Feb 16, 2012

Drug Trade: Meth in Mexico--A Turning Point in the Drug War?

Mexican authorities announced Feb. 8 the largest seizure of methamphetamine in Mexican history -- and possibly the largest ever anywhere. Stratfor Global Intelligence provides a detailed analysis of the significance of the growth of meth manufacturing in Mexico.  Here is their conclusion:

Stratfor: "Historically, organized criminal groups have relied on control of a market for their source of wealth and power. But the current situation in Mexico, and the cocaine trade in general, prevents the Mexican groups (or anyone) from controlling the market outright. As long as geography and market forces keep the traffickers split, all sides in Mexico will try to use violence to get more control over territory and market access. We assume that Mexico's geography will not change dramatically any time soon, but market forces are much more temporal.

Mexican criminal organizations can overcome their weakness in the cocaine market by investing the money they have earned (billions of dollars, according to the most conservative estimates) into the control of other markets. Ultimately, cocaine is impossible for the Mexicans to control because the coca plant can only grow in sufficient quantity in the foothills of the Andes. It would be prohibitively expensive for the Mexicans to take over control of coca cultivation and cocaine production there. Mexican criminal organizations are increasing their presence in the heroin market, but while they can grow poppies in Mexico and produce black-tar heroin, Afghanistan still controls a dominant share of the white heroin market -- around 90 percent.

What Mexicans can control is the methamphetamine market. ... For the Mexican TCOs, industrializing and controlling the methamphetamine market offers a level of real control over a market that is not possible with cocaine. We expect fighting over the methamphetamine market to maintain violence at its current levels, but once a group comes out on top it will have far more resources to expel or absorb rival TCOs. This process may not sound ideal, but methamphetamine could pick the winner in the Mexican drug war." read more

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