Tons of money, Org. Crime victory, and a blow to Chavez

At the end of last week, Mexican authorities seized the largest cocaine shipment in the country’s history – 21.3 metric tons (23.5 tons) according to the Attorney General’s office. The cocaine has an estimated street value of USD 2.7 billion, based on calculations that use the US government’s average price of USD 118.70 for a gram of cocaine sold inside the United States. I’ve seen more conservative figures, closer to USD 1.4 billion, but with a little quick math it’s easy to see how much Mexican drug trafficking organizations stand to earn a year.

(picture from Mexico's office of the Attorney General)

If 21.3 metric tons of cocaine is worth USD 2.7 billion inside the United States, then the 290 metric tons the US Government Accountability Office (GAO) estimates as the annual flow of cocaine from Mexico to the United States would be worth near USD 35 billion.

Now compare those earnings to the USD 1.4 billion that the US government wants to spend to help Mexico combat drug trafficking organizations that at the end of October were brazen enough to try and import 21 metric tons of cocaine into Mexico. Something doesn’t add up.

While Mexican authorities were counting sacks of cocaine, Guatemalan authorities were counting votes. Left of center candidate Alvaro Colom won the presidential run-off election, defeating his opponent and former military intelligence office Otto Perez. Two facts emerged from these results: a relatively low number of Guatemalans voted in the run-off elections and by choosing Colom, those that voted indicated they do not support the mano dura or “iron fist” policies promoted by Perez.

In Honduras and El Salvador, these policies have lead to increased levels of violence. Cops arrest individuals with tattoos because they assume they’re pandilleros, or street gang members. The police crackdown creates a response from the pandilleros, who in turn convince cops that death squads are the best way to exterminate the street gangs. The net result is extrajudicial killings and bold, gang-style murders. Neither are pretty.

So Guatemalans chose to avoid that trap and go with a man who is more focused on economics and reform, but who many believe has made deals with organized crime. That’s bad news, especially in Guatemala. According to the GAO, some 70 percent of the cocaine that enters Mexico passes through Guatemala. But it gets worse. Reports say Colom has "vowed" to use the Guatemalan army to combat drug trafficking organizations. We'll see if he comes through on that promise.

Part of the USD 1.4 billion counter-narcotics package will go to Central America. But if US authorities think they’ll get real help from the Colom administration, they may run into some serious challenges. Time will tell.

Meanwhile, former Venezuelan Defense Minister and General Raul Baudel broke camp with long-time friend and Venezuelan president Hugo Chavez this week when he told the nation to vote against Chavez’s proposed constitutional reforms, passed by the National Assembly on 2 November.

Baudel is now on a nation-wide campaign to give Venezuelan’s an insider’s argument for why the nation should not hand over authoritarian control to Hugo Chavez, who, by the way, is quite upset. Apart from Baudel’s significant defection, Chavez must deal with thousands of students who for over a year now have continued to build an increasingly vocal segment of the opposition.

The students remain a thorn in Chavez’s side, but Buadel’s participation in the opposition could turn into something altogether more interesting and significant as we march closer to the 2 December nation-wide referendum to approve or reject Chavez’s reforms package. Approval would be tantamount to the last nail in the coffin for Venezuelan democracy. Rejection would be a major blow to Chavez’s political position. Again, time will tell…