Published On: Sat, Dec 6th, 2014

Narco economics

Jacob Gelt DekkerWhat does it cost and who makes money?

Farmers in Colombia, Peru and Bolivia sell cocaine paste for US $ 200 per kilo.

Clandestine laboratories in those countries process the paste to pure powder, also for US $ 200 per kilo; total $400 per kilo

Transport, bribes for local authorities etc. will cost $ 1.000-1.200 per kilo, so the total comes to US $ 1.500 per kilo.

The European wholesaler in harbors of Antwerp and Rotterdam pay US $ 4.000 per kilo. His expenses for bribes and transport are at least US $ 1.000 per kilo, bringing his total to US $ 5.000.

The European wholesaler sells to Dutch gangs for US $ 12.000 per kilo.

Gangs sell to street retail dealers for US $ 32,000 per kilo.

Street dealers re-cut the powder and sell to end-users for US $ 50,000

Are you all confused now? Let’s summarize: Summary income/ gross profit per kilo cocaine: 1. The South American farmer makes US $ 200 Total price per kilo: 200 2. The South American laboratories receive US $ 200 Total : 400 3. The South American transport and bribes for authorities cost US $ 1.100 Total US $ 1.500 4. The South American exporter makes US $ 2.500 Total US $ 4.000 5. European cost of transport and bribes US $ 1.000 Total US $ 5.000 6. The European wholesaler makes US $ 7.000 Total US $ 12.000 7. European gangs make US $ 20,000. Total US $ 32.000 8. Street dealers make US $ 18.000 Total US $ 50.000

Selling from Antwerp and Rotterdam through to England, Germany, Russia and Greece may realize even higher prices and larger margins for the European wholesaler.

Estimates of South American income from the cocaine production vary annually from US $ 19-38 billion. The European nacro-business makes about ten times that amount.

The twenty-five islands in front of the Venezuelan coast are the gateway of the nacro trade to the world. It is estimated that these islands take in about US $ 4-8 billion dollars, in total. Between the islands activities are constantly shifted depending on law enforcement activities. The large number of jurisdictions of the Caribbees, relatively little international joint effort, availability of a poor and desperate work force as mules, the abundant tourist industry and its proximity to the USA and the EU make the islands extremely attractive to the narco industry.

Unfortunately the South American narco industry is full of violence and abuse, it costs 6-10.000 lives per year, not considering the health effects on the end-user.

Continuation of this industry in the Caribbees is far most an economic decision.; economics jump local politics.

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