Argentina, A Quiet Link In South American Drug Trade

Like with the 18th century Andean silver route for Spain, Argentina has become a short cut for sending Peruvian and Bolivian cocaine to Europe. It's also a customer.

Argentine-Bolivian border
Argentine-Bolivian border
Jorge Ossona

BUENOS AIRES — Whether it's poor kids sniffing coca paste, or middle class and wealthy youth indulging in refined cocaine, these are the hapless end users in a continental drug chain in which Argentina is now a critical link.

As in the late 18th century, when Spain turned this area into a viceroyalty with Buenos Aires as its capital, Argentina remains a corridor for goods destined for Europe. The trade then was in silver from the mines of Potosí in Peru, which the laws then mandated be exported via Buenos Aires, because it was the shortest route to Spain. The new route worked for decades, until Spain's colonies began to revolt in 1810, and new states emerged on the continent.
Two hundred years later, the country is again a strategic stepping stone, this time for drug cartels that want to ship cocaine from Peru and Bolivia back to the Old World.
The decline of the Colombian cartels in the 1980s and 1990s and the problems their lackluster successors have had in taking their goods into the United States have created this veritable geopolitical shift. Peru and Bolivia, whose raw materials are used to make drugs, have redirected the export routes southward, turning southern Bolivia's city of Santa Cruz de la Sierra into a processing and refining center for coca paste. It is the new Potosí.

A Spanish coin from the Potsoi" mint. Photo: Wikipedia
Curiously, the change of routes has led to the resurgence of several actors from 200 years ago: indigenous communities and drug-producing peasants. They produce the coca paste by treading on hundreds of kilos of coca leaves mixed with gasoline, suphuric acid and ammonia. Then there are the contingents of thousands of locals, who load and carry this product on their backs along the narrow paths of Peru's central mountains, as the "feudal" laborers and porters of the Inca empire once did. When they reach the south, vehicles take their loads either to Santa Cruz or to Chilean ports for shipping to the United States.
The more powerful cartels have opted for air routes, which has also made Santa Cruz de la Sierra a training ground for Bolivian pilots who can become millionaires within a few years.
Getting it in
Once the base paste is refined in Santa Cruz, it must then be taken into Argentina. It's no easy task, because here the traffickers face a solid state, even though it's weakened by fissures and corruption. It is the cracks that allow the drugs to get through.
The most powerful capitalists take advantage of limited scanning to bring their loads in by air and dropping them into fields across northwestern Argentina. The safest landing tracks are located in the northern province of Santiago del Estero, though when they don't land, they just "shower" the loads onto the fields before cars load the drugs and take them to Argentine ports.
There is also entry by land, though the adventurers using this "low-cost" option must negotiate their way through gendarmerie posts. This is sometimes done using the "spectacle" of traditional Andean caravans bringing in a range of goods such as fake Chinese goods, some of which conceal coca paste. Whatever comes through can be sold in La Salada, the popular forgeries market outside Buenos Aires.

Coca leaves in Bolivia. Photo: Dr. Blofeld
For the next step, taking either paste or refined cocaine onto Argentine ports — the last stop before Europe — there is a well-oiled infrastructure of partners in the security forces and "multitasking" criminal gangs linked to them. One loading point par excellence is Rosario, the capital of soy, just inland from Buenos Aires. Local criminals receive an in-kind commission for their services, which they can sell in the local market.
In Rosario, the drugs flow through the social divides. The gangs that refine coca paste in their "kitchens" distribute it among the "soy children" from wealthy families, and lower-quality stuff that resembles crack is sold in the crowded housing estates. Local sporting clubs that intermittently act as hired hands for politicians are thought to have a hand in this local drug trade.
Similar scenarios apply in Greater Buenos Aires, Córdoba and Mendoza.
The small amounts of merchandise remaining in Argentina — the commission the cartels pay to local gangs — are enough to create growing damage to Argentina's social fabric.
Like the great merchants of colonial Spain, the drug cartels of today run an entire system through their agents in the various stopovers of the global drug circuit: Ayacucho, Sant Cruz de la Sierra, Rosario, Córdoba, Buenos Aires and the European ports.
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Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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