INTERNATIONAL NARCOTICS DEVELOPMENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A001800010017-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 22, 2016
• Document Release Date: May 11, 2009
• Sequence Number: 17
• Publication Date: August 3, 1977
• Content Type: NOTES

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International Narcotics Developments
DOJ Review Completed.
DIA and DOS review(s) completed.
Secret
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NOFORN/NOCONTRACT/ORCQN
INTERNATIONAL NARCOTICS DEVELOPMENTS
3 August 1977
COLOMBIA: Narcotics Meeting with
President Lopez . . . . . . . . . . . . . . . . . . .
PAKISTAN: Opium Price Increases . . . . . . . . . . . 12
PAKISTAN: Diversion of Opium Into Illicit
Channels . . . . . . . . . . . . . . . . . . . . . . 14
THAILAND: Crop Substitution Efforts . . . . . . . . . 15
ITALY: Seized Hashish Probably Came From
Lebanon . . . . . . . . . . . . . . . . . . . . . . . 16
NOTEWORTHY POLITICAL AND ECONOMIC DEVELOPMENTS
1. Turkey . . . . . . . . . . . . . . . . . . . . 17
2. Pakistan . . . . . . . . . . . . . . . . . . . 19
3. Burma . . . . . . . . . . . . . . . . . . 21
4. Malaysia-Thailand . . . . . . . . . . . . . . 22
BRIEFS . . . . . . . . . . . . . . . . . . . . . . . . 24
This publication is prepared by analysts in the Directorate of Intelligence for
specialists in the Washington community who are interested in international nar-
cotics matters. Comments and queries are welcome. They should be directed to the
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COLOMBIA: Narcotics Meeting with President Lopez
A US delegation met with
President Lopez in Bogota last
month to discuss the problem
of narcotics related corrup-
tion among Colombian govern-
ment officials. The meeting
with Lopez--which was preced-
ed by a series of discussions,
briefings, and media attention
on drug trafficking in Colom-
bia--marks another stage in
what appears to be steadily
improving relations in joint
drug control efforts be n
Washington and Bogota.wo
President Carter's offer to provide President Lopez
with evidence compiled by the US government on official
corruption in Colombia was politically unprecedented.
Lopez, however, who is deeply concerned about the nar-
cotics problem, was receptive to the demarche and very
candid during the meeting. After hearing information
on cases 25X6
Lopez stated that he planned to set up an
elite civi ian law enforcement unit to cope with crime
and corruption in Colombia. Furthermore, he pledged
that finding some way to solve his country's drug prob-
lem would be a priority issue during his final year in
office.
Outlining some of his prospective actions, Lopez
described his intentions to reform Colombia's judicial
system. He explained that he had in mind adopting US
procedures in which attorneys, rather than.judges, would
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~ nvestiaate and prosecute c-aaP~
Lopez admitted that, although his candidate was "left
of the leftists," he had complete confidence in his se-
lection and felt he was the best criminal investigator
available. There is speculation that former assistant
attorney general Miguel Angel Sanchez Mendez will be
named to fill that position. 25X6
Lopez' stated commitment to improve narcotics en-
forcement in Colombia may serve to facilitate certain
bilateral drug control efforts.
Furthermore, his loyalty to the ruling Liberal Party
will work against his saying or doing anything which
would jeopardize the party's chances in next year's
election.
The extent to which Lopez can address the drug issue
may be further circumscribed because of next year's elec-
tion. With the primary slated for February, Lopez will
soon become a "lame duck." After that the relationship
between Lopez, his party, and the other major political
institutions is likely to undergo significant changes as
public attention shifts to the Liberal Party candidate
and power begins to slip inexorably from the President's
grasp.
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In the face of diminishing authority, Lopez may
prove unable to follow through on many of his intentions
regarding narcotics control.
In fact, many former Lopez supporters believe he has
failed to accomplish a wide range of social, political,
and economic goals to which he assigned high
At best
perps, 7~opez mays able to set some machiner inn mo-
tion that will be continued by his successor. L----]
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PAKISTAN: Opium Price Increases
Opium prices in Pakistan's Northwest Frontier Prov-
ince continue to rise. Although a sharp increase in
demand is the most logical explanation, there is no rea-
son to believe that consumption has increased significantly
in Pakistan, Afghanistan and Iran--the traditional markets
for this opium--and no firm evidence that opium is now
being shipped to other areas such as Western Europe and
the US.
According to surveys by both the Pakistanis and the
DEA, the price of illicit opium is now between $180 and
$200 a kilogram. Last fall, the price rose from $50 to
$80, and in May the reported price was around $140 a
kilogram. The Pakistani government pays about $20 a
kilogram for licit opium.
One explanation offered for the most recent price
rise is fear that the new military government will take
stronger action against illicit traffickers. This theory,
however, does not explain the previous price rises, and,
although there may be some panic buying, it could be argued
that fear of a crackdown might actually lower prices.
Those who now have the opium might be eager to sell be-
fore the government takes stronger action, the middlemen
who would buy the opium might be less eager to do so be-
cause their business could become more risky.
Pakistani opium has traditionally been consumed in
Iran, Afghanistan and Pakistan, and there is nothing to
indicate a significant increase in consumption in any of
the three countries. Rising prices last year in Paki-
stan reportedly encouraged farmers to plant more poppies,
and there is clear evidence of increased production in
Afghanistan. Relatively stable demand and an increased
supply should mean lower, not higher, prices.
Both Iran and Afghanistan--through which the Paki
stani opium is shipped--have increased their efforts
against the illicit traffic, and opium seizures have in-
creased. So far, however, seizures have been such a
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small percentage of production that it seems unlikely
that there would have been any impact on prices in pro-
ducing areas. Last year Iran seized about 2,000 kilograms
of opium; total production in Pakistan and Afghanistan
is in the neighborhood of 30,000 to 50,000 kilograms.
A price increase of about 400 percent in one year
clearly does not fit with the assumption that Pakistani
opium is sold only to traditional consumers. Although
there is no hard evidence that the opium is now being
shipped beyond Iran, it is more likely that it is being
sent to developed countries than that the law of supply
and demand has been repealed by Pakistani farmers.
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PAKISTAN: Diversion of Opium Into Illicit Channels
Pakistan's licensed poppy growers may have sold more
of their production to illicit traffickers this year than
in recent years. The government purchased 7,580 kilo-
grams from licensed growers, or about 4 kilograms per
hectare. The land should produce between 12 and 20 kilo-
grams per hectare, however, and the difference almost
certainly goes into illicit channels.
Since 1973 an increasing percentage of the opium
grown in licensed fields had been going to the govern-
ment. The amount per hectare sold to the government this
year, however, dropped to about the same as in 1973, be-
fore the government stepped up its efforts to control
narcotics. Last year it purchased almost twice as much
as this year from approximately the same acreage. The
licensed diversion presumably is due to rising prices for
illicit opium.
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THAILAND: Crop Substitution Efforts
The Thai government narcotics board is preparing
for cabinet consideration an intensified crop substitution
plan that envisages a 50 percent reduction in poppy plant-
ing by 1979 and 90 percent by 1981. Although attainment
of such ambitious goals is questionable, the plan is at
least a measure of the Thai government's sincerity.
The initial focus of the plan, scheduled to begin
in October, is a district in northern Thailand that ac-
counts for about one half the country's annual opium
production of 50 tons. To facilitate access to markets
for alternate crops---a major obstacle to date in crop
substitution efforts--twelve collection centers will be
built, all connected with gravel roads tying in with the
existing national road network. The 200 to 300 villages
in the remote mountainous area encompassed by tie pilot
project will be connected to the twelve centers by trails
passable by pack animals.
Thai officials appear to be coming around to the
view that crop substitution is the only effective way
to reduce opium output. An experimental program has
been under way in northern Thailand since 1973, and at
least a dozen crops seem to offer promise of higher an-
nual family incomes than now derived from opium produc-
tion. One crop under consideration is coffee for which
there is a Thai market considerably in excess of current
production.
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ITALY: Seized Hashish Probably Came from Lebanon
The Italians suspect that the hashish recently seized
at Rome's Leonardo da Vinci International Airport can be
traced to Syrian sources. According to the Italian am-
bassador in Beirut, the hashish was shipped from Damas-
cus by Lt. Col. Rifaat Asad, younger brother of Syrian
President Hafiz Asad. Rifaat commands the elite Defense
Companies, elements of which form part of the Syrian con-
tribution to the Arab peace-keeping force in Lebanon.
The Defense Companies are stationed in the northern Bekaa
Valley, source of most of Lebanon's hashish crop.
Syrian forces in Lebanon have generally adopted a
hands-off policy toward the lucrative drug trade, pre-
ferring for political reasons not to get involved in
either policing or trafficking. Recently, however, a
Lebanese army officer told the US defense attache in
Beirut that Syrian army officers are taking control of
the illicit drug trade in the northern Bekaa Valley.
Although we have no previous reports of the Defense
Companies' alleged involvement in drug trafficking, it
would not be an unusual activity for them.
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NOTEWORTHY POLITICAL AND ECONOMIC DEVELOPMENTS
(Editor's Note: These items, produced for
other CIA publications, do not deal specifi-
cally with international narcotics. They
are included, however, because they concern
developing situations that could impact on
the international narcotics control effcrt.)
(Contributions rom
TURKEY: New Government Faces Shaky Economic Situation
Having narrowly escaped a severe balance-of-pay-
ments crisis a few weeks prior to the June 5 election,
thanks largely to a credit from West Germany, the new
Demirel government will face another critical foreign
exchange shortage within the next six months unless it
obtains outside help. The timing of the crunch will de-
pend on how long Ankara can hold up payments for imports
and foreign bankers are willing to maintain deposits of
foreign currency in Turkish banks. The Turks have fi-
nanced nearly half of their cumulative $4.2 billion cur-
rent-account deficit in 1975-76 through these so-called
convertible lira deposits. Deposits totaling $530 mil-
lion must be repaid or rolled over by the end of the
year, Ankara currently has only $700 million in for-
eiyii exchange reserves.
Turkey has exhausted readily available sources of
financing; creditors and potential. creditors are telling
Turkish officials they will first have to begin negotia-
tions for IMF assistance. With a much larger share of
its foreign debt in private hands than ever before, gov-
ernment leaders are beginning to recognize that condi-
tions for rolling over this debt may be stringent. Dis-
cussions with the IMF will take time. The pre-election
Demirel government did not permit IMF representatives
in the country for more than a year, fearing their pol-
icy recommendations would be politically unworkable for
the shaky coalition. In the interim, Turkey may ap-
proach the US for emergency credits.
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Ankara's decision to finance rather than try to re-
duce its current-account deficit reflects the political
conditions weak caretaker and coalition governments have
operated under in the last four years. All parties were
bent on pushing rapid economic growth and building up
Turkish military forces despite the steep rise in oil
prices and a world recession. None was willing to
jeopardize its political position by dampening import
demand. The US arms embargo put further strain on the
balance of payments; the Turks began shopping for weap-
ons in Western Europe on more costly terms.
Turkish leaders apparently have done little to pre-
pare themselves or the electorate for the austerity mea-
sures the new government will have to adopt to restore
the country's credit rating. The only move reportedly
under consideration is a series of small devaluations--
a continuation of a policy followed in recent years.
If the IMF were to suggest remedies like those agreed
to by Britain and Italy, Ankara probably would accept--
even if it could not effectively implement--limits on
the growth of domestic credit and the money supply.
Curbs on military spending doubtless would be rejected
out of hand. The government might accept limits on non-
military spending if they did not involve substantial
cuts in politically sensitive programs such as price
subsidies.
Regardless of what steps Ankara takes, slower eco-
nomic growth is a foregone conclusion. Without addi-
tional foreign assistance, Turkey would have to slash
imports--possibly by direct controls on non-military
goods. With foreign assistance and a moderate austerity
program, the cuts would be more gradual and less severe.
Restoration of US military aid could partially ease the
foreign exchange shortage but only if the government de-
cided to cut back on purchases of West European arms.
Inflation and unemployment probably will remain
high. Devaluation of the Turkish lira would immediately
raise the cost of imports and subsequently retail prices.
In addition, wage pressures remain strong despite very
high unemployment. The traditional outlets for surplus
Turkish labor in Western Europe are plagued with high
unemployment themselves and continue to send Turkish
workers home, adding to the potential for political vio-
nce which has flared up frequently this past year.
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PAKISTAN: Situation Report
Chief Martial Law Administrator Zia-ul-Haq is keep-
ing to his timetable for turning over power to an elected
civilian government next fall despite the objections of
some senior army officers.
On July 28, the military government released former
prime minister Bhutto and 15 other political leaders who
had been in custody since the coup on July 5. Since
then, the government has announced the ground rules for
the campaign, which were accepted by the politicians prior
to their release, and has set October 18 as the date for
provincial assembly elections. Electioneering is banned
until mid-September, but the released political leaders
will be allowed to organize for the campaign, and they
have, in fact, already begun campaigning.
Zia took these steps despite strong objections from
some of his subordinates, including General Mohammed
Iqbal Kahn, who commands the important Fourth corps.
Iqbal recently told Zia that the election should be post-
poned, that the military should be doing more to elimi-
nate corruption and inefficiency, and that Bhutto should
be barred from the campaign and prosecuted.
Athough Zia did not accept these recommendations,
he may well have been influenced by them. He has made
it clear that he will impose additional strict controls
on political activity if necessary. A contingency plan--
in case the election has to be postponed--is being de-
veloped. Although Bhutto will be allowed to campaign,
the military government is allowing individuals to bring
criminal charges against him.
Zia's willingness and ability to continue with his
plans for surrendering power will, of course, depend on
events during the campaign. Should the electioneering
become violent or should it appear to be encouraging
separatist tendencies in the two westernmost provinces,
Zia would be much more inclined to listen to those who
advise a longer period of military rule.
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India
China
] A Of
I?AP
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Kengtung
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BURMA: Communist Push Blocked
Burmese security forces succeeded in stopping and
rolling back a Communist insurgent offensive during the
recently concluded dry season. This achievement was par-
ticularly noteworthy in view of the increasing drain that
narcotics suppression efforts are making on the country's
limited military resources.
Early this year, Burmese Communist forces moved out
of their long-time base area east of the Salween River
along the Chinese border in an apparent attempt to estab-
lish themselves in new areas in Shan State west of the
Salween. The Burmese believe that about 2,200 Communist
insurgents were involved. The offensive, the most ambi-
tious effort to date by the Communists to expand their
limited presence west of the Salween, appears to have been
self-initiated, with no indications of prompting from their
Chinese mentors. Chinese support continues, but appears
to have been steadily reduced since the end of the Cul-
tural Revolution. The Chinese, nevertheless, failed to
meet Burmese President Ne Win's hope for a disavowal of
the insurgency when he visited Peking three months ago.
The Burmese counteroffensive began in February, and
by the end of June most Communist forces apparently had
been forced to withdraw to their normal operational areas
east of the Salween. Had the push succeeded, the Commu-
nists' territorial, population, and economic base would
have been significantly expanded, and Burmese armed forces
and towns in eastern Shan State would have been increas-
ingly isolated and possibly cut off from land resupply.
The normally secretive Burmese regime has been
giving unusual publicity in its controlled press to the
military operations, and the accounts jibe with other
information available to the US embassy in Rangoon. Be-
sides wanting to give credit to the military, Rangoon
probably felt impelled to ease popular concern over
Communist penetrations into new areas.
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Despite the Ne Win government's economic shortcomings,
it continues to demonstrate a capability to contain, al-
though not eliminate, the formidable Communist insurgency
and at the same time to cope with ethnic insurgencies and
opium-running organizations.
MALAYSIA-THAILAND: Cooperation Against Insurgents
Sacred Ray I and II, the counterinsurgency campaigns
being conducted jointly by Thai and Malaysian forces along
their common border, provide the best indication to date
that the two countries can cooperate effectively to deal
with the threat of Communist terrorists. Although sus-
picion and poor coordination have hampered previous ef-
forts, this operation could lead to new and more efficient
initiatives against the insurgents.
The campaigns are directed against the Malayan Com-
munist Party (CPM), based in southern Thailand since
Malaysian forces shattered its organization and forced
it across the border in the 1950s. CPM insurgents were
able to maintain their border sanctuaries by striking
across the border into Malaysia and avoiding contact
with Thai security forces.
Previous efforts to counter the insurgents were
hindered by conflicting perceptions and interests. Bang-
kok viewed them as Kuala Lumpur's problem, and considered
them a less serious threat than insurgents in other parts
of Thailand. Moreover, Thai leaders suspected that
Malaysia might use joint operations as a pretext for sup-
porting the Malay Muslim separatist movement endemic in
southern Thailand. The Malaysians were reluctant to com-
mit their predominantly Muslim troops to action in areas
where they have strong cultural and religious ties to
local villagers.
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Operation Sacred Ray, the third joint military of-
fensive carried out this year, represents an effective
balance between Thai and Malaysian interests. At Bang-
kok's insistence, its principal target is the only ethnic
Malay unit in the predominantly Chinese CPM. Malaysian
willingness to move against this particular CPM component
may help allay Thai suspicions about Kuala Lumpur's in-
volvement with Malay Muslim separatists. The secondary
target, CPM camps in the Betong salient, is of interest
to the Malaysians because it includes the headquarters
for the two strongest CPM factions. Furthermore, Betong
is the region from which Malaysian counterinsurgency
teams were expelled in June 1976 following Communist-
inspired anti-Malaysian demonstrations.
Although the current operation will not succeed in
killing or capturing many insurgents, it is meant to
disrupt their base camps and logistic systems. Plans
are also being developed to establish joint teams in the
area to gather intelligence, organize village defense
forces, and gradually win the trust and support of the
villagers.
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EUROPE: A Reuters news feature from Amsterdam under-
scores the critical nature of drug trafficking in
Western Europe. According to unofficial U14 statis-
tics, Interpol heroin seizures increased 44-percent
in 1976 over the previous year; and heroin seizures
in both East and West European countries reportedly
have tripled. Amsterdam is still the major distri-
bution center for illicit drugs coming from the 11id-
dle and Far East, but Dutch authorities are cautiousl','
optimistic that new and tougher penalties and an in--
creased number of narcotics police will sharply re-
duce international drug traffic through their country.
The recent crackdown on illegal Chinese immigrants
from Hong Kong and Southeast Asia, who have controlled
most of the drug traffic in Amsterdam, apparently
has resulted in changing trafficking patterns with
large land and sea shipments replacing the use of
individual couriers smuggling relatively small
amounts of narcotics by commercial airlines.
TURKEY: The only known heroin chemist in Turkey, who
has been a fugitive for over three years, was cap-
tured recently in southeastern Turkey, according to
the Turkish press. The fugitive, who reportedly had
been associated previously with an Austrian heroin
trafficking net, reportedly is seriously ill with
tuberculosis. The Austrian drug ring reportedly
was broken up about four years ago, but the former
leader of the ring and the chemist's wife and sons
had been providing raw opium and morphine base which
the chemist had been converting into heroin in hotel
room laboratories in Turkey.
TURKEY: The opium poppy harvest continues on schedule
with nothing to alter the earlier unofficial esti-
mate of upwards to 60,000 tons of poppy straw. Until
Turkey's poppy straw processing plant is completed
in mid-1978, the entire harvest will have to be
shipped abroad for processing. The bulk of the
crop is sold to foreign pharmaceutical firms as
straw, but a small amount is processed abroad and
returned to Turkey for its own pharmaceutical in-
dustry. Several thousand tons of last year's crop
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are still unsold. Apparently some of the current
crop of poppy capsules being stored in southern
Turkey have become moldy, causing concern among
Turkish officials that the crop's morphine content
might be affected. Chemical analys'
howeyt-
shown no loss in morphine content.
HONDURAS: Captain Erin O'Connor, commander of Honduras'
newly established Coast Guard, has informed US em-
bassy officials that he suspects an international
food company located in Honduras' Bay Islands is
using its facilities to smuggle narcotics into Flor-
ida. O'Connor also told embassy officials that he
had long heard reports of narcotics trafficking via
the Bay Islands to the US. Now that he has respon-
sibility for intercepting contraband in his country's
coastal areas, Captain O'Connor intends to investi-
gate the reports and to curtail any drug smuggling
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AFGHANISTAN: The initial meeting of the Joint Commission
on Afghan narcotics matters, including representatives
of the UN, the government of Afghanistan, and the
US was held on July 27 as scheduled. The session
was essentially exploratory and focused primarily on
the development of the terms of reference for future
discussions. It was agreed, for the time being at
least, that the attention of the committee, as well
as any concrete narcotics control programs, will be
concentrated in the region of the Helmand River
Valley, rather than in other areas in Afghanistan
where narcotics producing crops, primarily opium
poppies, are grown.
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