The balloon effect is considered to be one of the greatest failings or challenges of supply-side counternarcotics policies. As authorities attempt to diminish cocaine production in a region, cocaine prices go up and people in other regions experience strong incentives to fill the market gap. Stopping cocaine production is therefore like trying to squeeze air out of a balloon, the argument goes, it simply moves somewhere else in the balloon, but does not leave the balloon at all. This effect has been observed within Colombia and between Colombia, Bolivia, and Peru.

But Brazilian authorities were surprised a few weeks ago when they found a coca plantation with a nearby processing lab about 80 miles south of the city of Tabatinga, which is across the border from the Colombian city Leticia. The media reported that this was the first coca field and cocaine laboratory found in the Brazilian Amazon. The International Herald Tribune reported that “The coca leaf — the raw material for cocaine — is usually grown in mountainous regions of Andean countries, but in recent years, coca has been found growing at low altitudes on the Colombian side of the Amazon thanks to the development of hybrid strains.” In response to the finding, a Brazilian army Lt. Col. suggested a transgenic or an adaptation of the coca leaf may have been used. DEA spokesman Garrison Courtney warned last week that “the Amazon would be a perfect area, with all the brush and uninhabited areas. It almost creates a perfect opportunity.”

So why is coca suddenly being grown in the Brazilian Amazon? This could either be a sign of technological developments, as the International Herald Tribune suggests, or of advanced cultivation techniques, as the Brazilian Lt. Col. implied. Either way, it means that the coca industry is responding to pressure, and can be interpreted as a symptom of Colombia’s progress in establishing rule of law. We have already seen that the Colombian government has managed to push out the FARC’s leaders to neighboring countries; now we are seeing cocaine production responding to the same pressures.

The movement of both coca and the FARC to countries surrounding Colombia is perhaps a sign of success of Colombia’s U.S.-sponsored counternarcotics and counter-guerrilla efforts.  However, it also demonstrates how a misguided strategy, yet successful, can have unintended consequences.  While Colombia may be getting safer, the region is becoming more unsafe and unstable due to the internationalization of Colombian dynamics.  Colombia is increasingly isolated in the region, and the balloon may just be expanding.