Another Way Uruguay’s Legalization Experiment Could Go Wrong

I wrote a few months ago that legalizing marijuana in Uruguay could be a bad idea because gangs and drug traffickers might export cheap, price-controlled government pot for sale in foreign countries where it is illegal. Recently, Quartz had an interesting article that made me rethink the issue.

Citing Paraguayan officials who say illegal pot from Paraguay will be still cheaper for Uruguayans than the government’s product – $0.30 a gram versus the government price of $1 (in Paraguay it fetches only $0.06 per gram) – the article describes how Paraguayan smugglers might have an opportunity to undercut the state-controlled Uruguayan market.

The head of Paraguay’s National Anti-drugs Secretariat Luis Rojas said his government is “more than convinced [legalization] is going to stimulate internal consumption [in Uruguay] and thus the trafficking of marijuana towards there.” Non-citizens are not covered under the law, so the least-risky way for smugglers to grow and move weed in the country would be to contract production and transportation to local Uruguayans.

As much as 80% of cannabis from Paraguay ends up in Brazil. The new law could give Paraguayan trafficking organizations the opportunity to increase their presence in Uruguay and open up new routes and networks into Brazil – especially the southern city of Porto Alegre, Brazil’s fourth largest metropolitan area.

If all these hypotheticals actually came to fruition, you could end up with an expanded presence of drug trafficking organizations in two, three, or possibly four or more countries, including Bolivia and Argentina, and an influx of revenue and personnel for DTOs, which could paradoxically exacerbate the problem Uruguay supposedly set out to remedy.

Criminal organizations don’t just traffic pot, nor do they only deal drugs. They also derive significant revenues from money laundering, identity theft, human trafficking, arms trafficking, kidnapping, extortion, robbery, murder for hire and even child pornography – and I don’t advocate legalizing any of those activities.

However, in order to have the resources to focus on and combat those harmful illicit activities, the international community needs to develop a more effective approach to the problem of the role of drug use and the drug trade in funding organized criminal activity. All around the world, violent criminal and terrorist organizations are financed in large part by money from the production and distribution of illegal drugs; the Taliban in Afghanistan, the FARC in Colombia, Mexican cartels, US and Canadian gangs.

Instead of criminalizing simple cultivation, possession and distribution and cramming prisons full of low-level dealers and users, governments should work to establish a well-regulated, legitimate market for recreational drugs on both the domestic and international levels. There are also socioeconomic and political considerations to explore – providing alternate economic avenues for people wishing to quit or avoid a criminal lifestyle, educational and career opportunities for young and disadvantaged people, effective police forces and judicial institutions.

For all the ill effects of tobacco and alcohol use, many countries have at least some regulatory infrastructure surrounding the sale of those products. The challenges of abuse, addiction, smuggling, sale to minors and the rest are common to all drugs, even medicines, including many that are now legal and which few would propose banning, like oxycontin, codeine, ritalin and others. As Jeffrey Miron and others have argued, prohibition “almost certainly the worst possible choice” for achieving the stated goals of US and international drug policies.

Nevertheless, that does not mean that Uruguay got it right here. The legalization/nationalization law was unpopular with the country’s people and it seems poorly thought-out from a number of angles. Colorado, on the other hand, has shown some initial success with its private, but heavily regulated market, with some reports claiming it has saved the state upwards of $40 million and brought in over $5 million in tax revenue.

Workable solutions to international problems require international cooperation and consultation. Uruguay seems to have foregone that process in favor of a somewhat radical unilateral approach. As I wrote in October, “[m]y main concern is that this seemingly well-intentioned effort will fail and that will in turn scare off other countries from pursuing decriminalization or legalization efforts in the future.”

A number of high-level government officials from various Latin American nations have voiced support for a new approach to the drug issue. However, the onus is not just on the countries producing and trafficking the substances, but also on the countries that consume those drugs who are responsible for shaping a solution to these problems.

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