Economy & Trade, Headlines, Latin America & the Caribbean, North America

DRUGS-PERU: U.S. Aid in Free Fall as Cocaine Production Soars

Milagros Salazar

LIMA, Feb 23 2007 (IPS) - U.S. anti-drug aid to Peru has dropped sharply since 2004, in spite of the surge in cocaine production. Next year it will reach its lowest point yet, unless negotiations in Washington to prevent a further cutting of aid are successful.

The Alan García administration in Lima has complained about the hard blow represented by this reduction in U.S. aid, which in recent years has accounted for between 80 and 90 percent of the international anti-drug assistance received by Peru.

Of the 124 million dollars in foreign aid received in 2006 for this purpose, 104 million dollars came from the U.S. government, according to the National Commission for Development and Life without Drugs (DEVIDA) which is responsible for implementing anti-drug policies in this country.

“Yes, the reduction in funding is cause for concern, especially from a consumer country like the United States, but we are seeking other funding sources and ways of allocating our own resources,” DEVIDA chief Rómulo Pizarro told IPS.

Although some officials, like Interior Minister Pilar Mazzetti, have played down the issue in the media, the García administration is clearly concerned.

The best evidence for this is that Pizarro will be travelling to the United States in March, as he confirmed to IPS, to try to persuade U.S. legislators to maintain aid for Peru at around the 100 million dollar level.

The U.S. budget for fiscal year 2007-2008 that President George W. Bush has presented to Congress earmarks only 66 million dollars in anti-drug aid to Peru.

The U.S. government has chosen to reduce anti-drug aid in the Andean region from 722 million dollars to 443 million dollars, a cutback of 279 million dollars, in order to boost its financial support for the war in Iraq.

Peru, Bolivia, Colombia and Ecuador currently have the additional privilege of preferential tariffs under the Andean Trade Promotion and Drug Eradication Act (ATPDEA), but this was extended for only six months in December, when it expired, after having been in effect for five years. It had followed a similar arrangement in force since 1991.

If Bush’s budget proposal is passed, Peru will be the most affected country, followed by Bolivia which faces a funding cut from 42.6 million dollars to 30 million, and Ecuador, where funding will decrease by 16 percent. Colombia, in contrast, is scheduled to receive an increase in anti-drug funding.

In Peru the cuts will bite deepest in the areas of eradication of coca leaf plantations, and interdiction efforts to find and destroy maceration pits (where coca leaves are soaked and processed into cocaine paste), laboratories (where the paste is converted into cocaine hydochloride) and chemicals used in processing, and to disrupt bands of drug traffickers – all efforts aimed at controlling the supply of cocaine.

Fifty-five percent of the resources the Peruvian government spends on eradication and interdiction come from international aid, mainly from the United States, according to DEVIDA.

Washington has given the highest priority to these two areas since 2004. Nearly 77 million dollars of the 126.4 million dollars it granted Peru that year went towards eradication and interdiction. The rest was for developing alternative crops such as coffee and oil palms in coca-growing areas.

Statistics provided to IPS by the U.S. embassy clearly show the fall in aid, from 126.5 million dollars in 2003 to the 93 million dollars intended for this year.

Embassy staff said the cuts were foreseeable from the trend in aid over the last three years. In 2003 and 2004 the highest amounts were donated, they said, for the country to put an effective anti-drug system in place.

Pizarro, however, insisted that this was not a good enough reason to cut funding in the global battle against drugs.

The topic has divided opinions in the country. Fernando Rospigliosi, former interior minister in the Alejandro Toledo administration (2001-2006), told IPS that the United States “is simply adjusting its budget according to its current needs, like the war in the Middle East, which is understandable.”

According to the U.S. embassy, only 12 percent of the drugs entering the U.S. come from Peru, while 80 percent come from Colombia.

In contrast, between 60 and 70 percent of the drugs leaving Peru are heading for the United States, according to information from the National Anti-Drugs Directorate, an agency of the national police.

But while most people’s opinion is that the cutbacks will have a dire effect on the fight against drugs, expert Ricardo Soberón regards it as “a great opportunity to become independent from the heavy policing policy that Washington uses to combat drug trafficking.”

“Now it’s the (Peruvian) state’s turn to invest,” he said.

Soberón was alluding to the U.S. interest in concentrating its aid on eradication and interdiction, “without having a social view of the problem.” He said this was the time to forge closer links with the European Union, which takes “a wider view.”

Declining aid figures are mirror-imaged by the statistics revealing increased production of cocaine in Peru.

The United Nations Office on Drugs and Crime (UNODC)’s report for 2006 said that potential production of cocaine in Peru stood at 141 tons in 2000, and 180 tons in 2005. The latter amount would be worth 4.14 billion dollars once the mafias unload it on the U.S. market.

However, the Financial Intelligence Unit has only detected 29 cases of drug money laundering, involving 379 million dollars, equivalent to only 9.1 percent of the drug traffickers’ potential gross annual income.

The impunity enjoyed by drug traffickers is confirmed by statistics from a number of sources. The National Anti-Drug Directorate, for instance, has only seized 14.6 tons of the potential 180 tons of cocaine produced.

Regulation of the chemicals used to produce the drug is even worse. In 2006, police confiscated only two percent of these chemicals, less than half of what they seized in 2005. In other words, as cocaine production increases, control measures are becoming more lax.

“This is the result of inefficient spending on interdiction. What should be done is to concentrate efforts on the exit corridors for cocaine paste, to prevent shipment by sea,” Soberón said.

Statistics in the 2007 Drug Threat Assessment by the National Drug Intelligence Centre, part of the U.S. Department of Justice, confirm the rise in cocaine production in Peru, and therefore the low efficiency of anti-drug actions.

According to DEVIDA, 55 million dollars have been requested from the Peruvian government, to be channeled mainly into interdiction efforts, in order to correct this situation.

Part of these resources will be devoted to stricter enforcement of the law on chemical inputs, which are to be controlled by means of a unified register of companies purchasing these products, and their clients, in order to identify supplies reaching the black market.

Among the chemicals used in manufacturing cocaine paste are kerosene, acetone, sulphuric acid and sodium carbonate.

Up to last July, under the Toledo administration, the state was only contributing an estimated four million dollars to the total of 124 million dollars spent on fighting drugs. But under García, calculations have taken into account all kinds of actions taken by agents of the executive branch in the coca-growing valleys, and the current estimate is 130 million dollars.

The numbers have changed, but there has been no increase in actual resources yet.

Pizarro is meeting representatives of the European Union to ask them to increase their present annual support of 11 million dollars. He admits that Peru has depended on U.S. aid for the past few years, and that it is time for this country to look to its own resources to fund the fight against drugs.