The Balloon Effect, In Effect: Humala, Peru And The Drug Dilemma (Part 2 Of 2) – Analysis

By Liam Whittington

The ‘balloon effect’ is a well-worn analogy used by drug policy analysts to illustrate the process by which drug production is displaced across national borders in order to evade eradication and interdiction efforts. Squeezing one end of the balloon forces the air to the other side – clamping down on cocaine production and trafficking in one area of the Andes simply pushes it into another region or country. If efforts are made to eliminate production in the new area, production simply moves back to the original area in a cyclical process which continues as long as there are individuals willing to risk jail to reap the economic rewards. This displacement is the crucial factor behind the failure of enforcement-based approaches to counter-drug strategy in South America – cocaine production process that has been pushed around Peru, Bolivia, and Colombia for at least forty years.Displacement saw coca cultivation move from Peru and Bolivia to Colombia in the late 1980s and early 1990s, and has now resulted in Peru’s ascent to cocaine kingpin status once more. The balloon effect is the element that historic U.S. directed counter-drug policies have failed to address – there are insufficient enforcement resources that are available to stop drug production moving from country to country. Enforcement strategies that appear to be successful in one area prove to be paper tigers, as the effects of Plan Colombia on Peru have demonstrated.

Rather than being defeated, many of the traffickers who previously operated in Colombia have displaced cocaine production to Peru, where they find it easier to operate. As in Colombia, there is a ready supply of agricultural labor willing to grow coca in exchange for a better financial stake, and in Peru the state security forces do not have the resources to prevent drug-related activity over the entire country. For example, a June 2013 report by Peru’s daily La Republica revealed how drug traffickers paid campesinos $60 a day to build a 600 meter road in the Peruvian highlands (known as a ‘narcopista’), which can be used as an improvised landing strip for narco-planes.[1]

While cultivation and production sides of the industry have moved to Peru much of the violence, which plagued Colombian cities when that country’s cartels controlled illegal trafficking, has been exported to Mexico and Central America. Indeed, many of the features that were characteristic of Colombia in the 1990s could also be applied to parts of Mexico from 2008 onward. These included extreme levels of violence, lack of state authority, control of territory by illegal entities, and a militarized government response.

Fortunately, Peru has so far largely been spared the violence experienced by Colombia and Mexico in their attempts to deal with drug trafficking. If Humala were to adopt a militarized approach like the governments of Colombia and Mexico, however, it is possible that violence in the country could escalate, particularly if the Sendero Luminoso mounts a renewed concerted campaign alongside the traffickers. Lima’s current eradication and interdiction based approach, even if successful at minimizing the drug production in Peru, will only push traffickers back into Bolivia and Colombia.

Not only is an enforcement-first approach likely to simply lead to displacement, it also entails some significant challenges in Peru that requires the exercise of resources arguably beyond the capacity of the state to make skilful use of these resources. Eliminating illegal coca is a difficult problem in many parts of the country – eradication is a highly controversial policy among coca farmers, who have used violence to resist government eradication efforts.[2] In September 2011 Humala declared a 60-day state of emergency in the Ucayali region after coca farmers blocked roads to prevent police offices reaching the coca farms.[3] Some coca farmers have allied themselves with the Sendero Luminoso, and the VRAEM remains an emergency zone administered by a joint operation of the Peruvian police and military, in which it is dangerous for Peruvian eradication forces to operate.[4] Many illicit coca farms are hidden high in the hills and are strategically placed in inaccessible areas, making eliminating the drug crops extremely difficult as Peru does not allow aerial fumigation and relies on manual eradication.[5] The state has a comparatively weak presence in the areas in which the majority of illicit coca is produced, namely the Alto Huallaga, the VRAEM, and La Convención-Lares in the Cuzco region. Rumours that trafficking organisations are beginning to produce strains of coca which can be grown at lower altitudes and maintain a high level of quality may explain the expansion of cultivation outside of traditional growing areas.[6] While growing coca currently produces much higher returns than many other crops, farmers are beginning to understand that the financial rewards of processing their leaves into coca base, paste, and cocaine itself are even greater – increasing numbers of maceration pools that are being discovered at illegal growth sites.[7]

Further complicating the eradication and interdiction efforts of Humala is the continued presence of the Sendero Luminoso. While the extent of the group’s commitment to its Maoist revolutionary ideology today is debateable, the expansion of the drug industry has provided the remaining members with a convenient niche in which to operate. Certainly, rebel forces are involved in the drug trade, allowing them to amass a large amount of money for use in the political struggle or personal enrichment. The lack of provision for alternative development in Lima’s current strategy plays into the hands of the insurgents. Eradication and interdiction efforts allow the Shining Path to win the propaganda war and gain the support of disgruntled coca farmers. It also provides an opportunity to launch attacks on government forces when they enter rebel-controlled territory to destroy coca crops and re-assert state control.[8] As with Colombia, the fight against drugs risks being conflated with combatting a politically based internal conflict, increasing the likelihood that a military solution will continue to be the preferred modus operandi for resolving both issues.

Changing the Game – Failure to Success in the Long Term

The difficulties of applying an effective counter-drugs strategy based primarily on force in as well as across the Andes more broadly, has meant that Humala’s current strategy is likely to fail. A lack of resources, weak state territorial control, challenging terrain, the involvement of the Sendero Luminoso, and above all the balloon effect are challenges which will not be surmounted by policy issues focused on enforcement. There will be little if any impact on the overall production of cocaine in South America. Similar drug war policies have failed to produce meaningful results for more than three decades, and a fundamental shift in attitude and policy is needed in the Western Hemisphere to tackle the issue of illegal drugs. The U.S. cannot be condemned for its willingness to provide its hemispheric neighbours with significant resources to combat a social problem that has significant deleterious effects throughout the hemisphere. However, the provision of these resources is dependent upon countries executing a counter-drug policy approved by Washington, which for the past four decades has been couched in the political narrative of a ‘war on drugs’.

It is not unreasonable for the U.S. government to expect to have some influence over how its aid money is utilized, but policymakers must now accept that the counter-drug policies it has encouraged its Latin American partners to adopt have largely failed. Ultimately, these approaches that have focused on enforcement and control, on eradication and interdiction, have mainly turned out to be a colossal waste of resources, time, and lives. Washington has to accept a significant degree of responsibility for this. The U.S. government must now alter the outlook for the future by accepting that it is time for a different approach, and by supporting Peru, Colombia, and Bolivia in implementing these alternative policies. Leaving aside the dire current state of U.S.-Bolivia relations, particularly regarding counter-drug initiatives, a fundamental change in attitudes to counter-drug strategy in Peru, and across the whole of Latin America, is required.[9]

Crucial to minimizing cocaine production in the Andean region is reducing the economic and social impetus to grow coca illegally – to separate career criminals from those civilians who participate out of necessity. The majority of peasant farmers do not want to take part in illegal activity, but the financial rewards and the chance to improve the lives of their families make participation too tempting an opportunity to reject. The implementation of a more holistic strategy emphasising economic and alternative development over eradication and interdiction would represent a step in the right direction. USAID does currently provide money for alternative development to Peru, but the proviso that a farmer must eradicate 100 percent of their coca before entering a U.S. funded program is financially unsustainable for many.[10] Increasing flexibility on this issue, allowing farmers to make a gradual transition to legal crops while maintaining a source of income, could increase participation. Taking the money currently spent on counter-narcotics efforts in Peru and redistributing it to other aid sectors to which Washington currently spends far too little, such as education, economic growth and trade, and agricultural development, could also help stimulate the licit economy.[11] If accompanied by concerted government attempts to build a broad campaign against cocaine in Peruvian civil society (including informing the public about the damage inflicted by the cocaine trade at home and abroad), this would discourage the participation of ordinary Peruvian farmers in illegal activities. Resources dedicated to eradication and interdiction could then be targeted more effectively at the traffickers rather than being wasted in a futile attempt to destroy all of the crops planted by peasant campesinos.

A more impactful holistic strategy requires a great deal of resources and a long term political commitment to supporting economic and alternative development. Moreover, the approach must recognize that cocaine production in the Andes does not confine itself to the national borders of individual countries. It is a fluid, mobile entity which can only be countered though a pan-Andean effort, not piecemeal country-by-country solutions. Multilateralism is an essential element in such an endeavour. The dilemma of drug usage cries out for the governments of Peru, Bolivia, and Colombia to cooperate to tackle the displacement issue together. A broad, international agreement on the implementation on a counter-drug strategy which focuses on alternative development, collaboration, and the sharing of resources, and which mandates a commitment to this approach for decades, is needed to avoid the pitfalls of temporary political gains sought by policymakers at the national level. The Peruvian and Colombian governments are generally on the same page when it comes to combating drugs, and the two countries enjoy a robust list of agreements that promote joint cooperation to tackle drug trafficking along their common border. The Bolivian situation, however, is more complicated as the Morales administration views coca production in a different light due to its status as a fundamental cornerstone of Bolivian culture.

Adopting a new approach would not mean the end of enforcement and control efforts altogether. Ideally, even more resources would be made available in terms of eradicating drug crops and interdicting drugs and traffickers, but the relative importance of these elements would be reduced in the overall strategy. Clearly this would require the mobilization of far greater financial resources to be conveyed to counter-drug policies than are currently provided. Those determined to take part in the drug trade will, of course, continue to do so and a change in strategy will not automatically be a panacea. But there is nothing to suggest it will be any less effective than the past forty years of the war on drugs, which has not witnessed a stellar performance.

There are signs that a nascent atmosphere in which changes to counter-drug strategy could become more acceptable is developing among some of the United States’ and Latin America’s political classes. Former presidents of Mexico, Brazil, and Colombia (Ernesto Zedillo, Fernando Cardoso, and César Gaviria respectively) have all deemed the drug war to be a failure.[12] In an interview conducted in January 2011 former Mexican president Vicente Fox voiced his support for legalization of the production, transit, and sale of prohibited drugs.[13]

Even President Obama appears to acknowledge that tackling the root causes of drug-trafficking are as significant as stopping trafficking operations. In a speech to Mexican students in May 2013, he commented that ‘problems like narco-trafficking arise in part when a country is vulnerable due to its poverty, and because of institutions that are not working for the people, because young people do not see a brighter future ahead’.[14] Aside from this rhetoric, the possession of small quantities of drugs for personal use has been legalized in Mexico, Uruguay is expected to soon legalize the cultivation, sale, and the use of marijuana, and state laws were passed in November 2012 in Colorado and Washington legalizing marijuana for personal use (likely to be followed in the near future by California).[15]

This is not to suggest that cocaine (or any other drug) will be legalized in Peru anytime soon. However, an environment in which the need to ‘fight’ drugs is not the dominant policy priority, or is deemed to have been a failure, could allow fundamental changes to be implemented that offer a better chance of combatting drug trafficking more successfully in future. The primary responsibility for enabling change in the way that Latin American nations deal with drug production lies with the United States. As the source of anti-drugs assistance for Latin American nations, and the main source of demand for Latin American cocaine, Washington must lead the way in halting a failing policy and moving in a new direction, one which at the very least cannot fail to be more effective. Humala’s current strategy for Peru will not work – at best it will only provide temporary relief. It is time to try something different.

Liam Whittington, Research Fellow at the Council on Hemispheric Affairs


[1] Hidalgo, Maria Elena. “Narcos tienen 36 pistas de vuelo en valle Pichis-Palcazu.” La Republica (Peru). Politica. 26 June 2013.

[2] Taft-Morales, Maureen. Peru in Brief: Political and Economic Conditions and Relations with the United States – Congressional Research Service Report for Congress. Congressional Research Service, 7 June 2013. Pp.14.

[3] Mapstone, Naomi. “Coca Farmers Throw Down Gauntlet In Peru,” The Financial Times, 14 September 2011.

[4] Taft-Morales, Maureen. Peru in Brief: Political and Economic Conditions and Relations with the United States – Congressional Research Service Report for Congress. Congressional Research Service, 7 June 2013. Pp.14-15.

[5] Leon, Adrian & Kraul, Chris. “Peru Suspends Coca Eradication Program,” Los Angeles Times, 18 Aug 2011.

[6] Graham, Ronan. “Peru Sees Spread of Drug Crops Outside Guerrilla Territory”

[7] Reiser, Philip. The Drug Industry in Peru – From Scared Leaves to Political Curse. Konrad Adenauer Stiftung International Reports, August 2011. Pp.5-6.

[8] In April 2013 a Peruvian soldier was killed and another wounded when the Sendero Luminoso ambushed the officers in La Convención. As well as launching regular attacks on soldiers in the VRAE, the rebels has also attacked infrastructure sites such as natural gas plants. See:
Dube, Ryan. “Peruvian Soldier Killed by Shining Path Rebels in Coca Growing Region,” The Wall Street Journal, 5 April 2013.

[9] Bolivian president Evo Morales, has enjoyed a somewhat strained relationship with Washington throughout his administration and the issue of drugs has been an especially problematic one. As a former coca grower, Morales currently heads Bolivia’s union of coca growers, and has rejected a number of U.S. counter drug policies in in his country. In 2008 Morales expelled the U.S. Ambassador to Bolivia, Philip Goldberg, along with DEA agents from the country in 2008, resulting in the severing of diplomatic ties for three years. In a similar incident, in May 2013 Morales expelled USAID from the country, accusing them of conspiring against the Bolivian people and his government.
For more information, see: British Broadcasting Corporation News. “Bolivia’s Morales Insists No Return for U.S. Drug Agency,” British Broadcasting Corporation News. 9 November 2011.;
Neuman, William. ‘U.S. Agency is Expelled From Peru,’ The New York Times. 1 May 2013.

[10] Taft-Morales, Maureen. Peru in Brief: Political and Economic Conditions and Relations with the United States – Congressional Research Service Report for Congress. Congressional Research Service, 7 June 2013. Pp.14-15;
United States Agency for International Development. Country Development Cooperation Strategy 2012-2016.

[11] Embassy of the United States, Lima, Peru. “USG Assistance to Peru FY2012: Principal Programs by Sector,” United States Department of State.

[12] Grillo, Ioan. “Mexico’s Ex-President Vicente Fox: Legalize Drugs,” Time Magazine Online, 19 January 2011.,8599,2040882,00.html

[13] Ibid.

[14] Shear, Michael D. & Archibold, Randal C. “In Latin America, U.S. Focus Shifts From Drug War to Economy,” The New York Times, 4 May 2013.

[15] Hakim, Peter & Combs, Cameron. “Uruguay’s Marijuana Experiment,” The Los Angeles Times, 21 August 2013.;
The Associated Press. “Mexico Legalizes Drug Possession,” The New York Times, 21 August 2009.



COHA, or Council on Hemispheric Affairs, was founded in 1975, the Council on Hemispheric Affairs (COHA), a nonprofit, tax-exempt independent research and information organization, was established to promote the common interests of the hemisphere, raise the visibility of regional affairs and increase the importance of the inter-American relationship, as well as encourage the formulation of rational and constructive U.S. policies towards Latin America.

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