Wednesday, June 26, 2013

When is a Narcotrafficker Not a Narcotrafficker?

Horacio Cortes celebrates.
The man is flooding Colombia and other nations with an illegal, addictive drug. He's been accused by the Brazilian government and investigated by the United States government for trafficking. In a rational world, you'd expect him to be behind bars. Instead, Horacio Cartes will soon take office as president of Paraguay.

As president, Cortes, who's also one of Paraguay's richest men, will undoubtedly be accorded all the honors due to the leader of a friendly nation whenever he visits Colombia or other countries. He's already met with the president of Spain and the head of the European Commission.

A street vendor's stand in San Victorino, which sells
cigarettes alongside candies.  The 'Gold Seal' cigarettes
must be smuggled in and cost a third the price
of legal cigarettes.  

If Cortes' deadly, addictive product - cigarettes manufactured in a plant in Eastern Paraguay and then smuggled into Brazil and around the world - just happened to be on the other side of the legal wall, then he'd be likely to be on the run like Pablo Escobar (who was elected to Congress himself), rather than soon running his country.

A man on San Victorino Plaza lights up a single 'loosie' cigarette,
which he's just purchased illegaly. 
More than two billion of Cortes' cheap Ibiza, Marine y Rumba brand cigarrettes smuggled into Colombia make up 14 percent of Colombia's cigarette market, according to El Tiempo.

Colombian media reports have focused on the massive smuggling's economic impacts, particularly the lost taxes and lost jobs in Colombian manufacturing and farming.

That's all true. But much more importantly, cheap smuggled cigarettes encourage more smoking and lure kids to start smoking - and become lifelong addicts. A vendor in the San Victorino market area was selling cigarettes by the stick (which is itself illegal) including the Gold Seal brand (which is not made by Cortes) which cost only 100 pesos per stick, one third or one fourth the price of legal cigarettes.

The vendor, whose young daughter was standing nearby, assured me that she "almost never" sells cigarettes to children, but that some other vendors do. The police, she said, don't bother to enforce either the anti-loosie or the prohibition on selling to children.

It's also ironic that Coltabaco and Protabaco, which split Colombia's tobacco market between them, have led the complaints about the smuggling. They are owned, respectively, by tobacco giants Philip Morris International and British American Tobacco. But, Just a few years ago, those same tobacco giants cooperated with cigarette smugglers to flood Colombia with cheap smokes, according to journalist investigations and internal company documents. (They even worked with the same Mansur family on the island of Aruba, who now allegedly smuggle in the Paraguayan smokes.)

The multinationals' tune has since changed, because they now own Colombian tobacco companies and smuggling competes with their own businesses. They continue to argue that tobacco taxes encourage smuggling. But it's a bit hard to take them seriously when they were making the same argument a few years ago while facilitating the smuggling themselves.

Colombia's organization of departments sued the big international tobacco companies over the smuggling, but ended up settling for a paltry sum and some promised policy changes. Now, according to El Tiempo, the governors are considering suing Cortes's company. But don't hold your breath.

When Cortes assumes the presidency we can expect any lingering obstacles to cigarette trafficking to evaporate.

When Cortes visits Colombia, will he be treated like a honored guest or a smuggler poisoning Colombia's children?

By Mike Ceaser, of Bogotá Bike Tours


mauricio forero l said...

Miguel, if it is approved by USA, and in a mysterious way this guy is helping America's interest he can be president...Uribe has so many skeletons in his closet for so long, even before he was elected; there were rumors of him and his family connections with narcos and paras and, he went to be president so many times. If you have a population in which most people are stupid and willingly ignorant and, USA likes whoever is trying to be president, even somebody like Pablo Escobar Gaviria could be president.

Miguel said...

I expect that the US will do their best to get along with him, ignoring the contraband. Washington badly wants allies in the region, whether they're contrabandists or not.

It's all short-term interests.

The case of Uribe is different, since the acts alleged against him are serious on a different level.


Stuart Oswald said...

If only the state didn't get it's hands dirty by taxing it. Hmmm... Turns it all around. ;)

Miguel said...

Why not? If anything should be taxed, it's tobacco, because of the huge social costs it generates.

And to discourage its consumption.