New voice in drug-war debate: businessmen who are feeling the pinch

The drug trade has had a negative impact on the business climate in Central America, and the private sector is starting to speak out in favor of new approaches to the war on drugs.

Legalizing drugs in an effort to combat organized crime, narcotrafficking and gang violence in Latin America has gained traction in recent months. Presidents from Guatemala and Colombia have raised the possibility of legalization in their countries and the region, with politicians from Costa Rica, Mexico and El Salvador joining the debate.

Though decriminalization doesn’t guarantee an end to violent organized crime in the Americas, it could free up government resources and potentially divert profits away from traffickers, supporters say. And it’s not only Latin American governments that are seriously contemplating the idea: regional business leaders are starting to speak out in favor of the controversial policy change as well. 

The issues of drug trafficking and citizen security are no longer just state problems, says César Zamora, Nicaraguan businessman and vice president of the Association of American Chambers of Commerce in Latin America (AACCLA). They’re also problems for Latin American businesses and economies.

“The drug war is weakening state institutions, infiltrating judicial systems and undermining rule of law,” all of which is bad for business, Zamora says.

The AACCLA and other business leaders’ entrée into the drug debate represents a dramatic shift in priorities for commercial lobbying organizations that have spent the better part of two decades focusing almost exclusively on promoting free-trade agreements between Latin America and the United States. It reflects the evolving challenges to doing business in a globalized economy, and in a region plagued by violence.

The renewed debate over the legalization of drugs in the Americas is largely a result of Guatemalan president Otto Perez Molina.  He met with Salvadorian president Mauricio Funes on Monday, and proposed decriminalizing the drug war in Central America as a way to undercut the viciously violent cartels and gangs that are moving narcotics through the region and leaving high body counts in their wake.

Mr. Funes initially backed Perez’s initiative in Guatemala City, but by the time he returned home that evening he was backpedaling.

“I am not in agreement with decriminalization of production, trafficking or consumption of drugs,” he said in an attempt to “avoid erroneous interpretations.”

Funes’s response is not entirely surprising. The region is still largely dependent on the US, an opponent of legalization, for training and investment in the region’s war on drugs, efforts to strengthen government institutions, and fight impunity.

Mr. Perez is one of few sitting presidents in Latin America to explicitly call for the decriminalization of drugs. In 2009, three former Latin American presidents from Brazil, Colombia and Mexico wrote a joint op-ed in the Wall Street Journal calling the drug war a failure. A year later, former Mexican president and long-time drug war supporter Vicente Fox came out against the approach to curbing trafficking and violence as well.

Perez criticized the US government’s handling of drug consumption in the United States on Monday, saying, “As long as they don’t reduce consumption in the United States, the problem (of drug trafficking) will continue.”

But the US government has long blocked legalization as an approach to curbing both drug use in the US and the violence that accompanies it in the Americas. “The notion that we can declare a truce at this point and hope that everyone will go home and play nice is not consistent with what is happening in other parts of the world,” says Kevin Whitaker, Deputy Assistant Secretary for Western Hemisphere Affairs, in Nicaragua this week.

“Obviously there are a number of leaders in the region who have expressed frustration about the devastating effects of the drug trade on their societies, and we understand that and we appreciate that…But we all have a problem together, and we all have to treat it together,” Mr. Whitaker says.

Mr. Zamora isn’t surprised by the US stance. “For a politician in the United States or Central America, it is very difficult to talk about [the legalization of drugs] because it doesn’t win votes—and politicians live on votes,” he said.

But it’s the private sector’s understanding of the hemispheric supply chain and demand, he says, that posits business leaders to lend their voice to the debate, says Zamora.

“[I]t is hard to talk about certain issues related to drug-trafficking [for politicians]. But for the business class, we have visions that are more pragmatic,” Zamora says. This might include focusing on freeing up resources through the decriminalization of drugs, and diverting profits away from traffickers.  That could allow the taxation of businesses involved in the drug trade, followed by the investment of that money into military and police in order to crack down on criminals.

Carolina Castellanos, director of Guatemalan- American Chamber of Commerce (AMCHAM Guatemala) says leaders of the private sector in Guatemala have been communicating by email this week to discuss the merits of President Pérez’s proposal as well.  

“Latin America can’t continue to keep supplying the dead to reduce the consumption of drugs in the United States,” Zamora says.  “There is no way to stop the trafficking; it’s a problem of supply and demand.”

– A version of the article was published on the author’s website, The Nicaragua Dispatch.