Guns, Cocaine: One Market out of Control

The market for small arms and light weapons has completely overlapped the cocaine market. Purchases for arms are no longer made with cash but with cocaine, and the same routes used to smuggle cocaine out of South America are used to smuggle guns in. Actors far and wide rush to meet the weapons demand created by continued conflict in Colombia.

What used to be two separate cash-for-product markets has blended into one nearly perfect market.

Due to the conflict in Colombia, perfect elasticity of demand exists for anyone who can smuggle guns into Colombia. And the market there will absorb any and all weapons at the going rate, which in this case is measured not in cash but kilos of pure cocaine for one functioning rifle.

The incentive to smuggle guns into Colombia is doubled because the cocaine received in exchange for guns is consistently in high demand. Trading one product - guns - in high demand for another - cocaine - with even higher demand is good business.

This market is inherently transnational, beyond the control of any single government.

While the word waits for the next terrorist attack in the US or Western Europe, the black market for cocaine and weapons continues to erode democratic institutions in Latin America, breeding corruption, instability, and, ultimately, contempt for elected officials.

The ready availability of small arms and light weapons in both South and Central America coupled with the lack of police presence on borders and in backwater areas makes the market a very fluid one.

What used to be a system of limited purchases for cash - made largely to individual gun smugglers by the leftist Revolutionary Armed Forces of Colombia (FARC) and the paramilitary United Auto-Defense forces of Colombia (AUC) - has turned in to bulk purchases of weapons paid for with pure cocaine. The suppliers range from Central American street gangs and Mexican mafia to Brazilian organized crime groups and Islamic radicals in Trinidad and Tobago.

Honduran police seized 218 weapons and over 50,000 rounds of ammunition in April last year, uncovering a slick guns-for-cocaine operation while adding evidence to the pile that puts Honduras at the center of Central American black market operations. Police seized 161 M-16 assault rifles, 26 Soviet-era AK-47 rifles, 11 US M-60 machine guns, nine grenade launchers for attachment to the M-16 rifle, and five portable grenade launchers, among other things. These weapons were to be exchanged for one to two metric tons of pure cocaine.

The Honduran government believes that these weapons were destined for the FARC. Police in Honduras claim that a functional M-16 or AK-47 is worth around seven pounds of pure cocaine. Using information gathered from interrogations, Honduran police conclude that cocaine that lands there is worth some US$1,350 a pound, while a rifle is worth over US$9,000.

According to the United Nations Office of Drug Control