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Security personnel guard the Unasur building in Quito Ecuador. Security personnel guard the Unasur building during the Summit of the Community of Latin American and Caribbean States (CELAC), Quito, Ecuador, Jan. 27, 2016 (AP photo by Dolores Ochoa).

Why the U.S. Can’t Ignore Latin America’s Security Challenges

, Tuesday, March 28, 2017

Latin America and the Caribbean are dotted with potential crises and the worsening of any single challenge could have a destabilizing effect on the others. With U.S. security and prosperity tied closely to the region, policymakers in the United States need to be drafting policies that help improve economic and political stability from Mexico to Venezuela.

Although not always reflected in the attention of U.S. national security policymakers, no region other than Latin America and the Caribbean more directly affects the prosperity and security of the United States. As U.S. President Donald Trump and his team begin their work, mutually reinforcing dynamics and events in the region are poised to present Washington with expanded security challenges uncomfortably close to home.

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Potential crises in the near-term span the region. In Mexico, mounting crime in the context of a new reality for relations with the United States could strain efforts to control the U.S. border and manage the challenge of transnational criminal organizations operating on both sides of it. In Central America’s Northern Triangle region—El Salvador, Honduras and Guatemala—an expanded wave of gang violence, prompted in part by U.S. deportations, has driven a regional migrant crisis that could escalate. Venezuela’s government, which has overseen the country’s descent into political and economic chaos, is increasingly cooperating with Iran, China and Russia. At the same time, Cuba has lost Venezuela as its principal economic beneficiary; if Trump undercuts Havana’s hopes for access to U.S. markets, it could potentially expand relations with Russia and China as well. And in Colombia, where drug production is on the rise, a historic peace deal with the Revolutionary Armed Forces of Colombia—the guerilla group known as the FARC—is inadvertently leading to the expansion of criminal gangs and guerrillas tied to the National Liberation Army, or ELN, another armed group.

Governance challenges from expanding drug and refugee flows through the Caribbean, particularly impacting Jamaica and Hispaniola, as well as Trinidad and Tobago, Aruba and Curacao, could also have consequences for Washington. A so-called narco-corridor through Peru, Bolivia and Paraguay to portions of Argentina, Uruguay and Brazil is growing in importance, with harmful consequences to the region. The states that make up the Pacific Alliance trade bloc—Chile, Colombia, Mexico and Peru—are reorienting toward potentially destructive China-centric trade models. And in Argentina and Brazil, new center-right democratic governments face growing impediments to governance.

The transformation of any of these challenges into a crisis would likely have destabilizing effects on the others, with grave repercussions for the region due to transnational links between criminal groups, commercial and financial interdependence, and the flow of refugees.

A Survey of Instability

The war against the drug-trafficking cartels that began under former President Felipe Calderon in 2006 has decapitated the leaderships of Mexico’s principal cartels, breaking up alliances and sometimes the cartels themselves. The result, however, has been to atomize rather than eliminate the criminal organizations. By 2014, Mexico’s attorney general estimated that over 40 gangs and criminal groups were operating in the country—up from approximately eight a decade ago. The new leaders are also often less experienced, more violent and less predictable than the longtime bosses of the larger cartels of the previous generation, producing a splintered criminal landscape that is much less stable and more difficult to combat.

Relatives of 43 missing students from the Isidro Burgos rural teachers college march during a protest, Mexico City, Dec. 26, 2014 (AP photo by Marco Ugarte).

In the middle of these new dynamics, the recapture—and January extradition to the United States—of Sinaloa Cartel leader Joaquin “El Chapo” Guzman has left that organization, once the most powerful cartel in Mexico, vulnerable to its rivals. At the same time, the cartel Jalisco Nuevo Generacion cartel, or CJNG, which demonstrated its capability and penchant for violence in its blockade of the major Mexican city of Guadalajara in April 2015, is leveraging its considerable international drug connections to make inroads against its traditional rivals such as Los Zetas. Recent operations against El Chapo’s family, including the September 2016 kidnapping of his son at a nightclub in Puerto Vallarta, indicate that a relatively broad coalition of groups, including the Tijuana and Juarez cartels and remnants of the Beltran Leyva organization, may be joining CJNG in attempting to take on Sinaloa, setting the stage for an expanded wave of violence beyond what is already evident in recent crime statistics.

Trump’s presidency creates further potential for instability for Mexico, from the possibility of decreased Mexican commercial access to the U.S. market through protectionism; changes in U.S. immigration policy that could produce greater deportations; and new taxes or restrictions on remittances from Mexicans in the U.S. to their families in Mexico.

These challenges emerge as a domestically unpopular Mexican President Enrique Pena Nieto approaches the end of his term, limiting his political leverage to make difficult decisions to effectively manage the crisis. In this context, the increasing tension between the Trump administration and the Mexican government will likely damage security cooperation between the two countries. Such cooperation, and the confidence between both nations’ security forces, has grown significantly since the Calderon era. While the extradition of El Chapo illustrates that the protocols for cooperation between Mexico and the United States are still in place, hostility at the political level will strengthen the voices within Mexico’s institutions of those who are suspicious of their neighbors to the north, and could even bring to power a Mexican government in 2018 much less inclined to cooperate with the United States.

Compounding the risk of a crisis, a shift in U.S. policy could push Mexico into a closer relationship with China and other American competitors.

Compounding the risk of a crisis, a shift in U.S. policy could push Mexico into a closer relationship with China and other American competitors. Until now, Mexico’s structural ties to the United States, including geography and business relationships, and the competitive threat that China poses to Mexican firms, have limited closer ties with Beijing. Trump’s promise to renegotiate NAFTA would undermine an important part of the economic logic for China-based firms to establish production operations in Mexico. Yet any significant expansion of Beijing’s corporate presence and political and military relationships with Mexico would likely force a U.S. reassessment of the strategic and commercial threat that China poses to U.S. interests in Latin America.

Central America
In the Northern Triangle, progress against violence generated by the Mara Salvatrucha (MS-13) and Barrio 18 street gangs could be reversed by a sudden expansion in deportations from the U.S. of Central Americans with criminal records; in fact, increased deportations of undocumented immigrants with criminal backgrounds in the early 2000s helped give rise to the gangs currently destabilizing the region.

As in Mexico, recent government successes against local drug-smuggling families—such as the Perrones in El Salvador; the Cachiros and Valle Valles in Honduras; and the Mendoza, Lorenzana, Leon and Lopez Ortiz families in Guatemala—have left a fragmented criminal environment in the Northern Triangle. If the rivals of Mexico’s Sinaloa cartel challenge its dominance in Mexico, the fight could spill over into Central America through a struggle for control of logistics routes through the region supporting the contending Mexican groups.

Despite current attempts by MS-13 and Barrio 18 to negotiate a peace pact with the Salvadoran government, an influx of refugees could prompt a new wave of violence, as the two gangs vie for control of territory in the region. In fact, MS-13 has already expelled Barrio 18 from some of its strongholds in Guatemala and Honduras.

Increased deportations of undocumented immigrants with criminal backgrounds in the early 2000s helped give rise to the gangs currently destabilizing Central America.

Further contributing to uncertainty, the 2008 informal agreement between Taiwan and China, in which neither side would pressure states recognizing the other to change their position, may be breaking down. A renewed effort by Beijing to secure diplomatic recognition from the five Central American states recognizing Taiwan would introduce new political pressures into an already unstable environment.

After more than 15 years of Hugo Chavez’s so-called Bolivarian Revolution, Venezuela faces a major economic downturn and a collapse of public security under Chavez’s successor, President Nicolas Maduro. However, the aspect of the Venezuelan crisis with the most far-reaching consequences is the criminalization of the state. The small clique of party officials and military officers who run the regime has transformed government offices into tools for illicit business, with officials commonly using their positions to build criminal networks and profit from drug trafficking and other illegal activities.

The criminalization of the Venezuelan state is accompanied by the emergence of ungoverned spaces in cities and the countryside, as has occurred with so-called peace zones—urban areas in numerous cities where the government has withdrawn its security forces, allowing the consolidation of criminal fiefdoms.

The political radicalism of the Chavista government, combined with the emergence of extended criminal networks, is transforming the country into a locus of instability. Venezuelan territory is already operating as a huge corridor that facilitates drug trafficking toward the U.S. and Europe.

A protest against Venezuelan President Nicolas Maduro, Caracas, Venezuela, Oct. 26, 2016 (AP photo by Ariana Cubillos).

In addition, faced with economic desperation, Maduro’s regime may offer economic or other guarantees to induce China or Russia to provide more loans, thus enabling them to expand their economic footprint in Venezuela, posing new challenges for the U.S. just across the Caribbean.

The critical factor weakening the foundations of Colombian stability is a radical shift in the economic balance between the state and illegal armed groups. As the fall of oil prices has significantly reduced Colombia’s economic well-being, the production of cocaine has expanded dramatically.

Although the historic peace agreement reached between President Juan Manuel Santos’ government and the FARC offered hope for a new era of stability, the implementation process has already faced setbacks in its early stages, creating new security challenges. A dissident faction of the FARC has rejected the agreement and announced that it will continue the armed struggle, making it impossible for the rebel group to completely disband. At the same time, ELN guerrillas—who just initiated “peace negotiations” with the Colombian government that could stretch out for years—and criminal gangs have begun to take over the areas abandoned by the FARC. Such activities could engulf significant areas of the Colombian countryside in multisided confrontations for control over regions with extensive coca crops and illegal mining.

Meanwhile, the unfolding crisis in Venezuela will compound Colombia’s security challenges. Corruption and ideological sympathy among Venezuelan officials have helped Colombian guerrillas and drug traffickers use the neighboring country as a safe haven. As the Venezuelan state collapses, criminal elements and guerillas will be pushed across the border into Colombia, along with refugees.

Corruption and ideological sympathy among Venezuelan officials have helped Colombian guerrillas and drug traffickers use the neighboring country as a safe haven.

Colombia’s security forces will be severely challenged by such developments. Because of the economic downturn and expectations of peace with the FARC, the Santos administration has reduced the defense budget in real terms, with substantial cuts to procurement and operations. Under these circumstances, even if the Trump administration maintains U.S. security assistance to Colombia, which it has already suggested it may not do, it will not be enough to compensate for the diminished capability of the Colombian military.

The Caribbean
The deterioration of governance in Venezuela has contributed to the significant expansion of narco-flights from that nation through the Caribbean, bound for both the U.S. and Europe. The Dominican Republic has become a significant hub, with drugs often dropped by air at the edge of national waters to the south of the island, among other means. The corresponding influx of drug money through the island has severely strained law enforcement institutions, including the nation’s anti-narcotics police, DICAN.

Closer to Venezuela, the islands of Aruba, Curacao and Trinidad and Tobago have been strained by refugees and illicit flows from Venezuela, including narcotics and weapons. Venezuela’s collapse has also made piracy a serious threat in the area. The possible breakdown in the truce between Taiwan and China could add to uncertainty, introducing a new wave of economic and political pressures, focused on the nations of the Caribbean.

The significant cutback of support from Cuba’s primary economic benefactor, Venezuela, has put it under serious economic strain. Meanwhile, the forced reassessment of its economic strategy in light of Trump’s presidency and Republican majorities in Congress have dimmed Havana’s hopes of broader access to U.S. markets. Faced with economic pressures, and no longer having any incentives to restrain its behavior in order to pursue access to the U.S. market, Cuba is more likely to welcome more provocative partnerships with China and Russia, possibly including expanded military collaboration.

Finally, the death of the iconic Cuban leader Fidel Castro expands the range of possible political change on the island, particularly with the upcoming 2018 Congress of the Cuban Communist Party. In this context, the armed forces will play a critical role in shaping the direction of the political transition.

The Andes-Southern Cone Narco-Corridor
The corridor from Peru through Bolivia and Paraguay, and extending into southern Brazil, northern Argentina and Uruguay, has become an important transit zone for drugs bound for Europe, with associated corruption and severe strains on regional governance. Indeed, $4.5 billion in drugs is estimated to pass each year from Peru through Brazil alone.

Within Peru, although the government has made significant progress against the terrorist group Sendero Luminoso, coca production has expanded along the eastern side of the Peruvian Andes, as well as the Peruvian side of the Putumayo River border with Colombia.

Bolivia, with its porous borders, serves as both a source of drugs and a transit country. It also plays host to drug laboratories, facilitated by national laws and traditions that permit the growing of coca; inadequate counterdrug efforts and cooperation with the United States; and relatively little control over precursor chemicals.

Some of the drugs and other illicit flows pass from Peru and Bolivia into prosperous southeastern Brazil, where major cities such as Sao Paolo and Rio de Janeiro have become important consumer markets and provide international ports to ship drugs to Africa and Europe. Others pass from Bolivia through northern Argentina to ports such as Rosario, Buenos Aires and Montevideo.

Bolivia, with its porous borders, serves as both a source of drugs and a transit country.

Drugs and contraband also travel to the east of Paraguay, and from there to Argentine and Uruguayan ports. The corrosive impact of those flows is becoming increasingly severe at a time when depressed international metals and petroleum prices have strained the commodity-driven and export-oriented Peruvian and Bolivian economies.

The Pacific Alliance Countries
Trump’s withdrawal from the Trans-Pacific Partnership (TPP) has prompted Peru and Chile to look to the China-promoted Free Trade Area of the Asia-Pacific as a substitute, while tensions between the U.S. and Mexico have prompted Pacific Alliance partners Peru and Colombia to criticize the positions of the Trump administration in solidarity with Mexico.

The shifting of Pacific Alliance countries from the TPP to a China-promoted alternative could be the fulcrum for substantially reorienting South America’s commercial and, to some extent, political focus toward China and a multilateral trade framework less favorable to Western companies. Indeed, China’s attendance at a meeting of TPP countries in Chile in March illustrates its intent to push its own alternative forward, to the detriment of the United States.

Argentina and Brazil
South America’s largest economies and most populous and politically influential countries have fragile, center-right governments facing potentially paralyzing economic crises, with Brazil’s compounded by the possibility of political crisis. Under these circumstances, there could be an opportunity for the return to power of populist left-wing parties.

In just over a year in office in Argentina, President Mauricio Macri has impressively restored Argentine access to international credit markets, eliminated agriculture and mining export taxes, and gone far to restore Argentine credibility as a responsible international actor. Yet his elimination of utility subsidies have produced enormously unpopular 300 to 500 percent increases in gas and electricity bills, while his economic reforms have not yet begun to attract significant investment or produce economic growth. This raises the risk that the 2017 midterm elections could go badly for his Republican Proposal party.

In Argentina and Brazil, there could be an opportunity for the return to power of populist left-wing parties.

In Brazil, President Michel Temer is enormously unpopular due to his ascension to power through the impeachment of his predecessor, Dilma Rousseff, and Brazil’s continuing deep recession. The continual unfolding of Brazil’s bribery scandal and its extension to an ever-broader array of businessmen and politicians creates uncertainty regarding who will be left in power to govern.

Recommendations for U.S. Policymakers

For all the economic and political uncertainty facing Latin America, the region’s challenges will be heavily influenced by U.S. policy changes. To the extent that the U.S. increases deportations to Mexico and Central America, it should coordinate with its partners in the region and make adjustments where possible to avoid a new wave of criminality in the recipient country that would ultimately undermine U.S. security. As well, it is critical that any potential changes to free trade agreements be made through negotiations, and not by unilateral decisions that could disrupt the economy and generate political turmoil.

The multiple sources of instability in Latin America, and the complex connections between them, mean that events in the region impacting U.S. security may unfold in a variety of ways. Currently, neither the U.S. State Department nor the Department of Defense dedicates sufficient personnel and resources to Latin America to permit ongoing scenario-based analysis to effectively anticipate and plan for the most probable or dangerous paths that could loom. The resources required for such an effort are miniscule compared to the price of being taken by surprise.

No other region of the world impacts U.S. security and prosperity as directly as Latin America and the Caribbean.

Investment by U.S. companies in Latin America and purchases of goods from the region contribute to prosperity, stability and good governance that advance U.S. security. In the same way, modest U.S. efforts to strengthen institutions and the rule of law in Latin America can help build citizens’ faith in democratic institutions and goodwill toward the U.S., making the region more resistant to threats such as terrorism and organized crime.

The broad and interconnected security challenges faced by the region will continue to require police and military activities as part of internationally coordinated responses. That will make continued close security cooperation a necessary part of the ongoing partnership between Washington and the countries of the region.

Latin America and the Caribbean today have many options in terms of regional institutions through which to pursue economic, political and military relationships. This interconnectivity makes it more important than ever for the U.S. to engage the region respectfully, as a partner with shared interests. Wherever possible, Washington should work through the Organization of American States. While the system is imperfect, the alternative is the region’s management of such crises through less-capable institutions in which the U.S. does not have a voice, such as The Union of South American Nations (UNASUR) and Community of Latin American and Caribbean States (CELAC).

No other region of the world impacts U.S. security and prosperity as directly as Latin America and the Caribbean. The U.S. trades more with the region than with any other, and in no other part of the world do bad conditions so immediately impact the United States. American policymakers should take note of this strategic importance, crafting policies that improve economic and political stability from Mexico to Venezuela. U.S. security and prosperity may depend on it.

Dr. R. Evan Ellis is research professor for Latin America and the Caribbean at the U.S. Army War College Strategic Studies Institute. He has written over 170 works on security issues in the region, including three books on the China-Latin America relationship and a forthcoming book on transnational organized crime in the region.

Dr. Román D. Ortiz is a security analyst specializing in counterterrorism and counternarcotics. He has worked as consultant on Latin American security affairs for a broad number of private and public institutions in Latin America, Europe and the United States. Between 2010 and 2014, Ortiz was adviser to the Colombian Ministry of Defense.

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