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Moreover, as coca production booms, refineries and transshipment centers have been sprouting up throughout the hemisphere. Traditionally, Peru and Bolivia have grown 90% of the world's coca and converted the leaves locally into raw coca paste (see box). Colombians have taken care of 80% of the rest of the business, refining the paste into pure cocaine, then smuggling it into the U.S. As some of the Colombian drug dons have been forced out of their homeland, however, and as coca plants have begun to shoot up in Ecuador and Brazil, refineries have been springing up in Panama, Venezuela, Argentina and even Miami.
From these labs the tendrils of the traffic have reached into Nicaragua and Paraguay, while continuing to flourish in Mexico and the Caribbean. The cocaine business has, in fact, drawn its net around every country in South America except the tightly policed dictatorship of Chilean President Augusto Pinochet. "The drug trade is like a water balloon," says one frustrated U.S. official in Colombia. "You step on it in one place, and it squeezes out the side of your foot."
The cocaine trade in Colombia took off in the late 1970s when crime bosses entered the business. Until then, their profits had largely come from smuggling cars, liquor and electronic appliances into the country and sneaking cattle, emeralds and coffee out. Then, it seems, Pablo Escobar Gaviria, an entrepreneur whom Colombian bankers describe as "a self-taught administrator with a genius for organization," convinced Smuggler Fabio Ochoa of the profits to be earned from cocaine. The two took over the domestic industry and sent murderous local toughs, now known as cocaine cowboys, to seize control of the U.S. wholesale market.
Before long, the Colombian cocaine kings had created the largest chemical export operation in South American history. Overseeing the business as if they were heads of a multinational firm, the coqueros transformed a once chaotic industry into a vertically integrated consortium. For the transportation of drugs, they used well-established smuggling pipelines; for their distribution, a North American syndicate stretching from Miami to Vancouver. Escobar united the coqueros into a cartel and even organized a fund to serve as a kind of insurance in the event of raids or losses. The drug dons were also shrewd enough to invest their profits in diversified holdings: they now own extensive real estate in Florida, half of the approximately 200 high-rises along Panama City's oceanfront, and a variety of small businesses and financial institutions, like currency-exchange houses, through which they can launder their profits. "These guys don't rob banks," says Craig Vangrasslek, who studied the drug industry on a Fulbright scholarship in Bogota. "They buy them." Soon the drug pipeline was operating as smoothly and as punctually as a regularly scheduled airline. Almost every day, soon after dawn, Colombians in sleek twin-engine Cessnas descend upon remote airstrips carved out of the hinterlands of Peru and Bolivia. In a matter of minutes the traffickers load up the planes with a few hundred kilos of raw paste. This is whisked off to processing plants like Tranquilandia to be turned into cocaine and eventually smuggled into the U.S.