The use of human mules to traffic illegal drugs, one of the most time-tested and expendable methods, is decimated by the closure of national borders resulted from the COVID-19 pandemic. However, this development has the unintended effect of drug cartels shifting to take advantage of legitimate supply chains to facilitate drug trafficking. Methamphetamine, one of the most profitable illicit drugs, is going along for the ride.
Methamphetamine, also known as meth, ice and crystal, is a highly addictive stimulant with potent physical and mental effects on users. Making and trafficking meth have rapidly become the most profitable illicit business, with the profit margin reaching unprecedented and dangerous levels.
For example, the retail meth market of Southeast Asia, East Asia, Australia, New Zealand and Bangladesh are inter-connected and is estimated to be worth between US$30.3 and US$61.4 billion annually, according to the latest report by the United Nations Office on Drugs and Crime (UNODC).
Drug cartels are continuing, in fact expanding, their operations, in the midst of the pandemic by changing their modus operandi to take advantage of legitimate supply chains. And for them, Southeast Asia is important as both an origin and transit region, with Myanmar believed to be the world’s biggest manufacturer of meth. Meth production also takes place in Malaysia, Indonesia and the Philippines. In terms of market size, East and Southeast Asia is one of the two largest in the world, the other being North America.
Drug cartels are importing chemical precursors, needed to make synthetic drugs like meth, from China and India. They are trafficking the drugs within the region and also further afield to major consumer markets like South Korea, Japan Australia, and New Zealand where profits are higher.
According to UNODC, the wholesale price of crystal meth produced in northeastern Myanmar is as little as US$1,800 per kg but retail prices are US$70,500 per kg in Thailand, US$298,000 per kg in Australia and US$588,000 per kg in Japan. For the Japanese market, that is more than 300 percent mark-up, an unprecedented margin not found in any legitimate business.
Hitching a ride on the super highway
Incidentally, Southeast Asia’s global supply chain connectivity, regional integration, free trade agreements, special economic zones, and status as a global pharmaceutical and chemicals manufacturing hub provide favorable conditions for drug trafficking to thrive.
As countries in Southeast Asia simplify trade and customs procedures in conjunction with developing their economies, there is a shift of emphasis from border management control to facilitation. However, drug cartels are also expanding their illicit trafficking alongside growing legitimate trade flows. They are embedding illegal drugs into the legal movements of freight and goods across borders.
On 2 Nov, the Hong Kong customs authority announced that a record haul of half a ton of crystal meth, worth US$39 million, was seized. The meth was hidden in 251 bags of cement in a shipping container on its way from Mexico to Australia, that arrived at the city on 29 Oct.
Authorities decided to search the container after their suspicions were aroused by the circuitous route it was taking. The shipment had been to South Korea and Vietnam before arriving in Hong Kong, and was expected to go on to Singapore and then to Australia, its final destination, where the meth could potentially worth five times more.
For the first nine months of 2020, the Hong Kong customs confiscated 244 kg of meth, a 280 percent increase over the same period last year. The Hong Kong authorities said that most of the trafficking was conducted through freight transport, postal services and express delivery.
The maritime connection
There are substantial maritime flows of meth from ports in Yangon and the southern regions of Myanmar, via the Andaman Sea into Central and Southern Thailand, Malaysia, Indonesia, and other parts of the region.
Traditionally, drug cartels transport illicit drugs into different countries through human mules, overland routes and unofficial seaports. However, as smugglers are circumventing international travel lockdown, more drugs are now being transported using the same maritime infrastructure and routes as legitimate trade.
Southeast Asia’s regional connectivity initiatives that boost legitimate cross-border trade are also helping to provide opportunities for drug traffickers to illicitly import precursor chemicals and export meth and other synthetic drugs.
Specifically, UNODC says that maritime drug trafficking will likely expand as the region’s economic connections proliferate. This is not surprising given that 90 percent of global trade flows through the ocean. Moreover, compare to other transport modes like air, there is relatively less security at maritime borders and less screening of cargoes onboard ships. Maritime transport is also less expensive and can hold a much larger quantity than air transport.
A hidden but urgent transnational problem
The global trade of illicit drugs poses a major challenge for governments around the world, more so when the crime is also transnational in nature and requires close and seamless collaboration between many national agencies.
Drug trafficking tarnishes the reputation of the affected countries and legitimate businesses. It also has significant negative consequences of increased crimes and violence, impacting on the health, well-being and functioning of societies.
The supply chain of illicit drugs, a multi-billion-dollar industry, includes not just the street peddlers but the vast hidden network that places the drugs on the street, from the masterminds, manufacturing bases, fleets of ships, to the bribery of port and customs officials. Nowadays, it is not an exaggeration to say that drug cartels are run almost like multinational corporations, with drug kingpins acting as chief executive officers.
Therefore, tackling this pervasive and urgent problem has become a cornerstone for many governments around the world.