South Asia rising force in global meth trade

ISLAMABAD -- Iran, Pakistan and other South Asian countries are a fast-rising force in the global methamphetamine market, with drug cartels thriving off the weak governance and law enforcement that have long fueled the region's heroin trade.

The environment has allowed criminals to tap into the countries' relatively advanced pharmaceutical industries to get their hands on meth's two main ingredients: ephedrine and pseudoephedrine. The drug is more valuable than heroin and, some say, more addictive.

Highlighting this scourge are U.N. figures showing that the number of meth labs uncovered in Iran rose from two to 166 in three years, while the supply of precursor chemicals in Pakistan has more than tripled over roughly the same period.

A Supreme Court case in Pakistan involving the prime minister's son has drawn more attention to the problem. The case revolves around two Pakistani pharmaceutical companies that allegedly used political connections to obtain huge amounts of ephedrine and are suspected of diverting it to people in the drug trade who could have used it to make meth worth billions of dollars. The companies have denied any wrongdoing.

Ephedrine and pseudoephedrine are used to make common cold medicine, but either can also be used to manufacture meth easily at home or, in places like Mexico where the trade is most advanced, in huge labs indistinguishable from those of large pharmaceutical companies.

The greater South Asia region has a long history of drug manufacturing, but most of it has involved opium and heroin made from the vast quantities of poppy grown in Afghanistan and smuggled out through Pakistan and Iran.

As governments elsewhere clamp down on the availability of the precursor chemicals, this region is attracting more dealers, said Matt Nice of the Vienna-based International Narcotics Control Board, which enforces U.N. conventions regulating the manufacture and distribution of ephedrine and pseudoephedrine.

They look for a country with weak security and regulation "where you can obtain the chemicals because no one is paying attention, or it has never been a problem before," he said.

Iranian police dismantled 166 meth labs in 2010, up from just two in 2008, according to the U.N. Labs have also been dismantled in Sri Lanka and India, one of the world's largest manufacturers of precursor chemicals.

Worldwide, nearly 10,200 meth labs were seized in 2009, the most recent aggregate data available, according to the U.N. Most were small labs dismantled in the U.S. But the number of labs outside the U.S. has increased significantly in recent years.

Much of the meth produced in Iran is smuggled to East and Southeast Asia, which have some of the highest street prices and are facing an epidemic of addiction.

"Over the past five years, Iran went from a nonissue in the global synthetic drug trade to top 10 in the world in terms of seizures," said Jeremy Douglas, head of the U.N. Office on Drugs and Crime in Pakistan. "They are also arresting Iranian meth couriers and traffickers throughout East Asia."

There are up to 21 million amphetamine users in East and Southeast Asia, out of a total high-end estimate of 56 million worldwide, according to the U.N. Nearly half of all people seeking drug treatment in East and Southeast Asia in 2009 were methamphetamine users.

There are signs Pakistan could be vulnerable to the synthetic drug trade and headed in the same direction as Iran.

Pakistani authorities arrested a Malaysian man last year at the airport in Karachi with a suitcase containing hidden compartments of meth that he admitted was made in the city, said Douglas. Thai officials have also arrested several Pakistanis carrying meth at the airport in Bangkok who flew there from Pakistan, he said.

"There are indications meth is being produced in Pakistan," said Douglas. "It makes sense because the supply of the precursors is high, readily available and cheap."

The chemicals are also being smuggled out of Pakistan to neighboring Iran and other countries.

Iran reported significant seizures of ephedrine originating from Pakistan and Syria -- 294 kilograms (648 pounds) in 2010 and 375 kilograms (827 pounds) in 2011, the U.N said. Pakistan also seized 265 kilograms (584 pounds) of ephedrine in provinces bordering Iran in 2010.

Last year, Pakistan also intercepted 245 kilograms (540 pounds) of ephedrine at Karachi port, bound for Australia hidden in spice packages, said the U.N.

About 3 pounds of ephedrine or pseudoephedrine are needed to make 2 pounds of meth. A single gram of meth can fetch more than $1,000 in Japan, according to the U.N.

Nice, the U.N. drug control official, said ephedrine and pseudoephedrine are often smuggled in pill form, and the smugglers mislabel the merchandise as something innocuous, like vitamins, to elude law enforcement in countries with little experience of meth.

"Once they do start seeing this stuff, you have to ask yourself how long has this been going on and how much bigger is it?" Nice said.

Smuggling may be peanuts compared with the amount of ephedrine and pseudoephedrine that is being acquired in bulk from pharmaceutical companies in the region and diverted to drug cartels through front companies -- the kind of deception that is suspected in the case before the Pakistani Supreme Court.

Most countries, including South Asian ones, are signatories to U.N. agreements that require them to report their ephedrine and pseudoephedrine needs to the International Narcotics Control Board each year.

The spike in amounts submitted by Pakistan and Iran in recent years has raised suspicions among U.N. officials that significant quantities may be diverted to drug traffickers.

Pakistan's need for ephedrine rose from 15,000 kilograms (about 33,000 pounds) in 2007 to 22,000 kilograms (nearly 50,000 pounds) in 2010, and pseudoephedrine from 10,000 kilograms (22,000 pounds) to 48,000 kilograms (nearly 106,000 pounds), according to the U.N. Iran's estimate for pseudoephedrine increased from 40,000 kilograms (more than 88,000 pounds) to 55,000 kilograms (more than 121,000 pounds) in 2010. Its estimate for ephedrine is negligible.

"When you start to see those numbers go up quickly, or wonder why they need so much more than anyone else in the region on a per capita basis, that is when we start to get a little concerned," said Nice.

The two pharmaceutical companies now before the Supreme Court were allotted 9,000 kilograms (nearly 20,000 pounds) of ephedrine in 2010 even though the country had already exceeded its annual estimate to the U.N., according to court documents. Neither company had previously been allocated ephedrine.

Pakistani Prime Minister Yousuf Raza Gilani's son, Ali Musa Gilani, is accused of using his influence to help the firms obtain the ephedrine. He denies the allegation.

The companies initially said they planned to convert the ephedrine into tablets and export them to companies in Iraq and Afghanistan. But the amounts vastly exceeded those countries' needs, and the Pakistani firms said they eventually sold the tablets domestically.

Berlex Lab International, which received 6,500 kilograms (14,330 pounds) of ephedrine, said its tablets were sold to Can Pharmaceutical in the southern city of Multan. But investigators discovered the address for the company was a residential house in Multan, and nobody answered the door. The owner of the company didn't answer his phone.

The other firm, Danas Pharmaceutical, which received 2,500 kilograms (about 5,500 pounds) of ephedrine, said it sold its tablets to 14 customers in northwest Pakistan. But investigators indicated the "thin population" and poor infrastructure in the area couldn't absorb that number of tablets.

"The case shows that the regulatory framework needs strengthening," said Douglas, the U.N. official in Pakistan.