Category Archives: Latin America

It Will Be a Zoo

Today’s Washington Post has a good summary of the international search for Mexican drug lord Joaquin “El Chapo” Guzman. He’s worth billions, is in hiding but not on the run, is ruthless with those who try to claim his territory, including the Mexican government, and has a small personal army that may or may not have shoulder-to-air missiles.

He was the barefoot son of a peasant who became one of the richest moguls in the world, a billionaire entrepreneur with a third-grade education. He controls a vast drug distribution empire that spans six continents, but he still carries his own AK-47. He is generous and feared, a mass murderer and a folk hero. He is a ghost who has become a legend.

In the fifth year of a terrible war in Mexico that has exhausted the military, consumed the presidency of Felipe Calderon and left more than 43,000 dead in drug violence, Joaquin “El Chapo” Guzman, the founder of the Sinaloa cartel, reigns supreme.

He also has daughters who are American citizens, but that’s a separate story.
Felipe Calderon has pledged to arrest El Chapo, his nemesis, before he leaves office. I wish him luck. But then what?

Then there’s the possibility that removing Guzman will unleash an even bigger bloodbath across Mexico, as rivals rush to fill an enormously lucrative power vacuum. U.S. drug agents warily agree. “It will be a zoo,” one said.

This is not to say that I don’t wish Guzman brought to justice. I sincerely do, and wish him a long life of pain and humiliation in prison. It is only to say that the war will go on with or without him.

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Colombian President Backs Drug Legalization

Juan Carlos Hidalgo of the Cato Institute reports:

One of the worse kept secrets in Latin America is that Colombian President Juan Manuel Santos believes in drug legalization. Back in the 1990s he co-signed an open letter to then UN Secretary General Kofi Annan calling for an end to the war on drugs. And, since assuming office last year, Santos has hinted on several occasions that a new approach is needed in drug policy.

Earlier this week, Santos finally came out supporting the legalization of soft drugs, such as marijuana. In an interview published by Metro World News, Santos said that he favors legalization “provided everyone does it at the same time.” However, Santos balked at the idea of being the first sitting president to propose this in an international forum, citing mostly political reasons: “I would be crucified if I took the first step,” he said.

Despite Santos’s lukewarm endorsement of drug legalization, he adds his voice to the growing number of Latin American leaders calling for ending prohibition.

Colombia legalizing drugs won’t solve the problem; the U.S. must do it. Santos says that everyone must do it at the same time, but leaders in Colombia and Mexico are willing. They are only waiting for the U.S..

They will be waiting a long time.

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FDI Drops in Argentina

Foreign direct investment, FDI, in Argentina fell 30% in the first six months of this year, while the whole of Latin America and the Caribbean received 54% more, the United Nations Economic Commission for Latin America said in a report on its website.

“The increase in FDI inflows is due to the stability and economic growth in most of the countries and the high prices of raw materials, which continue to attract investment in mining and hydrocarbons, particularly in South America,” the report said.

Such are the prices paid by Argentina, a commodities-rich nation, for their redistributive policies of populism. There are trade-offs, and less FDI for more control of the capital in your country is one that Christina Fernandez has chosen. Fuerza!

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Filed under Economics, Latin America

How Long Before Argentina Collapses?

Excellent reporting from Buenos Aires. From the FT:

In a bid to stem capital flight, Cristina Fernández, newly re-elected as Argentina’s president by a landslide, has ordered energy and mining companies to repatriate all their export revenue.
“This reeks of desperation at trying to curb capital outflows and in the long run is unlikely to be successful,” said Jason Press, Latin American strategist at Citigroup. “This is her first move since re-election. It puts a bad taste in your mouth for the next four years.”
Argentines have been scrambling to buy dollars, which are more attractive because the peso has been depreciating at about a third of the real rate of inflation, now believed, in the absence of credible official figures, to be about 25 per cent. Capital flight is running at about $3bn a month and totalled $9.8bn in the first half of 2011, compared with $11.4bn in the whole of last year.
As a result, the central bank has been blowing through reserves – it has spent $3bn in the past two months – to stop the peso from depreciating too quickly. The central bank has promised no brusque shifts but, unless inflation is curbed, faster depreciation looks inevitable.

Christina is at it again. Her justification is fairness.

It said the move was necessary “for reasons of fairness, since the circumstances which gave rise to these exceptions have changed and in a bid to grant equal treatment to other productive activities, such as the agricultural export sector”.

The troubling economics aside, fairness is not a justification. At least not by itself. It is, however, perhaps the most abused word in our politics. First, it is meaningless. Ask ten reasonable people what fair means and they will give you ten different answers, but none will say they are opposed to it. A fair fight in boxing is one where the rules are followed: weigh-ins are passed, the referee is impartial and enforces the rules, the players use regulation gloves and are drug free, etc. “He won a fair fight.” I weigh about as much as Wladimir Klitschko. That fight would NOT be fair.
Second, it can always be used as a justification. No evidence need be offered to prove unfairness, and there is not metric to measure fairness. It is as elastic a term as we have. When someone says that something is unfair, they really mean, I wish it were no so. Too bad.
What is my definition of fairness? That simple rules are applied across the board, without fraud and evasion, and that third parties, including the government, are limited in their abilities to place costs on others. Part of fairness is freedom from coercion.
But back to Argentina. What should Christina do? She should simply offer free classes on the Kirchner Method of Wealth Growth and Accumulation, and then go back to Patagonia and supervise glaciers.

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Filed under Economics, Latin America, Philosophy

“We, Hondurans, have lost the right to live without fear.”

From Yahoo! News:

The 2011 Global Study on Homicide calculated a rate of 82.1 homicides per 100,000 people for Honduras and 66 per 100,000 people for El Salvador. Cote D’Ivoire in West Africa followed with 56.9 and the Caribbean nation of Jamaica with 52.1. The United States had a homicide rate of 5 per 100,000 people in 2009, the report said.

Honduras Human Rights Commissioner Ramon Custodio said Thursday that he was worried about rising crime and feared worse figures are yet to come.

“We, Hondurans, have lost the right to live without fear,” Custodio said in a news statement.

He said the enemy in the 1980s was the army, police and secret corps, but now the threat is organized crime.

U.S. officials say crackdowns on drug cartels in Mexico and Colombia have pushed gang activity to Central America, which has long been a lucrative corridor for trafficking.

(H/T to FP.)

This is in part due to the “balloon effect.” The drugs entering America used to be trafficked from Colombia through the Caribbean. Due to a nationwide crackdown on the Cali and Medellin drug cartels and to increased control of the Caribbean waters by the U.S., the balloon was squeezed and expanded in Mexico. As crackdowns in Mexico squeeze the balloon it expands southward into Central America. Already plagued by high levels of violence, their situation worsens.

This is far more of a concern for Mexico and their southern neighbors than it is for the US. Mark Kleiman calls this the “great asymmetry.

Mexico and the United States do not occupy symmetrical positions in the binational drug situation. The United States is central to Mexico’s drug problem, whereas Mexico is incidental to that of the United States. Before the mid-1980s, when the heavy use of U.S. naval and air power shut off the Caribbean smuggling route from Colombia to the Gulf Coast, Mexico was not the main source or transit country for illicit drugs entering the United States. But the U.S. drug problem was at least as severe then as it is now. By contrast, Mexico’s current drug-trafficking problems relate almost entirely to exports to the United States. In other words, if the United States stopped importing drugs, Mexico’s drug violence would shrink dramatically. But an end to Mexican exports would, once new routes and sources replaced Mexico in serving the U.S. market, have only a modest impact on the U.S. drug problem.

If stronger Mexican efforts against drug trafficking could substantially reduce drug abuse in the United States, Washington’s repeated demands for more vigorous law enforcement in Mexico would have some real basis. But to call on Mexico to make increasing sacrifices for no more potential benefit than redirecting the flow of illicit trade is surely unjustifiable. The upsurge in violence since Mexican President Felipe Calderón began his crackdown against traffickers in 2007 shows how increased enforcement can lead to increased bloodshed.

This line of reasoning seems to support the reply U.S. officials often hear when they demand that Mexico strengthen its antidrug efforts: that the basic problem is not supply from Mexico but demand from the United States, and that it is incumbent on the United States to reduce the quantities of illicit drugs its residents sell, buy, and consume.

If only we could help them pop the balloon.

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Troops Are Not Needed

The legalization of drugs is.
Rick Perry has decided that American troops may be required to end the drug war raging in Mexico.

Mr Perry was speaking during a campaign appearance in New Hampshire.
“It may require our military in Mexico working in concert with them to kill these drug cartels and keep them off our border,” he said.
Such a move would go far beyond current US involvement in Mexico’s drugs war.
The suggestion is also likely to irritate Mexico’s government over the sensitive issue, correspondents say.
Governor Perry gave no further details of what sort of possible military intervention he would consider.
“I don’t know all the different scenarios that would be out there,” he said.
“But I think it is very important for us to work with them to keep that country from failing”.

Let us hope that he didn’t clear this idea with his campaign advisers. First, the Mexican government would most likely not approve such support. (Without their support, it is no longer assistance, but rather an invasion.) So perhaps it’s a moot point. Second, the move is entirely unnecessary for a nation with a broken army, deficits as far as the eye can see, and overflowing prisons. If Perry, or any leader, truly wanted to win the drug war, they would defund the violence by legalizing the drugs the cartels are fighting to traffic. It is sad that no serious political leaders – except for and – are willing to state the obvious: we Americans like our marijuana and cocaine, and Mexicans are dying to get it to us.

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Filed under Domestic Politics, Drug Wars, Election 2012, Foreign Policy, Mexico

Los Mata Zetas

A new group of armed vigilantes, Los Mata Zetas (the Zeta Killers), has surface in Mexico to combat Los Zetas, arguably the most violent and ruthless of Mexico’s five major drug cartels, all of whom are waging a bloody battle for turf to control the drugs trafficked from Central and South America to consumers in the U.S. Some have argued that Los Mata Zetas are not a paramilitary group simply out to defend innocent and unarmed Mexicans, but rather another drug cartel looking to exploit the population’s fear and loathing of Los Zetas and win popular support.

The WSJ reports:

Nevertheless, the rise of a group like the Mata Zetas raises troubling questions for ordinary Mexicans and the government: Is it a good thing when members of a bloodthirsty cartel known for murders, extortions, and kidnapping are themselves summarily killed by other criminals?

While Mexico’s federal government has condemned the killing, the response by Veracruz Gov. Javier Duarte was widely seen as more equivocal.

“It’s lamentable the assassination of 35 people, but it’s more so that these people had chosen to dedicate themselves to extortion, kidnapping and murder,” the governor wrote on his Twitter account a day after the event.

Forty-three thousand Mexicans have been killed in this drug war since 2006, and every tactic of the federal government to turn the tide has thus far fallen short. Would the government welcome this, or at least look the other way? What about the civilian population?

Jorge Chabat, a security analyst at the CIDE think tank in Mexico says that the emergence of illegal groups such as the Mata Zetas—perhaps with some help from local or national government authorities—wouldn’t be a surprise, given the level of violence inflicted by the Zetas on the Mexican population and the Mexican state’s inability to provide its citizens with protection.

Officials “would never tell you openly, but I wouldn’t be surprised if some sectors of government look the other way, and I fear that parts of the civilian population would also see this with approval,” he said.

It is an unfortunate measure, but will it be seen as necessary? Perhaps, at least until the U.S. ends the drug war by legalizing drugs.

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