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Session Three of a Council on Foreign Relations Symposium on Organized Crime in the Western Hemisphere: An Overlooked Threat?

Speaker: Adam Isacson, Director of Programs, Center for International Policy
Authors: Francisco Thoumi, Tinker Visiting Professor of Latin American Studies, University of Texas; Former Research Coordinator, United Nations Office of Drugs and Crime, and Shannon K. O'Neil, Douglas Dillon Fellow for Latin America Studies, Council on Foreign Relations
November 18, 2009
Council on Foreign Relations


SHANNON O'NEIL: Okay, welcome back, everybody. If you don't mind taking your seats so we can get started on this last panel that would be great. (Laughs.) Well, we've had a couple of interesting panels here and now we're turning to our last one of the day, and it's up to our two speakers here to resolve all of the problems that we've posed for the last couple of hours. (Laughter.) Or, if not that, perhaps add a few more layers to it.

ADAM ISACSON: We can do it.

O'NEIL: So you all have their bios, but I have Adam Isacson here, who is at the Center for National Policy, a long-time scholar and thinker about drug trafficking, organized crime, other issues in this hemisphere, and Francisco Thoumi, also a professor. As he mentioned in one of his comments a Colombian-American but also someone who has been thinking about these issues for at least a couple of decades now, if not more, and has some strong opinions but also interesting ideas about it.

So let me start -- we've had other -- both panelists on the first two panels laid out what they thought that organized crime was and the issues on the table, so let me give both of our speakers this time just a chance to put on the table what they see as the main challenges or sort of fundamental underlying issues that we're facing when we think about organized crime in the hemisphere. So, Adam, let me start with you.

ISACSON: Okay, that's a big issue. It's very general, but I would say when you're thinking about addressing the problem of organized crime in the hemisphere you're looking at, well, first of all, what the military likes to call ungoverned spaces: geographic areas where there's just not a state presence, where the state cannot deal with the problem because it's simply not there.

In places like Colombia, though, that's rural zones, where coca is produced, cocaine is trafficked, where armed groups have dominion, and it also includes neighborhoods in the major cities, usually the slums that ring the cities, where organized crime holds a lot of sway. The state has not moved into those places in a big way and when it has, often impunity itself for state agents is a problem, either for corruption or human rights abuse.

Now, there's also another kind of ungoverned spaces that I think is at least as important, which is within states themselves. Organized crime throughout the region, be they gangs in Central America or the cartels in Mexico or even armed groups in Colombia, have managed to penetrate and to co-opt major parts of the state in many of those areas. And probably the first step you have to take in a lot of these countries is to work to separate organized crime from the state itself in order to fight it. And your main tool there, really, is judicial systems, which in many parts of the region are in terrible shape.

O'NEIL: Mm-hmm. Francisco, let me turn to you.

FRANCISCO THOUMI: Well, let me follow on on that, first off saying that I'm an economist. My training is economics and mathematics and I cannot understand the world unless I have a model, and I'm certainly not a man of action. I am extremely coward. (Laughter.)

Now, I got into the topic of drugs and crime simply because I couldn't understand it. It was accepted that money drives the business. However, if profits were the main driver for the drug industry, then coca would grow in the 30 countries in the world where it can grow and it would be refined in a lot more countries. I mean, how come a country like Colombia has a lot more competition in coffee than in cocaine? Don't you think that cocaine is a lot more profitable? It makes absolutely no sense. Economics cannot explain that.

It's also accepted that organized crime generates violence. Yes. Some years back Arturo Morales got kicked out of Congress, I had the opportunity to talk to him and he simply said, "Look, Professor, you know, the situation in your party is totally unacceptable. In the last year four presidents were assassinated." I mean, we look at Colombia, Mexico, I mean, the only thing I could do was embrace him and say, "You don't know how much I envy you." (Laughter.)

When the point is that there is absolutely no correlation between organized crime or drugs and either violence, I mean, you have places like Afghanistan today, where maybe 30 percent of the economy comes from drug and the violence has escalated with drugs does not compare at all to what you have in Mexico and Colombia. You have the same in Peru, Bolivia, Thailand, Laos, Myanmar, et cetera, et cetera. Okay?

So what that suggests, at least what I have arrived at, is that organized crime has no causes in the traditional sense. In other words, it's true that poverty, social exclusion, inequality, economic crisis, they are factors that contribute to, but none of them is necessary, and you can have many people who commit crimes that don't fit into the traditional patterns of being excluded, poor and so on. So what you have is a situation in which we have contributing factors.

Now, what is necessary for crime? Well, to have an illegal market, you have to have an illegal demand and illegal supply. And this is why, by the way, the legalization is so attractive because if you legalize, you eliminate a necessary factor to sell drugs. Now the question is why it is necessary to have an illegal production. And the only thing that is really necessary is to have a big gap between the law and the norms accepted by some groups in society. Those empty spaces, those neighborhoods, things of this sort.

But you also have to have a situation in which that gap has some characteristics. First, we have the same gap, for example, in Nepal but the monks are confronting the state are not trafficking in cocaine and heroin; they're not doing prostitution or anything like that. So you have to have a situation in which you have an enemy or basically what I might call in Colombia an amoral individualism, in which people don't give a damn about what they do or about the effect of their actions on society or in cases when they feel, yeah, this is bad, they have a greater cause that justifies that.

We do it for the -- getting rid of the oligarchy, against imperialism. It's only for infidels or whatever. Basically, it's higher cause. Now, the policies that we have, they all focus on attacking contributing factors. Okay? But they don't deal with the necessary factors for production. In other words, to do that, to attack those necessary factors, we have to focus on institutions and the structure of the country.

And then we have to talk about words that are listed in the lexicon of some countries today have been excluded. Have to talk about reforms, not policies. So what policies to -- can accomplish, at best, is to lower traffic, to lower crime and normally since -- if demand continues, you just ship somewhere else. We have been doing that for many, many years, since Dick Nixon declared the war on drugs, over 40 years. We just continue that, so we talk about this great success at Colombia. Fine. We'll continue doing business somewhere else.

Colombia, despite this great success, is one of the top producers of counterfeit U.S. dollars, it competes with Mexico sometimes; otherwise North Korea, wherever. It is the first or second Latin American exporter of prostitutes. It is the country with the largest number of displaced peoples in the world today, according to the last data. It has the second largest number of child warriors, has the largest number of children that are victims of land mines and has the largest number of land mines in the country, et cetera, et cetera, et cetera.

With or without drugs, there is a need to create a new society, to have a nation building project. One way to look at it is to see that -- I mean, to follow the path that some of the countries in the former Soviet Union are following. In other words, they are looking -- I mean, when you go to that part of the world, they all talk about being in transition. We go from a socialist or communist regime to a capitalist regime and they're very careful about studying institutions to see what institutions would work. What we have in Latin America is societies in transition that go from a pre-modern society with some institutions that were feudal, or pseudo-feudal if you want, to a society that will be a big capitalist society.

The question is, how do we build a modern capitalist society? And if we don't deal with that, forget it. We'll just continue spinning our wheels.

O'NEIL: Mm-hmm. Well, let me ask you, though, because the idea of reforming and rebuilding society that seems to suggest that the answers or the policy solutions are at a local or a national level, not a multilateral international level. Is that your take on that?

THOUMI: Yes. I mean, we have to look inwards. I mean, we cannot -- when we deal with drugs, everybody knows who's responsible. It's the other one. In the U.S. we have been invaded by the Chinese that brought opium, by the Mexicans that brought marijuana, and then the blacks in the south that consumed cocaine. I mean, those were the three top -- (inaudible) -- we had. In Latin America, there is always, when there is demand, there is supply, okay? Most of the money remains abroad. We cannot do anything unless you change.

I mean, two weeks ago in Mexico at a meeting I confronted the audience, telling them a very simple point. Look, here in the audience there is an agreement that the U.S. is a deeply sick society and it has to change. Of course, Colombia and Mexico are very sane ones. I mean, we don't have to change, we're not sick, so -- (chuckles) -- what's the problem? Sorry. If we don't look inwards, we cannot accomplish significant changes.

O'NEIL: Mm-hmm. How do you see that?

ISACSON: I mostly agree with that, but I do think there are areas where the countries are --

THOUMI: Well, they can improve policies, yes.

ISACSON: The states in the region can cooperate and are not now. One is simply cooperation, intelligence-sharing and particularly on what are now regional networks, what are almost like multinational corporations, and one state alone often can't keep tabs on them.


ISACSON: Mexico and Colombia should be sharing that information, linked between armed groups and cartels and certainly in border areas, where organized crime activity actually contributes to instability and maybe even conflict scenarios. I hate to even call it that, but between some two countries and these ungoverned border areas, there is more need for cooperation.

Another area of cooperation badly needed would be between judiciaries. The judicial systems in the region need technical knowhow. They need, well, they simply need resources, which they can't give each other, but they need protection. They need a response to threats against judges, witnesses, prosecutors. And the third way that the countries in the region had begun to cooperate, or at least had begun to raise their voices, is simply to pressure the United States government to be more open to alternatives.

And we've seen the example of the Cardoso Zedillo Cavalli effort and some of the changes being made to laws in places like Mexico and Argentina and there should be more interchange politically there, on working to get the United States to consider a new approach, as well.

O'NEIL: In that area, in that multilateral area, is the problem that governments aren't willing to work together or is the problem that there isn't an apparatus or an infrastructure for this type of security cooperation? What is it that's stopping those things from happening?

ISACSON: A lot of it is a lack of apparatus. I mean, there is a defense apparatus, you know, the Inter-American Defense Board, the Rio Treaty, that doesn't work. You know, especially now, I mean, you're talking about defense ministries cooperating. We don't even have cooperation between public security ministries.

There has been a regular series, ever since the Clinton administration, of defense ministerial meetings which now they can't hardly even agree on, you know, where the put the place settings on the table because of the utter lack of consensus within the region, even just on what the role of the military should be, much less the ideological divide in the region. So to get from that, it is easier, team of external defense, to actually cooperation on what is openly a sovereign internal issue. It's hard to imagine any formal approach to that. Right now I think what we're going to be seeing mostly is ad hoc bilateral or subregional cooperation from time to time on this issue.

O'NEIL: Mm-hmm. Francisco.

THOUMI: Yeah. In the earlier panel, Rodrigo mentioned the need to strengthen the U.N., or to bring in the U.N. The U.N. office of drugs and crime is very much co-opted, okay? If you look at the budget that they have for last year, 5 percent of the budget came from funds from the U.N. itself, 95 percent of the funding comes from specific projects from donor countries, okay?

A long-term contract there for a person that was to work there is two years. Many of them are only three and six months renewable. To me, they are completely co-opted. In 2007 -- I mean, last year, in 2008, the estimate for the total cultivations of cocaine in Colombia went up, according to them, 99,000. Then within the last year, they ended up administering a lot of the alternative development programs of the country, of the government, funded by the Colombian government. Of course, the acreage estimate decline to 81,000, very successful. So, I mean, unless one can have an independent U.N. agency, there is not going to be a move because that is totally co-opted by the prohibitionist policy of our supporters.

O'NEIL: So does it have to come from the U.N.? If it's not the U.N., are there other organisms or are there other ways the international community can help these countries?

THOUMI: Well, I mean, now in the U.N., you have the three conventions on drugs. Then you have the convention on organized crime. Now they are working on the conventions on terrorism, so you have all the norms of the normative framework is there. So I think one has to go through them.

ISACSON: Yeah, I mean the OAS has the CICAD, which does not exert any forceful presence and is largely seen as captured by the United States.

O'NEIL: Mm-hmm. We've heard this morning that the United States is beginning to move away, perhaps, from a strictly punitive, a strictly prohibitionist position, that we're looking at medical marijuana in many states. We're looking at other changes. If the OAS is captured by the United States or if the U.N. is led at times by the United States, do you see a chance for a change on an international level in these bodies or is it not something that the United States can handle?

THOUMI: Well, the world is prohibitionist. I mean, look, China's identity was built very much on the fight against opium. All the countries that have had authoritarian regimes, all the former Soviet Union, Eastern Europe, are extremely prohibitionist on drugs. Okay? In the last session of the Commission on Narcotic Drugs, the leaders are gains including the (wartime ?) reduction in the declaration were Russia, Italy, Sweden, Japan, the Holy See and two Latin American countries -- Cuba and Colombia. So it's, I mean, I don't see how you can move the Muslim world, for example, to modify policies.

ISACSON: On the other hand, as far as the role of the United States, I think there's certainly more openness now if Latin American countries are willing to experiment or try anything. Compare the Bush administration's reaction when the Fox government came close to signing a law legalizing the possession of small amounts of drugs. The amount of political pressure exerted to stop that law from getting passed was actually -- I can think of few other examples in the U.S.-Mexican relationship. Mexico just passed a law like that, and there was not a peep out of the Obama administration.

THOUMI: Mm-hmm.

ISACSON: It shows that there is some more tolerance of trying new things.

O'NEIL: Mm-hmm. Well, and as Rita said, with moving to bilateral relations, or the multilateral perhaps there the influence may be stronger. You know, let me turn -- one thing we've talked about today, we've heard, is this idea of, you know, the whole of government has to get involved, whether from the U.S. point of view or the Colombia and the Mexican, other governments, there have been some attempts at that beyond just the defense ministry side and other parts have come in, particularly in Colombia.

So how have you seen that play out? Has it been more successful than just pure military side or what are the strengths and limitations of it?

ISACSON: Were just putting -- just this morning I put the last footnotes in a report that we'll be publishing in a week or two on exactly these programs in Colombia, the integrated action strategy, where they picked out about 13 zones and they're trying to create military security commissions in a coordinated way, on paper, on PowerPoint, bring in the rest of the state and it's a better concept than Plan Colombia, much more nuanced, much more realizing that you need a full state presence, a strong state that is not just armed.

And at least there is lip service paid that they need to bring in the judicial system and reduce impunity, although the jury is very much out there. There's some learning going on, certainly the amount of resources that they poured into the La Macarena region in getting what is really still a mostly military presence and is responsible for much of the reduction that the U.N. measured last year.

The questions we have about it is -- I mean, is there really a credible plan to replace that military presence with a functioning state? Can you work with local governments in places like Montes de Maria where they continue to have, you know, mayors and councilmen and even governors continue to have strong ties to what were the reigning armed groups in the region. Can a government like Colombia's really coordinate? Will the judicial system have the support that it needs?

Will they listen to local populations about what their preferences are for how their area should be governed and what the economy should be based on? You know, there are other issues, but there is certainly a promise in that there are some pretty bright people in Colombia's government. It's hard to say how politically supportive they are, but there are some bright people who are trying to bring more of this whole of government approach. How long term that's going to be, whether there's going to be real follow-on or whether they're just going to leave populations disappointed in these regions, yet again we are unable to tell right now because it's still pretty incipient. This really got underway around 2007.

O'NEIL: Mm-hmm. And Francisco, how do you see that? I mean, you talked about not just dealing with the contributing factors but dealing with the fundamental disconnect with society and law. How do you see some of these programs or different types of policies that you've seen people try to implement?

THOUMI: No, what I see is that in Colombia there is no real nation building project, okay?

ISACSON: Counter-insurgency.

THOUMI: It is a counter-insurgency project. So as long as that persists, I mean, you can achieve some results in the areas where you go. For example, Macarena and so on, but I don't think that that would lead to a sustainable solution in the long run.

O'NEIL: So what does a sustainable solution look like? You know, if you had the resources, the ear of Uribe and the other presidents around the region, what do you see?

THOUMI: First of all, I mean, we have to acknowledge that there is an armed conflict, okay? We have to bring everybody to the table and then the question would be, well, what would be a viable society? I mean, what is it that people can agree on? I think that we have to explore options like regional autonomy in some cases. Maybe a federal regime, I don't know.

I mean, sometimes I think of Colombia as the Central America that didn't break down -- (laughs) -- and the basic reason why was the regions were very isolated, had very little communication amongst each other, were very different. You had local groups at each that controlled the regions, but they were not viable as independent countries. The only region that was viable as an independent country became one, and that was Panama.

So the question is, how can you bring all that diversity, okay, and create a nation? I mean, we have to somehow explore different ways of handling it. I don't know. Rodrigo has a better idea than I do. I cannot handle that. (Laughs.)

O'NEIL: Okay. That's why changing -- well, it isn't all that hard to change constitutions in the Andes, as we've seen in the last several years, but it's hard to change those types of structures. And if you would compare it to Mexico, which is a federal system which does have increasing regional autonomy, monetary and otherwise, it doesn't seem that it solved their problems.

THOUMI: No, you have to have a very strong local tax base. It's the only way in which you can have accountability, and what happens now is that in those regions the local budget very much depends on transfers from the central government, so basically we deal with bounties to be distributed. There is no way to generate accountability.

I mean, that's part of the reform that people have to come up with, but as long as we insist that we are not in transition, that basically we are as capitalist as everybody else, we won the war against socialism so we don't have to change, the thing will not change. I mean, as long as the problem is defined as having some narco-terrorists that we have to get rid of, there is not much that one can advance.

O'NEIL: And is this plan that Colombia has put in place, is it redefining it in a way that Francisco seems to think needs to be done or how do you see it so far?

ISACSON: I mean, while it's an improvement over what came before it, is still a very top down, it's very centralized effort there. Clearly, they are trying to include local governments as partners to the extent that local governments have the capacity but it's -- right now the main agencies involved are the social action office of the presidency, which is sort of they do all the conditional cash transfers and they're a many, many tentacled octopus in their defense ministry and it's -- there's not much devolution of responsibility yet to local governments in which many -- La Macarena has always been almost non-existent anyway, which the danger, though, of devolving too much responsibility is that it happens without accountability.

O'NEIL: Mm-hmm.

ISACSON: And you end up with a return to either a warlord situation like you have already in many regions in Colombia or this Mexican model of, you know, how many police forces? There's no accountability coordination and it's very easy for organized crime to take control.

O'NEIL: Mm-hmm.

THOUMI: I mean, Mayor Garza made a very good point when he talked about the culture, okay? I think that we have to look at cultural change as a policy goal. I mean, we cannot go on with a society in which most people believe that wealth is captured or encountered and is not created, in which there is no link between individual wealth and the welfare of the society, so I mean, what we have today is a situation in which, really, we have four different sectors in the economy.

We have what is legal and legitimate. We have a very large sector that is illegal but is legitimate for many people. Then we have legal and illegitimate -- it might be a small one, and also illegal and illegitimate. And once you have that, there is a big issue of property rights. Property rights are not well defined and there is a lot of effort in ransacking and capturing wealth and transferring wealth.

O'NEIL: Mm-hmm.

THOUMI: Okay, so as long as you don't have good property rights, there is not much you can do. For example, today Colombia, I mean, one of the main obstacles to sell carbon rights is that there are no solid property rights for the land, for the forest and so on. We have to talk then about that unpleasant work of land reform and a land reform that will strengthen and establish true property rights. And today the way the expansion of the palm oil firms, for example, has taken place has been taking advantage of very weak pre-existent property rights or non-existent property rights among peasants.

So, I mean, one great advance in Colombia would just be to start with -- (inaudible). For example, the national drug directorate has seized many properties. It has farms that they don't know where they are. (Laughter.) I mean, they don't have documents; there is no way to locate them. So maybe we need some fundamental issues to establish a capitalist system. If you don't have those property rights, you cannot go on with a sensible capitalist system.

ISACSON: There's a direct link here to organized crime. In 2003, Colombia's comptroller general's office said that about four and a half million hectors, multiply that by two and a half million acres, of Colombia's farmland is in the hands of narco-traffickers because that's always been a preferred means of laundering money. Colombia in the last 25 years has gone to what they call a reverse land reform as narco-traffickers have accumulated more and more land.

That's about 3 percent of Colombia's land area but it's about half of the sort of best, most sought after, desirable land in the country. So when you look at that, first of all, yes, there's a need for reversing that land reform and getting that land back into the hands of the original proprietors, in many case, who are displaced people.


ISACSON: There is also, though, I mean, a need to look at who owns this land and when you look at it, you've got to look at who sort of -- who owns organized crime in Colombia today? You've seen, you know, the Cali and the Medellin and the Norte Del Valle cartels go down, the paramilitary, the AUC leadership, much of them are here now, but who are the new guys? I mean, Aguilas Negras, Rastrojos, a couple of friends of the FARC. Look at the land.

Follow that money and you will find that there is a new generation emerging whose names we don't hardly even know yet, but who have their own private armies, which have territorial control, which enter into joint ventures on things like African palm with some of the more respected members of the economic elite in those regions who have key politicians still, including members of congress and governors, et cetera, in their pockets but who keep a much lower profile, who don't, you know, like to show up in public and hand out T-shirts who don't issue threats saying, "I'll give you a thousand dollars for every cop you kill," and who have maintained quite an amazing degree of anonymity while the amount of cocaine leaving Colombia has barely changed. Who owns that stuff?

O'NEIL: I mean, this tie between the legal economy and the illegal economy in Colombia, but in the other nations that we've been talking about today, can you expand a bit on that, and if we were to somehow reduce this illegal economy, how would that relate to the legal economy? Are they complementary? Would harming one hurt the other? Are they contradictory? How do you see that? Are these business people who are narco-traffickers also legitimate business people or how does that work?

THOUMI: Well, nobody knows much about it, but clearly the greater the informal economy and the illegal economy, the more difficult it is to have a strong legal one. To begin with, the burden of the state would fall most on those who pay taxes, so you ended up -- I mean, the more you have in formality and illegality, the more problems -- I mean, the less competitive will be your formal sector.

One has -- I mean, part of the problem is that a lot of the formal firms also have had historically several accounting books, for example. So that means basically that they do try to benefit from illegality. They play it both ways. Okay? And again, this is the issue of changing the culture, but how do you really shift from this mindset in which basically I'm not a member, I mean, I'm not a citizen in the sense that I don't have responsibility from just here and actually how I can try to take advantage of things?

It's kind of a big competition. I mean, in a way Colombia is a society at war with itself. You have a lot of people but there's very little cooperation, solidarity and trust, and if we don't build that, the issue of legality and illegality will continue and it will be a grayed area in which, at the end, most everybody is part of what?

O'NEIL: Let me ask before I open it up to others the question that Andrew posed, which is what advice would you give to the United States and even though many of these issues we're talking about are deep-seated issues within each of these countries, the United States one way or another is going to be concerned about this issue and potentially getting involved one way or another, so how can the U.S. or the international community, in general, but how can the U.S. better get involved, assuming there's going to be some involvement?

ISACSON: Well, first it's make it a priority. I mean, the United States bureaucracy is not set up at all right now to combat organized crime, especially in Latin America. Nearly half of our assistance to Latin America and most of our counter-drug assistance to Latin America continues to be aid to militaries and police forces.

We're the largest -- and this is beyond eradicating crops and the second largest being on just trying to find the stuff in boats and on planes. You know, much less goes to actually looking at who the networks are and where the wealth is and helping judiciaries in particular. I keep going back to judiciaries and I will continue to keep going back to judiciaries. Find these guys and lock them up.

If only our judicial relationships or even our, you know, our State Department judicial relationships were even half as strong as our military to military relationships are in the region after all the years that we've cultivated those, we could be making an enormous help with transferring technologies, everything from crime labs to DNA to just plain old databases, to training programs, to even just money to help increase manpower and reduce caseloads. Certainly security, again, for threatened judges, witness, prosecutors, trying to break that plato o plomo dynamic. That would be amazing.

But right now, I mean, who is even in charge of an organized crime strategy? The Southern Command has the resources but we don't want Southern Command helping, you know, the region's militaries take over this issue. The State Department has an international reconnaisant law enforcement bureau who have not really been set up for this and are not ready to take on -- they're not on the cutting edge of crime fighting, let's put it that way. They have an air wing and they manage the fumigation program and they manage the narcotics affairs sections in the embassies.

DEA could play more of a role, perhaps, in intelligence, but they're sort of off in their own lane and don't talk to anybody else. And nobody really has the budget to take this on in an integral way and nobody is really -- there's been an increase in funding in this Democratic congress above the requests of the administration per the judiciary, particularly in Colombia but also as part of the Merida initiative, but it could be much greater and they could be doing much more to increase capacities and just plain protect people.

O'NEIL: Francisco, do you have some advice?

THOUMI: Well, I'd like to see, for one, can identify the vulnerability of every society. I mean, when countries were very isolated, when there was little trade and very little international communications, it was feasible, it was fine to have societies that were grossly unequal in which you had many pre-modern institutions and things were okay. In the 1940s and 1950s almost 2 percent of the population of Colombia died during the violencia.

Earlier, in the '10s, a similar amount of Mexicans, I mean not coincidentally, but there were the two Latin American countries that in the 20th century had huge internal conflicts with a very large number of dead that we're talking about here today. Now that happened and the world didn't care. (Laughs.) Okay?

What happens with globalization is that society that had those types of structures become extremely vulnerable and now the consequences are a spillover and become global issues. In the modern globalized society, the only way one can work is raising the social defenses. I mean, we should look at this as basically a body that somehow might be vulnerable to particular viruses. Now, I think that the approach the should be to look at social vulnerabilities, identify them, divide them and see how you can deal with them, but as long as we insist that the problem of organized crime is the one of bad apples, okay, just kind of an anomaly, then we're not going too far.

I mean, we're not in Norway when there are a couple of people who are dealing drugs because they are bad apples. I mean, here we have a society that have to become other in the sense that you have to have true governments, true democratic governments through citizenship, and that is not easy, of course. Those are the big challenges, but otherwise we just continue spinning our wheels the way we have with drugs in the last 40, 50 years.

O'NEIL: Well, let me open it up to questions from the audience. Can you start?

QUESTIONER: Hi, my name is Pamela Phillips. I work for the Hyda (ph) program here in New York. I have two questions, one for Professor Thoumi and one for Mr. Isacson. Professor Thoumi, I was wondering if you see anything in the examples of Bogota and Medellin, the reduction in violent crime there, the reduction in at least some forms of illegal activity, if you see anything in those cases -- the reductions we've seen in the last few years there, where they seem to have taken some of an inward-looking, locally focused approach to dealing with some of those problems? There's been an attempt to sort of change attitude, change the culture. That's at least been part of the package there.


QUESTIONER: If you see anything in those cases that you think is sort of instructive or is an example of the type of reform that you talk about. And Mr. Isacson, I was curious to know whether you think that there is an opening or you see any possibility under the new administration for the type of shift in international policy against organized crime or counter-narcotics policy.

You seem to have some very specific ideas about how it should change, and I wonder whether you think there's a window of opportunity now and whether you have any thoughts on where that change could be generated from, whether that entity exists or if it needs to be created.

O'NEIL: Francisco, you want to start?

THOUMI: Yes, I mean, the experiences of both cities are interesting, but they are also different. In the case of Bogota, the clear emphasis was on culture, and it did succeed substantially. Unfortunately, the last government in Bogota doesn't seem to have followed that, Moreno. But there was a lot learned about it in the sense that it was an attempt to create, through citizenship and responsibility and it worked.

The case of Medellin is more complex because it was very difficult to prove exactly what happened, but they had to deal with Don Berna one way or another.

ISACSON: Don Berna -- (inaudible).

THOUMI: Well, they managed -- things went down, I mean, real quick. In this last year, as Rodrigo has suggested, things are getting out of hand or could get out of hand. I mean, unfortunately, but in both cases what this illustrates is that there is an emphasis that people are certainly willing to change behaviors once they trust the government, once they feel comfortable with an institutional framework that they can work with, okay?

I mean, chaos is not particularly attractive to living and even if we look at the successful, at the large drug traffickers, I mean, their lifetimes have been a disaster. I mean, very, very few -- we look at the illegal drug industry, there have been very few successes. I mean, the large traffickers end up in jail or in the cemetery. Some might leave some money for their heirs, but it's not particularly the sort of picture that you have there.

So it's really -- the potential is there, but to do that one has to start recognizing that this is a problem. As -- (inaudible) -- is that we have to harmonize the law, the culture and the morals, I think, to be level. And that's a big challenge, but if we don't pose that even as a problem, then you cannot advance.

ISACSON: Possibilities for change. Don't hold your breath, but perhaps. Certainly in Southern Command, the discourse of the new commander is all about trafficking and how trafficking, you know, he doesn't call it organized crime; he calls it trafficking, which probably means that they'll stay in their lane and only focus on how the stuff is physically trafficked, but he defines -- General Fraser defines that as his main priority, so he'll be pushing for more of an integrated approach perhaps.

In the State Department, we've just got a Assistant Secretary for Western Hemisphere sworn in a week ago. I mean, it's still a zombie version of the Bush administration there, with not much movement on this happening yet. And of course, it is the State Department that would have to take the lead on this issue if they get around to it, and there is no movement at all in international narcotics and law enforcement affairs.

Where I might see hope for taking this on, and it's modest hope, is in Congress, where the Foreign Affairs and Foreign Relations Committees right now are slowly doing a rethinking of the Foreign Assistance Act of 1961, redrawing authorities, not redrawing the bureaucracy -- and that might be the downfall of it, but at least redrawing authorities to ease things like community policing and judicial aid as sort of their own category.

I don't know if that would necessarily be an outcome of it, but it's something being discussed and more discussion of sort of institutional assistance like this. This would be, you know, creating new aid programs, doing away with old Cold War aid programs and, hopefully, making things a little more agile, but meanwhile you've still -- there is no reauthorization of the apparatus itself, those agencies that I was talking about before who each have partial responsibilities, very sort of specific pieces of the puzzle, low budgets and not much inclination to cooperate.

And I think that's going to continue to be frustrating while this administration has so many other battles to fight and, really, when the discussion centers on Latin America at all, for the moment, it's about Hugo Chavez and about Honduras and more political issues than this crime issue, so that reduces the likelihood of political will moving on this. But maybe by 2011, 2012.

O'NEIL: Yeah, I was going to ask that -- there was a question earlier.

ISACSON: Well, I mean, this administration has certainly been more thoughtful in its approach, which isn't saying much, but it has been. But it's also been demoted. It's staff is smaller, it is no longer a cabinet-level position, which means that it's not something that the Obama administration is going to get out in front on, so --

But what that also means, like we said before, is there's more room for experimentation, more flexibility with others, being states or Latin American countries that perhaps want to take on and make some changes to the approach. On organized crime, though, I have not heard Ilkowkowski (ph) say very much about it. His focus has been very domestic so far.

O'NEIL: In the back there.

QUESTIONER: Hi, Ivan Rebolledo, TerraNova Strategic Partners. Since the expulsion of the DEA from Bolivia we hear Europeans, and particularly the Brazilians, expressing grave concern about increased transshipment from Bolivia to Brazil North Africa and on to Europe. The Brazilians have increased their police and military presence in Bolivia on the border but also, with the blessing of the government of Bolivia, but both the Brazilians and the Europeans are calling for a stronger U.N. office on drugs and crime.

Do either of you see that potentially happening, giving the U.N. office on drugs and crime greater teeth in this matter as well as whether the United States will pour in more money into the programs of the U.N. office on drugs and crime? Thank you.

ISACSON: What would a stronger U.N. office on drugs and crime do? They would have more robust training programs. They would increase alternative development programs. Interdiction has not been their forte, really, at all in the past. So I'm not sure whether that would be much of a solution.

THOUMI: Well, you know, it depends on how it's played. (Inaudible)-- has requested now formally to take the coca out of the Schedule I which -- I mean, coca is -- in the U.N. conventions has the same status as cocaine, heroin, amphetamines and so on. Now, the U.N. has a system to allow for the production of legal opium to produce morphine, codeine -- I mean, Tylenol -- (laughs) -- things and so on.

So if, I mean, the U.N. response, for example -- I mean, I see an opportunity here in the sense of responding to -- (inaudible) -- saying, okay, look, you can grow coca for traditional uses and so on but then you have to have a very strong control system, which is the only way that will work out. If it goes that way, I think ---

ISACSON: Political pressure more than anything.

THOUMI: Yeah, and also to establish a monitoring system with the U.N. there and so on. I mean, if that can be worked out, I mean, I see that as a possibility to satisfy the goals of the Bolivian traditional Indians and the coaseurs (ph) and so on and also to be able to improve on the control. We'll see what happens with that request at ECOSOC -- the Economic and Social Council.

O'NEIL: And Jorge. Let's wait for the microphone, please.

QUESTIONER: (Name inaudible). Two questions. Drug-related violence in the U.S. has plummeted over the last, say, 10 years or so while drug-related violence in Latin America has gone up. Is there a link there that says, this has become even more of a foreign problem rather than a domestic problem for the U.S. and, therefore, it's less of an emphasis?

And the second question -- related, I think, is, you know, drugs don't kill. They're a health problem; occasionally it's overdose and they kill, but what kills is the weapons that go along with the drugs, and there doesn't seem to be yet enough of an effort by the U.S. administration to deal with this traffic of weapons, particularly high power weapons. There are so many issues, but this is at the core of something that the U.S. could do.

I mean, you see the news in Latin America, they confiscate hundreds of thousands of weapons a year and they keep coming, and most of them are made in the U.S. Not all of them, but a lot of them are made in the U.S. and somehow is there a hope that some of these things will be taking higher priority?

ISACSON: On the latter question, not really. I mean, there have been several high level panels lately recommending renewing the assault weapons ban and increasing controls on gun shows and gun shops in border areas. It hasn't gone anywhere. There's a fear to confront the NRA that has not diminished in this administration and it seems easier sometimes just to send Mexico a bunch of helicopters instead.

I mean, that's a little dismissive, but it is a substitute for political courage and that brings, I mean, you could find the same lack of political courage in efforts to reduce what the Mexican government estimates is $15 billion in Mexican drug profits that are laundered in the U.S. banking system. These are powerful lobbies.

On the question of reduced drug violence in the United States, yeah, I mean the household surveys show that consumption of drugs that are imported, at least, is pretty flat over the last ten or 15 years. Cocaine seems to be the same 2.5 percent or so of the population that has used cocaine in the last year, since the early '90s. The growing markets have been in Brazil, elsewhere in Latin America and in parts of Europe -- Spain, the U.K., Russia.

The biggest sort of decline in use has been in crack, which was, you know, God knows the drug that generated so much violence in poor neighborhoods here in the United States in the late '80s, early '90s, and for reasons that are still debated usage dropped off after the early '90s and that contributed mainly to the reduction of violence. I think the reduction of violence and the flatness in the demand, even though it's still a huge health issue, as you say, is what kept drugs from even being mentioned, as far as I can tell, in any, you know, presidential debates or town hall meetings during the campaign last year. It just fell off the radar.

O'NEIL: Nancy.

QUESTIONER: This is a slightly different topic but relates to Colombia. If you look at Latin America in terms of philanthropy, Colombia always stands out as having the largest number per capita of foundations and fairly effective ones, and I've never been able to understand why Colombia, so do you have an answer to why Colombia is more philanthropic than the others?

O'NEIL: Especially related to the cultural issues that we've been talking about.

THOUMI: There are a few large ones, I mean, when you look at foundations, but I mean, I don't know if you include a lot of things, like universities, for example, or schools in that. I mean, they are foundaciones -- ranking foundations. Well, no, I don't think I can give you a good answer.

ISACSON: Yeah, I don't know why Colombia would be more distinguished from other countries. I actually didn't know that the percentage was higher. There are some -- you know, that's in Corona and Alvar Alise (ph) and Restreop Barco and others do give out a good deal of grants. If I had to guess, and feel free to contradict me, actually urban, wealthy Colombians not, you know, the large land-holding, resource-extracting dinosaurs in the countryside, but the people in the service sector in the cities tend to be center-left in their politics.

You know, the Polo Democratica wins in Bogota and -- (inaudible) -- wins in Medellin with support of sort of a more modernizing part of the elite, and that might be part of it, but, you know, you don't think that there's a greater sense of noblesse oblige in Colombia compared to Venezuela or Peru, so I can't quite explain it.

O'NEIL: Go ahead, Dick.

QUESTIONER: We've looked at this from the point of view --

O'NEIL: Just wait for the microphone if you would.

QUESTIONER: Sorry. Dick Foster. We've looked at this from the point of view of the United States and talked about U.S. reactions. Could you look at it through the eyes of Brazil or Chile or Europe and maybe Spain -- how important is this issue for those countries and how do they figure into the solution?

THOUMI: Well, in the case of Brazil, quite important. I mean, there the big issue has been the consumption and the control of the areas in some of the favelas (ph). And it's growing. I mean, consumption is growing. Also in Argentina and Chile, I mean, the sort of -- (inaudible) -- market, basically basuco or, the equivalent of crack has grown a lot and they are increasingly concerned -- more concerned about it.

Some of those countries have also been used for money laundering, and Uruguay is a good case. And Chile is there. And while there are concerns, I am not sure there have been any real movement in that respect. But, I mean, what is clear is that in the last, say, five years now this has become an issue, but it was not an issue before. I mean, the drug trafficking. There is also the link in that region -- in Brazil and Argentina to Africa and to the markets in Europe, a substantial part of coca, the cocaine produced in Bolivia, for example, goes to Brazil and Argentina goes out to Europe that way, so as a trafficking -- as a transit area, that has gained in importance.

It's possible that in a few years parts of West Africa might be growing coca, and there are several reports that suggest that Colombians have provided technical assistance there, and that somehow is the -- I could see that within a few years the European market for cocaine might be supplied directly from West Africa.

QUESTIONER: Are we leveraging those interests to solve these problems as much as we could be?

THOUMI: No, I think it's simply the result of increased globalization and, basically, the learning. I mean, people from those regions now have much better links to Europe. They have the networks. They build the networks and so on.

O'NEIL: Next. Andrew.

QUESTIONER: Thank you. Very interesting. Two questions. I mean, one is to what extent -- one of the things we hear, those who follow Mexico, is that increasingly, back in the late '80s and early 1990s the Colombian drug trafficking organizations really controlled a lot of the drug flow to the United States and there were a lot of Colombian advisors working with the Mexican in drug trafficking organizations.

That's kind of shifted and increasingly the Mexican organizations have more control over the flow, increasingly they're going to Colombia, they're smaller organizations. I mean, is that happening?

And I guess the second thing is more of a philosophical reflection, and just tell me if this is way off base, but it sounds a little bit like in Colombia to some extent they're very good institutions relatively speaking, judicial institutions -- there's a police force that functions. There are institutions to build on, but there are a lot of ungovernable areas.

Mexico is somewhat the opposite, which is that the institutions aren't necessarily there, but there aren't really ungovernable areas. I mean, the border being a partial exception. That's way too much of a generalization, but I'm wondering if there's some truth to that. In essence, you're talking about sort of extending institutions into new areas, and I'm wondering if that's a different situation in some ways than in Mexico, where it's sort of really reforming the institutions completely and across the country.

ISACSON: On the first question, I mean, I've actually heard it said from law enforcement people lately that when cocaine leaves Colombia for the north these days, it leaves Colombian hands almost immediately. I mean, maybe the first stop, go past -- (inaudible) -- it's in Mexican hands, and now those who are trying to map who the cartels are in Colombia. Who owns this route, who owns this corridor?

The other question is, who's their Mexican contact? Because it is the Mexican organizations that have most of the trans-shipment and, as we're finding in cities like Phoenix and Atlanta, a lot of the networks, including in our own territory, that Colombian organizations, you know, after years of police work taking down the cartels who have that ability, can't do that anymore and the big transshipment money is in Mexico, which may explain why the violence is worse, as well.

The other question is interesting. I mean, in Colombia, when we're talking about bringing the state into areas where there's never been a state, one example is everything -- almost half the territory, everything east and south of the Andes, is jungles and savannahs where only about 4 (percent) or 5 percent of the population lives.

There's an agricultural frontier that every day is moving slowly and where the government has not followed -- never follow the people who live there. There's areas along the Pacific Coast similarly that, you know, were founded by estate slaves or freed slaves, but the government never followed them there and there's really not an analog to that in Mexico.

I'm sure there's ungoverned areas in places like Guerrero and Oaxaca, but an open agricultural frontier where, you know, it's the wild west on its own. You don't see that as much and a lot of that is probably a factor of geography. A lot of that has been a factor of Bogotá's unwillingness to exert its authority over the territory of the country, for whatever reason. Urban elites in Colombia have never really bothered and they left it in the hands of warlords.

I don't know if Mexico has had that -- probably a hundred years ago, but Mexico didn't have a Benito Juarez or a Porfirio Diaz just trying to get everybody all over the country, so there may be something to that.

THOUMI: There is something else here. Mexico ---

ISACSON: Mexico had a land reform, too, actually.

THOUMI: Yeah, it had a land reform. I mean, Colombia is the only large country that had peasantry in Colombia that never had, really, a meaningful land reform. Now in the case of Mexico, the PRE (ph) played a controlling role on drug trafficking and for a long time, you know, drug trafficking was a virtual franchise of parts of the state, not of the state but in parts of the Mexican state.

And when Colombians got in there -- after the U.S. pressure on the Caribbean routes, Colombians began to go there, really the negotiations with the Mexicans -- they were at a disadvantage because on the one hand they were dealing with virtual franchises of the police in the state. They were not just trafficking, I mean, it was not the same organizations and also the Mexicans had better access to a lot of the networks that they had already built for contraband and for people and so on in the states.

So what one can argue today is that in many ways Mexico, Spain today the cost of having for a long time institutionalized corruption in a way that went all the way up and establishing control over the organized crime from the states and then when Pre (ph) collapsed, then all these controls broke down. So the question then is how you can build some controls afterwards.

O'NEIL: Sam.

QUESTIONER: Hi, Samuel Logan with Southern Pulse. I think when we talk about social development or societal development within the context of organized crime it makes me think about security and development. So, looking across the region we see where different efforts at development, specifically infrastructures, roads being built between Brazil and the Pacific Coast or between very specifically Bonavista in northern Brazil and Georgetown in Guyana, I start thinking about how development may facilitate insecurity, so I'd like for you all to maybe touch on that if you would. Thank you.

ISACSON: It goes back to that state presence and impunity thing that I keep going back to. I mean, Venezuela has spent a great deal on anti-poverty and development and, to some extent, infrastructure during the Chavez years and the amount of state control of territory or the degree of state controlled territory has plummeted as measured by the murder rate or as measured by the amount of drugs right now transiting Venezuela.

State presence is not coordinated and it appears that evidence of mafia infiltration or a collaboration with armed groups is simply not investigated and punished. I'm not saying that Hugo Chavez is, you know, the world's biggest narco-trafficker, as some people in the U.S. Congress are saying, but he's certainly not actively trying to stop it. And so, even if you are investing more in people and trying to -- actually, you have some sort of plan for economic development, even if it's just political largesse, yeah, if you don't do that along with the presence of the state that's there to enforce the rules in a fair way, then, yeah, you're going to create, you know, sort of a wild west boomtown situation, I guess. That's a terrible analogy, but ---

THOUMI: I didn't like the use of the word development there. I mean, you can have growth.

ISACSON: Growth.

THOUMI: Economic growth and you can have infrastructure for economic growth, but if you don't have the institutions ---

ISACSON: Government.

THOUMI: -- and governments, you don't have development. That reminded me of this case in the early '80s when after the Inter-American Development Bank and the World Bank financed a highway through the Chipari linking Cochabamba to Santa Cruz and an American delegation from Congress went to see this nice highway. They asked the peasants if they thought it was very well built and so on, and the answer was "Yes. Sure. Last night a little airplane landed here and took off without any problem." (Laughter.) Sure enough, you can have economic growth, little development.

O'NEIL: Okay, Alex. Next question.

QUESTIONER: I actually wanted to ask a broader question. Adam, you were talking about Honduras, Venezuela and how that's sort of dictating U.S. policy at this point. That's kind of reactive. Ultimately, it's not proactive and you know it's no secret that Latin America's really been an afterthought in U.S. diplomacy for some time now. Do you see any indication that that's going to change under the Obama administration?

ISACSON: Oh, man, I want to be positive here. I want to end this on a positive note. (Laugher.) A senior staffer in the Senate recently described the role of Obama's Latin America advisor in the National Security Council as that of keeping Latin America away from the president at all costs. (Laughter.)

The issue of the trade agreement came up before and, you know, it's not just Colombia that's being singled out and delayed, it's Panama and South Korea, as well, and whatever your position is on the trade agreement, there will be no movement until President Obama gives his speech on trade and what the administration's trade policy will be.

That speech was going to happen in July and there's no plan yet to have it given because of all the other things on the agenda. And Ron Kirk -- I don't know what Ron Kirk does all day. I bet he's really good at computer solitaire. (Laughs.) I'm just kidding. That was mean. But it's true. There's no policy and there's no policy for many, for Latin America in general.

Look, Arturo Valenzuela just got here. Maybe now that there is somebody who is actually an Obama administration appointee working on Latin America day to day, there will be movement on things like Cuba. They won't, you know, make the sort of mistakes they just made in Honduras. There won't be such a bungling of things like the rollout of this base agreement with Colombia and maybe there will be initiatives other than these very small initiatives that have nice titles but almost no backing or funding behind them, like Pathways to Prosperity in the Americas and things like that.

Maybe there will be a new push, but I don't know where the high level political backing will come from. I don't see Secretary Clinton going to spend a lot of time with this, with the Afghanistan debate, the, you know, Iran developing nuclear weapons. Latin America, unless all of a sudden you find U.S. troops being killed there or somebody developing nuclear weapons or terrorist groups plotting to attack the American citizens on U.S. soil, Latin America is not going to get a lot of air time.

O'NEIL: Thank you.

ISACSON: I'm sorry. I wanted to be more ---

O'NEIL: On that positive note, I want to thank these speakers. I want to thank our other speakers and I want to invite all of you to join us for lunch just outside in the other room. Thank you all for coming. (Applause.) What are you going to do? (Laughs.)







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