Drug-Dealing Organizations in Latin American Politics

What is the subject and why do I care?

The principal subject examined is drug-dealing organizations and their influence on Latin American politics. It is unclear if DDOs impact domestic and international politics as legal entities do. The topic is significant because the success of counter-narcotics efforts in North America is limited by the influence these organizations have on domestic and international policy, notably in Mexico and Colombia.

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What are the background issues?

The rise in drug trafficking and political influence of DDOs in Mexico and Colombia reflect deep underlying socio-economic issues. First, growth in the global drug consumption and limited counter-narcotics efforts in these countries have allowed DDOs to acquire significant economic power. Second, the proliferation of remote production zones and cross-border transit routes is another source of political influence. Speculative investment in rural land and facilities such as schools and hospitals increases their public influence. They also use bribery, threats, and violence to expand their influence in politics.

What are the considerations/caveats?

To understand the political influence of DDOs, it is necessary to view them from an economic perspective. Agrarian inequality and unemployment in rural Latin America provide ideal conditions for clandestine drug production and export. Complicity from local law enforcement and prosecutors paid-off by DDOs is another factor increasing their presence and influence in remote areas. Most DDOs are run by the social underclass who hide their illicit proceeds in legal businesses and property, making it hard to trace.

What are the findings, analysis, and recommendations?

This analysis establishes that DDOs are quite influential in Latin American politics. They derive their influence from their economic power, rural land speculation, bribery of law enforcement, threats and violence, and manipulation of transnational politics in their production zone and transit routes. It is recommended that the counter-narcotics war prioritizes property acquisition by DDOs and laws that allow them to accumulate wealth and influence.

Introduction

The 20th century saw a rise in the consumption of psychoactive substances in the US and other countries, fueling an illegal drug trade and trafficking led by organized groups from Latin America. The proliferation of powerful, multinational cartels financed by revenues from the export of illicit narcotics like cocaine and heroin poses a big challenge to governments running counter-narcotics programs (Langton 2013).

The United Nations Office on Drugs and Crime (UNODC) was created to bolster the efforts of states through funding and legal support. Nevertheless, drug trafficking has continued to flourish with significant impacts on health, the economy, and local and regional politics. The narcotics trade, which has an annual value of over $20bn, has increased the political influence of incorporated illicit organizations mainly in Latin America (UNODC 2018). Their ability to shape politics is derived from their economic power. This paper analyzes the extent to which drug dealing organizations (DDOs) are still influential in Latin American countries of Mexico and Colombia.

The Extent of the DDOs’ Influence

The political ties of DDOs can be understood from a larger political-economic context. Their influence can be felt in economic, social, and political spheres. Certain historical events influenced the evolution of powerful DDOs with political ties in Latin America. First, since the 1970s, the philosophical foundations of the counter-narcotics paradigm have focused on reducing supply to make narcotics unavailable and costly and thus decrease demand (North and Grinspun 2016).

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This policy inadvertently led to an increase in cocaine producers and illicit proceeds. For example, Colombian cartels earn over $2.5 billion annually from drug trafficking (U.S. Department of State 2017). Second, weak counter-narcotics systems in Latin American countries have made illicit trade more profitable than legitimate business (UNODC 2018). Macroeconomic factors such as unemployment and corruption allowed drug-trafficking operations to thrive in transit countries. A lower risk of arrest and prosecution coupled with rugged geography also fostered the economic growth of DDOs.

Even today, DDOs serve significant geopolitical purposes in Latin America (Collins 2014). As stated, the supply-side policy has failed to reduce global demand; instead, it has created powerful drug dealers – non-state actors. In particular, the prohibition of cocaine criminalized producers and traffickers but made them very wealthy and influential. According to the U.S. Department of State (2018), in 2017, about 200 tons of cocaine from Mexico earned drug cartels about $6 billion. Huge profits have made traffickers in transit routes of Mexico and Colombia very influential non-state actors.

Using their economic might, DDOs are able to corrupt social and political players and law enforcement (Cox 2014). Despite sustained counter-narcotics efforts, it has been difficult to stop cocaine from being shipped from its production areas in Latin America to North America due to this influential power. Drug interdiction carried out by military alliances such as the Central American Regional Security Initiative (CARSI) that brings together countries in the transit route has changed these dynamics (Jones 2016).

However, the CARSI has also created ideal conditions for traffickers to expand their influence regionally by establishing new transit routes to avoid detection. For instance, according to UNODC (2018), DDOs have moved the main trafficking channels severally between the Caribbean to Mexico since the late-1990s. These displacements incentivize DDOs to re-establish new alliances and frontiers for production of narcotics. They target and influence political, social, and religious actors in indigenous territories to establish ‘safe havens’ and transit routes to ship their drugs without detection by the police.

A primary outcome of DDOs’ political influence is weak regulatory oversight. They influence the financial regulations of countries to cover their money laundering activities through the banking system. For instance, in Mexico, DDOs were able to move $1.09 trillion in 2011 through Wachovia and HSBC banks (INCSR 2017). Proceeds from narcotics sales are invested in stable assets such as land for plantation agriculture and manufacturing plants.

In Latin America, DDOs invest in oil palm and soybean crops as a part of state-led development efforts that attract private capital (INCSR 2017). DDOs also have a significant influence in the planning and construction of major government projects in frontier areas. Well-positioned DDOs and corrupt officials influence tenders and win state tenders to develop remote areas by constructing roads, airline hubs, and dams. In this way, they own the frontier and use it as a production zone or transport route for their narcotics.

Government policies on land in Latin America coupled with the mega projects in remote areas have affected local livelihoods and political voice significantly. For instance, multilateral agreements such as NAFTA have affected cereal farmers due to the removal of subsidies (Rodrigues et al. 2017). DDOs have also pushed for the regularization of rural land. The market-driven land reforms have removed communal protections, allowing DDOs and traffickers to acquire property in remote areas for narcotics production and create transit zones (Aranda 2013). Powerful DDOs use the law enforcement to harass and even kill indigenous farmers protesting the dispossession of their land.

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How DDOs Acquire Political Influence

Rural Investments

In Colombia and Mexico, DDOs earn an estimated $2000 per kilo of cocaine sold (Richani 2013). Thus, revenues from narcotics trade can run into millions of dollars. Since their earnings are in cash (usually $20 bills), they have to find a way to hide their illegal proceeds (Rachani 2013). To do so, they often invest in businesses or assets that can take up this foreign currency and make it untraceable. These money laundering activities occur at frontier areas where they have established trade alliances and protections. They compensate their ranch workers and local communities in dollars, which makes them critical players in the rural economy (Vo 2018). Their ‘generosity’ gives them immense political influence and power in frontier areas.

Agricultural production is another path DDOs use to gain political influence. Investing in agriculture – ranches and palm oil plantations – not only helps to make their illicit proceeds untraceable but it also endears them to the locals. For instance, Colombian and Mexican DDOs are known to invest in agribusiness using their proxies, a model that is similar to that used by legitimate enterprises (Richani 2013). In the process, they employ thousands of rural workers and support livelihoods in frontier areas where government presence is low.

Land Acquisition

Landownership in a region where plantation agriculture is widely practiced is another tool of political influence. ‘Latifundista,’ which describes the ownership of large estates, is considered to be an avenue to “upward mobility and political power” in most parts of Latin America (Aranda 2013, 53). It confers proprietors’ immense wealth that is characteristic of the bourgeoisie, which impoverishes peasants. In this regard, latifundista allows DDOs to control “the labor and political participation” of dispossessed communities (Aranda 2013, 54). The DDOs often acquire frontier land, which they use to cultivate crops for export.

DDOs also engage in speculation of the value of the land acquired. By purchasing large parcels of agrarian land in rural areas, they create demand, which results in a sharp rise in prices (Organization of American States 2013).

They can hold onto the property until its value increases and earn them good returns. Guereña and Zepeda (2013) note that a common practice among DDOs is to lease their land to corporate actors, including ranching firms and petro companies for profit. Thus, they acquire immense political influence by owning large parcels of land in a countryside inhabited by poor peasant farmers. Land ownership also helps DDOs hide their illegal money and at the same time make huge profits. Sometimes they form groups to pool their resources to purchase frontier land, displacing communities in the process.

Financial Coercion and Threats

DDOs have unparalleled sums of liquid cash generated from illicit drug sales, which they use as leverage to acquire property and influence politics. Some DDOs have been known to buy an entire communal land (Mavrellis 2017). They are also known to influence social relations through generous gifts and later demanding property or collaboration in the places they operate (Mavrellis 2017). They use these tactics to embed themselves in the society. DDOs can also resort to violence as a tool for enforcing agreements. They would rape, injure, and kill those opposing them or their family members in a bid to consolidate their influence in their areas of operations.

DDOs launder money in businesses and property. They then seek a formal title for their land. According to Grajales (2013), revenue from drug sales is converted into licit capital using formal government processes. For this to happen, the DDOs must co-opt formal institutions, such as those involved in the issuance of property titles, into their schemes. In Colombia, the DDOs used bribery, falsification of documents, and intimidation of government officials to gain control of 12% of the nation’s agrarian lands (Goldberg 2016). They also use violence and mass killings to keep possession of their transit routes and production zones in Colombia and Mexico.

Protections from Law Enforcement and Politicians

The illicit drug trade in Colombia and Mexico has been blamed on the complicity of law enforcers in these countries. As Caulkins (2014) puts it, when a DDO first moves into a new transit route, pay-offs are required to make police to neglect surveillance activities on these channels. They infiltrate the law enforcement to ensure a sluggish response to drug-related violence and pay-off local enforcers to alert them of any interventions by agencies such as the Drug Enforcement Administration. Sometimes they torture and murder members of competitor DDOs to preserve their ‘territory’ and transit routes. Thus, through manipulation and bribery, DDOs can acquire significant political influence locally.

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DDOs also influence politics directly by funding political campaigns or appointing their proxies to run for municipal leadership. They bribe voters or buy votes to help their preferred candidate to win (Van de Bunt, Siegel, and Zaitch 2014). In some cases, their generous contributions to the community institutions like schools and health centers endear them to the locals, and thus, their leaders of choice easily clinch legislative seats. In this way, the political autonomy of the leaders is diminished. For instance, Colombian president Virgilio Barco could not extradite known DDO leaders like Pablo Escobar because of local opposition and media campaigns (Cabañas 2014). The goal is to ensure that the political environment is favorable to their drug trafficking activities.

References

Aranda, Maldonado S. 2013. “Stories of Drug Trafficking in Rural Mexico: Territories, Drugs and Cartels in Michoacán.” European Review of Latin American and Caribbean Studies 94 (April): 43-66.

Cabañas, Miguel A. 2014. “Imagined Narcoscapes: Narcoculture and the Politics of Representation.” Latin American Perspectives 41 (2): 3-17.

Caulkins, Jonathan P. 2014. “Effects of Prohibition, Enforcement and Interdiction on Drug Use.” In Ending the Drug Wars, ed. John Collins. London, UK: LSE IDEAS, 16-25.

Collins, John, ed. 2014. Ending the Drug Wars. London, UK: LSE IDEAS.

Cox, Dennis. 2014. Handbook of Anti Money Laundering. Chichester, UK: Wiley.

Goldberg, Paul. 2016. “Narco-Pastoral: Drug Trafficking, Ecology, and the Trope of the Noble Campesino in Three Mexican Narconovelas.” Interdisciplinary Studies in Literature and Environment 23 (1): 30-50.

Guereña, Arantxa, and Ricardo Zepeda. 2013. The Power of Oil Palm: Land Grabbing and Impacts Associated with the Expansion of Oil Palm Crops in Guatemala: The Case of the Palmas Del Ixcán Company. Washington, DC: Oxfam America Research Backgrounder Series.

Grajales, Jacobo. 2013. “State Involvement, Land Grabbing and Counter Insurgency in Colombia.” Development and Change 44 (2): 211-232.

Jones, Nathan P. 2016. Mexico’s Illicit Drug Networks and the State Reaction. Washington D.C.: Georgetown University Press.

Langton, Jerry. 2013. Gangland: The Rise of the Mexican Cartels from El Paso to Vancouver. Ottawa: HarperCollins.

Mavrellis, Channing. 2017. Transnational Crime and the Developing World. Washington, DC: Global Financial Integrity.

North, Lisa L., and Ricardo Grinspun. 2016. “Neo-Extractivism and the New Latin American Developmentalism: The Missing Piece of Rural Transformation.” Third World Quarterly 37 (8): 1483-1504.

Organization of American States. 2013. The Drug Problem in the Americas. Washington, DC: General Secretariat, Organization of American States.

Richani, Nazih. 2013. “The Narcobourgeoisie and State Making in Colombia: More Coercion, Less Democratic Governance.” In The Hidden History of Crime, Corruption and States, ed. Renate Bridenthal. New York: Berghahn Books, 196-215.

Rodrigues, Thiago, Mariana Kalil, Roberto Zepeda, and Jonathan D Rosen. 2017. “War Zone Acapulco: Urban Drug Trafficking in the Americas.” Contexto Internacional 39 (3): 1-15.

UNODC. 2018. 2018 World Drug Report. Vienna: United Nations Office on Drugs and Crime.

U.S. Department of State. 2017. 2017 International Narcotics Control Strategy Report. Washington, DC: Bureau of International Narcotics and Law Enforcement Affairs.

U.S. Department of State. 2018. 2018 International Narcotics Control Strategy Report. Washington, DC: Bureau of International Narcotics and Law Enforcement Affairs.

Van de Bunt, Henk., Dina Siegel, and Damián Zaitch. 2014. “The Social Embeddedness of Organized Crime.” In The Oxford Handbook of Organized Crime, ed. Letizia Paoli. Oxford, UK: Oxford University Press, 321-339.

Vo, Charity S. 2018. “Drug Trafficking and Community Welfare in Costa Rica.” Global Social Welfare 5 (1): 59-69.

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