US boosts funds to fight Central American drug crime

As Central America’s leaders sought more help from abroad this week in their fight against violent drug cartels, it was increasingly clear that solving the region’s security problems would require more than just money.

Presidents attending a two-day regional summit in Guatemala City warned that the current surge of violence, fueled by drug traffickers, threatens the entire hemisphere, and pledges for financial assistance from the US and development banks approached $2 billion dollars.

But doubts remain about whether leaders are prepared to implement the reforms needed to take on organized crime groups that often have more resources than the weak states they terrorize.

US Secretary of State Hillary Clinton called on Central American countries to assume their “shared responsibility” in fighting drug traffickers. She announced that the administration would increase assistance to the region by $40 million to $300 million this year, still a much smaller amount than the billion dollar sums guaranteed to Mexico and Colombia in the past decade.

“The folks at the State Department that are running the Central American Regional Security Initiative – they are very skeptical about the ability of Central American countries to absorb, and spend effectively and wisely” any increase in international aid, said Kevin Casas-Zamora, a senior fellow at the Latin America Initiative at the Brookings Institution.

The Guatemalan capital provided a somber backdrop to the event, where heavily armed police patrolled the streets around the Westin Camino Real. Just days before the conference, candidates for mayor of a town outside Guatemala City considered suspending their campaigns after two opponents were assassinated. Elsewhere in the capital, neighborhood groups started barricading streets with bars and concrete to keep out criminals, Prensa Libre reported. The country’s homicide rate nearly doubled between 2000 and 2009, according to the Interior Ministry.

International donors committed $1.7 billion for security programs in Central America over the past three years, according to a study released this week by the Washington Office on Latin America (WOLA) and the Inter-American Development Bank. The report found a lack of coordination and communication between donors and recipient governments, which led to duplication of efforts and sometimes to conflicting goals.

“It’s not just an issue of quantity, but of quality and sustainability,” said Adriana Beltran, senior associate for citizen security at WOLA, in an e-mailed response to questions. “Many countries have tended to focus on short-term, heavy handed responses that have proven to be ineffective and counterproductive.”

Ms. Clinton said yesterday that efforts are beginning to resolve those problems through more high-level coordination, and this week’s conference was the first ever meeting organized by the Central American Integration System, a regional body founded in 1991, that focused specifically on security.

But if Central American presidents aren’t able to provide the leadership to find political consensus at home for much-needed reforms, it may not matter how much aid is offered. The struggle to raise taxes is a clear example of the constraints faced by cash-strapped governments like Guatemala, El Salvador, and Nicaragua.

El Salvadoran President Mauricio Funes is fighting to implement a wealth tax to finance security spending, a concept modeled off a tax implemented by Colombia’s popular former President Álvaro Uribe.

In Costa Rica, President Laura Chinchilla is confronting resistance to a proposed casino tax, and in Guatemala, the government has struggled to boost revenue beyond 11.8 percent of gross domestic product, far below the Latin American average of 25 percent. Honduran lawmakers gave reason for optimism yesterday when they approved a temporary security tax on withdrawals from large accounts.

Even Clinton acknowledged in her speech that “businesses and the rich” would have to pay their fair share to resolve the region’s security crisis. Convincing elites to contribute in one of the most unequal parts of the world may be the biggest challenge for leaders.

The wealthy “don’t get any services from the state,” said Mr. Casas-Zamora, who was Costa Rica’s planning and economic policy minister from 2006 to 2007. “They don’t get healthcare from the state, they don’t get education from the state, they don’t get security from the state, and therefore are not willing to pay taxes.”

Part of their reluctance to pay may also stem from the widespread perception that higher taxes would only finance more corruption and waste.

“Guatemala is one of the least transparent countries in Central America,” said Pedro Trujillo, director of the Institute for Political Studies and International Affairs at the Universidad Francisco Marroquin in Guatemala City. “We don’t know very well how much the government spends. I don’t think your starting point can be that more money is needed until you’ve seen that spending has been efficient, and that funds are short.”

Even as leaders emphasized their willingness to work together, tensions were clear.

Guatemalan President Álvaro Colom said he understood the need to raise taxes, and countered that the region would benefit from strengthened US efforts to cut drug consumption and weapons trafficking.

Largely absent from the discussion was whether the US should begin to consider legalization as an alternative. After decades of fighting a bloody war on drugs, leaders including former Mexican President Vicente Fox are pressing to include it on the agenda, though it’s unlikely to gain much traction in the US, said Sylvia Longmire, author of the forthcoming book "Cartel: The Coming Invasion of Mexico's Drug Wars."

“For so long, the US has looked at itself as Latin America’s savior,” she said. “Sometimes we can help, and sometimes we can’t.”