Drug lords line up for Asian invasion

PUBLISHED : Sunday, 14 May, 2006, 12:00am
UPDATED : Sunday, 14 May, 2006, 12:00am

He might be known as Mr Big, but the name hardly does justice to today's super-rich drug baron. The money involved in his illicit trade is so large it's almost beyond comprehension. Drugs, just like any other in-demand commodity, have boomed on the back of globalisation.

Best estimates value the trade at around US$400 billion a year; a figure that not only dwarves the revenues of the world's major companies, but outranks the gross domestic product (GDP) of almost all nations.

Last week's revelation that 141kg of cocaine had been seized in Zhongshan in March - by far the biggest bust to date on the mainland - demonstrated that the drug syndicates are as optimistic about China's potential as their counterparts in legitimate lines of business.

And the simple dynamics of demand and supply apply. Ever-growing levels of disposable income, huge profit margins and high levels of official corruption prove an irresistible combination for the enterprising drug lord.

'Why should people in China be different to people living in any other country in terms of their needs?' says Mark Craig, an associate fellow at the University of Hong Kong's centre for criminology.

'There is always going to be, and always has been, a demand for illicit products and drugs are no exception.

'The networks and syndicates are already established there, so this is just another way of expanding the business opportunities.'

The South American cartels are already exporting large quantities of cocaine to the mainland, investigators warn.

The arrests of nine people - including two alleged Colombian traffickers in Hong Kong - highlighted the international connections so vital in greasing the drug trade's global supply chain.

With huge money to be made, highly organised criminal gangs around the world are forming strategic alliances to maximise product delivery and profit.

Large-scale production and complex distribution networks are operated by an army of specialists, including engineers, lawyers, accountants and even pilots. It's a super-efficient system that would be the envy of most companies, and the numbers are just as appealing. According to the United Nations, 200 million people worldwide use illegal drugs, generating US$400 billion from users. While cannabis remains the drug of choice for most (160 million), heroin and cocaine have 16 million users. In London, cocaine is said to be so prevalent that measurable traces are found in the River Thames. Scientists estimate that 2kg - or 80,000 lines - spill into the river every day after passing through users' bodies and sewage treatment plants.

But it is the rising popularity of synthetic drugs like methamphetamine that is causing most concern to law enforcement agencies and policy makers.

Commonly known as Ice or crystal meth, methamphetamine was last week branded a 'global threat' by the US Drug Enforcement Agency (DEA).

It's a highly potent and addictive drug 20 times more powerful than its predecessor, speed, and experts warn its shocking side effects could trigger a violent-crime epidemic.

A recent Australian television documentary described how a special security cell had been built for psychotic ice users at Sydney's St Vincent's Hospital.

'It can take six staff members to contain them,' said Gordon Fulde, the hospital's head of emergency services. 'These are the most out-of-control, most violent human beings I've seen in my life.'

Paul Thompson, a California-based neuroscientist researching its effects, said 40 per cent of people arrested in Los Angeles had been using the drug. 'We're worried that as this drug is spreading throughout the US and overseas, this could produce a massive increase in violent crime,' he said.

Methamphetamine is one reason why China seems destined to become a major player in the global drug trade.

Ephedrine, an ingredient in many cold and flu remedies, is also an essential component in the making of methamphetamine, and most stocks diverted for illicit use come from just two countries - China and India.

Businesses must adapt to stay ahead of the competition, and the explosion of Ice and crystal meth on the world's streets is a textbook example.

The cheap manufacturing cost persuaded Asian drug syndicates to switch emphasis to synthetic products several years ago.

Unlike heroin and cocaine, profits were also not dependent on the unpredictable nature of crop cycles.

There are now estimated to be between 26 and 38 million meth users worldwide, which the DEA says outnumbers cocaine and heroin users combined.

These changing trends go some way to explaining a dramatic slump in Southeast Asia's infamous 'Golden Triangle' region.

Since 1996, production of opium, from which heroin is derived, has dropped by 78 per cent.

But the slack has more than been taken up in Afghanistan, where poppy farmers now produce almost all of the world's heroin - just four years after the fall of the Taleban, which had all but wiped out production.

Afghanistan also provides a telling example of the drug trade's economic impact: proceeds from heroin production and trafficking are thought to be equivalent to about half the nation's gross domestic product.

While heroin production booms in Afghanistan, market conditions are tighter in the traditional home of cocaine, Colombia.

A crop eradication campaign backed by the US has taken its toll, and Mexican gangs have seized the initiative to control much of the supply of illegal drugs on American streets.

So diversification was required, and the Hong Kong arrests underscored the Colombian cartels' aggressive push into China and the rest of Asia.

'This is extremely significant, as it confirms that Colombian drug-trafficking organisations are expanding their distribution operations into Asia,' said William Fiebig, a DEA special agent based in Beijing.

'Large quantities of cocaine are already being imported into the mainland.'

And as the demand inevitably grows, law enforcement efforts will only get tougher.

In the first three months of this year, Chinese agents recorded a 435 per cent increase in drug seizures on the same period last year. Almost half were synthetic drugs, like Ecstasy, ketamine and methamphetamine.

Mark Craig, who is also an expert on Chinese organised crime, says the sheer scale of the illicit operations in China is on another level.

'Other countries have laboratories, they have whole factories,' he says. 'The profits are so big and there is so much complicity with government authorities that this market will not be stamped out in the short term.'

Mr Craig says that even in Singapore - which has the world's most draconian anti-drug laws - demand for methamphetamine is high and he believes the threat of the death penalty provides little deterrent.

'You can get executed but there is no shortage of [couriers] willing to take that chance,' he says.