Area: Latin America. (Translated from Spanish) - ARI 84/2006 Date: 28/9/2006

A Parallel Power: Organised Crime in Latin America

Luis Esteban G. Manrique ∗

Theme: The World Health Organization (WHO) estimates that the number of homicides committed with firearms in Latin America –between 73,000 and 90,000 a year– has reached three times the world average. In the past two decades, violence has been the leading cause of death among Latin Americans between the ages of 15 and 44. And at the same time as public safety has been deteriorating, a potent ‘parallel power’ has been growing: organised crime.

Summary: Crime rates indicate that Latin American cities are the most unsafe in the world: in the 1990s, 74.5% of inhabitants of major Latin American cities were victims of some kind of criminal act. Despite having only 8% of the world’s population, Latin America registered 75% of the kidnappings in the world in 2003. This has made public safety one of the top concerns of Latin Americans today, second only to the economic situation. What is worse is that organised crime is making a qualitative leap towards ‘colonizing’ private initiative and subordinating it to the criminal hierarchy. In the most visible example of this phenomenon, there were five continuous days (May 10-14) of attacks against police stations and public buildings in the state of São Paulo, accompanied by prison riots and hostage taking which, according to the Folha de São Paulo newspaper, caused 272 deaths, including 91 police officers. The assaults were carried out by one of the largest criminal groups in the continent: the Primeiro Comando da Capital (PCC), also known as the ‘Crime Party’, which may have a ‘grassroots base’ of half a million people. is now the world’s second-largest consumer of cocaine and, according to WHO figures, has also become the country with the third-highest number of violent deaths, after Colombia and Russia, with an annual rate of 40 per 100,000 inhabitants, rising to 53 in the big cities.

Analysis: Drug trafficking has contributed substantially to the increase in criminality, generating corruption, violence and political instability. In 10 of the 13 countries that offer reliable comparative figures, crime rates increased between 400% and 600% in the 1990s. As government authority has diminished, broad urban and rural areas have become off bounds to police –areas where drug lords impose their political control, collecting taxes, setting curfews, carrying out recruitment and making seizures–.

In the Caribbean and Central America, small island nations have become transfer points for drugs and havens for organisations that operate networks controlling prostitution, the smuggling of illegal immigrants, counterfeiting, in-transit robbery of merchandise and other criminal activities, all with minimal state interference. Drug trafficking has flooded the entire region with vast quantities of money that enter the financial system and provide the means to corrupt government employees, the police and the armed forces. In turn, criminal impunity intimidates civil society, and the social and economic costs of insecurity

∗ Independent analyst of international economic and political affairs.

1 Area: Latin America. (Translated from Spanish) - ARI 84/2006 Date: 28/9/2006 affect foreign investment, as infrastructure is destroyed and additional security services are needed. According to the World Bank (WB), criminal violence costs Latin America more than US$30 billion a year. In Brazil, crime-related losses come to US$7 billion a year, or 1% of GDP. This figure may be as high as 13% in Colombia, if military and policing costs are included.

Dirk Kruijt, co-editor (with Kees Kooning) of Armed Actors: Organized Violence and State Failure in Latin America, believes that violence has taken on a variety and dimensions not seen in the past, with criminal activity mixed in with the activities of the national security forces, ethnic conflicts and ‘social cleansing’ aimed at eliminating people on the margins of society. In some cases, mafias operated by the police and intelligence services have gained control of the state machinery, for example in Peru under Fujimori and Montesinos, when 70% of the National Intelligence Service budget was allocated to reserved funds that financed drug and arms trafficking operations and extortion rings.

A 1997 WB study on criminality in Latin America showed that criminals base their decisions on a kind of cost-benefit analysis, calculating the potential benefits of a crime in terms of the costs and risks of committing it and the likelihood and severity of the punishment. If the kidnapping ‘industry’ in countries such as Colombia and Mexico is a reliable indicator of this theory, then criminal organisations have concluded that crime is extremely lucrative and goes largely unpunished. In the 2004 kidnapping and murder of Axel Blumberg, Argentine investigators found evidence of police collusion as high as the chief of the anti-kidnapping division himself, leading to massive street protests in Buenos Aires against police corruption. In Mexico, the ‘anti-drug tsar’, General Jesús Gutiérrez Rebollo, was arrested in 1997, when it was proved that he had links with the . Gutiérrez had been making use of military bases and sending his troops out to kidnap and murder members of rival gangs. One of Mexico’s most dangers gangs, the ‘Zetas’, which operate on the US border, include former army commandos trained in anti- drug trafficking techniques.

Between 1960 and 1980, state terrorism, guerrilla warfare and conventional counter- insurgent action were the main sources of organised violence. With the transitions to democracy, many expected the newly elected governments to restore the rule of law. However, more than two decades later, violence by a variety of ‘armed players’ (irregular militias, narco mafias, urban gangs and paramilitary forces) continues to affect social and political life in a large part of the region. In , around 6,000 children and teenagers work as ‘foot soldiers’ in the wars between rival gangs –a number comparable to the tribal conflicts in sub-Saharan Africa (Liberia and Sierra Leona)–. The reason for this is simple: by law, minors cannot be prosecuted. According to Amnesty International (AI), in Brazil twice as many young people are murdered as die in traffic accidents: among those aged under 25 there are 52.2 per 100,000 inhabitants, compared with 13.2 in the US and 2.1 in Italy. Furthermore, 93% of the victims are male.

All this very often goes unreported. The region has become a kind of minefield for investigative journalism, in part because of fear of retaliation by organised crime and drug traffickers. Frequent threats, attacks and murders have led once again to self-censorship in countries that fought for decades against the silence imposed by dictatorial governments. Colombia holds a tragic record: 28 journalists have been murdered in the past decade. Ramón Cantú, editor in chief of El Mañana, of Nuevo Laredo (Mexico), says that his city has become a battlefield for the drug cartels: 2005 saw 182 violent deaths and so far this year there have been 128. In March, grenades and shots were fired at El Mañana after the newspaper published a photo of alleged members of a local drug trafficking cartel.

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The Kidnapping ‘Industry’ Kroll Associates, a New York security company, estimates that half the kidnappings in the world occur in Latin America. Colombia is the undisputed leader in the sector. Kroll calculates that in 2003 there were 4,000 kidnappings there (2,043 according to the Colombian government), while Mexico was in second place with 3,000, followed by Argentina with 2,000. Even Brazil, with a population nearly twice that of Mexico, had only one third the number of kidnappings. But while the trend in Colombia is downward, it is rising in Mexico: the main victims are among the prosperous communities of Spanish, Lebanese and Jewish origin, although the phenomenon is spreading to the upper middle class, who are being asked to pay ransoms averaging around US$100,000. The Mexican government claims that kidnappings declined from 568 in 2001 to 531 in 2003. For its part, the Consejo Ciudadano para la Seguridad Pública (Citizen Council for Public Safety), a private organisation, says that nearly 4,000 people were kidnapped between 1997 and 2003 –an average of 571 a year–. But these are only the reported cases. Many families do not report kidnappings since they fear corrupt security forces, some of whose members are involved in the kidnappings. The worst aspect of this is their impunity: according to official estimates, only 75% of crimes are reported to the police in Mexico. In Brazil, only 8% of the 50,000 murders committed each year go through a full judicial process.

According to the Latinobarómetro, only one in three citizens in the 18 countries in the region express confidence in the police (Chile is the exception, with 60% confidence). In 2003, around 23,000 police (almost half the total number) in the province of Buenos Aires, where the crime rate has doubled since 1991, were being investigated and 4,000 were tried for corruption or abuse of authority. In a survey in Mexico, 75% of respondents said they had no confidence in the judicial authorities. Another reason for concern is that violence against victims of kidnapping has reached unprecedented levels, with torture and mutilations becoming increasingly common. Security analysts believe that this is due to a kind of ‘class war’ in which kidnappers of the lowest social classes take out social vengeance on their victims.

No country in the region has been free of the plague of violence, regardless of the political stripe of its governments. Even in Chile, the country least affected by the phenomenon along with Uruguay and Costa Rica, President Michelle Bachelet has announced that her government will step up measures to bring the crime rate down. Criticism from the opposition has intensified since the President of the Christian Democrat party, senator and former presidential candidate Soledad Alvear, was surprised by criminals breaking into her house while she was reading in one of the rooms. Only a few days later, another house break-in was reported by the President of the Supreme Court.

Despite the social policies financed by oil revenues, Venezuela has registered an average of nearly 10,000 homicides a year since Hugo Chávez came to power in 1999. The current rate of 37 deaths per 100,000 inhabitants is more than double what it was in the 1990s. The 2003 figure was 11,900. Caracas has always been a dangerous city, but the situation has worsened in the past five years. The lack of transparency at government agencies makes for varied estimates, but most analysts calculate that since 2001 kidnappings have quadrupled to nearly 300 a year, while homicides have nearly doubled. In 2005 there were numerous cases of police officers and national guardsmen involved in kidnappings, drug trafficking and murders. In the state of Guarico, for instance, the Governor has been accused of links to police-operated death squads. In August of last year, the Justice Ministry announced it was investigating 5,997 police officers for ‘questionable’ deaths in the exercise of their duties between January 2000 and July 2005. Only 88 were found guilty.

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In September 2005, Chávez signed a law on defence that makes the ‘preservation of the Bolivarian Republic’ a military mission and creates a military reserve force and a ‘territorial guard’ that will answer directly to the President. These forces will train and arm around 2.8 million Venezuelans for ‘resistance’ operations against any internal and/or external aggressor. To do so, 100,000 AK-47 assault rifles have been bought from Russia. The population of Cuba is armed and in Costa Rica it is quite normal to have firearms at home; but both countries have strong social control systems: in Cuba, the state itself sees to this, while Costa Rica is a deeply-rooted democracy, similar to Switzerland and Israel, where army reservists keep their regulation firearms at home. To distribute weapons to a population that has never had them is, to say the least, imprudent. Chávez will not be able to guarantee that these weapons will not end up in the wrong hands: Venezuela has thousands of kilometres of almost unsupervised borders, across which arms will end up crossing.

The Central American ‘Maras’ The situation in Central America is made particularly serious by the proliferation of maras, youth gangs that take their name from the marabunta, a voracious plague of ants that destroys everything in its path. This metaphor is no exaggeration: in December 2004, gunmen opened fire on a bus in Chamalecón, Honduras, killing its 28 passengers for no apparent reason. The attackers were members of the Mara Salvatrucha –or MS-13– which used the massacre to send a message to the government about what could happen if it continued its offensive against the gang’s members. A few months later, US police arrested the alleged planners of the attack in Texas.

Former Presidents Ricardo Maduro of Honduras, Tony Saca of El Salvador and Óscar Berger of Guatemala were elected largely because they based their campaigns on implementing a ‘zero tolerance’ policy against the gangs, which in Central America could have a total membership of between 70,000 and 100,000 mareros. In 2004, the homicide rate was 46 per 100,000 in Honduras, 41 in El Salvador and 35 in Guatemala, compared with 5.7 in the US and 12 in Mexico. According to the United Development Program (UNDP), the cost of violence in El Salvador in 2003 was US$1.7 billion –the equivalent of 11.5% of GDP–. The Inter-American Development Bank (IDB) is even more pessimistic: according to its calculations, per capita GDP in the region would be 25% higher if the crime rate were similar to the world average. In El Salvador and Guatemala the problem has worsened since the end of its internal wars, among other reasons because of the black market in arms, which is the legacy of the armed conflicts and the US policy of deporting foreigners arrested on its soil. Many deported persons are from poor neighbourhoods of Los Angeles and other US cities, where there are extensive networks that supply them with weapons and stolen vehicles in exchange for drugs. Police sources estimate that the MS-13 has around 5,000 members in the Washington, DC area alone.

US police authorities often simply place the deportees on the frontier without providing the receiving countries with their criminal records. Some analysts estimate that nearly 20,000 criminals were deported to Central America in this way between 2000 and 2004. Thugs from the maras are largely teenagers from broken families where domestic violence, poverty and social exclusion are endemic. The gangs provide them with protection and a sense of great power and group identity. In 2002, of the 82 Salvadorean mareros who died in clashes between the MS-13 and Barrio-18 gangs, 24 were under the age of 20. But analysts disagree on whether the maras have vertical command and control structures, or if they are small, virtually independent groups that operate as ‘franchises’ of gangs such as the MS-13. At first, Central American governments believed that as the post-civil war peace processes advanced, the problem would disappear. This has not been the case: the demobilisation of the guerrilla armies coincided with the rise of the maras, due to the lack of job opportunities for former fighters and the power vacuum in poor urban neighbourhoods after the wars. In El Salvador today, 36.3% of people believe

4 Area: Latin America. (Translated from Spanish) - ARI 84/2006 Date: 28/9/2006 it is ‘very likely’ their homes will be assaulted, while 40% of families say they have been victims of some form of crime-related physical violence.

The response of the countries involved has been fragmented and repressive, with programmes such the ‘Plan Escoba’ in Guatemala, ‘Mano Dura’ in El Salvador and ‘Libertad Azul’ in Honduras. But by focusing on military and police action, the governments have neglected preventative measures and social integration. In El Salvador, prisons have become recruitment centres for the maras, while two or three mareros die every day in prison. In November 2004 alone, around 100 salvatruchas died in a fire in a Honduran prison. The pressure they are feeling from the security forces has led many to enter Nicaragua, Belize, Costa Rica and Panama, countries that have been relatively successful in preventing youth violence.

The Brazilian Situation For several years analysts have been warning that Brazil’s oversaturated prison system is a ticking time bomb: while the prison population has doubled since 1994, the number of prisons has barely increased. In an extensive operation in Rio de Janeiro in 2004 in the Morro do Dende , the police discovered a network of tunnels and an underground headquarters for gunmen of the Rio-based gang known as the Comando Vermelho (CV). Its leader, Fernandinho Beira Mar, was captured in Colombia in 2003, while negotiating a drugs for weapons deal with the FARC guerrillas. But the greatest dangers are found in the state of São Paulo, which accounts for 30% of Brazil’s GDP: Brazil’s capital, the world’s biggest city, with nearly 20 million people, has more heliports than New York because the executives of big companies are afraid to travel in the city in their cars. São Paulo has the world’s greatest per capita demand for armoured vehicles for civilian use.

The state’s explosive and disordered growth –São Paulo generates 25% of the state’s tax revenue, but receives only 10 cents for every dollar it pays, thus reducing public spending on schools, roads, hospitals and police– explains why it is the organised crime capital of the country. The Primeiro Comando da Capital (PCC) had its baptism of fire in February 2001, when it organised the biggest prison riot in Brazilian history, in which 21 inmates died, although it was founded in 1993 as a reaction to the suppression of an inmate rebellion in the Carandirú prison. In a statement to a parliamentary commission, the Chief Investigator of organised crime in São Paulo Godofredo Bittencourt and Police Chief Ruy Ferraz Fontes said that the PCC has created a major mafia structure with an ‘army’ of 140,000 men. The organisation has expanded its operations, making it a huge crime ‘industry’. The PCC places its members in competitive exams for civil service positions and hopes to run in upcoming elections. The group even finances thieves, who pay back the money with interest after committing their robberies.

Ferraz described the organisation’s chief, Marcos Herba Camacho, Marcola, as an admirer of Trotsky and of Sun Tzu, the Chinese theoretician on the ‘art of warfare’. A large part of the information on the PCC was obtained after the arrest of its top treasurer with an accounting book that recorded more than US$300,000 a week in collections. The PCC is believed to be responsible for 70% of the kidnappings and extortions in São Paulo, and for a large part of the drugs traffic. Receiving their orders from the prisons, its members owe life-long obedience: those who do not obey the organisation’s orders die. The PCC’s audacity has grown over time, to the point of sending its jailed leaders boxes of weapons by regular mail. Police authorities say that its current expansion throughout the country is due to having mistakenly spread its leaders among prisons in various states. Police Chief Ferraz has reported, for instance, a summary ‘trial’ held by twelve top PCC leaders in different prisons, all connected by cell phones, at which they judged and ordered the execution of one of their members.

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‘A cell phone inside a prison is more dangerous than ten guns in the street’, Bittencourt said. ‘We are ready for many more attacks’, threatened a man who identified himself as Marcola in a radio interview from his cell phone. It is estimated that the PCC command structure has 768 members in prison, but it is not known how many are outside. On 18 February this year, the gang coordinated 29 simultaneous revolts in São Paulo prisons, with a total of 30 deaths, most of them members of the Comando Vermelho. Marcola is in prison for bank robbery and has been incarcerated in ten different prisons, but has never lost his position as capo di tutti capi. The authorities in São Paulo do not like to admit it, but the PCC has been a kind of ‘parallel power’ for a long time now. What sparked the latest revolt was the transfer, on 11 May, of 765 inmates who were PCC members, among them Marcola, to two maximum security prisons as part of an operation to break the gang’s control over several prisons. The State Governor Claudio Lembo said the operation involved ‘a calculated risk’. What he did not expect was the magnitude of the attacks, which were much bigger and widespread than in the 2001 revolt. Neither did police intelligence services detect that the PCC had managed to have a large number of its most violent members included among the 10,000 prisoners out on day leave.

The May attacks proved that the gang has reliable information on police activity in the city. On 12 May, riots began in 83 prisons, while prisons were assaulted from the outside. Schools and universities cancelled classes, businesses closed their doors and the São Paulo stock exchange suspended part of its operations. Bus services were suspended after 80 buses were burned. Thirteen bank offices were also attacked. The police were shot at even in the wealthy Higienópolis neighbourhood. But the violence was not limited to the capital, and affected dozens of other cities in the state. President Lula reacted by declaring that this was a show of force that demanded a military response. He proposed sending the National Guard into São Paulo, but Governor Lembo replied that the army was not necessary.

The federal authorities have criticised the state government harshly for its lack of foresight, while the former State Governor and now presidential candidate for the PSDB, Geraldo Alckim, has blamed the central government for the troubles for having cut back on public safety spending. This is to be expected: federal intervention would have damaged the image of the security forces in São Paulo, and in turn, Alckim’s campaign. But these reciprocal accusations have intensified the feeling among citizens of São Paulo that the lack of coordination on the part of the public authorities has exacerbated one of Brazil’s structural problems: the combination of large numbers of firearms in the streets, one of the greatest levels of social inequality in the world and police corruption.

In Search of Solutions Some of the richest have responded by walling themselves into ‘white ghettos’, a form of class segregation enforced by private police forces. In Rio de Janeiro, Bogotá and Mexico City, there are entire residential areas cordoned off by private security guards, allowing residents there to walk their streets safely. For those who can afford this, it is nearly paradise. By contrast, there are large areas where government, justice, security, direct taxation and public services are practically non-existent. A few figures illustrate this: while in 2002 in the São Paulo favela of Jardim Ángela there were 123 homicides per 100,000 inhabitants, in Moema, a middle-class neighbourhood only a few kilometres away, there were only three. In the , where traffickers dole out rough justice, evangelical preachers and Catholic charismatics are often the only people trying to show moral authority. In the last campaign against firearms, people were more likely to take their weapons to an NGO such as Viva Rio, than to the police. The impunity of corrupt agents and the weakness of the justice system encourage the growth of private security services and a trend toward vigilante action that includes lynchings, retaliation and other forms of private ‘justice’.

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Solutions to the problem are elusive: In 2003, Brazil adopted the so-called Disarmament Statute (Estatuto do Desarmamento) which limits the sale of firearms to civilians, but according to AI in Brazil, there are 15 million handguns in private hands, nine million of them held illegally, of which four million are likely in the hands of criminals. By June 2005, the disarmament campaign had managed to collect only 356,526 firearms, which were later destroyed. Brazil is the biggest manufacturer and exporter of handguns in Latin America. Police have found assault rifles, machine guns and mortars in the hands of gangs, most likely bought or stolen from the military. Since the 1970s, Mexico has not granted practically any weapons licences, but there is a huge illegal market for weapons smuggled in from the US, 38 of whose 50 states have very permissive gun laws. The Los Angeles Times reports that 95% of the illegal arms seized in Mexico each year were bought in the US. In 1997, President Bill Clinton signed the first inter-American agreement to shut down the black market, but Congress still has not ratified it and there is no indication that it will do so any time soon.

Presidents Fox and Kirchner have promoted reforms to harsh criminal legislation, tighten the control over police forces and create federal agencies similar to the FBI to satisfy the growing demand by business and civic organisations to do something about crime. In Argentina, the protest movement has asked for a declaration of a ‘state of judicial emergency’ to accelerate the processing of serious crimes, the appointment of prosecutors and local police chiefs by popular vote, and public examinations subject to ‘citizen control’ for appointments to the judiciary. The criminal codes in both countries require life sentences for the most serious crimes, but this has had no appreciable effect on the crime rate. One of the main problems is that police forces have been trained almost exclusively to maintain public order by means of repression. Periodic raids on favelas by Brazilian police make this clear: their strategic and tactical procedures are purely military, from planning the ‘invasion’ to the ‘collateral damage’ caused by clashes between gangs and security forces. According to official figures, between 1999 and 2004 the Brazilian police killed 9,899 people in situations described as ‘resisting the authorities, followed by death’. As a result, 558 police officers in Rio de Janeiro were disciplined, but only 14 of them were dismissed from the service.

In Argentina, the government has sometimes sent in the navy to patrol the most dangerous suburbs of Buenos Aires. Almost all the countries in the region have several police forces (federal, state and municipal) that not only cooperate, but also treat each other as rivals. The problem cannot be solved simply by increasing public spending on security: the Instituto para la Seguridad y la Democracia de México has pointed out that since 2000 the federal public security budget has increased by about US$3 billion, but delinquency has not decreased in the same period. According to the Brazilian NGO Justiça Global, police operations in Rio de Janeiro caused 1,195 deaths in 2003 –four times more than in 1999–, but did not bring about any reduction in the murder rate. In several Central American countries, where gangs are responsible for 60% of crimes, the police have draconian powers to arrest and imprison, but this has not reduced the crime rate. In cities such as Lima, responses are coming spontaneously from citizen organisations and the formation of surveillance and security committees that cooperate with the local police. In Colombia, the two-time mayor of Bogotá, Antanas Mockus, obtained a noteworthy reduction in crime through educational campaigns and stricter regulations on the sale of firearms and alcohol. But without comprehensive judicial reform and greater state authority, more effective police forces will not be enough: there are areas of Peru, Bolivia, Mexico and Colombia where drug traffickers go so far as to pay complementary wages to schoolteachers and civil servants. According to Santiago Peláez, of the Universidad de Antioquia, in Colombia, ‘not only poverty generates violence; but also the collapse of the state, when the state loses the power to say that something is good or bad and to impose a set of sanctions’.

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Conclusions: In its 1998 report, Violence in the Americas, the Pan American Health Organization highlighted factors that increase criminality, including: the impunity of those responsible for human rights violations; the great number of people accustomed to violence after many years of internal conflicts; the easy availability of weapons; oversaturated legal systems that are manipulated politically; and overcrowded prisons. Other analysts link the rise in criminality –in particular kidnappings– in Argentina with the economic crisis of 2001-02. A study by the Universidad Autónoma de México shows that between 1930 and 2000 increases in crime rates coincided with devaluations of the peso and other economic crises. Between 1981 and 1983, when the economy went into free fall, crime rose by 20%; then, after the tequilazo in 1995, it rose by 50%.

In this context, drug trafficking is much like a modern economy, with many complex interrelationships, demanding a high degree of rationality, foresight, coordination and control. Drug traffickers oversee a complex process: the purchase and transport of raw materials, the industrial-chemical processing of cocaine, its export to the US and European markets and the laundering of the resulting money in the legal economy. At the same time, these organisations coordinate payments, collections, embarkations and the export and transport of goods across thousands of kilometres of extremely difficult terrain under volatile political conditions. ‘Narco power’ also works its way into institutions to ensure itself protection and impunity. Colombian society’s initial indifference to drug trafficking was fuelled by the massive injections of dollars into the economy. Despite international cooperation, judicial reforms, new legislation and purges of police forces, the production and traffic of cocaine has only increased. This is reflected in the stability of the price of the drug and its growing supply in developed countries, Spain among them, which calls into question the very logic of the system that prohibits the drug.

In all likelihood, the only way out of this maze is by adopting the most radical solution: legalizing the production and marketing of cocaine. For Latin American countries, it is the illegal nature of the market that is at the root of the problems of drug trafficking; and the fact that some substances are illegal while others are not reveals that, in this case, morality appears to be merely the prejudice of the majority. The moral quality of laws cannot be judged only by their intentions, but above all by their practical effects. When the laws that set out to preserve moral values cause bigger problems than they are attempting to solve, their underpinnings must be reconsidered. As long as this problem is not tackled without prejudice, a solution for criminal violence in Latin America will remain far off.

Luis Esteban G. Manrique Independent analyst of international economic and political affairs

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