HomeNewsGameChangers 2021: Long on Criminality, Short on Democracy in Year to Come
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GameChangers 2021: Long on Criminality, Short on Democracy in Year to Come

BRAZIL / 31 DEC 2021 BY JEREMY MCDERMOTT AND STEVEN DUDLEY EN

Prediction of the criminal dynamics for 2022 is even harder than most years, as it involves predicting the march of coronavirus. Organized crime does not exist in a bubble. It is tied to the world economy and the free flow of goods and people, and the pandemic is wreaking havoc on both.

The one thing that Covid-19 and its accompanying economic and social crisis has assured is that the fight against organized crime has fallen further down the list of government priorities in the Americas. Government budgets – battered by economic contraction and greater spending on health – are directing less toward fighting organized crime. All of this is accompanied by a rise in political instability and tendencies toward autocracy in the region, which have undermined democracy, transparency and resilience to criminal activity. Allied with the perennial problem of corruption, these patterns will ensure that transnational organized crime (TOC) will have an open playing field in the region during much of 2022.

The only thing slowing it down may be the coronavirus itself. The latest variant, omicron, is raging across Europe, bringing further restrictions on movement and travel. The United States is gearing up for the same, and Latin America and the Caribbean will soon feel its effects. Therefore, destination markets for criminal commodities from Latin America, mainly drugs, may well see disruption, although likely less than in 2021, given how markets have adapted to the pandemic over time.  

Yet even as international travel and transport are disrupted again, drug production in Latin America, led by cocaine, continues to increase. Colombia, Peru and Bolivia collectively produce more than 2,100 tons of cocaine in 2020, and that is likely an underestimation. Coca fields have been found outside the main cocaine-producing nations, including in Ecuador, Mexico, Honduras, Guatemala and Venezuela. InSight Crime field research in Venezuela has found industrial-scale coca plantations in three Venezuelan states.

With supply increasing, the US cocaine market saturated and transport stymied, the tendency to open up new routes to different countries is set to continue. Led by Colombian drug trafficking organizations (DTOs), new markets outside of the US have been developed, not just in Europe, but in Asia and Australia. 

This pattern will continue during 2022 as product piles up in the Andean region, while demand remains steady in the main consumer markets of the United States and Western Europe. The eastward spread of the European Union has opened up additional markets, and traffickers continue to eye China, with the world’s largest population and growing disposable income.

Linked to these new markets is the expanding reach of criminal groups into ports around the region. As containers coming from Colombia, Ecuador and Brazil are routinely searched for drugs, DTOs are using ports in other nations to insert cocaine into shipping. Ports in Costa Rica, Chile and distant Uruguay are increasingly being targeted by criminal groups, all looking to bypass interdiction efforts.

SEE ALSO: The Cocaine Pipeline to Europe

Political instability, violence and a lack of economic opportunities look likely to worsen during early 2022 and will provoke more displacement of people and migration, mainly northwards to the United States. Haiti is the perfect example: The country moves from crisis to crisis, with a worsening security situation since the July 2021 murder of President Jovenel Moïse. Criminal gangs now hold much of the country hostage, especially in the capital Port-au-Prince. Since there is currently little functioning government, and winning slated elections in 2022 depends in no small part on gang cooperation, continuing criminal rule in some form or other is likely.

The Northern Triangle nations of Honduras, Guatemala and El Salvador produce a constant stream of migrants, while Venezuela looks set to challenge Syria as the world’s worst refugee crisis; some six million Venezuelans, a fifth of the population, have left the country. Organized crime preys on these migrants, exploiting and recruiting them, ensuring that international human smuggling and human trafficking networks will grow and strengthen during 2022.

The increasing Mexican criminal focus on synthetic drugs and opioids is likely to continue in 2022. The marijuana market, once a staple for Mexican DTOs, has collapsed, thanks to growing legalization in the United States. The Mexican heroin industry is also diminishing, if production levels are any indication.

Cocaine remains a mainstay of the Mexican cartels, but with the fragmentation of Colombian DTOs, combined with the attraction of higher returns and less risk exporting drugs to other parts of the world, the Mexicans are struggling to secure sufficient supply. Synthetic drugs, especially methamphetamine and fentanyl, are a booming market in the US and increasingly in Europe, and the Mexican DTOs are tailoring their production accordingly.

There is some good news. The United States has put corruption and the struggle against transnational organized crime at the center of its dealings with the region. The determination that the fight against corruption is a core US national interest could have profound implications in Latin America and the Caribbean. Already the US is targeting key individuals in Central America and worrying other corrupt leaders and officials around the region. The establishment of the United States Council on Transnational Organized Crime (USCTOC) could also have a significant impact on the region, as the US shifts investigative priorities and resources to focus on the myriad threats that TOC presents.

However, the US has fewer partners in the fight than it once did, especially as it relates to fighting corruption and strengthening democracy. While Colombia and Panama remain faithful allies, and there is a new recruit in Ecuador, other parts of the region are less enthusiastic about signing up to fight TOC. Venezuela, Cuba, Bolivia and Nicaragua remain largely opposed to US interests, while Mexico, once a key ally, has shown little appetite for working with the US on combating drug trafficking, which has deep implications for bilateral relations.

Another crucial former ally, Peru, faces chronic political instability, which the July 2021 election of President Pedro Castillo has done nothing to improve. Castillo was close to facing impeachment proceedings amid widespread accusations of corruption and incompetence. Currently, the world’s second-largest cocaine producer has neither the will nor capacity to implement serious policies to contain TOC.

SEE ALSO: Coverage of Covid and Crime

Paraguay is little better, undermined at every turn by corruption while producing record amounts of marijuana for the giant Brazilian market and becoming a major transit nation for cocaine en route to Europe. Even the normally staid Chile has seen a left-wing candidate win power, and president-elect Gabriel Boric may not be keen to embrace US efforts.

While Colombia, Mexico and Brazil are home to the most powerful criminal groups in the region, other nations, most notably Venezuela, contain criminal strongholds. There, President Nicolás Maduro has defied all expectations and consolidated his power in the country. Regional elections in December cemented his political control. Maduro has also managed to sidestep many of the international sanctions imposed, and keeps his regime afloat through selling oil to partners like China, Russia and Iran, while extracting gold as fast as possible and turning it into hard currency.

Maduro has also established a system regulating the cocaine trade that will be the subject of InSight Crime’s first published investigation in 2022. Dollarization has not only tamed stagflation created by the endless printing of worthless Bolívar notes, it has ensured that illegal dollars and euros can be spent freely in the country. But since Venezuela is largely isolated from the international financial system, money laundering there is still limited. Presidential elections are not until 2024, meaning that Maduro, now more politically secure than ever, can turn his attention to revenue-raising and capturing as much criminal rent as he can.

Maduro may find new partners as well, some of which have implemented his predecessor Hugo Chávez’s playbook on how to undermine a democracy even while nominally remaining one. The best example of this is El Salvador’s President Nayib Bukele. In addition to stacking the courts and the judicial system with his allies, Bukele has turned his back on the US and seems ready to partner with street gangs and pariah states alike, if it secures him more power in the long term. He also stunned the region when he decided to make Bitcoin a legal tender in 2021, alongside the US dollar. Bitcoin and other cryptocurrencies are increasingly accepted regionwide, and with few safeguards in place, will remain a good tool for paying criminal partners and laundering proceeds.

The erosion of democracy and the continuing pandemic has also opened the door to criminal governance in many parts of the region. Large swaths of Colombia remain under the control of DTOs and guerrillas. Brazil’s prison gangs continue their expansion in Bolivia and Paraguay as well as at home. Venezuela’s criminal groups work alongside officials and take on state functions. And Mexican criminal groups have become de facto leaders of entire municipalities. In sum, 2022 may look eerily similar to 2021, except worse.

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