant sources of organicdrugs, while Table 2 shows potential synthetic drug sources.

Countries identified in the analysis, which are already known to producesignificant quantities of organic drugs, have been excluded from Table 1.This includes Burma, Thailand, Iran, Afghanistan, India, Pakistan, Turkey,


Table 1. Regions at risk of becoming sources of highly-refined organic drugs.

Asia and Pacific Africa and Middle East The Americas Europe &

Central Asia

� E Asia (China, Cambodia, � South Africa � Central America � Greece

Vietnam, Indonesia, � Middle East (Ecuador,

Philippines, PNG) (Yemen, Iraq) El Salvador,

� Indian Sub-Continent � Egypt Guatemala,

(Bangladesh, Sri Lanka) � West Coast (Ghana, Nicaragua, Haiti)

� Central Asia Liberia, Cameroon, � Brazil

(Uzbekistan, Tajikistan) Congo, Nigeria,

Angola, Sierra Leone)

� Central Africa

(Chad, Sudan, Ethiopia,

Kenya, Uganda, Zaire,

Rwanda, Burundi, Mali)

Table 2. Regions at risk of becoming sources of synthetic drugs.

Asia and Pacific Africa and Middle East The Americas Europe

� E Asia � South Africa � Central America � Eastern Europe

(China, Vietnam, � Middle East El Salvador, Guatemala (Bulgaria, Poland

Burma Taiwan (Iraq, Israel, Lebanon) Nicaragua, Mexico) Hungary)

S Korea, Indonesia � North and Central Africa � S America (Venezuela � Western Europe

Philippines) (Egypt, Nigeria Argentina, Ecuador (Denmark, Croatia

� Indian Sub-Continent Niger, Zambia Colombia, Brazil) France, Belgium,

(Bangladesh, India) Zimbabwe, Ethiopia Finland, Spain

� Central Asia Mozambique) Greece, Ireland

(Tajikistan, Azerbaijan Italy, Portugal)

Kazakhstan, Kyrgystan,

Georgia, Russia)

Peru, Bolivia and Colombia. No countries have been excluded from Table 2because the synthetic drugs industry is less firmly established than thosesupplying organic substances and the nature of the industry provides greateropportunities for mobility.

It can be seen from Table 1 that clusters of neighbouring countries displayconditions which could render significant illicit drug cultivation feasible.Africa in particular has many nations with the appropriate conditions for drugcultivation, yet, other than the cultivation of cannabis, this continent is notknown for supplying organic drugs.30 There may be a number of reasons forthis, not least of which may be unsuitable growing conditions. However, it is

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possible to hypothesise ways in which this situation may change and this willbe discussed below.

Table 2 shows that few parts of the world are immune to potential syntheticdrugs production. The countries most worthy of note are those which wereselected by both analyses and have the potential, therefore, to become involvedin the production of both organic and synthetic drugs. Some of these regionsmay be already skilled in drug refining, thus, are better placed to diversifyinto new drug types. For instance, the competitive advantages gained throughlarge-scale distribution of cocaine and heroin may assist some countries (suchas Colombia and Burma, for example) to diversify into the synthetic drugsindustry. Brazil also warrants careful monitoring. Like Colombia, it producesall of the raw materials necessary to become self-sufficient in both organicand synthetic drugs production, and it is strategically positioned next to allthree major Latin American players in the cocaine industry.31

The potential for Central and South America to play a future role in thechemical synthesis of illicit drugs is worthy of attention because apart fromMexico, none of the South American countries have so far been recognised asmajor suppliers of synthetic drugs. If this scenario developed, the implicationswould be especially significant for the North American market for illicit drugs.

In Australia, overseas supplies have not so far been found to make a sig-nificant contribution to the domestic market for synthetic drugs. However, itis possible that this situation could change because evidence is accumulatingof diversification into synthetic drugs by established Golden Triangle heroinproducers.32

Since the Golden Triangle (i.e. Burma, Thailand and Laos) already suppliesthe bulk of heroin consumed in the Eastern hemisphere, the infrastructure andnetworks required to penetrate Asian and Australian drugs markets is alreadyin place which would lower production and transaction costs considerably.For Australia, this scenario is especially likely if purity levels of ‘home-produced’ drugs remains low and precursor chemicals become increasinglydifficult to obtain.33

Significant threats

The analysis reported above should assist policy makers and law enforcementagencies to identify regions at risk of becoming major future suppliers to theinternational trade in illicit drugs. Yet, the countries discussed must currentlypossess some barriers to entry as significant illicit drug production does not(yet) take place in most of the areas listed in Tables 1 and 2. By identifyingwhat the barriers might be, and then monitoring them, the international lawenforcement community would receive early warning of changes in the status


of ‘at risk’ countries. The purpose of this section is to provide a brief outlineof some developments that could trigger drug production in some parts of theworld. However, further research would be required to detail the mechanismsthrough which this would occur and to develop indicators that would informthe early warning system.

Economic transition

Some of the countries identified as potential producers of organic drugs arestill considered to be extremely economically underdeveloped (e.g. countriesin Africa and the Indian Sub-Continent). The conditions that have preventeddevelopment in these regions are still the subject of debate. However, it maybe that the characteristics which have prevented them from participating inthe legitimate economy have deterred their entry into the black economy aswell.34 Thus economic development in these regions may generate unintendedconsequences which could lead to these countries entering into illicit drugsproduction.

Insufficient supply

New drugs sources could develop in response to drug supply shortagesAlthough it is not clear to what extent illicit drug supply is stimulated bymarket forces, increased levels of demand could instigate this pattern. Supplyshortages could occur as a result of other forces also, such as pressures createdby law enforcement in traditional producing areas. If resolution of the polit-ical turmoil in Burma, Afghanistan or Colombia was achieved, for instance(and if this led to more effective drugs law enforcement), it is feasible thatdrug producers may look to establish new growing regions in other parts ofSouth East Asia, in the Central Asian Republics (which are already gaininga reputation for their role in the drugs trade), or in other countries in SouthAmerica.

Technological development

As applies in the case of licit industries, the spread of illicit drugs productionto new regions is assisted by the transfer of expertise and the development ofnew technology which makes the process easier, cheaper and more suited tolocal conditions. Illicit drug production has become more flexible due to theinvention of more efficient farming technology (e.g. irrigation) and growingmethods (e.g. hothouse cultivation and hydroponics), the development of newcrop strains (providing higher yield, resistance to pestilence, etc.), fast andaccessible means of knowledge transfer (e.g. the Internet) and the industri-alising of whole continents. The technological developments may not bring

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opium and coca cultivation into our urban neighbourhoods (as we have seenwith the advent of hydroponic cultivation of cannabis), but they could makeproduction more efficient and more attractive to a wider variety of people inmore regions of the world.

Synthetic drug sources could also become less concentrated due to sim-pler manufacturing processes and by increasing acceptance of the substancesthemselves. Although the factors that determine popular acceptance or rejec-tion are complex and largely undetermined, the simplification of chemicalrefining techniques is a reality that could re-shape production of illicit (andlicit) drugs in the future.

Continued development in all these spheres will reduce entry barriers andincrease the attraction of the illicit drugs industry.

Product diversification by existing suppliers

Trends such as economic development, changing law enforcement pressures,technological development and improved communications systems, not onlyattract new suppliers of illicit drugs, but may also increase ease of diversi-fication by existing suppliers. Existing suppliers could have a competitiveadvantage when diversifying into new product ranges which is created bytheir access to refining equipment, to established sources of precursor chem-icals and to existing lines of distribution. They may also have transferablerefining skills.

It is also possible that illicit suppliers of other types of commodities (besidesdrugs) could diversify into drugs production. In Cambodia, for instance, theKhmer Rouge have depended upon funds from illicit logging and gem miningto fund their war against the Cambodian Government. Recently, however, alarge section of the Khmer Rouge’s soldiers defected and are negotiatingcease fire agreements with the government. The breakaway armies controlmost of the logging and mining grounds in Cambodia’s North West,35 andwithout access to this lucrative territory, the Khmer Rouge will lose cross-border timber sales worth over $10 million per month.36 Loss of this revenuemay provide a strong incentive to the remaining Cambodian insurgents tobegin trade in other types of illicit products.

Conclusion

Whether source country policies will be an effective mechanism throughwhich to minimise the harms associated with the supply of illicit drugs willdepend upon their success in reducing the motivations and opportunities


which perpetuate drugs production. The purpose of this analysis was to iden-tify countries showing adverse symptoms of economic and political changes(opportunities and motivations) which may increase their risk of developinginto significant drug producers in the future. Some current global develop-ments were discussed which may provide the impetus for, or remove barriersto, drug production. By monitoring these developments, governments and theinternational law enforcement community would receive early warning ofpotential threats constituted by changes in the status of “at risk” countries.

The need for fore-warning of changing patterns of drugs production is evi-dent from the recent rapid increase in heroin production in Colombia and therate at which South American traffickers were able to capture such a largeshare of the United States’ heroin market (at least, according to drug seizuresfigures). With the advantage of hindsight, this should not have been an entire-ly unexpected scenario: the falling popularity of crack cocaine and reportedsaturation of the American and European markets for cocaine hydrochloride,coupled with the persistence of Latin American drug organisations (eventhough individuals have been arrested, the organisations seem to have per-sisted) and enduring networks throughout North America, made it possible,at best, or probable, at worst, that diversification would occur. Moreover, theColombians’ vast experience in the drugs trade and the fact that wholesaleheroin sales provide greater returns than cocaine would have made heroinproduction an attractive option. The main barrier to entering the heroin tradefor Colombian drug suppliers might have been lack of skills in the cultivationof opium poppies and production of heroin. However, the speed with whichthey managed to overcome this problem suggests that obtaining the knowl-edge and relevant skills for the production of good quality drugs may bemuch easier than analysts of the trade generally believe. This has significantimplications with regards to the potential for further diversification.

While the threat of a South American source for heroin has already becomea reality in North America, it is still worth considering what the potentialimplications of this trend are for other parts of the world. For instance, willEuropean or even Asian law enforcement agencies begin to make significantseizures of South American heroin? In Europe, where the heroin market issupplied mainly by drugs sourced from Afghanistan, this scenario is certainlypossible. Latin American drug supply networks already exist throughoutEurope due to the cocaine market there. If the European cocaine market reallyis saturated, heroin supply may become a viable option for those traffickersand distributors. Furthermore, opportunities to enter the heroin market couldincrease if the political situation in Afghanistan stabilises and internationalpressure mounts for the Taliban to abide by their promises to rid that countryof its illicit poppy crops.

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In the Eastern Hemisphere, the bulk of heroin consumed is supplied byChinese organised crime groups and this situation is not likely to change inthe short term. Unlike Europe, Asia and Australasia does not have a strongmarket for cocaine and the competitive advantage held by the Chinese in theheroin market would be hard to overcome. Of course, the market for heroinin the newly industrialising countries of Asia is expanding rapidly and China,with its enormous population, has the potential to become the largest heroinmarket in the world. Thus, in the longer term (10 to 20 years), it is uncertainwhether the Golden Triangle, South East Asia’s main poppy growing region,could support Asia’s future heroin market, or whether the Chinese will retaintheir traditional advantage in the vastly competitive market which is likely tobe created in the East. How the scenario develops will depend upon a numberof factors, including the rate of growth of Asia’s heroin market, the rate atwhich poppy production can increase in the Golden Triangle and surroundingregions and, of course, political and economic dynamics which are conduciveto the continuation and expansion of Latin America’s heroin industry.

Another point to ponder is the success and future potential of the synthet-ic drugs industry, a relative newcomer on the global stage for illicit drugs.This market has revolutionised the global drugs trade. The substitution poten-tial of the substances and the nature of the manufacturing processes provideenormous scope for diversification and expansion. Simple manufacture ofamphetamine analogues make it possible for suppliers to elude drugs legis-lation and to adapt to user preferences. These characteristics have created anillicit industry which is highly flexible and, possibly, with fewer of the risksassociated with organic drugs production.

Regulation of the precursor chemicals which are used in the production ofillicit synthetic drugs has become an important preventive strategy in mostcountries’ drug policies. However, the strength of the legislation varies fromcountry to country and, as this analysis suggests, drugs production is likely tobe attracted to those areas where controls are (perceived to be) weakest. Theglobal legislative context for precursor chemicals requires further analysisto spotlight those regions which are at risk of becoming major suppliers ofsynthetic drugs. This information could be used to inform policy. While itis not easy to develop proactive strategies which would prevent the furtherspread of illicit drugs production, it may be argued that it is even harder toaddress this situation once it has emerged. To be effective, source countrypolicies which operate at the level of motivation and opportunity reductionare required.


Notes

1. Mark L. Moore, ‘Limiting supplies of drugs to illicit markets’, Journal of Drug Issues,1979 (9:3), 291–308; M. Falco, "US drug policy: addicted to failure", Foreign Policy, 1996(102), 120–133.

2. Coca, from which cocaine is manufactured, does thrive in clay soils while opium poppies,the source of heroin, benefits from soil with a high lime content.

3. (Washington D.C: US Department of State, 1996); Interpol, Weekly Intelligence Message,1995 (26/95).

4. "Morocco’s drugs", Foreign Report, 1996 (16/96).5. Alfred W. McCoy, Drug Traffic: Narcotics and Organized Crime in Australia, (New South

Wales: Harper & Row, 1980).6. Interpol, op cit.7. Interpol, ibid.8. Sankar Sen, "Heroin trafficking in the Golden Crescent", The Police Journal, 1992 (July),

251–256.9. Sen, ibid., p 25.

10. Rensselaer W. Lee III, "Drugs in Communist and former Communist states", TransnationalOrganized Crime, 1995 (1:2), 193–205.

11. Lee, ibid., p 200.12. Interpol, 1995, op cit.13. Lee, op cit., p 193.14. Lee, ibid., p 197.15. US Drug Enforcement Agency (DEA), “Colombian heroin a major threat”, DEA Press

Release, 1995 (21 June); DEA, “The 1995 heroin signature program”, Intelligence Bulletin,1996 (August).

16. J.T. Fishel, “Coca, cocaine, sicarios and senderistas” in G.H. Turbiville (ed) Global Dimen-sions of High Intensity Crime and Low Intensity Conflict (Chicago: Office of InternationalCriminal Justice; University of Illinios, 1995), 184–203.

17. Fishel, ibid., pp 194–195.18. Ecstacy is the common name for 3,4-Methlenedioxymethamphetamine (MDMA).19. United Nations Commission on Narcotic Drugs, Stimulants and the use of their precursors

in the illicit manufacture of and trafficking in drugs, (Vienna: Report of the Secretariat,Commission on Narcotic Drugs, thirty-ninth session, 1996).

20. UN Commission on Narcotic Drugs, op cit., p 6.21. UN Commission on Narcotic Drugs, op cit., p 15.22. UN Commission on Narcotic Drugs, op cit., p 19.23. Precursor legislation is also less well developed in these areas than in Western societies

where, until recently, most of the demand for synthetic drugs was located.24. Lee, op cit., p 201.25. The International Narcotics Control Strategy Report, 1996, p 27, states that ‘a major illicit

drug producing country is one in which: (a) 1,000 hectares or more of illicit opium poppyare cultivated or harvested during a year; (b) 1,000 hectares or more or illicit coca arecultivated or harvested during a year; or (c) 5,000 hectares or more of illicit cannabis arecultivated or harvested during a year’.

26. Transparency International and Gottingen University, Internet Corruption Ranking 1996(World Wide Web, 1996).

27. A.J. Jongman, “Contemporary conflicts: a global survey of high and lower intensityconflicts and serious disputes”, PIOOM Newsletter, 1995 (7:1), 14–21.

28. Central Intelligence Agency (CIA), World Factbook (World Wide Web, 1995).29. CIA, ibid.30. S. Baynham, “Africa: drugs set to become Africa’s new invaders”, Jane’s Intelligence

Review, (World Wide Web: Jane’s Information Group Ltd, 1996, 9/96),.

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31. Maria Velez de Berliner & Kristin Lado, “Brazil: the emerging drug superpower”, Transna-tional Organized Crime, 1995 (1:2), 239–260.

32. Interpol, 1996, Weekly Intelligence Message, 1996 (27/96); Bertil Linter, “The noosetightens”, Far Eastern Economic Review, 1995 (19 October).

33. Purity levels for retail sale drugs remain low in Australia at between 3 and 5 percent(Australian Bureau of Criminal Intelligence (ABCI), 1996, Australian Illicit Drug Report,(Canberra: ABCI, 1996). Effective precursor legislation may be the cause of this situation.

34. For an assessment of some of the conditions that have prevented Africa from obtainingsuccessful economic growth, see W. Easterly & R. Levine, Africa’s Growth Tragedy: ARetrospective, 1960–89, Policy Research Working Paper no 1503, (Washington D.C: TheWorld Bank, Policy Research Department, 1995).

35. “Cambodia: Khmer Rouge rebels pose dilemma”, The Guardian, 1996 (2 September).36. “Cambodia’s wood-fired war”, The Economist, 1995 (17 June).

the dynamics of illicit drugs production: future sources and threats

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