Central America's Failing States

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When the US Defence Department produced a report in December in which it named Mexico as one of two countries (along with Pakistan) at risk of rapidly becoming a failed state there was a predictable rejection of its findings in many quarters. In fact, the authors may have got their analysis right, just for the wrong country. Head further south to Central America - Guatemala in particular - and the failed state paradigm may be far more applicable.

Considering the apparent progress made by democracy in the region since the 1990s, this assessment may seem a little harsh. But dig a little closer to look at the quality of democracy, above all in the condition of state institutions such as the judiciary and the police, and the picture becomes less rosy. Ironically, it is Mexico's hardline strategy against the drug cartels on its own territory which is making the situation worse; gangs are seeking the relative sanctuary of Central America as a base for their operations.

The evidence from Guatemala is particularly worrying. Some 80 per cent of Latin American cocaine reaching the US passes through the country at some point. President Álvaro Colom in February claimed that 40 per cent of the 6,200 murders recorded in 2008 were linked to drug-related violence. Investigators from the US and Guatemala believe that the two biggest Mexican cartels, the Sinaloa and Gulf gangs, are spreading their tentacles across various departments; the Gulf cartel's notorious armed wing, Los Zetas, is held responsible for a spate of massacres in the country in the past year. Many economists believe that a major reason for the quetzal's strength against the dollar in recent years has been the amount of drug money laundered through the Guatemalan financial system.

Compared with the strong-arm tactics employed by his Mexican counterpart Felipe Calderón, Colom seems resigned to defeat. Comments in January that the country was helpless against an "avalanche" of drug-trafficking from the north were aimed at securing international support, but do little to inspire confidence in his leadership.

The sad truth is that he may well be right: the national police (PNC) are notoriously corrupt, understaffed and inefficient, as much a part of the problem as the drug gangs themselves. Moreover, the armed forces have become a shadow of their former self, and still have human rights legacies hanging over them from the country's bitter civil war. Even if the PNC were to convert itself overnight into the world's most effective crime-fighting machine, it would still be unlikely to have a significant immediate impact. Without an overhaul of the entire judicial system, any government measures or societal pressure are not going to make much of a difference.

This is true as much as for the rest of Central America - with the general exception of Costa Rica and Panama - as it is for Guatemala alone. Evidence from El Salvador would appear to bear this point out: the Salvadoran police are widely regarded as stronger and more efficient, but crime rates remain roughly on a par with Guatemala. In both countries, impunity is the key: in Guatemala only 4 per cent (at most) of all crimes, and less than 2 per cent of murders, result in a criminal conviction.

The condition of the Central American judiciary is at the heart of the prospect of state failure. Already weak and inefficient, prone to corruption, politicisation, lack of coordination between departments, and outright intimidation of its officials, judicial systems across the isthmus have been an easy target for organised crime. Guatemala has been the most obvious victim so far, but Honduras also suffers all the similar conditions to be the next in line.

Bringing the judicial system and other key state institutions to their knees is the main aim of the drug cartels. Being in virtual control of large swathes of Central American territory and being able to act with relative impunity are ultimately very good for business. The US may view its war on drugs in Mexico and Colombia as partially successful; the danger is that Central America does not have those countries' institutional resilience, leaving the way open for new fronts to be opened. Quite aside from the terrible human and institutional impact, this situation also undermines the long-term economic strategies of Central American governments. For better or for worse, democracy in the region has been accompanied by policies of economic liberalisation and efforts to attract foreign investment, culminating in the signing of the Central American Free Trade Agreement with the US in 2005.

While foreign companies have not been deliberately targeted, regular headlines of new killings hardly present a positive international image. On-the-surface political stability and favourable investment laws may be in place, but in the absence of an effective judiciary or reliable security forces, committing capital to promising projects becomes that much more difficult.

Significant improvements to this situation will be hard won. Central American politicians' habitual tough talk on violent crime has paid few dividends in practice; it makes little impact on drug cartels, whose resources often far outweigh those of the local police or army. Attention will inevitably be focused on the US to provide more material and technical support to the security forces; drips of funding for Central America under the term of the Mérida Initiative agreed with Mexico are welcome, but likely to be insufficient in the grand scheme of things.

Meanwhile, the economic downturn is doing its bit to help the gangs' cause: jobs will dry up, poverty will increase and the government's ability to provide basic welfare and social services will be tested, making a life of crime all the more attractive and rewarding. The possible implications of this Catch-22 are troubling to say the least.

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