Think Again: Mexican Drug Cartels

Glad you linked this, SWJ editors. We were talking about that article in another thread, especially given Nils Gilman and other work on deviant globalization.

Antonio Maria Costa, who was executive director of the UN’s office on drugs and crime from May 2002 to August 2010, charts the history of the contamination of the global banking industry by drug and criminal money since his first initiatives to try to curb it from the European commission during the 1990s. “The connection between organised crime and financial institutions started in the late 1970s, early 1980s,” he says, “when the mafia became globalised.”

Until then, criminal money had circulated largely in cash, with the authorities making the occasional, spectacular “sting” or haul. During Costa’s time as director for economics and finance at the EC in Brussels, from 1987, inroads were made against penetration of banks by criminal laundering, and “criminal money started moving back to cash, out of the financial institutions and banks. Then two things happened: the financial crisis in Russia, after the emergence of the Russian mafia, and the crises of 2003 and 2007-08.

“With these crises,” says Costa, “the banking sector was short of liquidity, the banks exposed themselves to the criminal syndicates, who had cash in hand.”

http://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs

Prices dropped last year to about half what they were in 2005, and there are signs the Taliban are hoarding to try to corner the market. at one point you suggested they might actually have tried to discourage poppy cultivation themselves to bolster the prices of their opium reserves.

Recent NATO military operations are showing us that the Taliban are much closer to running the business than we thought. NATO has been seizing precursors, seeds, opium, laboratory equipment, arms, pickup trucks—all sorts of insurgent equipment in drug markets and warehouses that have been attacked. All of this suggests the insurgents are very heavily involved in the trading itself. This is, in a sense, surprising. We had thought they were just taking a cut of about 10 percent. We believed that they were motivated, basically, by religious and political extremism. But it looks like they are actually doing it for the money. Whether it’s for themselves, or whether it’s to finance Taliban crime cartels or their cause around the world, this is very hard to say. But I think it deserves very close scrutiny. We may be witnessing the birth of Afghan narco-cartels.

http://www.newsweek.com/antonio-maria-costa-talibans-drug-dealers-78667

Cartel money, the global economy, liquidity and the Great Recession of 2008. I’m sure governments knew some of this and want to push but only so far. What happens when the very economic system you depend on becomes propped up by illegal monies in this manner and you know it and needed the money to be in the system? Just playin’, I have no idea.

No one tell Dan Drezner:

Readers of this blog are by now bored aware that I’m finishing off a book on post-2008 global economic governance, in which I take the contrarian view that the system worked surprisingly well after the collapse of Lehman Brothers to avert a second Great Depression.

http://www.foreignpolicy.com/posts/2013/12/09/why_the_trade_deal_in_bali_was_a_game_changer#sthash.wR0uNJ0L.dpuf

Will be interesting to see what his book says about that topic.