Conclusion: Immediate Future Scenarios on Cocaine T rafficking and the Financing of Terrorism in West Africa

Social Impact The most likely short-term social impact of cocaine trafficking would be an increase in local drug use rates. Unfortunately, data on the use of c ocaine trafficking in Africais very limited. No survey has ever been conducted to estim ate the prevalence of cocaine use among the general population. UNODC has supported a few surveys on the abuse of drugs in schools and populations deemed at risk, but it remains diff icult to generalize on the basis of this data. Data on the use of cocaine in Africamostly come from three sources: the Annual Report Questionnaire returned by Member States to U NODC, some quantitative studies, and the analysis of data from drug treatment centers. F rom these three sources, it is possible to appreciate that cocaine is used to some degree in Burkina Faso, Guinea Conakry, Nigeria, Ghana, Senegal, Sierra Leone and Togo. According to the opinion of national experts, elici ted in the Annual Reports Questionnaire, cocaine use among the general popula tion was increased in Senegal and Guinea-Conakry in 2005, whereas the situation was r eported as stable in Nigeria and Burkina Faso. The use of crack cocaine was reported in Nige ria, Ghana and Cte dIvoire and the Gambia. In any case, if the flow through the region is highly organized, it is unlikely that much cocaine will be spilled into local markets, as there are strong economic incentives to bring as much of the drug as possible to its highes t value destination the European Union particularly and more generally West Europe. Economic Impact The routing of cocaine through West Africa is proba bly too recent an occurrence for any economic impact to be measurable yet. All evidence suggests that the traffic only began to take off in the last five years, and many of the cu rrent social indicators are based on data older
42

BBC News, 11 December 2007.

43

Ibid UNISCI Discussion Papers, N 16 (Enero / January 20 08) ISSN 1696-2206

223 than that. However, there are a number of curious d ata trends in the region, and projections can be made on similar experiences in other parts o f the world. In the short term, drug trafficking could result in an unexplained influx of currency to the region. Just how much money is involved depends on the details of how much the market is organized. It is possible that Latin American group s are retaining ownership of the drugs until they enter Europe. If so, only a few local workers would need to be paid for tasks like loading and re-packaging, and a few key officials bribed. L atin American expatriates would stimulate the economy to some degree by their presence and sp ending, but in the end, the impact could be minimal. In parallel, if parts of the region have become act ive as open wholesale markets, the influx of money could be considerable. Proceeds of drug sales in Europe would have to be transferred to the region in order to pay for more drugs. This could be done through wire transfers (remittances), though bogus commercial in vestments and transactions, or through the movement of bulk cash. While risky in such a volati le area, genuine investment of illicit money in licit businesses could occur. Some of this activity is likely to be captured in the recorded economy. There are however three side centripetal effects of such illegal activity: (a) Unexplained increases of cash remittances: It would be worth highlighting that cash remittances from Europe have increased dramatically in recent years in a number of West African countries. This is best seen in the larger countries with better developed systems. In Cte dIvoire, Ghana, Nigeria, and Sene gal, there has been a doubling or tripling of remittances in the past several years. There are reports that Nigerias

remittances increased by 200% between 2005 and 2006 . If part of the European wholesale market for cocaine has indeed moved from Colombia to West Africa, the movement of large amounts of hard currency to the r egion, representing the proceeds of retail cocaine sales reinvested in future suppli es, would be expected. (b) Sudden increase of Foreign Direct Investment in Guinea Bissau: Aside from wire transfers, drug money could be moved into the region, through business transactions, perhaps showing up as foreign direct investment (FDI). After years of invisible or zero FDI, Guinea Bissau suddenly attracted US$42 million in 2006, equal to nearly a sixth of GDP. Unlike remittances, FDI can suddenly jump as a result of a small number of transactions. (c) Appreciation of local currencies: One possible effe ct of a sudden influx of money into an area could be the appreciation in the value of t he local currency. Many of the economies of the region are extremely small, with G DPs of less than US$3 billion annually. Some of these countries are Members of th e Union Economique et Montaire Ouest Africaine or the Communaut Economi que et Montaire de lAfrique Centrale and so use their respective vers ions of the CFA Franc. Other countries have economies too large for sudden influ xes to have much impact, such as Nigeria and Ghana. But others, such as the Gambia, are both small and maintain their own currency. The Gambian currency, the Dalasi, after years of de clines, has experienced a rapid appreciation of its value since the end of July 200 7 which has left economists and local analysts puzzled. The appreciation has been most re markable between 26 and 27 of
UNISCI Discussion Papers, N 16 (Enero / January 20 08) ISSN 1696-2206

224 September 2007, where the Dalasi increased 25.9% in value against the dollar in one single day. Between mid-July and the beginning of November 2007, the Gambian currency had appreciated 37.9% against the dollar, 31.1% against

the Euro and 34.5% against the British pound. This could be due to speculation or legitima te investment, but it could also be due to money laundering
44

. Parallel to the previous lines of thought and analy sis, what is al-Qaedas economic strategy in Africa? Are there any links between ter rorism financing and drug cartels operating in Latin America and West Africa? Al-Qaedas attacks over the past six years have had specific economic repercussions. Firstly, Osama bin Laden gleefully noted, in a spee ch addressed to the American people on 29 October 2004, that al Qaeda spent US$500,000 on th e event [11 September 2001] while America lost, in the event and its subsequent effec ts, more than US$500 billion dollars; that is to say that each of al Qaedas dollars defeated 1 m illion American dollars
45

. The chain of alQaeda attacks had other economic repercussions: Ara b investors, worried that their assets may be frozen, withdrew billions of dollars from Wester n financial institutions and invested them instead in the Muslim world, including West Africa. Huge oil revenues resulting from the vastly inflated current price of oil are also now b eing invested in the Gulf states resulting in an economic boom. Regular insurgency attacks on oil pipelines and ins tallations in Iraq have also already impacted on oil prices with the so-called terror p remium leading to the highest prices on record. Al Qaeda has frequently urged OPEC minister s to reduce oil production, resulting in higher prices which squeeze Western economies. Similarly, the link between drug trafficking and te rrorism financing in the Latin AmericaWest Africa-European Union (EU) triangle has been a nalyzed by intelligent experts in the EU and the United States of America. In this context, it would be worth highlighting that on the Tri-Border Area (TBA) in Latin America where the fr ontiers of Brazil, Argentina and

Paraguay all meet, and which has figured heavily fo r the last two decades as a nexus for drug traffickers and even in the last decade- for terro rists, there are strong suspicions that a number of drug cartels are operationally affiliated with Middle Eastern groups
46

. The TBA is a nexus between two major points, and a drop off for air travel between those two points, and the region is economically importan t for legitimate business and illegitimate as well. According to the Brazilian government, US$ 12 billion is laundered through the TBA each year, and that is just on their side. Accordin g to estimates by the Commander of the U.S. Southern Command, James T. Hill, some US$50 to US$5 00 billion is laundered in the TBA, as the area is vibrant and alive with legitimate an d specifically illegitimate businesses. Out of this has emerged a terrorism financing network, wit h several figures involved including merchant Assad Ahmad Barakat, who has been designat ed a key Hezbollah financier responsible for sending at least US$50 million to H ezbollah since 1995
47

.
44

Cocaine Trafficking from West Africa to Europe, UNODC Report presented to the UN Security Council, (November 2007).
45

Abdel Bari Atwan ( 2006): The Secret History of al Qaeda, by, University of California Press, pp. 96-99.
46

John Lombardi, Department of Defense, Terrorism Financing & State Responses in Comparativ e Perspective, Conference Report, Monterey, CA, 4-5 November 2004.
47

Ibid. UNISCI Discussion Papers, N 16 (Enero / January 20 08) ISSN 1696-2206

225 It goes without saying that the very same drug cart els acting in Latin America are now reaching the coasts of West Africa due to an enabli

ng environment with weak legislation on all sides of the border, poor law enforcement, nontransparent financial institutions, poorly monitored borders beyond the checkpoints and easy a ccess to illicit activities conducted by organized crime. Governance impact Whatever the macroeconomic effects, drug flows of t he magnitude seen in West Africa are highly likely to result in the higher incidence of corruption of law enforcement and the consequent undermining of the rule of law. In count ries like Guinea Bissau, there are repeated allegations that high ranking officials in governme nt and the military are complicit in drug trafficking and there have been a number of questio nable judicial and executive decisions that appear to be corruption-related. Corruption of this sort cannot but undermine the already tenuous confidence many citizens of the region have in their governments. The example of Guinea Bissau, where 635 kg of cocaine have been se ized in 2007, goes along with the seizure in Senegal in 2007 (2,450 kg), Mauritania ( 1,460 kg), and Ghana (in 2006 a total of 2,064 kg and in 2007 at least 333 kg in 2007 throug h the UK supported West Bridge operation alone). Based on the international indicators, many of the countries of the region can scarcely afford to suffer a further loss in credibility. The World Bank establishes quantified governance ratings for countries throughout the wor ld
48

. Governance ratings in West Africa are generally not high, with a few countries scorin g about the international average for most indicators.