When it comes to Central America, all eyes are usually on the Northern Triangle. But 2016 saw local organized crime in Costa Rica and Panama -- traditionally oases of calm in the region -- enter unprecedented territory.
In Costa Rica, the evolution of domestic criminal groups has led to a surge in violence, while criminal structures in Panama appear to be growing increasingly sophisticated. This trend is set to continue into 2017 as state institutions struggle to cope with the burgeoning threat, while drug trafficking through the region grows.
The year 2016 offered yet more evidence that local organized crime in the Central American countries of Costa Rica and Panama -- nations not typically thought to harbor home-grown transnational crime syndicates -- is becoming more complex.
In Panama, local gangs that have long been associated with petty criminal activity are consolidating into two rival "blocs" named Bagdad and Calor Calor. There are indications that these structures are acting as so-called "oficinas de cobro," or collection offices, which collaborate directly with transnational organized crime.
These oficinas offer services such as the "protection of drug routes and contract killings for other criminal groups, and act as a bridge between Colombian criminal organizations like the Urabeños and traffickers who move drugs to subsequent destinations," according to the Panamanian government.
What's more, Panama's gangs apparently control drug trafficking routes through the country and may even be operating transnationally. Calor Calor and Bagdad "reportedly have cells in Costa Rica, although it is unclear just how high up their involvement in the drug trade goes."
Across Panama's western border, Costa Rica, which has long been considered the "Switzerland of Latin America," has seen a drastic rise in violent crime associated with the illegal narcotics trade. Between 2000 and 2015, the country's murder rate nearly doubled from 6.3 to 11.5 per 100,000 citizens. Up to 70 percent of the violence has been associated with territorial battles between local drug gangs.
This dynamic is new to the country, with Costa Rican Security Minister Gustavo Mata explaining that "criminality in the country now revolves increasingly around the drug trade, whereas previously it largely consisted of bank robbery, vehicular theft, and kidnapping."
The Evolution of the Gangs
To understand the evolution of crime in these countries, it is important to take a step back. Located on a key drug movement corridor, these nations were long ago penetrated by transnational trafficking organizations. As such, gangs in this part of Central America have typically been considered subordinate to Mexican and Colombian cartels. Indeed, captures of foreign criminal emissaries in Panama in 2016 suggested that the nation's "largest gangs are stepping up their role in domestic drug transport while remaining under the service of Colombian and Mexican cells."
However, there are signs that local groups are operating with increasing independence from their powerful patrons -- a trend not unusual for drug transit countries. In one prominent example from November 2016, Costa Rican authorities claimed they had dismantled the first ever "criminal structure which managed all aspects of drug trafficking from Costa Rica."
Also last year, Colombian and Panamanian authorities reportedly disbanded an international drug trafficking network led by a Panamanian criminal. The complexity of this organization's activities "raises the question of whether Panamanian groups continue to act merely as service providers for Colombian and Mexican criminal organizations, or whether they have begun to set up their own transnational trafficking operations."
The driving forces behind this growing independence have various facets. On the one hand, it is natural for domestic criminal structures with links to more powerful organizations to make their way up the criminal ladder over time. On the other hand, transnational criminal dynamics also play a key role.
Following the collapse of Colombia's powerful cartels, both Panama and Costa Rica have increasingly come under the sphere of influence of Mexican rather than Colombian groups. By the turn of the century in Costa Rica, gangs that had been at the service of Colombians found themselves "freelancing" without leadership, and eventually fell under the control of Mexican crime syndicates.
However, turmoil in Mexico's underworld may now be forming a new generation of independent groups.
"In recent years, Mexican cartels have experienced a splintering similar to that of their Colombian predecessors, which appears to be providing the space for local groups to take on a bigger role in Costa Rica's illicit drug trade," we noted in November. "As a result, whether or not Costa Rica's drug trafficking organizations continue to evolve may have as much to do with the criminal dynamics in Mexico as with efforts by Costa Rican authorities to dismantle these homegrown structures."
The same could well be true of Panama's more sophisticated gangs.
Security Forces in Deep Water
There is much room for improvement in these countries' response to the local gang threat. In Costa Rica, the rapid escalation in violence has caught authorities off guard. Following a gang-related massacre on October 2, the security minister himself "lamented that his agency lacks sufficient financial and human resources to combat growing criminal violence, threatening to resign if the ministry was not allocated additional resources soon."
The Costa Rican government has attempted to boost security efforts by, for example, deploying 400 extra police officers in October to the important seaport of Limón, which has been at the heart of the country's role in the transnational drug trade. The United States has also allocated $30 million in security-related aid to the country.
Nevertheless, the ill-equipped government recognizes the need to change its strategy to effectively confront the abrupt deterioration in its security situation.
Panama also has to face problems of its own, despite a significant decrease in overall homicides over the past seven years. Panamanian President Juan Carlos Varela attributes up to 70 percent of murders in the country to organized crime, and there is evidence that gang dynamics are largely behind clusters of violence, as homicides are highest in the areas with the greatest gang presence.
Graphic taken from October 19 article "Mapped: Where Panama's Gangs are Strongest, Homicides are Highest"
In 2016, President Varela continued to both threaten gangs with tough crackdowns, and offer his signature amnesty and rehabilitation program to thousands of youths. But the efficacy of his mixed strategy is questionable, as the number of gangs in the country has not dropped since he took office in 2014.
Looking forward, the most tangible organized crime threat in this stretch of Central America will probably be domestic gangs continuing to step up their activities.
In Costa Rica, this could contribute to a further increase in violence as groups struggle for power. But the "bloc" gang structures present in Panama could add a bit more stability to its underworld in the imminent future. It is likely that these networks will become more organized, and perhaps transition from their role as go-betweens to assuming greater control over stages in the drug trafficking chain typically run by Mexican and Colombian syndicates.
A greater volume of drugs flowing through the Central American isthmus may further strengthen the power and earnings of local groups. Despite numerous suggestions that drug routes from South America to the United States are shifting towards the Caribbean region, there is evidence that the Central American pathway is actually growing in importance. Panama has seen the highest level of drug seizures since the year 2000, and the Costa Rican government has made outlandish predictions that "1,700 tons of cocaine will be trafficked through Costa Rica in 2016" -- a hardly credible figure considering that the total worldwide production is closer to 900 metric tons.
Perhaps most importantly, the soaring cultivation of coca crops in Colombia -- which borders Panama and is the main supplier of cocaine to the United States -- will probably continue into next year, providing its northern neighbors with even greater supplies of the drug.
To add to this, the expansion of Panama's canal, which connects Pacific and Atlantic waters, could widen the gateway for illegal goods being smuggled through the country.
Such dynamics illustrate the strategic importance of these two countries for organized crime in the Americas, and indeed worldwide. With such prospects, we may well see Costa Rica and Panama follow in the footsteps of other transit countries, where domestic gangs worked their way to the top echelons of organized crime. The evolution of Mexico's cartels is a prime example, Central America's gangs could soon provide another one.