COVID-19 is reconfiguring organized crime in Latin America and the Caribbean

COVID-19 is reconfiguring organized crime in Latin America and the Caribbean

Robert Muggah and Steven Dudley

Latin America and the Caribbean are suffering from the twin epidemics of COVID-19 and organized crime and violence.[1] On the one hand, a third of all the world’s COVID-19 related fatalities  occurred in the region's sprawling unequal cities, especially its most vulnerable neighborhoods. On the other, the region clocks over a third of all global homicides despite registering less than a tenth of the global population. Some 43 of the 50 most violent cities on the planet (with populations over 250,000 people) are located there.

COVID-19 has not yielded reductions in lethal criminal violence in Brazil

(Léu Britto, CC BY-NC-SA 2.0)

The pandemic has yet to make a dent on the region's grim standing in the violent crime rankings. That said, COVID-19 and government responses to it may be altering the opportunity structure for organized crime, especially in Mexico, the northern triangle countries of Central America, and South American nations such as Brazil, Colombia and Paraguay. The combination of disease contagion, state-imposed lockdowns, weakened police presence, and disruption of global supply chains is altering the behavior of cartels, gangs, militia and mafia, with dangerous implications for public security.[2] Add to that a rapid economic deterioration in a region where close to 50 percent of the pre-COVID economy was already informal, and you have the makings of a long-term calamity.[3]

During the early stages of the COVID-19 crisis and  lockdowns in 2020, several types of violent and non-violent crime appeared to plunge. This was explainable: reduced contact between would-be perpetrators and victims reduced interpersonal violence and theft. And some of the world’s historically violent cities and countries recorded stunning declines in homicidal violence in the first few months of the crisis. With the notable exception of Mexico and the US, from Canada to most of South America, the trend lines all pointed downward in the short-term.[4]

Although welcome, these improvements in public security were ephemeral. Physical 

distancing and shelter-in-place orders did not deter drug cartels, gangs, and militia for long. To the contrary. The combination of police shortages and supply-and-demand shocks in the drug market triggered fresh waves of violence, especially in producer and transshipment countries such as Brazil, Colombia, and Mexico. As is often the case during crises, organized crime groups likewise took advantage of the pandemic to expand their power and influence, consolidating their territorial reach at a time of weakened state presence.[5]

Changes to the business

As expected, the drops in violence were neither lasting nor uniform across the region. In São Paulo, for example, home to South America’s most powerful drug trafficking faction—the Primary First Command, Primeiro Comando da Capital or PCC—murders rose 10 percent over the three months of lockdown compared to the same period in 2019. Levels of reported domestic violence also surged in most states over the same period, including by more than 50 percent in Rio de Janeiro alone.[6] Police killings likewise soared, though some governments simply stopped reporting them for fear of public rebuke. Much of this violence is due to competition over drug trafficking routes and territorial control over retail outlets.

Mexico was most badly affected, registering a dramatic surge in lethal violence soon after the COVID-19 pandemic was announced, especially in states dominated by criminal organizations like Chihuahua, Michoacán, and Guanajuato. Homicide rates reached an all-time high in the first four months of 2020, including more than 3,000 murders in March alone.[7] With the armed forces and police distracted with pandemic control measures, Mexico’s principal cartels and hundreds of criminal groups ramped-up their efforts to control drug routes and siphon petrol from exposed pipelines. 

All of this was a portend of things to come. Criminal violence is frequently a consequence of competition over illicit markets. When there is disequilibrium in markets (illegal or otherwise), there is often violence as groups seek to reach a new equilibrium by establishing a new pact or bargain. COVID-19 provoked disequilibrium on an unprecedented scale. The slow-down in international trade means that cartels and gangs have fewer opportunities to push their product through global supply chains because there are simply fewer ways to move illegal merchandise by land, air, or sea. Meanwhile, drug producers in Bolivia, Colombia, Peru, and Mexico are struggling to source precursor chemicals to make methamphetamine, fentanyl, and even cocaine.

The global economic crunch is triggering supply and demand shocks for the narcotics business as a whole. The COVID-19 crisis tamped-down production, including in Peru which produces 20 percent of the world’s supply of cocaine. In Colombia, where 70 percent of global cocaine is manufactured, anti-narcotics police have taken advantage of the lockdowns to ramp-up eradication efforts. The price of coca, the raw material for cocaine, plummeted over 70 percent, an indication of a glut at source; meanwhile, the price of cocaine in US cities reportedly doubled, an indication of shortages at the distribution points. Street prices for cocaine in Europe also reportedly increased by 30 percent in 2020 and show no sign of letting-up.[8]

The illegal drug business is an agile one. Cartels are adapting to the challenges presented by COVID-19 and government efforts to target them and using new routes to sell their wares. And users started to substitute in alternatives once their drug of choice was harder to source. Growing numbers of Europeans reportedly shifted from foreign-manufactured cocaine to home-grown marijuana or other synthetic alternatives. Meanwhile, some heroin users transitioned to even more potent and dangerous opiates such as fentanyl. Across the region, COVID-19 has accelerated the purchase of drugs online, including via the Darknet.[9]

Faced with economic uncertainty, closed borders, patchy communication, and difficulties accessing customers, organized crime groups are expanding their traditional activities or diversifying their income streams. Marijuana production rose substantially in Paraguay, evidenced by a recent string of wildfires in the production zones and a series of large-scale seizures along the Paraguay-Argentina border. Oil theft rose in Argentina, Colombia and Ecuador. Illicit wildlife seizures jumped in places like Brazil, and trafficking maritime species also rose. Extortion gangs began targeting money changers in Argentina, and contraband cigarette seizures spikes in Chile.[10]

Some groups are starting to target banks, businesses, and high-net-worth individuals. Feeling the pinch, crime groups are resorting to kidnapping, extortion, and protection rackets to keep the cash flowing. Most lucrative of all, however, is cybercrime which has spiralled out of control considerably as governments, businesses and citizens started working remotely. This is hardly surprising: there was a more than 40 percent surge in machines running remote desktop protocols, often without even minimal security precautions. Rapid digital transformation accelerated by COVID-19 has created new opportunities for cybercrime: so-called brute force attacks against users increased over 400 percent and email scams grew by almost 700 percent in the first few months of the global pandemic.[11]

In the longer term, organized crime groups may seek to deepen their influence and reach by providing liquidity to cash-strapped businesses, effectively infiltrating the legal economy and deepening their relationships with political parties and civil society organizations. Sometimes organized crime groups are in a position to offer high-interest loans to services in high demand—especially the food industry, transportation sector, retail outlets, cleaning companies and even funeral homes. In others, they can issue zero interest loans, requesting ‘favors’ on demand in lieu of cash payment. When firms and individuals are unable to pay-back loans or undertake said favor, crime groups may effectively take their businesses over. Their goal will be to secure interests in companies that allow them to expand their criminal capacities, including laundering profits and shipping contraband.

But crime groups will also seek power. In El Salvador, where street gangs have made arrangements with political parties in the past, the Mara Salvatrucha (MS-13) appears to have positioned itself to trade political support for control over government aid flowing into their areas of control.[12] That support is critical for a president who is seeking to prolong his stay in power by changing the constitution. But he can only do that if he wins mid-term elections in February. The gangs may put him over the top.

The deepening of criminal governance

El Salvador is just one of many examples of how criminal groups worldwide have exploited COVID-19 pandemic to expand their political influence at home.[13]  In Italy, mafia groups delivered food relief through fake charity organizations. In Japan, the Yakuza doled out masks and sanitary products to pharmacies and primary schools. Gangs in Cape Town called for a temporary ‘truce,’ factions in de Janerio imposed curfews on local residents, and militant extremist groups in parts of Syria distributed health information.[14]

In Latin America, the pattern repeated itself. In Mexico, the uber powerful Jalisco New Generation, Gulf and Sinaloa cartels distributed groceries and protective gear across their areas of control. Some food parcels distributed in Guadalajara were even emblazoned with the logo of ‘El Chapo 701,’[15] the notorious jailed leader of the Sinaloa cartel. In Tamaulipas, aid was covered in stickers reading: “Gulf Cartel, in support of Ciudad Victoria, Mr. 46, Vaquero.”[16] In Brazil, influential prison-based gangs enforced curfews and even threatened price-gougers selling personal protective equipment.[17]

While often colluding with public and private entities—in some cases co-opting political elites, law enforcement agencies and the judiciary and customs officials—the ability of organized crime groups to influence residents provides an additional layer of protection (and a continued flow of recruits). This helps explain the overt performative component of their aid delivery. Much like aid agencies stamp their food relief with organizational logos, cartels and gangs are adamant that recipients know who is providing them with assistance. It also serves to underline the relative weakness of official state service providers. This explains why crime groups may publicize their good works—they understand that optics matter.

In some instances, such as El Salvador, there was a de facto recognition of this power. In other instances, the recognition was more overt. In Brazil, for instance, the health minister suggested during a press gaggle that the government negotiate with criminal groups who could help them keep control of the spiraling situation.[18] The criminal groups were not just helping the citizens in these areas, they were becoming an extension of the state. Meanwhile, the governments did little to bolster their own legitimacy. Up and down the region, fraud, theft of medical and protective equipment, and bald-faced criminal corruption ran rampant and lined the pocket of government functionaries and their preferred contractors. For the governments bent on permitting some version of business as usual amongst the elites, the optics did not seem to matter.

Difficult to contain and control

Several international organizations were quick to acknowledge the threats of organized crime in the wake of COVID-19. Global policing institutions, in particular, reported large-scale operations to disrupt drug trafficking networks, pedophilia rings, online fraud and the smuggling and sale of faulty medical equipment and supplies. Interpol coordinated several major operations in partnership with police, customs and health regulatory authorities, including one stretching across 90 countries to crack-down on the vending of illegal medicines and medical products.[19] Europol also created a dedicated unit to fight COVID-19-related crime—the European Financial and Economic Crime Center—specifically to tackle fraud, counterfeit goods, and money laundering.[20] While some of these efforts suggest accelerated global action, a closer inspection of international responses reveals they were more limited than implied.

Virtually every national government around the world prepared for a potential crime surge in the wake of COVID-19. An overriding concern was the risk of social unrest and disorder in the event of deep economic setbacks and the fragmentation of food supply chains. Yet with notable exceptions, non-violent crime rates remained comparatively stable and even declined during the lockdown period. Where police adopted overly aggressive enforcement, however, the risk of protest and riots often increased. A priority for many countries, especially those in Latin America and the Caribbean, was keeping violence from spread within and outside the prison system.[21] Another worry for police agencies was the diversification of organized crime into new revenue streams and their taking advantage of the weaknesses of law enforcement agencies that were also at risk of reduced staffing due to COVID-19, especially those that regulate less traditional trafficking activities such as timber and wildlife. In Guatemala, for instance, there have been reports of increased timber trafficking from the Petén region, just as the government was slashing the security budget.[22]

Sky-rocketing international demand for medical supplies and personal protective equipment triggered a parallel jump in criminal activity and the selling of counterfeit wares, much of it spurred by politically-connected contractors and other well-connected purveyors. Several organized crime groups—who themselves were also intimately connected to political power blocs or worked in government ministries—seized the opportunity to divert supplies, launch online fraud schemes, and sell dodgy goods on the legal and black markets.[23]

The response to this graft has been uneven at best. Many governments launched well publicized operations to take down such criminal networks, from Iran and Nigeria to the UK and US. Interpol issued guidelines to support law enforcement agencies,[24] including recommendations on how to address the issue of fake and counterfeit medical products such as disposable surgical masks, hand sanitizers, antiviral medication and test kits.[25] They advocated for high-powered communications strategies to educate the public about false and misleading adverts as well as hotlines to detect scams at an early stage.

Still, in many areas, these efforts far fall short. What’s more, their failures open the door for cartels and gangs who continue to exert control over specific parts of government, the private sector, and civil society, particularly as the government shows it is not up to the task or worse. And as the human and economic impacts of the virus deepen, these criminal groups appear poised to exert even greater oversight of entire sections of cities and neighborhoods. The effect may last for years to come.

Endnotes

[1] See Robert Muggah, “The Pandemic has Triggered Dramatic Shifts in the Global Underworld.” Foreign Policy. 8 May 2020, https://foreignpolicy.com/2020/05/08/coronavirus-drug-cartels-violence-smuggling/ and John P. Sullivan and Robert J. Bunker, Eds. “Covid-19, Gangs, and Conflict,” A Small Wars Journal Reader. Bloomington: Xlibris, 2020, https://www.amazon.com/Covid-19-Gangs-Conflict-Journal-El-Centro/dp/1664124349.

[2] See Robert Muggah, “The Pandemic is Disrupting Organized Crime, But Not Necessarily for the Better.” Inter-American Dialogue, 26 June 2020, https://www.thedialogue.org/analysis/the-pandemic-is-disrupting-organized-crime-but-not-necessarily-for-the-better/.

[3] See “The Effects of COVID-19 on Latin America’s Economy.” CSIS (Center for Strategic & International Studies). 18 November 2020, https://www.csis.org/analysis/effects-covid-19-latin-americas-economy.

[4] See “Mexico’s Homicide Rate Stayed High in 2020 Despite Pandemic”, Associated Press. 20 January 2021, https://apnews.com/article/homicide-coronavirus-pandemic-latin-america-mexico-a90c2a172f39ab2546de465c73a60543; “US Homicide Rates Skyrocket in 2020: Exacerbated by the COVID-19 Pandemic.” Security Magazine. 6 January 2021, https://www.securitymagazine.com/articles/94292-us-homicide-rates-skyrocket-in-2020-exacerbated-by-the-covid-19-pandemic; “UNODC Research Reveals Drop in Reported Property Crime and Homicide During COVID-19 Lockdown is Only Short Lived.” UNODC (United Nations Office on Drugs and Crime). 11 December 2020, https://www.unodc.org/unodc/en/frontpage/2020/December/unodc-research-reveals-drop-in-reported-property-crime-and-homicide-during-covid-19-lockdown-is-only-short-lived.html.

[5] See “COVID-19 and Conflict: How Armed Groups are Instrumentalizing the Pandemic.” United Nations University/Centre for Policy Research. 10 December 2020, https://cpr.unu.edu/events/archive/event/covid-19-and-conflict-how-armed-groups-are-instrumentalizing-the-pandemic.html; Luis Fajardo, “Coronovirus: Latin American Crime Gangs Adapt to Pandemic.” BBC. 22 April 2020, https://www.bbc.com/news/world-latin-america-52367898

[6] See Borba Telles, Alexandre Valenca, Alcina Barros and Antonio Geraldo da Silva, “Domestic Violence in the COVID-19 Pandemic: A Forensic Psychiatric Perspective.” Brazilian Journal of Psychiatry. 1 June 2020, https://www.scielo.br/scielo.php?script=sci_arttext&pid=S1516-44462020005015211; Emma Graham-Harrison, Angela Giuffrida, Helena Smith and Liz Ford, “Lockdowns Around the World Bring Rise in Domestic Violence.” The Guardian. 28 March 2020, https://www.theguardian.com/society/2020/mar/28/lockdowns-world-rise-domestic-violence.

[7] See “For the Second Year, Guanajuato Leads the Country in Homicides,” Mexico Daily. 22 December 2020, https://mexiconewsdaily.com/news/guanajuato-leads-in-homicides/; and “Crime in Mexico: Homicides Increase by 52 percent.” Yucutan Times, 23 November 2020, https://www.theyucatantimes.com/2020/11/crime-in-mexico-homicides-increase-by-52/.

[8] See Cecilia Anesi, Giulio Rubino, Nathan Jaccard, Antonio Baquero, Lilia Saúl Rodríguez, and Aubrey Belford, “What Lockdown? World’s Cocaine Traffickers Sniff at Movement Restrictions.” OCCRP (Organized Crime and Corruption Reporting Project). 20 May 2020, https://www.occrp.org/en/coronavirus/what-lockdown-worlds-cocaine-traffickers-sniff-at-movement-restrictions.

[9] See Alberto Bracci, Matthieu Nadini, Maxwell Aliapoulios, Damon McCoy, Ian Gray, Alexander Teytelboym, Angela Gallo, and Andrea Baronchelli. “Dark Web Marketplaces and COVID-19: Before the Vaccine.” EPJ Data Science. Vol.10 , no.6. 2020, https://epjdatascience.springeropen.com/articles/10.1140/epjds/s13688-021-00259-w and Anthony Cuthbertson, “Coronavirus Traced: Dark Web Drug Supply Surges Nearly 500% During COVID-19 Pandemic.” The Independent. 1 June 2020, https://www.independent.co.uk/life-style/gadgets-and-tech/news/dark-web-drugs-coronavirus-covid-19-a9534236.html.

[10] See Juan Delgado, “Organized Crime Adapts to Coronavirus in Argentina,” Dialogo. 1 June 2020, https://dialogo-americas.com/articles/organized-crime-adapts-to-coronavirus-in-argentina/; Josefina Salomon, “Argentina Smugglers Turn to Cigarettes in Coronavirus Lockdown.” InsightCrime. 14 May 2020, https://insightcrime.org/news/brief/smugglers-cigarettes-coronavirus-lockdown-argentina/; and wider literature on COVID-19 and crime from InsightCrime at https://insightcrime.org/tag/coronavirus-and-organized-crime/.

[11] See David Gewirtz, “COVID-19 Cybercrime: 10 Disturbing Statistics to Keep You Awake Tonight.” ZDNet. 14 September 2020, https://www.zdnet.com/article/ten-disturbing-coronavirus-related-cybercrime-statistics-to-keep-you-awake-tonight/.

[12] See Steven Dudley, MS-13: The Making of America’s Most Notorious Gang. New York: Harper Collins, 2020.

[13] See “Crime Gangs Threaten COVID-19 Vaccine Campaigns, Interpol Warns.” Agence France-Presse, 2 December 2020, https://www.ctvnews.ca/health/coronavirus/crime-gangs-threaten-covid-19-vaccine-campaigns-interpol-warns-1.5213368.

[14] See Camilo Tamayo Gomez, “Organized Crime Governance in Times of Pandemic,” Bulletin of Latin American Research. Vol. 39, no.1. 2020,  https://onlinelibrary.wiley.com/doi/full/10.1111/blar.13171; Nicholas Barnes and Juan Albarracin, “Criminal Governance in the Time of COVID-19.” Urban Violence Research Network. 6 July 2020, https://urbanviolence.org/criminal-governance-in-the-time-of-covid-19/ and Steven Dudley, “COVID-19: Gangs, Statemaking, Threats and Opportunities.” InsightCrime. 7 October 2020, https://insightcrime.org/news/analysis/covid-19-gangs-statemaking-opportunities/.

[15] See Drazen Jorgic, “El Chapo’s Daughter, Mexican Cartels Hand Out Coranvirus Aid.” Reuters. 16 April 2020, https://www.reuters.com/article/health-coronavirus-mexico-cartels/el-chapos-daughter-mexican-cartels-hand-out-coronavirus-aid-idUSL8N2C40PE.

[16] See Juan Alberto Cedillo, “The Gulf Cartel Distributes Food in Tamaulipas Due to COVID-19.” Proceso. 6 April 2020, https://www.proceso.com.mx/nacional/2020/4/6/el-cartel-del-golfo-reparte-despensas-en-tamaulipas-por-covid-19-240935.html.

[17] See Ryan Berg, “COVID-19 is Increasing the Power of Brazil’s Criminal Groups.” American Enterprise Institute. 29 May 2020, https://www.aei.org/articles/covid-19-is-increasing-the-power-of-brazils-criminal-groups/.

[18] See Ryan Berg and Andrea Varsori, 2020, “COVID-19 is Increasing the Power of Brazil’s Criminal Groups.” LSE Latin America and Caribbean Blog. 28 May 28 2020, https://blogs.lse.ac.uk/latamcaribbean/2020/05/28/covid-19-is-increasing-the-power-of-brazils-criminal-groups/.

[19] See “Interpol Warns of Organized Crime Threat to COVID-19 Vaccines.” Interpol. 2 December 2020, https://www.interpol.int/en/News-and-Events/News/2020/INTERPOL-warns-of-organized-crime-threat-to-COVID-19-vaccines and “Unmasked: International COVID-19 Fraud Expoed.” Interpol. 14 April 2020, https://www.interpol.int/en/News-and-Events/News/2020/Unmasked-International-COVID-19-fraud-exposed.

[20] See Zdravko Ljubas, “EUROPOL Launches New Unit to Address Crime Related to COVID-19.” OCCRP(Organized Crime and Corruption Reporting Project). 8 June 2020, https://www.occrp.org/en/daily/12493-europol-launches-new-unit-to-address-crime-related-to-covid-19.

[21] See Pattricio Dominguez and Pedro Rodriguez Martinez, “Pandemic and Prisons: What are the Challenges for Latin American Governments.” Inter-American Development Bank, IADB Blog. 22 April 2020, https://blogs.iadb.org/ideas-matter/en/pandemic-and-prisons-what-are-the-challenges-for-latin-american-governments/ and Clavel Rangel, Joe Parkin Daniels and Tom Philips, 2020, “We’re All on Death Row Now: Latin America’s Prisons Reel from COVID-19.” The Guardian. 16 May 2020, https://www.theguardian.com/world/2020/may/16/latin-america-prisons-covid-19-riots.

[22] See Max Radwin, “Guatemala Officials Say Organized Crime Largely Responsible for Forest Fires.” InsightCrime. 11 June 2020, https://insightcrime.org/news/analysis/guatemala-crime-forest-fires/.

[23] See Shane Sullivan, “Liquid Gold - False COVID-19 Vaccines Emerge in Latin America.” InsightCrime. 18 January 2021, https://insightcrime.org/news/analysis/false-covid-vaccines-emerge/.

[24] See “Interpol Issues International Guidelines to Support Law Enforcement Response to COVID-19.” Interpol. 26 March 2020, https://www.interpol.int/en/News-and-Events/News/2020/INTERPOL-issues-international-guidelines-to-support-law-enforcement-response-to-COVID-19.

[25] See Interpol, “Fake Medicines.” Interpol. No date, https://www.interpol.int/en/Crimes/Illicit-goods/Shop-safely/Fake-medicines; “COVID-19: The Global Threat of Fake Medicines.” Lyon: Interpol. May 2020, https://www.interpol.int/en/content/download/15305/file/20COM0356%20-%20IGGH_COVID-19%20threats%20to%20medicines_2020-05_EN.pdf; and Stacey Vanek Smith and Cardiff Garcia, 2020, “INTERPOL Warns People About Counterfeit Coronavirus Vaccines.”, NPR. 25 December 2020, https://www.npr.org/2020/12/25/950224149/interpol-warns-people-about-counterfeit-coronavirus-vaccines.