Trickle Down Drug Economics

August 30, 2013 in Daily Bulletin

Bluefields, a part of Nicaragua that is arguably the poorest region in the Western Hemisphere, used to benefit immensely from the drug trade writes Ray Downs:

  • Drug kingpins built their own intelligence network by paying local fisherman to report on the movements of the Nicaraguan Navy and the US Coast Guard.
  • The drug business itself generated demand for more infrastructure such as a Hooters Hotel that created much-needed jobs.
  • Successful drug overlords would buy lavish houses in the poorest areas. While this exacerbated inequality it also provided construction jobs in an area where there is little other ongoing construction.
  • The parties held by the drug cartels were legendary affairs with free meats, rice, and beer available to all, and helped to periodically stimulate the local economy.
  • The patronage networks set up by the cartels meant that those who knew the right people could cut through government bureaucracy and speedily obtain things such as fishing licenses.
  • When the government started cracking down on the drug trade and arrested key leaders, there were protests on the streets.
  • Since then the Nicaraguan government – with the aid of the United States and Russia – has successfully driven away the drug industry. Unfortunately the government has done nothing to replace the economic benefits it used to produce.

Read more about the trade, the key players involved, and the problem of racism over here.

Source: Vice