Vice Empires: Causes and Implications of Narco-State Emergence

Drug trafficking for the purposes of national profit is certainly nothing new. China, at the very least, certainly remembers when the British Empire went to war with it for the right to sell opium to the Chinese. However, at least within recent history, few states have attempted to turn to narcotics exports as a core means of supplementing incomes and enforcing power.

This trend is changing. For rogue states with few friends, the lucrative global drug trade, after rapid 21st-century growth, has become an attractive means of survival. This essay will analyse three of these narco-states in their formative stages, and seek to understand why states undergo this process of narcotization and what implications the narco transformation will have, for both the states themselves as well as their wider regions.

Narco-State Prototypes

Before further proceeding, it is important to first define what narco-state are. For the purposes of this essay, narco-states will be determined as states which use involvement in the narcotics trade, both domestic and international, as a core means of state maintenance. As things currently stand, the three most prominent proto-narco-states are Venezuela, North Korea and Syria.

In Venezuela, the regime has long effectively granted military officers carte blanche to traffic drugs in an effort to maintain the military’s loyalty despite not having the funds to pay it directly. This has allowed for the growth of the so-called Cartel of the Suns, named after the sun emblems on officer uniforms. More recently, this trade has skyrocketed, and the Cartel of Suns has gained participants of cabinet ministers as well as allegedly Maduro himself. Some reports indicate that, by now, the Maduro government is completely dependent on drug trafficking to keep its patronage networks running and its government afloat.

North Korea, on the other hand, has exported methamphetamine for decades, smuggling its product to Chinese Triads, Japanese Yakuza (including the notorious Yamaguchi-gumi) as well as the Philippines, Thailand and Australia through both conventional smuggling routes as well as embassies (since diplomatic bags are immune to searches). As with most information about North Korea, details about the nature and scope of operations are difficult to discern. However, what is known is that North Korea runs its drug operations under Central Committee Bureau 39 (which also runs currency counterfeiting operations), which has worked hard towards building a global brand around 98-99% purity, allowing North Korea to become one of the premier sources of the most high-quality meth in Asia.

While reports are mixed in Syria, the situation does not look good either. It should be no surprise that in a region of seemingly perpetual war and profound human suffering, the drug business has been good. The Assad government has far outgrown its days of cannabis resin cultivation and counterfeiting during its early 2000s Lebanon occupation (which was estimated to make the government $500 million annually). Instead, as the Civil War group and its reliance on paramilitary assistance from the Shabiha gangs grew, it became an active participant in the production and distribution, with lax enforcement policies at border crossings and airports which allowed drug arrests to drop since 2011 whilst arrests of Syrian drug exporters outside their borders skyrocketed. Recently, within a period of 40 days, 1 billion USD in amphetamine pills in Assad government-linked packaging was seized by authorities in neighbouring Saudi Arabia and Egypt. Analysts noted that this quantity would constitute 11% of Syria’s annual budget.

The similarities between these states are striking. All of them are states commonly characterized as rogue regimes. Notably, none of the states actually take ownership of their drug dealing and even make vague assurances that all drug exports are merely the work of criminal elements that their respective regimes are trying to contain. All the states, to some extent, have allowed for their drugs to be sold both internally as well as externally. In North Korea, meth can even be bought from the state pharmacy as simple medication and some analysts estimate that 25%-50% of the population are addicts. Yet differences do exist. Venezuela’s state apparatus is so dysfunctional that it has been unable to resolve a fight between rival governments within the same country with Maduro’s rival, Guaido, making frequent trips in and out of the country with relative ease. Such a state of bizarrely frozen conflict would be unthinkable in North Korea, which while poor, maintains fiercely totalitarian state control. From here, then, some conclusions can be drawn about the nature and characteristics of narco-states.

Why Narco-State?

The short answer is, of course, money. However, from here more interesting questions arise. What exactly about the international drug market fits the rogue dictatorship more than regular economic activity or, god forbid, building normal economic partnerships with other states?

Firstly, engaging in the drug trade clearly can be an excellent way to raise foreign currency. For states under economic sanctions, foreign currency is often valued at an incredible premium, as such foreign currency is critical towards making high-value imports which would not accept their local money. These imports could include sophisticated nuclear or missile equipment and electronics, or luxury goods, sports cars and wine for the autocrat in question. Regardless, they need foreign cash. When exporting drugs, they work with a sophisticated global market that has long-established avenues of avoiding oversight, hungry for the kind of large-scale production that only the economies of scale that nations possess can truly provide.

Secondly, a state-run narcotics trade can be an excellent way to extract wealth for the state at a previously impossible rate with minimal investment. Tax collection can often be difficult and bureaucratically demanding, especially if the existing bureaucracy is already corrupt, incompetent or both. Accurate statistics of each person’s assets must be made and updated regularly. If the state is too large, stretched over difficult terrain or has a bloated and byzantine bureaucracy, local government officials can sometimes get away with simultaneously overcharging taxes and underpaying the state. Property confiscations possess the same faults, and can be excessively coercive and can spark revolts when done too intensively or too quickly. Regular state monopolies might not make enough returns for the investments required. All these measures can be made even more difficult in periods of civil unrest, whether they be total civil war in Syria or awkward quasi-open conflict in Venezuela. For narcotics, on the other hand, citizens would gladly line up at government pharmacies to purchase their “medicine”, without the need to depend on, or devolve power to corrupt, incompetent or ambitious bureaucracies or paramilitaries, with massive potential gains.

A parallel of this can be seen in the Russian Tsardom, where the state monopoly on vodka distillation proved critical towards building autocratic power since the days of Ivan the Terrible, who supposedly “encouraged his subjects to drink their last kopecks away in state-owned taverns”. In Russia, traditional beers and meads were discouraged and eventually largely disappeared in exchange for the mega-distilleries that only the state could dominate. Vodka production and sale licenses became an alternative gift towards rising rent-seeking nobles, and Peter the Great decreed that the wives of peasants should be whipped if they dared attempt to drag their imbibing husbands out of taverns before the men were ready to leave. This proved useful for obtaining unpaid labour as well – Peter managed to create a significant unpaid workforce by offering alcohol addicts debt relief through military service instead of debtor’s prison. Indeed, one of the classic turning points that many leftists point to when Stalin supposedly “betrayed” the Revolution was when he reopened the vodka monopoly that Lenin closed, to pay for Soviet industrialization.

On a broad economic perspective, drugs can also be quite flexible towards the economic needs and resources of rogue dictatorships. Opium poppy cultivation, for instance, is not particularly high-skill and can be done so long as appropriate climate and land are available. If manufacturing processes are truly lacking, some collaboration with pre-existing regional criminal organizations can more than make up for the skills gap. However, for states with a bit more technical rigour behind them, amphetamines can be an attractive industry to enter, especially if an easily convertible pre-existing chemicals or pharmaceuticals industry exists.

This broad range of drug markets makes also transitioning from low skill to high skill narco-state trafficking possible. This is best exemplified in North Korea, which transitioned into the high purity meth business after testing smuggling networks and regional gang networks through its time in the opiate market.

Lastly, for the purposes to sustaining state control, a drugged-up population can be an easy shortcut towards preventing dissent and unrest. After all, the core source of unrest in many autocracies is often exposure to Western freedoms and standards of living gained through watching Western media. From this exposure, secret discourses and intellectual growth can occur, which can birth ideological movements capable of toppling regimes. If drug addiction can infiltrate the life of the average citizen, and fill up that person’s life between twin stages of earning money and spending that money on a drug habit, then there would be little space to consume and consider Western media, let alone organize vast secretive opposition movements.

Side Effects

A state built on narcotics is unlikely to be very sustainable for a whole host of reasons. Most evidently, having massive drug operations present in one’s borders is likely to poison the local population’s social health and economic productivity. While a purely-export narcotic industry (the most feasible and sustainable model) might seem like a tenable workaround, leakage of drugs into the local population is inevitable. After all, narcotics are not easily regulated like casinos with large physical spaces and clear boundaries. Drugs or drug-producing equipment can be stolen. Depending on the particular narcotic, people trained in cultivation or production could use those also same skills to set up their own independent operations, as is reported to be common practice in North Korea. From that point onward, the vicious cycles of narcotic-induced societal death come into effect. Drugs create unemployment, poverty and broken homes, which in turn create drug addicts. Addiction hypnotizes adults from working and parenting and children from schooling, which leaves further self-medication as the only source of hope in their lives. Et cetera, et cetera.

The results of such social-demographic corruption would likely be an even more extreme version of the centuries-long alcoholization of Russia, where every year alcohol often kills more people than the decade-long Soviet-Afghan War and where vodka is estimated to have directly killed more than 600,000 people since the Soviet collapse.

In addition through the direct corrosive effect that high drug use has on overall health, the development of narco-states would drastically distort local governance incentives to the detriment of the population. For instance, if narcotics become the primary source of government funds, the need to establish a competent bureaucracy, with statistics and surveys on the whole country, would fade away. If a government believes that it can maintain its patronage networks keep itself in power through ramping up state wealth extraction rather than increasing overall economic growth through using the drug trade, then there will be no incentive to maintain basic governance duties, like education and civil services. This is illustrated best by the rampant poverty and economic distress in cartel-controlled territories in Mexico. Despite anecdotes of greater prosperity and employment in cartel land than that of the corrupt incompetent national government, studies have shown that what little employment can be gained from the drug trade is largely counteracted by the lower quality of governance, and completely buried by the violence that cartel rule brings.

If one focuses on governance through a more biographical person-based lens (in line with Waltz’ First Image of the Individual), one must also wonder how having drug addicts in government could compromise governments. Certainly, some government leaders might possess the Spartan austerity to refrain from dabbling in the vice fuelling their regime. Still, as generations of leaders come and go, and using narcotics as gifts or social lubricants becomes tradition within the civil service (as is the case in North Korea), it would be surprising if some hardcore addicts did not fall into positions of great influence. Building a country on a product that undermines rational thought does not often lead to rational governance. Images of Adolf Hitler’s final days of denial and tantrum, doped up with heroin, cocaine and bovine testosterone prescribed by his quack doctor Theodore Morell, come to mind.

However, beyond the national frame, the transformation of regular state actors into narco-states has tremendous implications for international politics. As with their non-state cartel counterparts, narco-state must necessarily be a state in perpetual conflict, if not outright war, with all of its neighbours. For the narco-state economy to function, the drug exports must flow, and will necessarily leak (if not directly exported) to criminal elements in all surrounding countries. This would fuel not just the direct drug problem in its neighbours, but also all other problems affiliated with organized crime, including gang violence, the illicit arms trade and corruption. Hence, any cooperation with such states would be immensely difficult even if desirable. This could be worsened by the Security Dilemma, wherein actions to ensure security by one state are perceived as aggressive coercion by another. For instance, if a narco-state’s neighbour deploys paramilitary troops near the borders to prevent drugs from leaking across national lines, it could be perceived as an act of military aggression which could spike relationships towards greater conflict and possible war.

To adherents to realist theory, which assumes that all states are in perpetual competition and states of distrust with each other anyway, this might not seem like a particularly major change. However, even such a frame must consider the substantial increase in competition intensity and scope that such a narco-state would experience. Under some realist theories, coalitions are built around not actual power, but threat perceptions. Narco-states would naturally possess threat perceptions that grossly exceed their actual power, and hence would find that at the very least, balancing coalitions will continuously work against them in ways large and small, making every single geostrategic move incredibly difficult. In addition, allies would be far harder to coordinate with. While common interest might permit for limited cooperation between across specific levels of state hierarchies, the massive threat perceptions surrounding narco-states would mean that such cooperation would always remain highly limited and loaded with distrust, and hence even slower and more inefficient.

For instance, North Korea and China have many security concerns in alignment. Both oppose American, Japanese and South Korean power and possess resources and technologies which they could mutually benefit from exchanging. Yet, their relationship is frosty at best, and while China remains North Korea’s largest trading partner, massive distrust, frustration and subtle slights rest at the core of their relationship. Much of this can be attributed to the paranoia and hypernationalism present within North Korean leadership. However, at least part of this can be attributed to the fact that North Korean drug exports have steadily flowed into border regions with China, particularly the provinces of Jilin, Heilongjiang and Liaoning, where North Korean drug exports have fuelled the profits of local Chinese gangs.

Narco-states might also seek to use their connections with drug cartels and gangs to control such elements both within and without their borders, perhaps hoping to even use them as part of a coercive paramilitary apparatus for foreign operations, like how Pakistan used the Taliban in Afghanistan. On a practical level, this could mean establishing supply lines and embedding military experts within friendly groups. However, if pursued, this strategy could very likely go terribly wrong, and control could very well be established in the opposite direction. Loyalties could leak in both directions. Weapons supplied by the narco-state could be turned against it, military leaders could be bribed or otherwise flipped against the narco-states. After all, Pakistan too was eventually infiltrated by the very Islamists it had sought to use. Drug cartels might even be more chaotic and dangerous tools of policy than terror groups – while terror groups often have to at least nominally tie themselves to an ideological mission, cartel structures tend to be held together by a mix of pure coercion and micro personality cults.

In a more tragic sense, a world with more narco-states would also be a world worse for refugees. Even without narco-states, refugees have historically been targets for drug cartel recruitment. As the Rohingya trek across Golden Triangle territory and Central American refugees struggle through cartel land, the impoverished, unrecognized status of these people often makes them perfect recruits as drug mules. This, of course, has not helped the case for welcoming refugees as xenophobic forces find more nuggets of limited truth to build massive conspiracy theories around. If more refugees were to originate from a narco-state where they are more likely to be not just addicts but trained in drug cultivation and production, all these issues would likely be multiplied tenfold. Cartel recruitment would soar, anti-refugee sentiment would skyrocket and refugee camps would become even more dirty and dangerous places to live. Cases of thus-far limited nationalistic refugee-on-refugee violence, grown out of fears that some refugees are making life harder for everyone, will likely also increase.

Yet, in a strange, twisted way, this could possibly be the salvation of the narco-state. Through creating a population too far gone to rescue or relocate and a state apparatus too internally rotten to be salvaged, a narco-state could conceivably construct a scenario where regime change would do no good and the state has to be tolerated by outside powers in order to keep its population from fleeing and maintain some kind of limited grip over its own odious drug apparatus. This could be similar to how Great Powers from France to Russia have supported dangerous characters like Libyan warlord Khalifa Haftar, on his promises to keep refugees from fleeing his country and keep the Islamists (many in his own coalition) under control.

In such a bizarre situation, even the most sophisticated IR theories do little by way of predicting how nations will react. There would be too many incentives in too many directions, and predictive capacity would lay solely with diplomats and intelligence on the ground more familiar with the specific actors involved.

Conclusion

Narco-States are certainly still a rare phenomenon. As it stands, the trade-offs still involve a bit more uncertainty than many regimes are willing to take on. However, if their systems of economy and connections to the global drug market improve, their dangerous path might become far more attractive for other regimes to try. States like Russia and Iran might turn to such methods as desperate last resorts if they fear total regime collapse. In such a scenario, it will fall upon traditional great powers such as the US and even China to ensure that anti-narco tactics remain up to date, and broader anti-narco strategy and cooperation with regional partners remains strong.

UnderStated

Vice Empires: Causes and Implications of Narco-State Emergence

Narco-State Prototypes

Why Narco-State?

Side Effects

Conclusion

Further Reading

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Vice Empires: Causes and Implications of Narco-State Emergence

Narco-State Prototypes

Why Narco-State?

Side Effects

Conclusion

Further Reading

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