The Caribbean Narcoeconomy

Jerome L. McElroy and Klaus de Albuquerque*

A third wave of globalization, following upon centuries of sugar monoculture and the postwar growth of tropical island tourism, is washing across the insular Caribbean. It is the clandestine spread of the global narcoeconomy, and it threatens the political and economic stability of the archipelago.

Successful joint US efforts in recent years to staunch the flow of Colombian drugs across the Mexican border have deflected trafficking eastward across the island chain from Bahamas to Aruba. Roughly a third of all cocaine and heroin consumed in the U.S. cris-crosses the area, and money-laundering drug profits has infested several of the region's offshore financial centers.

The Caribbean narcoeconomy has been nourished by a confluence of factors: strategic geographic location between Southern producers and Northern consumers, vast unguarded coastlines and inaccessible mountainous interiors, a long-standing historical network of intensive trade permitting a variety of air and sea routes and methods of conveyance, plus the anonymity afforded by the presence of hordes of tourists.

The most common traditional route is from the north coast of Colombia to remote Bahamian islands where air-dropped drugs are loaded onto high-speed "go-fast" boats for a final run to the U.S. mainland. More recently, the Eastern Caribbean has provided another corridor for stockpiling contraband for later transit by sea or air to the U.S. Virgin Islands and Puerto Rico. There they are repackaged as domestic freight and transported north by cargo or courier taking advantage of crowded airports and perfunctory customs checks.

Traffickers have displayed a remarkable resilience and ingenuity in keeping one step ahead of detection. Sophisticated satellite positioning systems as well as the latest communication


technology are often employed to coordinate drops in the least policed waters. To elude U.S. radar, they are now using "stealth boats" made entirely from wood and fiberglass as well as semi-submersible vessels.

To aggravate matters, in the past two decades the region's macroeconomy has been shocked by destructive periodic hurricanes, the sharp drop in sugar exports from consumer taste shifts toward artifical sweetners, the deflection of textile investment and employment to Mexico via NAFTA, and the loss of banana export preferences through European economic consolidation and U.S. pressure on the WTO not to discriminate against Central American growers.

In addition, since the demise of Communism, the diplomatic downgrading of the Caribbean (the Cuban threat in particular) has resulted in an 80 percent cutback in U.S. aid. Some scholars also argue that the IMF and World Bank structural adjustment policies mandated

for the larger debt-burdened countries like Jamaica, Guyana and Trinidad-Tobago have resulted in declining living standards and social expenditure especially in poor urban areas where the drug trade flourishes among an underclass of impoverished unemployed youth.

Such ghetto subcultures are springing up across the islands increasingly led by organized posses that surfaced in Jamaica in the 1970s. They originated as local ganja gangs but were also supported by political factionalism as rival political parties began arming ghetto youth, pitting poor urban "garrison" constituencies against one another. By the 1980s the posses had graduated to exporting marijuana to the U.S. Today, in cooperation with Colombian cartels, they control much of the cocaine transiting through the islands.

Impressionistic evidence of the spread of the narcoeconomy is mounting. Police across


the islands report sharp increases in property-related crime and that most serious crimes are drug-related, involve violence and firearms, and, more and more frequently, marginalized addicted youthful perpetrators. They also note the rising prominence of home-grown posses in organized crime (trafficking, arms smuggling, money-laundering, prostitution) and the increasing menace of thousands of returning felons deported from the U.S. who are sophisticated drug and gun traffickers with substantial stateside narcotics experience.

Even to the casual observer, the globalization of organized crime activity is visible in the ubiquitous press reports across the region of drug-related murders and American-style tactics involving gang warfare, drive-by shootings, home invasions and the use of high-powered semiautomatic weapons. Further evidence is the alarming rise in citizen gun purchases, the spread of private security agencies and high-tech alarm systems, and the proliferation of guard dogs, high-wire fencing and grilled windows.

Few segments of island life have gone untouched. They include the rising incidence of addiction, the active complicity of some local police, customs and shipping officials and airline personnel, collusion among top law enforcement and elected officials in at least ten countries, drug-related prison overcrowding and clogged courts and, in a few high-profile cases, the associated problems of evidence tampering and jury and witness intimidation.

The short-run economic impact is substantial. At the macro level, the value of drugs in transit routinely dwarfs the GDPs and government budgets of even the larger islands. At the micro level, it involves the steady payroll to various pilots, boat captains, baggage handlers, couriers, pushers, enforcers and public officials. Like an economic narcotic, this cash infusion sustains many local livelihoods and businesses.


In the longer run, the large-scale scope of the traffic and associated money-laundering tarnish the investment climate, reduce the credibility of government through creeping corruption, and weaken respect for law and honest work among youth. Unless more innovative ways are developed to reduce demand in the North and more effective cooperation is achieved by joint U.S. efforts with Caribbean and Latin American governments to reduce supply in the South (eradication and crop substitution, enhanced airport and border security and surveillance, the relaxation of bank secrecy codes for greater financial transparency etc.), the insular narcoeconomy will continue to flourish and threaten the future of tourism and offshore finance, the two pillars of many small island economies.


*Professor of Economics, Saint Mary's College, Notre Dame IN, and Professor of

Sociology/Anthropo1logy, College of Charleston, Charleston SC.