Paraguay has long been a key link in South America’s drug trafficking chain, but has grown in importance with the emergence of new criminal players and economies.

InSight Crime spent two years chronicling the evolution of organized crime in Paraguay, visiting a total of 11 departments on the border with Brazil and Argentina, as part of an in-depth investigation into transborder crime.

Below are the three main takeaways from InSight Crime’s investigation:

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Criminal Diversification

Paraguay’s relevance as a criminal hub stems from its position as South America’s main marijuana producer, feeding the consumption markets in neighboring Argentina and Brazil.

This has not changed — Paraguay produced an estimated 40,000 tons of cannabis in 2019 — but criminal groups are now branching out into new activities, most notably cocaine production.

In areas where marijuana trafficking was once the only criminal economy, like the northern department of Alto Paraguay, Paraguay authorities have discovered a number of laboratories equipped to produce cocaine and its derivatives.

There are also fewer restrictions in Paraguay on procuring the chemicals needed to produce cocaine than in larger producer countries like Bolivia, boosting the country’s appeal as an alternative location for fabricating the drug.

SEE ALSO: Border Crime: The Northern Triangle and the Tri-Border Area

In the southern department of Itapúa, a hub for marijuana trafficking, heightened tourism brought with it human trafficking, with minors forced into unpaid labor or exploited for sex.

With more criminal economies, Paraguay has become a more attractive prospect for international crime groups, including the notorious Brazilian gangs the First Capital Command (Primeiro Comando da Capital — PCC) and Red Command (Comando Vermelho — CV). Both have made aggressive attempts to establish a foothold on the Paraguay-Brazil border.

In the city of Pedro Juan Caballero, Amambay department, the PCC’s incursions into the cocaine and marijuana trade have upset the criminal balance and fuelled confrontation between increasingly fragmented groups.

The department’s homicide rate has subsequently skyrocketed: In 2020, Amambay accounted for around 35 percent of homicides in all of Paraguay, according to InSight Crime’s investigation.

The PCC has also sought to strengthen itself within Paraguay’s prisons, taking advantage of severe overcrowding to recruit new members.

‘Democratization’ of Contraband

Once controlled by a tight-knit group of political elites, Paraguay’s booming contraband economy is becoming ever-more accessible to small-time criminal actors and lower-level politicians.

The elites’ crumbling monopoly has left the contraband trade working like a regular market economy, responding to shifts in supply and demand.

With the profits reaching a more diverse crowd, this criminal activity has become an important mechanism for financing political campaigns, in turn degrading the electoral process.

The arrival of international crime groups on Paraguay’s border with Brazil has also impacted the contraband trade, as local groups in Pedro Juan Caballero now sell a decent portion of their counterfeit goods to foreign buyers.

Drug Trafficking and Political Protection

The relationship between politics and organized crime has also evolved, with a growing number of officials taking an interest in the drug trade.

InSight Crime investigated how, in one case, an alleged drug trafficker named Reynaldo ‘Cucho’ Cabaña conspired with Paraguay congressman Ulises Quintana to protect cocaine shipments in exchange for illicit funds.

The pair’s relationship typifies a wider pattern: the increasing importance of drug money in political campaigning.

SEE ALSO: Drug Trafficking and Political Protection in Paraguay: The Case of ‘Cucho’ Cabaña

Quintana is also an example of a lower-level politician who broke into the criminal circles once controlled by elites, thanks to his alleged relationship with organized crime.

Cabaña had a similar trajectory, starting out as a small-time trafficker before expanding his criminal enterprise by exploiting the symbiotic relationship between traffickers and politicians paid drug money to protect them.

That protection has allowed smaller groups to set up criminal enterprises that span various stages of the supply chain, including drug transhipment and production.

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