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.
In a country already convulsed by violence, El Salvador’s murder rate has begun to increase dramatically, with 125 murders reported since Sunday, August 16. National Police Chief Mauricio Ramirez has confirmed that 40 people were killed on Sunday, 42 on Monday and 43 on Tuesday. It is believed that the majority of these deaths were gang related. These figures appear to be in keeping with the murder rates recorded over the first five months of the year, which saw a 50% increase in violent deaths (2192 in total) during the same period last year.
While El Salvador has long been plagued by violence, the levels which it is now being forced to endure have not been seen since the civil war in the 1980s. Murder rates have escalated rapidly and the government has struggled to rein in the powerful street gangs which control entire neighbourhoods in many of the Central American country’s towns and cities. In attempting to explain this trend, authorities say that gang leaders are using violence as a means of pressuring the government into a weakened negotiating position. “They want to exert some pressure and for the government to grant some of the things they are asking for,” said Justice and Public Safety Minister Benito Lara. This year alone, around 50 soldiers and police officers were killed by gang violence, despite the launch of a bold new offensive into the neighbourhoods were the gangs are known to operate.
At the centre of this conflict are the principal criminal groups that hold sway in El Salvador; Mara Salvatrucha, otherwise known as MS-13, and two independent factions of Barrio 18. They emerged after the 1992 peace agreement brought an end to the war between the US backed military and leftist guerrillas and their presence can be felt throughout the country, as drug dealers and extortionists; a damning indictment of successive failed attempts by police to curb the gangs’ growth and operational effectiveness.
According Rudolph Giuliani, a former mayor of New York City: “the best answer to terrorist groups and gangs is to confront them. Giuliani, who brought the broken-window theory, which claims that tolerance of small crimes, would encourage bigger ones in New York City, rejects the idea of negotiating with gangsters. He was hired in January 2015 by the business community in El Salvador in order to propose tough-guy solutions to crime in El Salvador. The team composed of experts was tasked to assess the effectiveness of the country’s law enforcement, to develop a fact-finding report and to analyse the criminal justice. The facts, however, may prove his theory wrong.
On March 9, 2012, the two main gangs that control turf in El Salvador, namely the Mara Salvatrucha 13 and the Barrio 18, whose origins date back to the incarcerated Salvadoran and Mexican populations in the prisons of Los Angeles in the 1980’s, reached a truce. From their headquarters in Salvadoran maximum-security jails, they instructed their members to stop murdering each other. Moreover, they agreed with the government of former President Mauricio Funes to constrain their members from killing law enforcement officers. While President Funes’ administration did not explicitly admit participation, the government offered to work on preventing youth from joining the maras, and assist in reintegrating them into regular employment. In addition, leaders were transferred to medium security prisons, cell phone communication and conjugal visits were allowed.
The talks between the two gangs were initiated by Monsignor Fabio Colindres who played the role of mediator between the parties. This truce initially resulted in a significant reduction in the national’s homicide rate from 14 per day to 5 per day. However, nearly 3 years later, the country suffered its bloodiest month in a decade and is to become the most violent country outside a war-zone. Homicides had initially fallen during the first months of the truce, but extortions were increasing. Indeed, in order to stay in business, the maras have been increasing their revenue by demanding weekly payments from local populations and businesses. The truce was brokered by the Salvadoran government, but it soared after the government broke down early 2014. The number of murders rose by 57% in 2014 compared with a year earlier, to almost 11 a day, according to the police. By March 2015, this number rose up to 16 per day, confirming that the death toll was 52% higher than in the same period in 2014.
According to Steven Dudley, an expert from Insight Crime, the agreement represented “more of a violence interruption project than a truce. It required the participation of police and trusted interlocutors with the gangs. It fell apart when the government pulled its support from the project in June 2013 and named a new security minister. It slowly unravelled after.” Gang leaders from both the Mara Salvatrucha and Barrio 18 blamed rising violence on poor government policy and asked the new government of President Sanchez Ceren to confront the “death squads” that had “recently taken the lives of many of our members, family members and civilians”, affirming that some of these groups operated inside the state apparatus. Security minister Perdomo was one of the protagonists in the anti-truce strategy who closed the channels of communication between imprisoned gang members and also claiming the gangs had used the truce in order to increase their involvement in transnational drug trafficking.
Indeed, President Sanchez Ceren’s administration has been implementing a tougher approach to the maras in parallel with the framework of Security Minister Perdomo. For instance, in January El Salvador’s vice-president announced that police should respond with force and “without any fear of suffering consequences if threatened by gang members.” Vice President Oscar Ortiz said that the government endorsed the decision of the federal police direct last week to authorize the new policy. Before the implementation of this new policy, police officers who used deadly force would be investigated and sometimes fired. Ortiz also added that the Salvadorian government would no longer tolerate attacks on the country’s police, military, judges or prosecutors. Additionally, President Salvador Sanchez Ceren announced the creation of four new rapid response battalions, one for the police and three for the army in order to strengthen the efficiency of current forces involved in the fight against street gangs. Salvadoran authorities also reported in April that some 400 gang members have been transferred from prisons in northern to eastern El Salvador to one with higher security in Izalco, in order to cut off communication with their gang and also prevent new waves of crimes.
In spite of the implementation of such tough new measures, no improvement has been noticed yet and conversely gang-related violence has skyrocketed. It is highly likely that a more fruitful approach would be to build on the truce rather than disown it and should be part of thorough pacification process that would include economic aid for gang-controlled areas in order to provide alternative to crime. The truce offered an alternative to iron-fist policies that have proven to be repeated failures to stop violence. Therefore, it seems important to re-establish dialogue between Mara Salvatrucha and Barrio 18 and the government as the militarization of the country provoked the gangs to systematically attack police and military forces.