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July 13, 2012

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"One story, put forward by authors like Richard Grant and Charles Bowden, holds that a 2001 study by CISEN, Mexico’s intelligence agency, found that an end to the drug trade would result in a 63 percent contraction of the Mexican economy."

That's a sharper economic contraction than anything I can think of outside the formerly Communist states, and even there, a depression of that scale would stand out.

Funny that you mentioned it, I recently had to research Central Asia's modern economic performance, and Tajikistan, which I think came out worse than anywhere else in the Soviet realm, suffered a 62 percent real output decline from 1990 to 1995. Libya also declined by 60 percent last year, according to the Financial Times, but of course the point of the article is that they rebounded with more than 100 percent growth this year, ie it was a one-off thing, whereas the Bowden scenario was that it would essentially be a permanent disappearance of two thirds of Mexican output.

http://blogs.ft.com/beyond-brics/2012/07/11/guest-post-after-libyas-election-focus-on-investment/#axzz20XF3h1vD

It is so difficult to give an estimate of the revenue of drug cartels. What strikes me as odd is the amount of money involved in the Wachovia-money laundering case. "For the time period of 1 May 2004 through 31 May 2007, Wachovia processed at least $373.6bn" from Mexican Casas de Cambio without "applying the proper anti-laundering strictures," according to the DEA. The number might well include transfers from legal activities--but is too high.
http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs

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