A leading source for news and analysis about Mexico and the U.S.-Mexican border.

Tuesday, May 24, 2011

It's time to stop exaggerating drug money numbers

By David Gaddis Smith

It is time for some more sensible numbers on the billions of dollars involved in the Mexican drug trade.

According to former Mexican Foreign Minister Jorge Castañeda, U.S. and Mexican officials have been meeting to try to hash out the numbers.

He told the Woodrow Wilson Institute on Friday that U.S. officials have put the total value of the Mexican drug trade at a range of $19 billion to $39 billion a year, but that Mexico's CISEN (National Security and Research Center) has come up with a number of around $9 billion.

Castañeda said he had no way of knowing what the right numbers were, but said that if the trade indeed were only $9 billion, it makes no further sense to him why President Felipe Calderón has spent so much money and blood on the drug war.

Mexico's estimated GDP for 2010 was $1.56 trillion. The $9 billion figure would be less than .6% of GDP; $20 billion would be only 1.3%.

Little has stopped writers from using the upper limits — and beyond the upper limits — of drug-trafficking dollar estimates.

Novelist T. Jefferson Parker says on Page 6 of "The Border Lords" that "sales of those drugs brought Mexico some fifty billion dollars a year —- by far the single largest contributor to its economy." Writer Charles Bowden also bandies about the $50 billion figure.

And even in the unlikely event that it were $50 billion, Mexico's oil industry would likely outpace drugs (although not Mexican oil exports, which economist Deborah Riner put at $40 billion.)

In an address to the Institute of the Americas in San Diego earlier this year, Riner would not directly address the drug numbers, other than to say, "It's an important element of the economy."

But important is far different than highly exaggerated.

For example, in the documentary "Tijuaneados Anonimos," Harrison Grey Morison said drugs made up 9% to 15% of the Mexican economy. This does not appear to be anywhere close to the truth.

Early last decade, Peter Reuter and Victoria Greenfield wrote a paper called "Measuring Global Drug Markets: How good are the numbers and why should we care about them?" that found that the drug figures bandied about through official sources such as the United Nations were highly exaggerated, at times four times or more higher than the apparent actual numbers.

Ideally, there will be more good, hard, non-politically determined numbers-crunching studies that help policymakers and the public put the scourge of drug trafficking in greater perspective.