By Leo Le Borgne
It is common knowledge by now that COVID-19 will pose economic challenges that will outlast the pandemic itself, but in the midst of an impending global recession, Latin America faces added stress as organised crime throughout the region capitalise on the situation. Local gangs, political guerrillas, and cartels are taking advantage of governments’ incapacitation, and the growing desperateness of the working class.
In the wake of the pandemic, Mexican cartels have been forced to adapt towards more violent strategies in order to survive. China, a major hotspot for the production of chemical precursors used for synthetic opioids and amphetamines, shut down large swaths of its economic sectors, disrupting international drug production operations. Furthermore, the Mexican-US border has been under heavy scrutiny, not only slowing down the spread of the virus but also interfering with the smuggling of drugs across the border. Experts warn that there will be a rise in extortion as a means to make up for lost profit from drug sales, and increased violence among cartels is also to be expected as they diversify their criminal activities to endure an upcoming recession.
In El Salvador, a major stopping point in the drug trade from South America, the country is simultaneously dealing with the pandemic and daily shootings and violence between gangs. As a result, the government is resorting to extreme measures, such as locking gang members shoulder to shoulder 24 hours a day, 7 days a week, as law enforcement is being deployed throughout the country. Although the homicide rate is falling at a historical low, mass shootings are still frequent and deadly.
COVID-19 has tested the Colombian government’s grip on its rural and isolated communities; militant organisations have been enforcing their own lockdowns in regions where the government has less influence. Many groups have been sending pamphlets, threatening murder to people who violate their lockdown rules. In addition to setting up checkpoints, guerrillas have increased their engagement in recruiting vulnerable minors.
The absence of a government presence in vulnerable communities is also giving organised crime the opportunity to further their support from local communities. From providing food parcels to loaning out money to help them get through economic downturn, gangs are overtaking government responsibility for providing to these people.
The aforementioned state of security, in addition to the Venezuelan refugee crisis, an upcoming recession, and climate change, have proven to be the greatest challenges that Latin America has faced so far. Reuters journalist William Rhodes coined the mega-crisis as another potential lost decade for Latin America, specifically a lost decade of economic growth, political stability and security. Although the prospects of the upcoming decade will be hindered by COVID-19, governments can still seize the opportunity to stop and reverse the dangers of sickness and violence. The most crucial government policy action to pursue is to improve infrastructure. Even though satisfying infrastructural needs is not a one-size-fits-all solution, the benefits from investing in infrastructure address many of the current issues.
Communities most harshly impacted by crime and Covid-19 are rural ones, where access to essential services is limited and governmental presence is almost absent. One reason why cocaine cultivation is still prominent in Colombia is because cocaine is more profitable than crop raising, where roads are poorly built. A Vox interview with coca farmers in rural Colombia revealed many of the struggles with transporting crops on inferior roads; most roads cannot accommodate for the transportation of large quantities of crops. On the other hand, cocaine substrates can easily be carried by foot to the nearest market. A greater investment in rural infrastructure also warrants a greater government presence, making it harder for organised crime to intervene while building local support.
One public policy paper recommends that Peru invests in telecommunications in the Amazon to ensure greater connection between urban areas and isolated indigenous communities. This investment not only facilitates online learning for vulnerable communities, but it also provides local, temporary jobs, sustaining indigenous economies.
We can look to the US’s herculean infrastructure investments when battling the Great Depression as an example. As unemployment will undoubtedly skyrocket, governments should take inspiration from Roosevelt’s New Deal to address the infrastructural deficiencies of their countries. Through the funding of infrastructure, better codes of practice for labour conditions can be imposed by the government, securing improved working standards for the long-term. Additionally, issuing government contracts with workers from heavily-hit sectors will prevent people from desperately seeking aid from criminal organisations.
While the World Bank report praises the region for its electricity and water infrastructure, it can diversify its operations to include greater clean energy infrastructure. These specific infrastructure investments will also address the issue that will outlive the COVID era: climate change. As CO2 emissions reduced dramatically due to lower urban activity during the pandemic, governments can take the initiative to make sure those emissions don’t spike up back to where they were originally. In the Colombian capital of Bogotá, the local government started a large bike path initiative to ensure that emergency workers could travel to where they needed. These types of infrastructures will provide incentives for cycling while reducing the amounts of cars commuting in a city notoriously known for heavy traffic.
From a broader perspective, investment in green energy under the equivalent of the American Green New Deal would further the region’s mission to achieve its 2030 sustainable development goals, delivering universal electricity and water regardless of location. Investing in renewable energy infrastructure will lower costs of electricity while supporting an economic sector that already employs 2 million people throughout the region.
These projects have gargantuan costs, but with the support of the World Bank, in addition to governments increasing their infrastructure budgets, Latin America has the potential to power through these troubling times. These investments in infrastructure provide not only serve as short-term relief, but will also benefit Latin American countries for the decades to come.
Although there is a plethora of solutions to Latin America’s problems, infrastructure can address a great portion of the issues arising from the pandemic and organised crime, but as well as climate change. Latin America has a chance for this decade to not become another lost decade, but rather a decade of triumph against all odds.
The views expressed in this article are the author’s own, and may not reflect the opinions of the St Andrews Economist.