The housing market, casinos, concert halls, and the livestock sector are all used to launder money in Central American countries.
Excerpted from the report "International Narcotics Control Strategy Report, Volume II, Money Laundering and Financial Crimes" by the US State Department:
Costa Rica Transnational criminal organizations continue to favor Costa Rica as a base to commit financial crimes due to its location and limited enforcement capability. Costa Rica’s government has attempted to strengthen the legal framework for supervision and enforcement; however, challenges remain in mitigating money laundering risks. Costa Rica is a transit point that is also increasingly used as an operations base for narcotics trafficking; and significant laundering of proceeds from illicit activities continues. Costa Rica should continue to close financial crimes legislative gaps and allocate resources for investigation and prosecution.
The figure is an estimate made by the Intelligence Directorate in Costa Rica released by the US State Department, along with information that indicates a rise in criminal organizations based in the country, and little capacity to combat them.
Money laundering is a criminal activity that handles amounts that are difficult to measure. For example, the report "Illicit Financial Flows from Developing Countries: 2004-2013" by Global Financial Integrity says that during the aforementioned 10 year period, the flow of illicit money from Costa Rica exceeded $11 billion, that is about $1.1 billion a year.
The complexity of drug cartels' internal structures, their strategies of "marketing and customer service" and the way they operate increasingly resemble those of large global corporations.
How are the Coca-Cola and McDonald's corporations similar to drugs cartels? Of course the products they sell are completely different, but the way the three try to position their products and brands, increase their market share and increase profits to generate more dividends to their shareholders, is almost the same.
If emergency measures are not taken, Central America will soon collapse into failed states dominated by criminal organizations who are able to buy political power.
This is the dramatic but realistic conclusion reached by a study on the subject carried out by a coalition of Guatemalan institutions composed of the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (CACIF), the National Economic Research Center (CIEN) the Foundation for the Development of Guatemala (FUNDESA) and Fundación G.
Central America's fall into the hands of drug traffickers makes the following quote seem true: "Insanity is doing the same thing over and over again and expecting different results."
EDITORIAL
Although their rulers deny it, Central American countries are losing the war against drug traffickers. In some it is happening faster than in others, and in all of the nations on the isthmus violence associated with drug trafficking is growing, and it is becoming increasingly apparent that mafia power has infiltrated public institutions and private organizations, through bribery, and also through terror.
The unprecedented increase in violence in Costa Rica, once an oasis of peace in the region, is another sign of the failure of the traditional methods of fighting drugs.
EDITORIAL
More powerful than the Central American states, drug trafficking is on the rise not only in terms of an increased supply of drugs in the countries in the region, but through its permeation of institutions using the power of money and generating a growing culture of violence that is making Central America´s lack of a death penalty seem risible. Yes it does exist, but the worst part about it is that it is not institutionalized justice systems that implement it, but the mob bosses, pointing out -to ever younger executioners- the people who should be executed.
Sooner or later, the growing momentum in all of the States of the Union to legalize marijuana will motivate the federal government to remove the ban on its use.
EDITORIAL
As noted by Juan Carlos Hidalgo on his blog on Elfinancierocr.com "... Today, after more than 40 years of continuous failures, we are witnessing the collapse of the international drug war, which has cost the continent hundreds of billions of dollars and tens of thousands of lives."
Guatemala's foreign minister in Europe has proposed a transition to the regulation of drugs in order to control their health effects, and to take away economic power from the drug cartels.
An article in Prensalibre.com reports that "The Chancellor took part in a seminar yesterday run by British Group of the IPU in which MPs from 30 countries discussed "the reform of drug policy" and the experiences of each nation over the last 18 months, particularly in the framework of the OAS (Organization of American States) . "
In the U.S. the number of people over 12 years old who use drugs increased from 5.8% in 1991-93 to 8.9% in 2008. In Mexico the war on drugs has killed over 50,000 people over the past 5 years.
Juan Carlos Hidalgo wrote an article for Nacion.com in February 2012. His approach, denouncing the harmful effects of drug prohibition, was based on a proposal by the President of Guatemala, Otto Perez Molina, to legalize drugs as a means to combat drug trafficking.
Breaking what is a taboo for any incumbent ruler, President Otto Perez Molina insists on his proposal to deny a market for drug traffickers.
Insisting that applying traditional methods to tackle the scourge of drugs and drug trafficking has not been successful , Perez Molina "does not regret his bold proposal to decriminalize drugs in Central America and is excited about a discussion of this global issue."
U.S. authorities estimate that 80% of the drugs reaching the country pass through Central America and Mexico.
The transfer of illegal drugs from South America to the United States, through Central America is worth about $35 billion dollars a year, which is twice the GDP of Honduras, estimates the foreign minister of Honduras, Arturo Corrales.