Latin America’s Adaptive Gangsters

BOGOTÁ – Many Latin American countries have made impressive gains in building state capacity and strengthening democracy in recent decades. And yet criminal networks – entrenched relationships between legal and illegal agents engaged in organized criminal activities – continue to play a large role in these countries’ formal and informal economies and political institutions, rending the social fabric and threatening further progress.

Illustration by Paul Lachine

Criminal networks distort the most important sources of change: globalization, technology, open markets, regional cooperation, and democracy. In a context of weak institutions, persistent inequalities, and high levels of marginalization and exclusion, new growth opportunities for organized crime have emerged. Latin America has more (formal) democracy, higher foreign-trade turnover, a larger middle class, and more advanced technology than it had 20 years ago. It also has more organized crime.

These networks bypass formal institutions to take advantage of the changes in recent decades, exploiting lacunae in the international system and the vulnerabilities of Latin American democracies. As a result, they have expanded into global markets, enabled by an extralegal system of relationships based on clientelism and corruption. Rather than resisting change, criminal networks have adapted the forces of modernization to their own advantage.

Criminal factions – whether Mexico’s “cartels,” Colombia’s “bands,” or Brazil’s “commandos” – are only the most visible part of these networks. The totality is based on a series of complex relationships that connect legal and illegal worlds, including politicians, judges, and prosecutors who are willing to alter sentences for money; policemen and military personnel involved in illegal activities; and businessmen who launder money.

The strength of these criminal networks rests on people and organizations – present at all levels of society – that engage with illegal markets when convenient. They expand locally and globally to satisfy market demand, providing the illicit goods and services that societies want.

Incomes produced by these illegal markets are huge, competing in size with Latin America’s most successful legal commodities. Consider just the profits from cocaine sales in North America, which, according to the United Nations Office on Drugs and Crime (UNODC), total roughly $35 billion. Another $26 billion in sales are made in Western and Central Europe.

The vast majority of these proceeds are retained by criminal organizations in rich countries and laundered by banks in global financial centers, with just a small amount returning to Latin America. According to the Colombian academics Alejandro Gaviria and Daniel Mejía, only 2.6% of the total street value of Colombian cocaine returns to the country. In Mexico, a recent report published by the magazine Nexos estimated organized crime’s total “rent” at $8 billion per year – a small portion of total profits, but enough to buy off underpaid cops, bribe corrupt public officials, and influence local economies.

Expansion of criminal networks occurs not only across borders; illegal markets have grown inside countries as well. Brazil is the world’s second-largest consumer of cocaine in absolute terms, and Argentina has the highest prevalence rate in the world, according to UNODC data. Likewise, extortion is growing in Central America, and illegal mining is a prosperous business in Colombia, with gold becoming the new cocaine – easy to market and with lower risk.

Violence is the other currency being traded in Latin America. With the exception of a few guerrilla groups, organized crime is the only strategic actor in the region that has the capacity to dispute the state’s claim to a monopoly on the legitimate use of force. Given the near-absence of legal forms of mediation, violence is the language used by criminal networks to resolve disputes. When corruption and alliances with public officials do not work, they confront state institutions directly.

Indeed, most Latin American countries far exceed the threshold of 10 homicides per 100,000 inhabitants that the World Health Organization uses to define an “epidemic” level of violence. Countries like Honduras, El Salvador, and Guatemala have the highest homicide rates in the world, owing to a high density of criminal structures. The obsession of politicians with imposing the rule of law through iron-fisted methods, it seems, brings about only more insecurity for their citizens.

Breaking the distorting power of these criminal networks requires first confronting the distortions that perpetuate it: the failed war on drugs and criminalization of consumers; the burgeoning privatization of security; police agencies that reproduce, rather than reduce, violence and crime; prisons that hone offenders’ criminal skills; and judicial systems that re-victimize crime victims.

Ultimately, the key is to build democratic institutions that are strong enough to de-escalate violence and protect citizens, which in turn requires that political leaders try new options, and that societies assume more responsibility for their fate. Latin America’s governments and citizens can recognize and address distortions in their own thinking, or they can remain on a path of corruption and violence that erodes states and citizenship alike.

Read more at http://www.project-syndicate.org/commentary/democracy-and-organized-crime-in-latin-america-by-juan-c--vergara#KXvhOv5tUGzsJlmC.99