Bolivia Coca Trade

Bolivia Coca Trade (BOLCOCA)



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     CASE NUMBER:   293
     CASE MNEMONIC: BOLCOCA
     CASE NAME:     Bolivia Coca Trade

A.   IDENTIFICATION

1.   The Issue

Bolivia's economy is one of the poorest in the Americas, ranking
ahead of only Haiti.  The coca plant, the source for the illegal
drug cocaine, has become the cash crop of the country, bringing
millions of dollars to the informal sector of the economy.  It is
also the only provider of work for thousands of poor people who
feel the government of the country is unable to provide their 
basic necessities.  The production of coca in the countryside has
become almost unstoppable, where hundreds of hectares of forest are
being cut yearly for the cultivation of the plant.  Also, millions
of toxic chemicals are being dumped into rivers and lands as a
result of the increasing use of pesticides and manufacturing of 
cocaine.  The real damage to the environment is still to be seen,
but  results from these practices are being noticed throughout the
country. The government, with assistance from the United States, is
trying to curtail the expansion of coca but with little success. 
One of the major challenges or problems that the government of
Bolivia faces is the fact that many people in Bolivia consider the
coca growing a part of their culture and a necessity for their
economic survival.

2.   Description
     
     Bolivia is the world's second largest producer of coca leaf
after Peru and the second largest producer of cocaine after
Colombia.  Most of the cocaine refined from  Bolivian coca leaf is
consumed in the United States.

     The growth of the coca plant is a centuries-old tradition in
Bolivia.   They have used the coca leaf for medicinal, cultural,
and religious purposes.   Its first use can be traced back to at
least 3,000 B.C.  During the colonial period, Quecha and Aymara
Indian laborers in the silver mines consumed coca or the "hoja
sagrada" (sacred leaf), as it is commonly known in Bolivia.  It is
used as a stimulant and as protection against altitude, hunger and
cold.  Five hundred years later, the practice known as "acuillico",
in which the coca leaf is chewed and held in a wad in the cheek, is
still regularly adopted by at least one million Bolivians, mostly 
Indian peasants and miners.  Coca remains an integral part of
indigenous community  life, used extensively in rituals as a
natural medicine and as a" highly valued gift in a system of
reciprocal favors."

     The original version of what we now know as Coca-Cola, drew on
the medicinal benefits of coca.  Now, as the Coca-Cola company
points out, any trace of an addictive drug has been taken out of
its product, but the company still buys coca from Bolivia to be
used as flavoring.  The flavoring of coca is non-addictive, since
most of the chemicals that cause addiction are removed from the
product.

     The boom in coca cultivation and more particularly its
processing into cocaine, is widely believed to have had a negative
impact on the environment due to the increased deforestation and
associated soil erosion, the dumping of precursor chemicals in
streams and rivers, and the use of pesticides to improve
production.  However, the absence of detailed studies on Bolivia,
in part a product of the risk involving collecting data, makes it
difficult to have much more than an impressionistic view of the
degree of ecological destruction.

     Coca in itself is not generally regarded as harmful to the
land or the environment.  It should be pointed out, that farmers in
the Yungas tend to use well tried, traditional methods of growing 
coca where areas many of the farmers in the Chapare are recent
arrivals who do not have much experience in tropical agriculture. 
They often apply large quantities of pesticides in an are that is
more ecologically fragile than the Yungas.  Surveys of the Chapare
indicate that a very high number of farmers (89%) say they use
pesticides to protect the coca plantations.

     The search for land to grow coca creates a more serious
problem:  It extends the agricultural frontier at a rapid pace, as
farmers chop down or burn down forest to establish new coca fields. 
"Studies in the Chapare suggest that a large areas of forest there,
too, are being cleared to maintain relatively small areas of
agricultural production (15,000 hectares of virgin forest in the
Chapare region  have been cleared to grow coca)."

     Perhaps the most damaging effect has resulted from the
processing, rather than the growing of coca.  Extracting cocaine
from coca requires a mixture of chemicals (lime, sodium carbonate,
sulfuric acid and kerosene).  "A study by the largest Bolivian
environmental pressure group, LIDEMA (La Liga de Defensa del Medio
Ambiente), suggest that in 1988 more than 30,000 metric tonne of
toxic chemicals could have been discarded that year, mostly into
nearby rivers or streams, in order to turn 127,000 tonnes of coca
into the final project".  The blame falls on the farmers, but it
also falls on the government troops because it is widely believed
and documented, that troops during raids into the illegal
plantations dumped chemicals into the rivers and land so the drug 
manufacturer could not use it.  The chemicals used in the process
of converting coca to cocaine are exported to Colombia from the
United States.

     U.S. chemical companies, including the giants Shell Oil and
Exxon export a variety of chemicals such as ethyl ether, acetone,
and potassium permaganate, that are important components of cocaine
production.  Between 1990-1995, Colombian imports of the precursor
chemicals grew nearly 60% to more than 6,000 metric tons, in which
59% of those imports came from the United States.  About five
companies  dominate U.S. exports of the listed chemicals, with
total sales of about $10 million to $15 million to Colombian
customers.

     The Bolivian government in 1988, passed the most extensive and
controversial law on the control and eradication of coca
plantations.  This law provided for the licit growth of a certain
quantity of coca, but it also stipulated the eradication of the
illegal plantations by using the army in such raids.  One aspect
that is very clearly stated in law # 1008 is that the eradication
process will be carry out by manual or mechanical means, the use of
pesticides and chemicals is totally  prohibited, thus pointing out
the importance of protecting the environment and the people that
live in those areas were coca is cultivated.
     
3.    Related Cases

     Coca case
     Colombia Coca case
     Plant case


     Keyword Clusters
     (1):  Trade Product            =  Coca Leaf
     (2):  Bio-geography            =  Tropical (Andes)
     (3):  Domain                   =  South America
     (4):  Environmental Problem    =  Deforestation and Pollution

4.        Draft Author:             Adrian  Muniz (May, 1996)

B.   LEGAL CLUSTERS

5.   Discourse and Status:          Agreement and In progress    
     Law #1008 passed by the Bolivian Congress in 1988 stipulated
the various points on the measures of controlling and eradication
of illegal coca production.  The most important points are as
follows.

     o A traditional zone of coca production in two provinces
     of the Yungas. (Article 9).
     o The establishment of 12,000 hectares of licit
     cultivation as that required to meet traditional demands.
     (Article 29).
     o An illegal zone, in which coca cultivation is
     prohibited comprising all territory outside the
     traditional and transitional areas.  Existing cultivation
     will be subject to forced eradication without
     compensation (Article 11).
     - A specific prohibition against the use of chemicals,
     herbicides, biological agents, and defoliants for the
     reduction or eradication of coca.  Only manual and
     mechanical methods will be used (Article 18).
     o  All substitution of coca will be planned in a gradual
     and progressive manner, at the same time as the execution
     of programs and plans of sustain socioeconomic
     development in transitional and traditional zones
     (Article 22).

6.   Forum and Scope:              Bolivia and Bilateral

     The United is the sole provider of aid to Bolivia, for the
eradication of coca plantations.  This aid includes: money,
advisors and strategies.

7.   Decision Breath:          2 (Bolivia and the United States)

8.   Legal Standing:               LAW

       Law #1008, ratified by Bolivian Congress in July 22, 1988. 

C.   GEOGRAPHIC CLUSTERS

9.   Geographic Locations

       a.  Geographic Domain: South America
       b.  Geographic Site:   Western South America
       c.  Geographic Impact: Bolivia

10.  Sub-Natural Factors:          NO

11.  Type of Habitat:         Tropical Rainy Forest and Savanna

D.   TRADE CLUSTERS

12.  Type of Measure:         Regulatory Ban and Quota

     The Bolivian government allows only the cultivation of 12,000
hectares of coca.  All other cultivation is banned by the state. 
Also the state provides money for farmers that substitute  their
farms from coca to other crops.

13.  Direct vs. Indirect Impacts:  Direct

14.  Relation of Measure to Environmental Impact

       a.  Directly Directed:      YES Coca
       b. Indirectly Directed:     YES
       c. Not Related:             YES
       d. Process Related:         YES (Habitat Loss)

15.  Trade Product Identification: Coca Leaf

16.  Economic Data:

     Since the cocaine traffickers have yet to publish quarterly
bulletins of statistics  on their activities, enormous but not
insuperable difficulties surround any calculation of the value of
Bolivia's coca-cocaine economy.  "In 1991 an internal U.S. embassy
calculation summarized the direct value of coca-cocaine industry at
U.S. $375-550 million, of which $150-300 million remained in
Bolivia, and between 97,000 and 100,000 people spent their working
time in the coca industry."  "Bolivian studies showed that the
total value of the industry at $1.5 billion of which 600 million
stayed in the economy and 300,000 people participated in some
aspect of the coca-cocaine production chain".

17.  Impact of Measure on Trade Competitiveness:  LOW

     Coca plantations around Bolivia are expanding each day, since
the demand for  cocaine keeps increasing at a rapid pace.

18.  Industry Sector:         Pharmaceutical

19.  Exporter and Importer:   Bolivia and MANY

E.   ENVIRONMENT CLUSTERS

20.  Environmental Problem Type:   Habitat Loss

     The coca cultivation is believed to increase deforestation but
also is a threat to the environment because of the dumping of
chemicals in rivers and the use of pesticides to improve the
production, which also makes it a problem in the pollution of water
and land. Also with deforestation many species of plants and
animals are separated from their  habitat, thus creating a possible
scenario for the extinction of certain types of plants and animals.

21.  Name, Type and Diversity of Species

       Name:        Coca
       Type:        Plant/ Angiosperm/Dicotes
       Diversity:   116,000 metric tons on 50,300 hectares

22.  Impact and Effect:  Medium and Scale

23.  Urgency and Lifetime:     Medium and 100s of years

24.  Substitutes:        LIKE

     Cash crops substitutes such as coffee, rice, maize, etc., have
been mentioned by the government.  Also the creation of more
government offices in these areas, so they can have a more direct
contact with their government and voice their needs.

VI   OTHER FACTORS

25.  Culture:       YES

     The government has recognized the importance of coca in the
culture of the Bolivians, especially the indigenous people, so it
has allowed the cultivation of 12,000 hectares of coca for cultural
and medicinal uses, such as "coca chewing."

26.  Human Rights:  NO

27.  Trans-Border:       YES

28.  Relevant Literature


Armstead, L.  "Illicit Narcotics Cultivation and Processing:  The
Ignored Environmental Drama.  United Nations International Drug
Control Programme", 1992.

Chernick, Mark.  " Legal versus Illegal Export Booms:  Researching
the Drug Trade and Its  Impact on Politics in Latin America". 
Paper presented at Princeton university, April 1993.

Long, William.  "Coca Power"  Winning Bolivian Drug War. Los
Angeles Times, September 24,1995.  P.1

Painter, James.  "Bolivia & Coca:  A Study in Dependency".  Lynne
Reinner.  London 1994.

United States Department of State.  "International Narcotics and
Law Enforcement Affairs".   Congressional Presentation, Fiscal Year
1996 Budget Report.  1995

U.S.  State Department Dispatch.  "Fact Sheet: Coca Production and
the Environment" March 2, 1992.

United States Department of State Bureau.  "International Narcotics
Control Strategy Report"  March 1995.

Thomas, Pierre: "Rules Target Chemicals Sales to Colombia from the
Washington Post.  March 28, 1996.  Page A23.


                    REFERENCES


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