Organized crime had to tighten its belt in 2020, and pickings remain lean as world economies contract and movement is restricted. Yet this crisis is likely to be a temporary stall and by the end of 2021, criminal activity will be back at full throttle.

Organized crime lives in the same world as us. It has suffered with the shrinking of economic activity, as a result of lockdowns. The movement of criminal commodities has been hit by travel restrictions. Several aspects of lucrative criminal economies, like drugs and prostitution, have been harmed by the plunge in social activity.

So the announcement of vaccine approvals and the start of vaccination programs at the end of 2020 were welcomed by all, the underworld and overworld. The main world consumer markets (and those at the top of the line to receive vaccines) may well be back to business as usual by the second half of 2021. Latin America and the Caribbean will certainly lag behind, but optimistic estimates have the virus contained in the Western Hemisphere by the end of 2021.

SEE ALSO: What Does Coronavirus Mean for Criminal Governance in Latin America?

The question is whether the coronavirus crisis will pass as simply a blip on the criminal radar screen or whether there will be long-term consequences and more permanent changes in criminal economies, modus operandi, recruitment and other aspects of organized crime.

Criminal Consequences

InSight Crime believes that by the end of 2021 there will be no permanent damage done to criminal markets. In fact, some criminal markets may expand considerably (see cybercrime below). However, there will be some COVID-19 “hangovers” and several tendencies that were already emerging pre-coronavirus, which have been amplified by the current crisis. These may have profound consequences for the criminal landscape, mostly in favor of organized crime.

The following is a list of potential consequences:

1. More criminal governance

Faith in democratic government in the region was already weakening pre-COVID. The poor reaction of many presidents to the coronavirus crisis has further debilitated the state, while the response of various criminal organizations has in many places raised their status. This will likely strengthen the idea that it is the criminal groups, and not the government, who are enforcing the social contract and providing vital assistance for their communities where states cannot.

As outlined in our opening GameChangers article, criminal groups in Brazil, El Salvador, Colombia, Mexico and Venezuela took advantage of the crisis from the start to establish greater authority in their areas of operation. Corruption and subsequent protests regarding lockdowns and the inadequacy of government assistance packages during 2020 in these nations — as well as in Peru, Bolivia and Guatemala — revealed the depth of frustration people have with their governments and the potential for upheaval to continue through 2021.

“If the population felt that criminal groups really helped during the crisis, and the government failed when people needed it, then this would increase the legitimacy of these groups and give them more power to carry out their activities, while the community protects them,” said Federico Varese, professor of criminology at Oxford University and author of books on the power of criminal groups.

“The implications for democracy could be dramatic. The legitimacy of institutions is under real threat,” he added.

What’s more, coronavirus will strengthen criminal-elite alliances or open the door to new ones. These alliances have been forged over years. They include pacts to finance elections, agreements to protect criminal operations and arrangements that cut across licit and illicit economic activities. The virus has deepened these ties, as political and economic elites alike seek to replenish their coffers and obtain capital for their sagging business projects, which will, as detailed below, likely not raise as many red flags.

2. More corruption amid tighter government budgets

Economic damage is going to cripple an already wobbly regional economy for years to come and much of the work to reduce poverty has been undone by the crisis. Budgets for law enforcement and security may well suffer, while those for social and educational programs are likely to be the first victims of cuts. Organized crime will find less resistance to its activities, more room for bribery and corruption and a new raft of recruits.

3. More money laundering opportunities

Linked to the above point on economic damage, sustained action against money laundering is likely to fall in the coming years. While there is currently less illegal money moving through the system due to COVID restrictions, the opportunities may increase in the short-term, once the business taps are turned on again. Governments in the region wrestling with economic downturns are likely to ignore dirty money if it is keeping their economies afloat.

Organized crime will also be able to scoop up businesses left bankrupt by the crisis. Thus, it will gain new ways to launder criminal proceeds and strengthen its hold on the legal economy in its areas of influence. This, as noted, will position it to forge even deeper ties with traditional economic and political blocs.

“Many countries in the region will have little incentive to crack down on illegal money. This will be especially true of those in economic crisis, those teetering on the edge,” said Kevin Mills, a Colombia-based security consultant who recently retired from Britain’s National Crime Agency after a three-decade career.

4. Increase in cybercrime

The acceleration towards a digital, cashless society is unlikely to be reversed, increasing the opportunities for cyber-criminals. This is not just the usual phishing scams and cloning of credit cards during consumers’ online transactions, but will infect the notion of moving money, setting up companies, creating and managing mortgages and dozens of other ways of conducting business online.

SEE ALSO: COVID-19: Gangs, Statemaking, Threats and Opportunities

Add to this the growing use of bitcoin and other cryptocurrencies to pay for criminal services, move money around the world largely undetected and launder funds. In Venezuela, bowed under the pressure of economic collapse and international sanctions, the military has taken to mining bitcoin aimed at generating “unblockable income.”

5. Use of encrypted communications and brokers to make deals

The travel restrictions have made it almost impossible for criminals to conduct the in-person meetings that are often necessary to close deals. Therefore, the criminal structures that have a permanent presence in Latin America and beyond, or have trusted intermediaries, have been able to broker drug buys and arrange transport far easier than those that relied exclusively on personal meetings.

“Deals are currently being brokered either via the internet or through brokers, as there has not been the flights available and options for face-to-face meetings. Air travel will likely be the last thing to fully recover,” said Mills.

The use of these brokers is not new, of course, but their emergence during this time period in certain networks may give rise to a whole new sub-genre of criminal organizations around these intermediaries.

6. Growing use of drug submarines

Most of the submarines are semi-submersible, since few of them can actually dive underwater for any length of time. Still, authorities say these so-called Low-Profile Vessels (LPVs) have proven to be a largely COVID-proof method of moving large drug consignments (up to six tons). They pass largely undetected, sidestepping current movement and travel controls.

There were record numbers of LPVs identified even before coronavirus, according to HI Sutton, who authored a book on narco-submarines and who specializes in tracking and analyzing all reports of these vessels and the evolution in their technology. The number of reported incidents in 2020 is slightly down, but Sutton suggests this might be because governments have been distracted by the coronavirus crisis, and security forces have had other priorities.

These vessels have historically been clocked along the Pacific seaboard, leaving Colombia and taking drug consignments towards Mexico. However, the discovery of a semi-submersible off the coast of Spain in November 2019 revealed that these crafts can now make transatlantic crossings.

“New types of narco submarines are being discovered all the time,” said Sutton. “A trend is that the payloads are getting larger once again, perhaps because other routes are restricted.”

A Prolonged Effect and a New Beginning

Once vaccines are administered and life returns to normal, InSight Crime believes that many criminal economies will recover very quickly. As the principal drug markets of Europe and the United States reactivate in the second half of 2021 and social restrictions are lifted, look for an explosion in drug consumption as people, long confined, celebrate their liberation.

At the same time, it may take longer for places like Latin America to recuperate from the virus. Distribution of the vaccine will undoubtedly lag (or be diverted because of corruption or political pressure), and the economic hangover described above will linger for more time than much of the rest of the world. This will open the door to more chaos and, of course, organized crime.

Nowhere is this more true than in Venezuela. Against the odds, President Nicolás Maduro has not only survived economic collapse and growing international sanctions during 2020, but he has actually strengthened his grip on power. He took control of the National Assembly — the last opposition-controlled official body in the country — via elections in December that were not recognized by the European Union, the United States, nor a dozen Latin American nations.

Now, amidst Venezuela’s smoldering political and economic ruins, the Maduro regime will increasingly depend on illegal rents to stay afloat and secure access to desperately needed foreign currency. This will have a knock-on effect around Latin America, especially for neighbors like Colombia.

Two of Colombia’s most powerful outlaw structures, the National Liberation Army (Ejército de Liberación Nacional — ELN) and the ex-FARC Mafia, have a significant presence in Venezuela, operating far beyond the reach of the Colombian security forces with the blessing of the Maduro regime. The ex-FARC Mafia are a loosely connected network of criminal groups that were formed after the 2016 peace process between Colombia and the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia — FARC).

It is not all bad news. The arrival of Joe Biden in the White House is likely to mark a significant shift in coronavirus strategy, a re-engagement between the United States and Latin America and a more strategic approach to transnational organized crime than that of President Donald Trump.

The White House may once again be able to build the necessary international cooperation and focus aid on building national resilience to both the economic malaise caused by the virus and organized crime throughout the region that is benefitting from it. With an emphasis on transparency, anti-corruption initiatives, free press and harm reduction, this may be a chance for a new beginning.

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Jeremy McDermott is co-founder and co-director of InSight Crime. McDermott has more than two decades of experience reporting from around Latin America. He is a former British Army officer, who saw active...

Steven Dudley is the co-founder and co-director of InSight Crime and a senior research fellow at American University’s Center for Latin American and Latino Studies in Washington, DC. In 2020, Dudley...