In testimony before the U.S. House of Representatives Domestic Policy Subcommittee of the Oversight and Government Reform Committee, Vanda Felbab-Brown assesses the Obama administration’s counternarcotics strategy, focusing on the role and design of supply-side programs within the strategy. Felbab-Brown’s statement highlights country-specific challenges and opportunities in Afghanistan, Colombia and Mexico.
Mr. Chairman and Members of the Committee:
I am honored to have this opportunity to address the Subcommittee on the critical issue of the Obama Administration’s counternarcotics strategy, specifically the role and design of supply-side programs within the strategy. The threats posed by the production and trafficking of illicit narcotics and by organized crime, and their impacts on U.S. and local security issues around the world, are the domain of my work, and the subject of my recent book, Shooting Up: Counterinsurgency and the War on Drugs (Brookings, 2009). I have conducted fieldwork on these issues in Latin America, Asia, and Africa.
While I will focus my comments on supply-side policies, I want to call attention to the fact that to a far greater degree than many of its predecessors, the Obama Administration has acknowledged the vital importance of reducing demand for illicit drugs and committed itself to reducing the demand in the United States. Beyond enhancing international cooperation in the fight against illicit narcotics through an unequivocal acknowledgement of joint responsibility, a robust and well-funded commitment to demand reduction also greatly facilitates the effectiveness of supply-side measures. As long as there is a strong demand for illicit narcotics, supply-side measures cannot be expected to stop supply and prevent consumption. Despite the operational and funding priority given to supply-side measures over the past thirty years, they have not dramatically reduced consumption in the United States or elsewhere. In fact, in many countries, such as Brazil, Argentina, Mexico, Afghanistan, Pakistan, Russia, and China, demand for illicit narcotics has greatly increased over that period. In some of these countries, the per capita consumption of illicit narcotics rivals and even surpasses that of the United States or Western European countries. However, supply-side policies do have great impact on the level of threat that the drug trade and drug trafficking organizations (DTOs) and other non-state armed actors pose to states and societies in source and transshipment countries.
In the rest of my statement, I will first offer several broad lessons about the effectiveness of supply-side measures and assess the extent to which these lessons are reflected in the Obama Administration counternarcotics strategy. Since the Office of the National Drug Control Policy (ONDCP) has not yet released a statement outlining its overall counternarcotics strategy, I will rely on other official documents, such as the congressional testimonies by Director of ONDCP, Mr. Gil Kerlikowske, the budgetary request by the Obama Administration, and newspaper commentaries on proposed counternarcotics strategies. Second, I will briefly sketch the design and funding of supply-side policies toward Afghanistan, Mexico, and Colombia — currently the principal focus of U.S. supply-side counternarcotics programs — and outline the outstanding challenges and opportunities in these countries. I will rely on the same type of documents today since some of the country-specific policy statements, such as the Afghanistan Counternarcotics Strategy, have not yet been released.
Lessons Learned about the Effectiveness of Supply-Side Policies
I. The drug trade generates multiple threats to the United States and other states and societies. Not only does it feed drug addiction and abuse in consuming countries, but also it also often threatens public safety, at times even national security, in supply and transshipment countries. And it can compromise their political systems by increasing corruption and penetration by criminal entities and undermine their legal economies. At the same time, large populations around the world in areas with minimal state presence, great poverty, and social and political marginalization are dependent on illicit economies, including the drug trade, for economic survival and the satisfaction of other socio-economic needs. They are thus susceptible to becoming dependent on and supporters of criminal entities and belligerent actors who sponsor the drug trade. In turn, such dangerous non-state actors derive large financial benefits and political capital from the drug trade.
II. Supply-side measures, such as eradication of illicit crops and interdiction of transshipment, have not yet succeeded in disrupting the global supply of drugs in a lasting way. At most, simultaneous supply-sides measures in critical production areas and along critical smuggling routes have generated relatively brief disruptions of global supply, reflected in increased, but temporary shortage of narcotics. After a short period, usually no more than two years, global supply has recovered whether through renewed production in the original source area, the relocation of production to new areas, or the use of new transshipment methods or routes by drug trafficking organizations.
III. Supply-side measures, however, have been at times effective in suppressing production in a lasting way in particular locales. Such durable suppression of illicit crops has required two elements: The first requirement has been that military conflict in the particular area must end and the state authorities must have firm control throughout the entire territory of the country. The second has been that the state imposing eradication of illicit crops must be capable and willing to sustain prolonged repression of populations dependent on illicit crop cultivation (the China under Mao model), or that alternative livelihoods are put in place to offset the economic losses and resulting human insecurity of the marginalized populations (the Thailand model).
IV. Given that the repression-based approach is deeply inconsistent with U.S. interests and values, only the second model that includes legal economic alternatives should be adopted. For the second model to be effective, however, it needs to be construed a multifaceted state-building effort that seeks to strengthen the bonds between the state and marginalized communities dependent on or vulnerable to participation in the drug trade for reasons of economic survival and physical insecurity. The goal of supply-side measures should not only be a narrow suppression of the symptoms of illegality and state-weakness, such as suppression of illicit crops or interdiction of illicit flows, but rather to reduce the threat that the drug trade poses from one of a national security concern to one of public safety problem that does not threaten the state or the society at large.
Such a multifaceted approach in turn requires that the state addresses all the complex reasons why populations turn to illegality, including law enforcement deficiencies and physical insecurity, economic poverty, and social marginalization. Efforts need to focus on ensuring that peoples and communities will obey laws – by increasing the likelihood that illegal behavior and corruption will be punished, but also by creating the social, economic, and political environment in which the laws are consistent with the needs of the people so that the laws can be seen as legitimate and hence be internalized. As I will discuss in detail below, the reorientation of the Merida Initiative toward such a multifaceted approach is an example of the needed reconceptualization of the drug trade threat and is a very encouraging development.
In the case of narcotics suppression, one aspect of such a multifaceted approach that seeks to strengthen the bonds between the state and society and weaken the bonds between marginalized populations and criminal and armed actors is the proper sequencing of eradication and the development of economic alternatives. For many years, the United States has emphasized eradication of illicit crops, including forced eradication, above rural development, such as alternative livelihoods efforts. Moreover, the United States has also insisted on eradication first. Such an approach has been at odds with — in fact, the reverse of — the counternarcotics policy of the European Union and many individual Western European countries. Such sequencing and emphasis has also been at odds with the lessons learned from the most successful rural development effort in the context of illicit crop cultivation, Thailand. Indeed, Thailand offers the only example where rural development succeeded in eliminating illicit crop cultivation.
I am encouraged that the Obama administration is cognizant of the need to focus on rural development and sequence it properly with eradication. The new U.S. policy in Afghanistan is a prime example of this deeper understanding, and I will discuss it in detail later. The Obama Administration has also shown such awareness in other instances. In his testimony to the Subcommittee on National Security and Foreign Affairs, Oversight and Government Reform Committee on March 3, 2010, ONDCP Director Kerlikowske pointed to the success of counternarcotics efforts in San Martin, Peru, stating that “Critical to this success was community participation in selecting the types of assistance provided and alternative development assistance in place before eradication began.” Yet such effective sequencing of alternative development and eradication is far from the norm in many U.S. assistance programs, including elsewhere in Peru and in Colombia where eradication often takes place in the absence of economic assistance.
V. Effective rural development does require not only proper sequencing with eradication and security, but also a well-funded, long-lasting, and comprehensive approach that does not center merely on searching for the replacement crop. Alternative developments need to address all the structural drivers of why communities participate in illegal economies — such as access to markets and their development, deficiencies in infrastructure and irrigation systems, access to microcredit, and the establishment of value-added chains. Such economic approaches to reducing illegality and crime should not be limited only to rural areas: there is great need for such programs even in urban areas afflicted by extensive and pervasive illegality where communities are vulnerable to capture by organized crime, such as in Mexico. Often the single most difficult problem is the creation of jobs in the legal economy, at times requiring overall GDP growth. Such job creation has been a major problem in Mexico, Colombia, Afghanistan, and Pakistan, and will continue to be so for the foreseeable future.
VI. The state-building approach also needs to include strengthening the justice and corrections systems in countries threatened by organized crime. Merely arresting offenders, without being able to successfully prosecute and rehabilitate them, only increases the recruitment pool for drug trafficking organizations. Thus, the great increase in arrests in Mexico to more than 70,000 since the beginning of President Felipe Calderón Administration should be a source of concern as much as applause, since it is likely that many of the arrestees will only develop stronger links to Mexico’s drug trafficking organizations while in prison. Improving justice and corrections systems abroad also involves expanding citizen access to justice and peaceful dispute resolution mechanisms. Such efforts are badly needed in Afghanistan, Colombia, as well as parts of Mexico.
VII. Consistent with the evidence of the meager effectiveness of supply-side measures in suppressing global supply, and with the proposed framework for reconceptualizing the fight against illegal drugs to one of state-building, is a reconceptualization of interdiction. Instead of singularly focusing on stopping illicit flows and thus reducing supply, interdiction measures should equally focus on reducing the power of drug trafficking organizations to corrupt and coerce the states or societies in areas of their operations. Such a reconceptualization may dictate different targeting patterns and methods as well as measures of success.
However, such reconceptualization of interdiction should not create the false impression that interdiction can provide a silver bullet for counternarcotics efforts. While cracking down on illegal arms sales to drug trafficking organizations and increasing anti-money-laundering measures are highly desirable, neither on its own is likely to significantly hamper the operations of organized crime groups. Anti-money-lauding measures effectiveness is very difficult to estimate, but such measures are often thought to capture less than ten percent of the illicit money flows. Thus, the Obama Administration’s goal of “increasing the cost of doing business for the DTOs, to the point where routine losses are no longer sustainable” will likely be elusive. DTOs tend to be flexible and highly capable of adapting to measures, such as high-value targeting, anti-money-laundering efforts, or weapons interdiction.
A comprehensive dismantling of DTOs through arrests of middle and top leaders has proved highly effective in the United States. A multilayered targeting of the Medellín and Cali cartels were also critical for their demise, even though in the Medellín case, rival DTOs significantly contributed to the incapacitation of the cartel. Moreover, after successful incapacitation of particular DTOs, the illegal drug trade business did not remain empty. Instead, new DTOs moved in and took control of the trade. The purpose of interdiction should thus be to steadily weaken the DTOs’ power to threaten the state and society and to prevent them from accumulating power — an unending, but vital function of law enforcement.
Nor are interdiction efforts likely to bankrupt belligerent groups, as the Obama Administration seeks to accomplish in Afghanistan. Neither eradication nor interdiction has yet resulted in bankrupting one single significant belligerent group to the point of sustainably and significantly weakening its military capabilities.
Finally, assistance in law enforcement to reduce the power of DTOs critically involves assistance in reducing corruption in the source or transshipment country’s law enforcement apparatus and political system more broadly. It also requires a focus on addressing street crime, frequently a far greater menace to the lives of communities in source and transshipment countries than organized crime. Assistance in addressing street crime provides a good testing ground of the level of corruption of law enforcement in the recipient country, and helps to build bonds between the society and the state, facilitating the community’s provision of intelligence to law enforcement agencies. Well-designed community policing approaches tend to be particularly effective.
VIII. Even when successful in particular locales, supply-side measures have inevitably transferred the transshipment or supply problems to new locales, whether elsewhere in the same country or to neighboring countries. This phenomenon is often referred to as the balloon effect.
The Obama Administration should be applauded for recognizing this danger with respect to the Merida Initiative, as increased law enforcement efforts in Mexico risk increasing drug shipments and associated threats to the states and societies in Central America and the Caribbean. There is already evidence that the presence of Mexican DTOs has greatly increased in Central America, posing security and corruption threats to local governments. To mitigate the spillover effects, the Obama Administration has unveiled two new initiatives: the Central American Regional Security Initiative (CARSI) and the Caribbean Basin Security Initiative (CBSI). These efforts are funded only modestly, with US$100 million requested for CARSI and US$37.5 million requested for CBSI.
The Obama Administration also recognizes such danger in Central Asia, with even more modest funding requested for law enforcement efforts in former Soviet Union countries. It is equally important to harness existing economic aid for Pakistan, including the Federally Administered Tribal Areas and in the Khyber-Pakthunkwa Province (until recently the Northwest Frontier Province), to prevent the reemergence of extensive poppy cultivation there as a result of the counternarcotics efforts in Afghanistan. Since undertaking rural development in the absence of illicit crops is easier than in the context of illicit crops (but includes many of the same measures as any rural development), U.S.-assisted efforts in those areas of Pakistan can double as drug-trade prevention measures. Small-scale rural infrastructure projects have been particularly promising there. However, developing legal employment opportunities will be one of the greatest challenges in those areas of Pakistan, U.S. reconstruction-opportunity zones programs notwithstanding.
Nonetheless, in the absence of a significant reduction in demand, drug supply and transshipment will inevitably relocate somewhere. Thus, there is a limit to what regional efforts can accomplish. As long as there is weaker law enforcement and state-presence in one area than in others, the drug trade will relocate there. Consequently, the United States needs to carefully consider which drug trade locations pose the least threat to the United States and what measures can be undertaken to mitigate the harms any such relocation will pose to recipient communities and states.
The imperative to mitigate the spillover effects, however, should not give impetus to a rush to assist with counternarcotics law enforcement efforts in any new areas. Some of these areas, including in Central America and West Africa, have such weak state and law enforcement capacity and such high levels of corruption that their capacity to constructively absorb external assistance is constrained. Worse yet, such assistance risks being perverted: in the context of weak state capacity and high corruption, there is a substantial chance that counternarcotics efforts to train anti-organized crime units will only end up training more effective and technologically-savvy drug traffickers. The limited funding requested by the Obama Administration for Central America and the Caribbean and West Africa is thus appropriate. The effectiveness of such programs also depends on their design, of course. The best assistance in such cases may be to focus on strengthening the capacity to fight street crime, reduce corruption, and increase the effectiveness of the justice system. Only once such assistance has been positively incorporated, will it be fruitful to increase assistance for anti-organized crime efforts, including through advanced-technology transfers and training.
IX. In devising supply-side policies, the United States government needs to be aware of the limits to effectiveness of outside policy intervention and assistance. Ultimately, supply-side policies will only be effective if they are fully embraced by recipient governments and local populations. Many such interventions, such as police and law enforcement building, require institutional reform and development that takes a generation or more. Rural development is fundamentally dependent on the political economy of each country, such as land concentration and access to land, fiscal capacity of local governments, and taxation systems in particular countries. Outside policies, including by the United States, have only a limited ability to change such institutional and political-economic arrangements. U.S. policy can thus advice and assist, but there will be significant limitations to what U.S. supply-side policies can accomplish, particularly in relatively short periods.
X. I am very encouraged that the Obama Administration has placed emphasis on reducing demand not only in the United States, but also abroad. Unfortunately, even today such programs receive only limited funding and often on a sporadic basis, rather than being a consistent and central feature of U.S. counternarcotics policies abroad. The design of such programs is as important as their resource base. To the extent that such programs mimic DARE programs in the United States, they frequently are not particularly effective. As we have also learned from U.S. experience with such prevention and treatment programs, tailoring them to specific target groups, such as teenagers, and understanding the local institutional and socio-economic settings are as critical for their effectiveness as is their comprehensiveness. One shoe does not fit all: Local conditions regarding access to medical care, including mental health facilities, for example, may require very different design of demand reduction efforts in Mexico than in the United Kingdom or in Afghanistan. Under the Merida Initiative, for example, the United States will assist Mexico’s expanding demand reduction capacity. The program appears rather comprehensive, but its funding is limited and its robustness remains yet to be seen.
XI. As the United States government designs counternarcotics programs abroad, it is important that consideration is given to second-degree effects and unintended consequences. A regular part of policy analysis should be to consider: Where supply or smuggling routes will shift if counternarcotics efforts in particular locales are effective; to what kind of illegal enterprise or economy criminal groups will turn to if their proceeds from the drug trade become diminished; and whether either of these developments poses a greater threat to the United States or other countries than current conditions. The United States Congress should encourage such incorporation of unintended-consequences assessments into the policy process.
I will now briefly describe the design and resourcing of supply-side policies in Afghanistan, Mexico, and Colombia.
Although the Obama Administration has not yet released its Afghanistan Counternarcotics Strategy, its overall counternarcotics strategy can nonetheless be gleaned from its budgetary requests and statements by its officials. The new strategy significantly scales back eradication in its funding request, and instead focuses on interdiction (with a budget request of US$450 million) and rural development. The total request for economic assistance, which includes alternative livelihoods efforts, is US$ 3.3 billion. Although far from all economic programs necessarily impact the size of the drug trade in Afghanistan, including the level of illicit crop cultivation, it is important to understand that alternative livelihoods efforts require comprehensive rural development efforts and that job creation outside the rural sector may be critical for the reduction of the population’s economic dependence on illicit crop cultivation.
The overall strategy represents a courageous break with previous ineffective and counterproductive policies. In particular, scaling back and defunding eradication in the current period allows for an optimization of counternarcotics policies with counterinsurgency. Given the economic and human security dependence of much of Afghanistan’s rural population on the illicit economy and its role in Afghanistan’s macroeconomic output, a rapid suppression of the illicit economy without legal alternatives in place will only push the population into the Taliban’s hands, generate social and political instability, and significantly suppress even legal economic output.
However, the design of interdiction measures and alternative livelihoods efforts and the quality of their implementation will be critical for success. It is, for example, highly unlikely that interdiction measures can significantly reduce the Taliban’s income and greatly limit its operational capacity. Interdiction measures have rarely succeeded in such an undertaking, and the Taliban likely derives half of its income from fundraising and taxing all other legal and illegal economic activity in the areas where its presence is strong, such as trucking, illegal logging, and development projects. Between 2002-2004, the Taliban was able to rebuild itself largely without access to proceeds from poppy cultivation in Afghanistan.
Moreover, some proposed interdiction programs, such as trying to prevent the access by itinerant harvesters to poppy cultivation areas, including in Marja, are extraordinarily resource-intensive and could divert military resources away from the more urgent tasks of preventing Taliban repenetration of cleared areas. In addition, in successfully disrupting local supply chains, such efforts would in their outcome mimic eradication, worsening the economic conditions of large segments of the rural population and once again pushing such populations into the hands of the Taliban. In sensitive priority areas, like the Marja district and Kandahar province, such policies would be counterproductive for the counterinsurgency effort.
Finally, interdiction and law enforcement efforts in Afghanistan also need to target government-linked traffickers to send a message that the era of impunity is over. Such efforts need to be accompanied by expanding the quality of and access to justice and dispute resolution mechanisms for the population and improving the capacity and quality of police, specialized counternarcotics units, the judicial system, and corrections facilities.
The Obama Administration has not revealed many details about the structure of the rural development and alternative livelihoods components of its Afghanistan counternarcotics policy. Administration officials were at times reported to emphasize that the new programs would focus “on the farm.” Such focus is needed, but it should not take place at the expense of generating secure markets and value-added chains. Without this latter component, alternative livelihoods efforts have not been highly effective.
The programs also need to address all of the structural drivers of poppy cultivation. The wheat distribution program, including the so-called Food Zone in Helmand, has for the past two poppy-cultivation seasons been one of the centerpieces of alternative livelihoods efforts. Subsequent evaluations of the wheat program pointed out many series deficiencies in its design and implementation and give a strong reason to remain skeptical about its long-term effectiveness. Because of land-intensity requirements for wheat cultivation, its limited ability to generate employment, and the fact that neighboring countries dictate Afghanistan’s wheat prices, wheat is overall not an effective substitute for poppy. The efforts should instead focus on high-value, high-labor intensive crops as well as on addressing the structural drivers of poppy cultivation.
Similarly, programs to compensate farmers for their own eradication of poppy crops should be treated at most as short-term stopgap measures. Although preferable to forced eradication in the absence of legal livelihoods being in place, such programs do not have a good track record in Afghanistan or elsewhere in the world, lacking sustainability and even encouraging moral hazard. The so-called Good Performers Initiative, rewarding provinces and governors who significantly reduce the size of poppy cultivation, should also be subjected to careful scrutiny. Often, such as in case of the province of Nangarhar, the Initiative rewards the output without regard to its sustainability, effects on political stability and counterinsurgency, the socio-economic needs of the population, or the goal of improving the quality of Afghan governance. Instead of rewarding the numbers of hectares eradicated or the decrease in cultivation through bans, the Initiative should disburse rewards for improving good governance and the socio-economic development of the province, measured by population-centric indicators. Such measures include a person’s food security and access to water, land, microcredit, and education, for example.
The new orientation of the Merida Initiative unveiled over the past several weeks by United States government officials puts the overall counternarcotics strategy on the right track and should be greatly applauded. Indeed, the new design of the Merida Initiative is an example of the kind of multifaceted state-building approach to counternarcotics I have advocated in the first part of my testimony. It represents a great improvement to the design of counternarcotics programs in Mexico and more broadly of U.S. supply-side programs.
The new strategy recognizes that there are no quick technological fixes to the threat that DTOs pose to the Mexican state and society. It also recognizes that high-value-targeting of drug capos, even while backed up by the Mexican military will not end the power of the Mexican DTOs.
Instead, the new strategy focuses on four pillars: a comprehensive effort to weaken the DTOs that goes beyond high-value decapitation; institutional development and capacity building, including in the civilian law enforcement, intelligence, and justice sectors; building a 21st century border to secure communities while encouraging economic trade and growth; and building communities resilient to participating in the drug trade or drug consumption.
As in the case of Afghanistan, even a great strategy is vulnerable to implementation problems. Deep obstacles persist in Mexico’s political and economic arrangements and social organization that make effective implementation of such a strategy not easy. Notwithstanding the level of U.S. assistance so far, including having generated over 4000 newly trained Mexican federal police officers, Mexico’s law enforcement remains deeply eviscerated, deficient in combating street and organized crime, and corrupt. Police reform will require sustained commitment over a generation. The persistence of monopolies in Mexico limits job creation, even in times of economic growth. Land access and distribution encourage the persistence of illicit crop cultivation and poverty in Mexico’s southern rural areas. The taxation system that poses a heavy burden on the middle class and the reality that more than forty percent of Mexico’s economy is informal put great constraints on the fiscal capacity of the Mexican state and its ability to encourage socio-economic development.
Moreover, the new strategy does not guarantee that substantial drops in drug-related violence will take place quickly. Indeed, the way interdiction has been carried out so far – focusing on high-value-target decapitation – has contributed to the levels of violence. Yet it is critical that drug-related violence (which over the past three years surpassed 18,000 deaths) is brought down in Mexico. Such violence cannot be dismissed as irrelevant or hailed as success. At these levels, especially in highly affected communities, such as Cuidad Juarez, the i