In this excerpt from El Narco: Inside Mexico's Criminal Insurgency, journalist Ioan Grillo explains the finances of the Mexican drug war.
The formula for Mexicans to make drug money is hard to beat.
Take cocaine.
A Colombian peasant can sell a bundle of coca leaves from a two-acre field for about $80.
After it goes through its first simple chemical process, known as chagra, it can be sold as a kilo of coca paste in the Colombian highlands for about $800.
This paste will then be put through a crystallizing laboratory to become a kilo brick of pure cocaine — like that General Solórzano showed me.
According to the United Nations, such a brick in 2009 was worth $2,147 in Colombian ports, rocketing up to $34,700 by the time it got over the US border, and $120,000 when it was sold on the New York streets.
The traffic and distribution of the drug, the part run by Mexican gangsters, nets a 6,000 percent profit from the narco to the nose.
If you calculate the cost all the way from the farm it is 150,000 percent. It is one of the most profitable businesses on the planet. Who else can offer that kind of return for your dollar?
ReutersSoldiers unload 134 tonnes of marijuana to be incinerated at the military base Morelos in Tijuana October 20, 2010.
Mexican cartels have emissaries in Colombia who place their cocaine orders.
But Mexican gangs get Colombians to actually deliver the disco powder to them in Mexico or Central America, especially Panama and Honduras. The way the business has developed has made Mexican traffickers the top dogs over the Colombian producers.
ReutersNarcotics wrapped in 10,000 brown and silver packages are on display in the patio of the Morelos military base in Tijuana October 18, 2010.
DEA Andean Bureau chief Jay Bergman explained it to me using more great metaphors: "Who really calls the shots in a global supply-and-demand economy? Is it Mexican cartels or Colombian cocaine suppliers? Is it the manufacturer or the distributor?
In a legitimate economic model, is it Colgate or Walmart that calls the shots?
APA counter-narcotic police stands guard packages of seized cocaine at the police station as it are show to the media in Necocli, Colombia, Tuesday, Feb. 24, 2015.
It is actually Walmart who says, 'This is what we want to pay for it, this is a unit price, this is when we want it delivered, and this is how it's going to be,' and Colgate's position is, 'As long as we are making a profit, as long as we are not losing money, we are willing to work on those terms.
And the more you can move my product, the bigger discount we will give you, and you get to really call the shots. Tell us where you want it, tell us how you want it, put it on the shelves where you want it, just get it sold,'... That is the evolved cocaine market we are dealing with."
From Central America, Mexican gangsters move cocaine on ships, submarines, or light aircraft. General Solórzano shows me the drug planes they have captured in Sinaloa. They are mostly single-engine Cessnas bought in the United States for about $50,000 a pop.
The army now protects the seized aircrafts because when they were in a police base, gangsters actually broke in and stole them back. In the last two years, soldiers have seized two hundred such planes. Driving around the airfield, the sheer size of the fleet makes a stunning sight. And these are only the ones they captured!
ReutersSoldiers stand next to 7.6 tonnes of marijuana is being incinerated at the military base in Ciudad Juarez December 17, 2010.
As drugs are flow up into the United States, all kinds of people make money off them. People are subcontracted to ship, truck, warehouse, and finally smuggle the product over the border. To complicate this, drugs are often bought and sold many times on their journey.
People actually handling these narcotics will often have no knowledge which so-called kingpin or cartel ever owned them, only knowing the direct contacts they are dealing with. Ask a New York cocaine dealer who smuggled his product into America. He would rarely have a clue.
All this helps explain why the Mexican drug trade is such a confusing web, which confounds both journalists and drug agents. Tracing exactly who touched a shipment on its entire journey is a hard task.
But this dynamic, moving industry has a solid center of gravity—turfs, or plazas. Drugs have to pass through a certain territory on the border to get into the US, and whoever is running those plazas makes sure to tax everything that moves.
The border plazas have thus become a choke point that is not seen in other drug-producing nations such as Colombia, Afghanistan, or Morocco. This is one of the key reasons why Mexican turf wars have become so bloody.
The vast profits attract all kinds to the Mexican drug trade; peasant farmers, slum teenagers, students, teachers, businessmen, idle rich kids, and countless others. It is often pointed out that in poor countries people turn to the drug trade in desperation. That is true. But plenty of middle class or wealthy people also dabble.
Shuttershock/Daniel Loretto
Growing up in the south of England, I knew dozens of people who moved and sold drugs, from private-school boys to kids from council estates (projects). The United States has never had a shortage of its own citizens willing to transport and sell drugs. The bottom line is that drugs are good money even to wealthy people, and plenty have no moral dilemmas about the business.
Republished with permission from El Narco: Inside Mexico's Criminal Insurgency by Ioan Grillo. Copyright © 2011 by Ioan Grillo. Reprinted by arrangement with Bloomsbury Publishing. All rights reserved.
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