The "war on drugs" refers to a hard-line approach undertaken by the US government since the 1970s, which involves strict law enforcement, and foreign aid and military intervention in countries, in order to stamp out the narcotics trade.

BBC: Davos 2013: Soros calls for new strategy on drugs

The trade surplus leads to large inflows of foreign currency, which is bought up by the central bank in order to hold down the exchange rate.

ECONOMIST: The economy just grows and grows