Bloomberg News

Costa Rica: Colorado Pot Law Raises Doubts on Drug War

November 12, 2012

The legalization of recreational marijuana use in the states of Colorado and Washington last week will lead Latin America to increasingly question the merits of the war on drugs, said Costa Rican President Laura Chinchilla.

The first U.S. states to decriminalize will spur demand at a time when Central American nations and Mexico are paying a high price to halt shipments, Chinchilla said in an interview yesterday in Queretaro, Mexico, at the Mexico Business Summit. Voters in Washington and Colorado agreed in a ballot Nov. 6 to allow people to hold one ounce (28.4 grams) of marijuana.

“This is an inflection point that is going to demand something that some Central American countries have already been doing, which is to analyze in a deeper way different scenarios in the war on drugs,” Chinchilla said.

Calls among Latin American leaders for a legalization debate have been growing after drug trafficking fueled violence in the transit nations that sit between Peru, Bolivia and Colombia, the region’s biggest cocaine producers, and the U.S., the world’s top drug consumer. Costa Rica, whose beaches and rainforest have made the nation a tourist destination for decades, in 2010 was included on the U.S. State Department’s list of major drug transit nations for the first time.

President-elect Enrique Pena Nieto has said he favors a legalization debate in Mexico, where more than 57,000 people have died in drug-related violence since outgoing President Felipe Calderon sent the army to take on the cartels after taking office in December 2006. Pena Nieto succeeds Calderon next month.

‘Dissonance’

The moves in the U.S. will “create a dissonance between some policies and others,” Chinchilla said. Some policies, “far from containing demand, will stimulate it, while others are trying to limit supply, at an extremely high cost.”

Costa Rica has decriminalized drug possession for small quantities, meaning people are not punished for holding drugs at levels deemed for personal use.

Chinchilla said she needs more information about the consequences of making drug sales legal to decide whether that would be a desirable policy. Such a step would only work if regulations were established to prevent an “explosion” in use, and for now Costa Rica will continue trying to stop the transit and sale of narcotics, she said.

Belize is studying marijuana decriminalization, and Guatemalan President Otto Perez Molina has urged regional leaders to consider it.

Bond Sale

Chinchilla said that Costa Rica’s economy “is showing health,” and she expects the sale of as much as $1 billion in bonds in “coming days” to be well received. The nation is making increasing efforts to attract foreign investment from Japan, China and South Korea, she said.

Costa Rica’s first overseas debt sale since 2004 will help fund a fiscal deficit forecast to reach 4.7 percent of gross domestic product by year end, according to a Nov. 9 statement by Finance Minister Edgar Ayales.

The Costa Rican colon was little changed today at 499.67 per U.S. dollar as of 11:45 a.m. in San Jose and has gained 2.4 percent this year, compared with a 5.6 percent appreciation in Mexico’s peso.

To contact the reporters on this story: Eric Martin in Queretaro at emartin21@bloomberg.net; Adam Williams in San Jose, Costa Rica at awilliams111@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.


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