Prohibition, insurgency and state failure

Daniel’s a hundred per cent right to call for an end to some of the more stupid measures taken in Afghanistan in the name of counter-narcotics work.  Take aerial spraying off the table? Absolutely. Avoid alienating farmers in order to avoid swelling the insurgents’ ranks?  Sign me up.

But I think we need to go much further than this.  Daniel argues that coalition forces in Afghanistan should focus on:

…arrests and the prosecution of drug lords and their backers in government. Unless these “narcotics entrepreneurs” are targeted, arrested and prosecuted, little will change. 

As he noted yesterday, the FT’s recent leader on this subject agrees with him, arguing that:

…while crop eradication and locking up bad guys may be an important part of addressing the crisis, they are not by themselves a solution. That can only come over years of a sustained and consistent strategy to develop a real market economy which would provide a better livelihood for farmers than the dangerous and volatile drugs business.

That will, it is true, require security and a role for the military. It will mean targeting the middlemen, smugglers and, yes, chemists who operate the infrastructure of the drugs business, hitting their finances and improving co-operation with Afghanistan’s neighbours.

Above all, it will mean that while the small poppy farmer escapes the attentions of the authorities, the big drug barons do not. That demands ending the de facto impunity enjoyed by some Afghans, a move that can be sanctioned by only the president.

I hate to be a sceptic, but, well, I’m a sceptic.  Targeting the big drug lords, the middlemen and smugglers is certainly preferable to targeting small farmers from a development point of view. But it’s still pretty pointless.  Just look at Colombia, where massive resources to the war on drugs have made negligible impact. True, interdiction efforts can influence the street price a bit – maybe even quite significantly, as in the aftermath of the destruction of the Medellin Cartel in 1989 – but the effects never seem to last much beyond a year.  For all the hullabaloo about the war on drugs,  the long term price trend for most illegal narcotics has been downwards. 

What’s more, we all know that this emperor has no clothes.  When I worked in the government, I used to ask the Afghanistan experts I came across what assessment had been made of what effect even a best case scenario on counter-narcotics in Afghanistan would have on the street price of heroin in the UK, or how we could be sure that production wouldn’t just be displaced to Turkmenistan instead.  The answers I got back were never very encouraging.

None of this, of course, is to dispute the underlying point about just how corrosive organised crime is to the legitimacy and effectiveness of states (c.f. Mark’s recent post on Guinea-Bissau, or mine on Italy and Mexico).  But the point is that if we want to halt that process of corrosion, the it’s not Helmand, or even Kabul, that’s the front line.  The real front line is with our policy of Prohibition, and the fantastically profitable economic opportunities that it introduces.

The war on drugs will never, ever be won on the supply side.  And until we figure that out and internalise it in our policies, the margins on illegal drugs will remain astronomical, the incentives for organised crime and insurgent movements will stay irresistible, and states will keep failing. After all, we can all see that Prohibiton in America created and sustained Al Capone.  So which bit about sustaining his inheritors at the global level is it that we don’t get?

Subsidies and fuel prices

A key fact here from BP, via the New York Times:

From Mexico to India to China, governments fearful of inflation and street protests are heavily subsidizing energy prices, particularly for diesel fuel. But the subsidies — estimated at $40 billion this year in China alone — are also removing much of the incentive to conserve fuel.

The oil company BP, known for thorough statistical analysis of energy markets, estimates that countries with subsidies accounted for 96 percent of the world’s increase in oil use last year — growth that has helped drive prices to record levels.

In most countries that do not subsidize fuel, high prices have caused oil demand to stagnate or fall, as economic theory says they should. But in countries with subsidies, demand is still rising steeply, threatening to outstrip the growth in global supplies.

The article goes on to report that while Malaysia caused no end of annoyance to its citizens when it hiked petrol prices by 40 per cent at the start of June, it was before this spending 7.5 per cent of economic output on fuel subsidies – more than anywhere else on earth.  (Indonesia is next, at 4 per cent.) 

“I know they could kill me, but the cost of filling my tank in the US is just too much”

From Reuters via John Robb:

U.S. motorists are risking rampant drug violence in Mexico to drive over the border and fill their tanks with cheap Mexican fuel, some even coming to blows over gas shortages and long queues.

The gap between Mexico’s subsidized gasoline and record U.S. prices has made it well worth making the trip, and U.S. drivers are even shrugging off the dangers of Mexico’s drug war which sees almost daily shootings in border towns.

Some say they can save up to $100 a month by filling up every two weeks in Mexico. The extra demand is causing shortages at hundreds of Mexico’s border gas stations, some of which are starting to ration fuel.

“It’s worth taking the risk even with the violence,” said a retired California engineer named Terry, who declined to give his surname, as he filled his red Ford pick-up truck in Tijuana, over the border from San Diego. “I know they could kill me or kidnap me, but the cost of filling my tank in the United States is just too much,” he said.

(See this post from 10 days ago for background and links on current violence in Mexico.)

Hazardscape

A fantastically useful map created by RSOE EDIS, a nonprofit emergency services organization based in Budapest:

The live map or hazardscape is regularly updated from hundreds of sources- like the WHO, US Geological Survey as well as from emergency services (mainly, it has to be said, in developing countries) who report on live operations from around the world. The map is a useful reminder of the number of risks that rarely make the news; an epidemic hazard in Russia, forest fires in Greece, to flash floods in China and earthquakes in Mexico.

America’s corn crunch

If there’s a silver lining to the disastrous flooding in the US mid-west, then this might be it.  As prices for corn go through the roof, the impacts of diverting so much of it to ethanol production – expectations before the flooding were of fully a third of this year’s crop –  are leading to an increasingly determined push-back from the US food industry.

Of course, the effects of corn-based ethanol on food prices aren’t exactly a newsflash: Mexico City saw riots on this very subject back in February 2007, well before food prices had reached the top of the global agenda.  But the extreme weather event that the US midwest is now experiencing shifts the intensity of debates up by at least two gears.

At present, the FT reports, US biofuel rules require 9 billion gallons of biofuels to be blended into transport fuels this year – mostly with corn-based ethanol.  But the US Environmental Protection Agency can – if it chooses – waive the requirement.  Texas has asked it to do just that – and food producers, as they watch their costs rocket – are asking it to do the same nationally.  As one food company chief puts it, “it is not fair to expect us to compete with a government-subsidised market”. It’s a fair point.

As readers will already be aware, the importance of corn to the US food economy goes far, far beyond cornflakes and tins of Green Giant sweetcorn.  If you haven’t already done so, read Tim Flannery’s excellent NYRB article from last summer entitled “We’re living on corn!” – he’s not kidding:

[Michael] Pollan gives us the example of the chicken nugget, which he says “piles corn upon corn: what chicken it contains consists of corn” (because the chickens are corn-fed), as does “the modified corn starch that glues the thing together, the corn flour in the batter that coats it, and the corn oil in which it gets fried. Much less obviously, the leavenings and lecithin, the mono-, di-, and triglycerides, the attractive golden coloring, and even the citric acid that keeps the nugget ‘fresh’ can all be derived from corn.

So dominant has this giant grass become that of the 45,000-odd items in American supermarkets, more than one quarter contain corn. Disposable diapers, trash bags, toothpaste, charcoal briquettes, matches, batteries, and even the shine on the covers of magazines all contain corn. In America, all meat is also ultimately corn: chickens, turkeys, pigs, and even cows (which would be far healthier and happier eating grass) are forced into eating corn, as are, increasingly, carnivores such as salmon.

If you doubt the ubiquity of corn you can take a chemical test. It turns out that corn has a peculiar carbon structure which can be traced in everything that consumes it. Compare a hair sample from an American and a tortilla-eating Mexican and you’ll discover that the American contains a far larger proportion of corn-type carbon. “We North Americans look like corn chips with legs,” says one of the researchers who conducts such tests.

And of course, turning food into fuel is only half the story: for America’s love affair with corn is also the tale of turning fuel into food – on a truly epic scale. In the US, according to academics David Pimentel and Mario Giampietro, even back in 1994 the equivalent of 400 gallons of oil was expended each year to feed each US citizen.  Meanwhile, another study – this time of Canadian farms – gives an idea of how this energy use breaks down:

– 31%: manufacture of inorganic fertiliser

– 19%: operating field machinery

– 16%: transportation

– 13%: irrigation

– 8%: raising livestock (not including feed)

– 5%: crop drying

– 5%: pesticide production

 Now, you may be wondering: if it takes this much energy to produce corn, how can it make sense then to use that corn as an energy source?  Wouldn’t that seem, not to put too fine a point on it, wantonly defiant of the laws of thermodynamics?  Alas, it would.  Indeed, studies show that the energy-returned-on-energy-invested (EROEI) of corn is actually negative: corn ethanol requires 29 per cent more energy to grow than what you can get out of it.

Rewind!  One more time: corn ethanol requires 29 per cent more energy to grow than what you can get out of it.  You may have seen some pretty mad subsidies in your time, but I’ll wager that none tops this; watching America tie itself in knots thus, one can’t help but feel an awestruck respect for the thunderous public affairs capacity of the US farm lobby.

Still, as we watch the US farm lobby and the US food lobby start to join battle, one might reflect that neither is clearly doing many favours for the public interest.  Corn-based ethanol may be an obviously stupid policy.  But it’s hard to see a diet as rich in red meat, saturated fat and processed food (all derived from corn) as is America’s, as being much more sensible – especially given that the globalisation of that diet is the number one driver of rising global food prices.