May 22, 2020 | Policy Brief

COVID-19 in Latin America: Organized Crime Gains and States Weaken

May 22, 2020 | Policy Brief

COVID-19 in Latin America: Organized Crime Gains and States Weaken

COVID-19 cases in Latin America are surging as the region heads into the Southern Hemisphere winter. Across the region, the pandemic has created opportunities for organized crime to step into the void left by insufficient government responses and economic downturn.

Situation Overview

Latin America has surpassed the United States and Europe in new daily coronavirus cases. In the absence of stimulus packages and basic services in rural areas, the economic and social impact of the region’s lockdowns is devastating.

The United Nations expects Latin America and the Caribbean to suffer a 5.3 percent economic contraction in 2020, the region’s worst economic downturn in history. Latin America’s largest airline, LATAM, just announced 1,400 layoffs. Colombia’s flagship carrier, Avianca Airlines, has filed for bankruptcy, while the country’s number of confirmed cases has reached over 18,000.

Mexico, with almost 60,000 confirmed cases, has already shed more than 750,000 jobs. Mexican President Andres Manuel Lopez Obrador has proven unwilling to shift economic priorities to initiate stimulus for the country’s most affected sectors. Brazil, Latin America’s largest economy, has tallied over 310,000 confirmed cases. This is the third-highest in the world.

Implications

Latin America’s organized crime has also suffered. The pandemic has disrupted fentanyl supplies from China and caused global cocaine exports to slow. Nevertheless, the pandemic has created opportunities for Latin America’s cartels to improve their standing and develop new revenue streams.

Mexican cartels have filled the void left by struggling state institutions, distributing care packages to cash-strapped residents. The cartels’ charm offensive not only helps them win sympathy among the needy. It also sends a clear message: The cartels, not the state, meet the poor’s basic needs.

In Brazil, crime gangs have also taken to distributing assistance to the needy and enforcing curfews in poor areas. Salvadoran gangs have similarly threatened violence against anyone breaking curfew or social distancing rules. They are now enforcing the law where state authorities fail to do so.

Lawlessness works both ways for some nonstate actors. Colombian media, for example, report a 113 percent increase in rebel groups’ forced conscription of minors. Panama’s prohibition of alcohol sales has led to increased smuggling of beer and liquor from Costa Rica. Contraband of medicine and medical equipment is also on the rise, with a chronic shortage of sanitizers and personal protection equipment driving illicit trade.

Elsewhere, Argentina’s decision to shut down tobacco manufacturing for the duration of the crisis has led to an increase in cigarette contraband from neighboring Paraguay. Brazilian authorities report sustained contraband seizures in the Tri-Border region of Argentina, Paraguay, and Brazil and drug seizures at Brazil’s ports.

What to Watch for

Organized crime’s provision of social services likely will continue to erode state authority among the region’s most vulnerable states. Economic contraction will put additional strains on local governments’ abilities to provide basic services. This will invariably engender resentment among the lower social strata across the region. The perceived legitimacy of governments is certain to fall in the short term, but perhaps longer. Protests are possible, if not likely. As economic hardships persist, jobless people will be driven to the welcoming arms of cartels.

The weakening of the Latin American state may rank among the most enduring consequences of the pandemic. With case numbers increasing across the region, that process appears to be happening more quickly by the day.

Emanuele Ottolenghi is a senior fellow at the Foundation for Defense of Democracies (FDD), where he also contributes to FDD’s Center on Economic and Financial Power (CEFP). For more analysis from Emanuele and CEFP, please subscribe HERE. Follow Emanuele on Twitter @eottolenghi. Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.

Issues:

COVID-19