Category Archives: Latin America

Latin American Consequences of the US Presidential Elections

The US presidential elections are already swinging the pendulum for Latin America in significant ways. The fear that the US will now revert to protectionism lead to a major sell off across different asset classes. The Mexican Peso tumbled to 20-years lows and has hardly recovered as of yet, pulling down the entire region. After an initial quick fall the Dollar bounced hard and is currently trading at multi-month highs. This has exacerbated the devaluation of Latin American currencies, which are traded against the Dollar.

Apart from the financial fallout, geopolitical consequences of Trump’s future policies have appeared as well. Now that Trump has confirmed he will not support the Trans-Pacific Partnership, potential members like Chili, Peru, Mexico and Colombia will likely beef up their bilateral economic relations in order to compensate for TPP. Peru already stated to foresee bilateral negotiations with Australia and New Zealand. Argentina, very open to free trade, will receive $4.1 billion in investments from Canada. This is about half the amount expected from US companies through 2019. A more protectionist approach by Trump could bring that amount down and leave the door open for Canadian companies to fill the gap. Withdrawal from NAFTA could exacerbate this and will constitute extra incentive for Latin American countries to strengthen bilateral relations with other geopolitical powers. Peru, which has strong historic ties with China, already trades more with China than with the US, a development that could potentially spill over to increased security and military cooperation. President Kuczynski’s pull to China is very clear: “We hope to tap into new markets in China, especially for agriculture. We are also interested in cooperation on science and technology. Furthermore, cultural exchanges and cooperation in archaeology and climate change are also very important for us.” It remains the question whether the US will look on from the sidelines if Russia and China increase their influence in Latin America.

Interregional relations are likely to strengthen as well, given Trump’s veiled threats to Central American countries on the topic of immigration. Whether the US will build a wall or will significantly increase deportations of immigrants, Honduras, Guatemala and El Salvador have said to form a bloc with Mexico to deal with the US under Trump leadership. However, with regards to Mexico, it is likely that organized-crime competition will increase, as a result of traffic restrictions and stricter border controls. In this scenario, conflict over control over the remaining open crossings would lead to increased violence. Violence in border cities like Ciudad Juarez and Tijuana is already on the rise. The second security consequence for Mexico stems from the influx of deportees, who would have few employment opportunities in Mexico. They could provide a ready pool of labour for criminal organizations. Central American cooperation is said to increase collaboration on jobs, investments and migration.

It remains to be seen as to which direction the pendulum will eventually swing, however, for the moment significant financial, economic and security consequences are already visible in Latin America.

Mexico election scandals spotlight importance of local corruption

The expulsion of three mayoral candidates in Tamaulipas state by Mexico’s ruling party amid allegations they are working with organized crime begs the question of why transnational traffickers would take an interest in local government. There are a number of good reasons drug lords covet control over city hall.

Written by Mimi Yagoub, this article appeared originally in Insight Crime and has been republished with permission. See original version here.

Institutional Revolutionary Party (Partido Revolucionario Institucional – PRI) President Manlio Beltrones announced the suspensions via Twitter on May 7, saying the candidates had been “threatened or bought off by organized crime.” The only evidence Beltrones offered was that the candidates had switched sides. He said they had been forced to support the rival National Action Party (Partido Acción Nacional – PAN).

“The PRI will cancel the registrations of three mayoral candidates in Tamaulipas, threatened or bought off by organized crime,” Beltrones published on his Twitter feed, adding that the candidates had been forced to support the rival National Action Party (Partido Acción Nacional – PAN). The announcement comes only weeks before Mexico‘s local government elections, which are scheduled for June 5.

One of the candidates announced all threes’ support for PAN’s Tamaulipas gubernatorial candidate, Francisco García Cabeza de Vaca, during a campaign rally late in April, Milenio reported. All three are being investigated by the Special Prosecutor for Electoral Crimes (Fiscalía Especializada para la atención de Delitos Electorales – FEPADE),according to Excelsior.

Cabeza de Vaca is facing his own accusations of organized crime links and of using these allies to pressure rival politicians — allegations that his party has denied. Despite those allegations and the fact that Tamaulipas has been a PRI stronghold, the PAN candidate is reportedly favored to win the governor’s seat in June.

The PRI candidate for governor of Tamaulipas has also been a controversial choice. Baltazar Hinojosa Ochoa has been accused of receiving money from the Gulf Cartel while running for mayor of Matamoros in 2002, in exchange for allowing the cartel to pick his chief of police.

Tamaulipas is not the only state where campaigns have been tainted by corruption allegations. Carlos Joaquín González, a candidate for governor in the southern border state Quintana Roo, was recently accused of ties to organized criminal groups.

Whether the current turmoil in Tamaulipas is a political smear campaign or real criminal ties, the involvement of organized crime in local-level politics is a very real concern. There are many examples in Latin America that illustrate the trend, and a number of reasons organized crime goes to the effort to corrupt the lower rungs on the political ladder.

One of the most important attractions of corrupting local government is that it affords criminal groups a measure of territorial control.

Dominating areas without the collusion of local authorities can require high levels of violence or sticking to ungoverned spaces where state forces are irrelevant. This is especially true for trafficking organizations, which can more easily carve out drug corridors if local authorities are on board.

Establishing corridors where government officials and authorities turn a blind eye to criminal movements is particularly important in border states such as Quintana Roo and Tamaulipas, where easier access to foreign soil and markets facilitates drug and human trafficking.

The El Salvador-based Texis Cartel has for years relied on high-level corruption rather than violence to ensure the safe passage of illegal drugs through Central America. Its influence over police chiefs, congressmen and other officials has made the cartel — and its alleged leader, Jose Adan Salazar Umaña, alias “Chepe Diablo” — famously immune to prosecution.

Corrupting the mayor of an area essentially means exerting control over local police. There are countless examples of municipal security forces working for criminal gangs by providing intelligence, protection, or muscle.

One notorious example is that of police officers in the Mexican municipality of Igualá who were found complicit in the disappearance of 43 students in 2014. They were accused of handing the victims over to the drug trafficking gang Guerreros Unidos, a group allegedly led by the mayor of Igualá and his wife.

In another Mexico case, local police agents were arrested in January 2016 and charged with kidnapping five youths and handing them over to a criminal organization in Veracruz state.

In Peru, recently arrested drug boss Gerson Gálvez Calle, alias “Caracol,” reportedly had at least 21 police agents on his payroll. These carried out operations against Gálvez’s rivals and planted evidence to frame them.

As Alejandro Hope points out in his own analysis of local corruption, even the poorest municipalities handle tens of thousands of dollars in government funds each year.

Diverting this money into criminal coffers through extortion or control over the municipal budget can be a comfortable source of income for local crime groups. In Colombia this is all too common, and guerrilla organizations are known to charge a percentage on state contracts in some regions.

In April 2016, a former governor of Arauca was sentenced to nine years in prison for allegedly granting a guerrilla group state contracts.

Political validation can be invaluable in maximizing criminal groups’ power. Representative examples can be found in Colombia and El Salvador. The now-defunct Self-Defense Forces of Colombia (Autodefensas Unidas de Colombia – AUC) had a phenomenal amount of support from local and state politicians of all ranks, largely due to their mutual opposition to guerrilla groups.

This paramilitary umbrella organization had so much political influence that often local politicians would approach the AUC for support, rather than vice versa. Reports emerged of the AUC making pacts with thousands of politicians, and over 100 members of Congress have been investigated in what is popularly known as the “Parapolitics” scandal. The AUC‘s power eventually helped them negotiate an advantageous peace deal with the national government.

Corrupting local politicians can bring even bigger payoffs as they move up the ladder. Some mayors go on to be governors and congressmen, corrupting a small-time politician today could mean controlling high-ranking government positions tomorrow.

This may be one of the reasons Latin America is seeing criminal groups have their own members run for local office. Numerous crooked mayors across the region have recently been arrested for being leaders of criminal organizations.

Once a criminal organization has corrupted a local government, it is easier for it to expand its territory. This so-called “oil drop effect” sees groups consolidate control and subsequently “bleed out,” spreading their power and influence to the surrounding area.

Written by Mimi Yagoub, this article appeared originally in Insight Crime and has been republished with permission. See original version here.

Hope for Global Drug Policy Reform Dashed at UN Assembly

The United Nations’ special assembly on drug policy ended without significant changes to existing drug conventions despite a push for reform from Latin American countries seeking a less prohibitionist regime. With the huge obstacles to a new international consensus made apparent, reformist countries around the region instead look set to continue national level experiments with drug policy.

This article was written by Michael Lohmuller for Insight Crime and republished with permission. See the original version here.

World leaders met at United Nations headquarters in New York City from April 19-21 to discuss global drug policy during the UN General Assembly Special Session on the World Drug Problem (UNGASS). The event — held three years ahead of schedule after a 2012 request from Colombia, Mexico, and Guatemala — offered a forum to debate and rethink the UN’s existing drug policies.

Currently, global drug policy is governed by three international drug control conventions, but these have come under criticism for their punitive prohibitionist approach and their failure to bring drug trafficking and consumption under control.  Calls for their reform have been growing for several years.

However, the UNGASS revealed deep disagreements over international drug policy. The divide largely fell between countries in favor of shifting to a “humane approach” that deals with drug use as primarily a public health issue, versus those nations still favoring a strict law and order approach.

As expected, Latin American countries took the lead in advocating serious drug reform, reflecting frustration over the violence and corruption that the drug trade has caused wherever it has taken root in the region.

Latin America Leads the Charge

Numerous Latin America presidents addressed the assembly with urgent calls for reform, with the leaders of Mexico and Colombia, the two countries that have historically suffered the most from the drug trade, taking center stage.

In an April 19 speech, Mexican President Enrique Peña Nieto told delegates, “We should be flexible to change that which has not yielded results, the paradigm based essentially in prohibitionism, the so-called ‘War on Drugs’ … has not been able to limit production, trafficking or the global consumption of drugs.”

Peña Nieto also declared Mexico would be taking steps toward reform, telling the assembly: “I am giving voice to those who have expressed the necessity of changing the regulatory framework to authorize the use of marijuana for medical and scientific purposes.”

To that end, Peña Nieto introduced a 10-point proposal for classifying drug use as a public health issue and moving away from the criminalization of users. The following day he announced he would send to Mexico’s Congress a proposal to legalize marijuana-based medicines and increase the amount of marijuana decriminalized for personal use from 5 to 28 grams.

Peña Nieto’s sentiments were echoed by his Colombian counterpart Juan Manuel Santos, who also called for a move away from repressive and punitive drug policies to alternative approaches focused on human rights and public health.

“After so many lives that have been destroyed, after so much corruption and so much violence, after so many young people being marched off to jail, can we say that we have won the war (on drugs) or at least that we are winning it?” Santos said. “Unfortunately the answer is ‘no.'”

Support for drug policy reform also came from other leaders from around the region. Guatemalan President Jimmy Morales, for instance, called for a more humane approach to drug control based on public health, saying “people, not substances” should be at the center of global drug policy.

“In this so-called war on drugs, countries like Guatemala have carried the worst burden, having suffered the injustice of lost human life,” Morales said as he denounced the ill effects the drug trade has had for countries located along major trafficking routes.

Morales, however, did not go as far as his predecessor Otto Pérez Molina, who had surprised the international community by advocating the decriminalization of drugs after taking office in 2012.

Speaking on April 21, Bolivian President Evo Morales added to calls for more humanistic drug policies while lambasting the “failed” anti-drug strategies promoted by the United States. He even went as far as advocating the dismantling of the US Drug Enforcement Administration (DEA), an agency Morales expelled from Bolivia in 2008.

Morales defended Bolivia‘s traditional use of the coca leaf, the main ingredient in cocaine, and criticized the militarized approach to coca eradication. However, he added that Bolivia has no intention of legalizing drugs.

Among Caribbean nations at the UNGASS, Jamaica questioned why international law still classifies marijuana as if it were as dangerous as heroin. Jamaica decriminalized the possession of small amounts of marijuana in 2015, and created provisions for its medical, therapeutic, and religious use.

Consensus Sinks Outcome

Despite the impassioned pleas of Latin American leaders’ for a move away from the existing UN drug conventions’ emphasis on prohibition, those hoping for meaningful drug reform came away from the UNGASS frustrated.

On the special session’s opening day, member states adopted an “outcome document,” entitled “Our joint commitment to effectively addressing and countering the world drug problem” (pdf). The document, the result of months of advance negotiation in Vienna, Austria — home of the UN Office on Drugs and Crime (UNODC) — does not break with the framework of the UN’s current prohibitionist policies. Instead, it reaffirms a commitment to “promote a society free of drug abuse,” and recognized the three UN drug control treaties as “the cornerstone of the international drug control system.”

While the statement does acknowledge public health concerns and recognizes “alternative or additional measures with regard to conviction or punishment,” it does not discuss drug decriminalization or harm reduction, two central aspects of calls for reform. As a result, the “outcome document” has come under heavy criticism from drug policy advocates who say it amounts to little more than minor tweaks to the UN’s existing conventions.

A statement released by drug reform campaigners the Global Commission on Drug Policy (pdf) said: “The document does not acknowledge the comprehensive failure of the current drug control regime to reduce drug supply and demand. Nor does [it] account for the damaging effects of outdated policies on violence and corruption as well as on population health, human rights and well-being.”

Former presidents turned drug policy critics also condemned the results of the assembly. Ex-Colombian President César Gaviria Trujillo said the UN’s aim of a drug-free society is “unrealistic, totally naïve, almost stupid,” while ex-Swiss premier Ruth Dreifuss said “the world community is not ready, is not willing, to have the change of politic that is absolutely necessary,” reported the Guardian.

The reason for the outcome document’s boilerplate wording and lack of meaningful reform reflects how UN drug policies are formed: consensus.

Beyond Latin America, many nations continue to push for punitive, even draconian, anti-drug policies. Chief among these is Russia, which VICE News reports took an extremely intransigent stance during negotiations over the document’s text in Vienna. In addition to Russia, other drug hardliners include Indonesia, China, and Iran, all of which routinely execute drug offenders.

What Comes Next?

Ultimately, the UNGASS’ failure to make meaningful changes to existing international drug control conventions means it is likely nations will continue to diverge and experiment with drug policy at the national level, particularly with marijuana and particularly in the Americas.

This is most immediately apparent in the case of Mexico and Peña Nieto using the UNGASS to announce changes to marijuana laws. In this, Mexico is joining a host of countries around the region in liberalizing marijuana laws, not least Uruguay, which is set to soon begin implementing the state regulated legal sale of marijuana for recreational use, becoming the first nation worldwide to do so.

Further to the north, the United States looks set to maintain its role at the forefront of marijuana legalization, albeit despite, not because of the national government. Four US states, including Colorado and Washington, now allow the sale of marijuana for recreational use, while another 24 have legalized medical marijuana. Canada‘s health minister, meanwhile, announced during the UNGASS that legislation to legalize marijuana would be introduced in 2017. Canada‘s new Prime Minister Justin Trudeau campaigned on a promise to legalize and regulate recreational marijuana, saying it would fix a “failed system.”

In addition to marijuana laws, reformist states are also likely to explore further policies with a focus on public health rather than law and order, as has already been seen — with varying levels of success — in countries across the region.

Given the powerful defenders of the status quo and glacial pace of building international consensus, national experiments are likely to represent the future of drug policy reform for the foreseeable future. What remains to be seen is whether prohibitionist international conventions will continue to dominate in the face of this challenge, or whether their global influence will be eroded by localized attempts to change the paradigm.

This article was written by Michael Lohmuller for Insight Crime and republished with permission. See the original version here.