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November 17, 2005
Plan Colombia rolls cocaine prices back to 2004 levels. Hooray?
I was perplexed when I heard that Drug Czar John Walters, in a press conference this morning, had announced a 19 percent increase in U.S. street cocaine prices and a 15 percent decrease in cocaine purity between February and September 2005. How could that be true when so many other indicators – coca acreage, coca-base prices, size and frequency of illegal drug-smuggling shipments – appeared to indicate that cocaine supplies were not reducing? Could it be that we’ve missed something, and that the deeply flawed U.S. approach to drugs in Colombia is finally working?
That, of course, was the main argument behind today’s press conference. But the Drug Czar’s office thoroughly undermined its own argument when it distributed – and prominently displayed on its website – the following chart to back up its claim. Look at it closely for a moment.
The big achievement being trumpeted here is that cocaine price and purity levels (about $170/gram and 65%, respectively) have been pushed back to what they were in… early 2004. Early 2004? A year and a half ago? That wasn't exactly a golden age for drug supply reduction. And didn’t Plan Colombia start five years ago?
Holding a press conference to celebrate cocaine prices rising to 2004 levels reminds me of Lewis Black's comedy routine making fun of Bill Clinton's 1992 campaign boast that, as governor of Arkansas, he had moved the state's educational performance from 50th to 49th place in the United States. (Paraphrasing: "Wow. What's the miracle? Do they have pencils now?")
The chart raises another interesting question: what happened in 2004 to make price plummet and purity increase? (We didn’t know about that remarkable hiccup until today, since until now the last year for which official data were available was 2003.) Why does the chart begin in July 2003, when Plan Colombia started in 2000? Some journalists with whom I’ve spoken today say that the Drug Czar’s data actually show prices declining and purities rising since 2002.
Put in this broader context, the rise in prices since April 2005 looks like little more than a very partial correction to whatever happened in 2002-2004 to glut the market with cocaine. While we can’t discount the possibility that it is a new trend of cocaine scarcity, it’s at least as likely to be a normal fluctuation within the same “band” of prices and purities we’ve seen since before Plan Colombia. It’s possible, then, that the Drug Czar’s office is making too much out of just a few months of data.
With so much confusion and evident fluctuation in the data, it is far too early to judge whether this is a trend or just a hiccup – much less what is causing it. I can understand the political pressures that might be motivating the Drug Czar’s office to rush these numbers out, but should prices start to go down again, they will have some very serious explaining to do. (Just kidding – there won’t be any explaining, just a period of silence with no releases of new numbers, which will end the next time they can show another few months of price increases.)
P.S.: A more technical question. I have yet to learn why the price data presented today do not match what we have seen from the Drug Czar’s office before. Today’s chart starts with a sky-high estimate of $210 per gram of cocaine in mid-2003. This doesn’t correspond at all with the Drug Czar’s previously released historical cocaine-price figures, which the Washington Office on Latin America has done such a thorough job of compiling. Look at the table of official price estimates below, pasted from WOLA’s website (I used this table for the price data in Monday’s blog posting). According to WOLA, ONDCP estimated in June 2003 that a gram of cocaine was being sold for $106 – but the chart from today’s press conference has it at nearly twice as much. If I find a reason for this incredibly broad discrepancy, I will post it here.
Posted by isacson at November 17, 2005 11:20 PM
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