Are we weak states?

A sad “political” truth is that we, the people of the Caribbean, are our own worst enemy. Caribbean nationals are some of the best read citizens you can find anywhere in the world. Not short on opinions on almost any global topic, neither are they shy with offering unsolicited advice. Yet, with all that knowledge and all the hubris, very little is done to change our circumstances. All across the Caribbean we cling to legacy, thinking about the way things should be done, while constantly railing against the same systems that we cling to. We rail against change with equal vigour as we rail against the “process”.

In a 2014 paper written by American journalist Tom Farer, who was investigating the Russian mafia, the author posited that Latin America and the Caribbean were weak states that were easy targets and the perfect incubation hubs for a now globally dispersed Russian mafia. Despite the discomfort Caribbean nationals may feel with the comments of Mr Farer, he might be correct.

No large multinational wants to do business in the Caribbean. Why? The islands are small with small populations; each one clings mercilessly to its independence and its own set of trading rules; its decision-making process is protracted, mostly paper based, complex, ambiguous and expensive, with astronomical fixed rates for its legal and accounting services. In a consolidated CARICOM market of 18 million inhabitants and $77 billion GDP, unless you have a regional master distributor and local representation to negotiate the minefields of the 11 markets, it is not even worth the conversation. This creates a natural environment for graft. Pay half price for speed or pay full price for efficiency.

These characteristics are what criminal elements exploit, easily. Add to this a relatively poor society living in high priced territories; highly taxed, poor social structures that leave the disadvantaged permanently so. It is easy to trace the dots to the thriving low-bar entry commercial enterprise of criminal activity. On top of all this, add a steady flow of American and British-bred ex-convicts with no attachment to the Caribbean countries they were born in, being exiled to their “homeland” after serving sentences for any crime. Suffice to say, this group will not find legitimate work, but they have an institutional knowledge of crime and unique exposure to brutality, contacts and skill sets that makes them dangerous to the communities they enter and useful to criminal elements. Add to this the gasoline of a large number of disenchanted youth who feel they cannot operate inside the formal economy for lack of academic prowess. The resulting bonfire is where we are today.

Here in Barbados, depending on which public official you speak with, we just might have an issue with firearms being easily accessible to the growing, active and increasing brazen criminal element—the net result being an unprecedented loss of life to violent crime and a population that is afraid, uncertain what to do next and beefing up on personal security.

Although the evidence currently available in the public realm is primarily journalistic and often anecdotal, it is, despite these limitations, sufficient to support the conclusion that the linkages, and or “strategic alliances” exist between various Russian-organised crime groups and major transnational criminal organisations in Latin America and the Caribbean.

It is believed that since 2001, these linkages were substantial and expanding rapidly. Moreover, it raises the spectre that, at least in some key countries in the region (e.g., Colombia, Mexico and Brazil), the alliances between homegrown and Russian criminal organisations may provide domestic criminal and/or guerrilla groups with access to the illicit international markets, money-laundering facilities and illegal arms sources that could convert them into major impediments to economic growth and serious threats to democratic consolidation and long-term stability at home.

The argument is that the small islands of the Caribbean are merely used as highways from the manufacturers in Latin America and Central America to the United States, the largest market for illegal drugs in the world. The island teams provide cover, refuelling points, protection and or safe haven for the transport teams. The payment is cash, drugs and illegal firearms. This is the stuff of Miami Vice and Bad Boys movie fame, that according to this investigative reporter is not fiction but a reality, happening in our backyard and being orchestrated by wealthy Russian criminal bosses.

The longstanding institutional weaknesses of most states in Latin America and the Caribbean, in combination with the existence of a highly lucrative underground drug trade in the Western hemisphere, make our countries especially attractive targets for Russian transnational criminal enterprises. The lack of transparency and effective state monitoring in the banking systems of many Latin American and Caribbean nations left them particularly vulnerable to penetration by Russian money launderers.

Corrupt and ineffective law enforcement institutions and judicial systems allowed Russian crime groups to operate outside of the law with virtual impunity. Indeed, the dubious, but financially life-saving practice of a number of the states in the region (e.g. Dominica, St Kitts, Panama, Uruguay and Paraguay) of “selling” citizenship literally provided an open invitation to Russian crime groups to establish themselves in the hemisphere.

As Farer notes, when states are weak but act as if they were strong “. . . spewing out laws and regulations purporting to regulate, inhibit, and tax private activity . . .” without the will or capacity to enforce the law, they inevitably create spaces or niches between reality and legality that can be and frequently are exploited by organised crime.

The ongoing processes of globalisation unquestionably facilitated the transnationalisation of Russian mafia activities over the last decade. In broad strokes, globalisation refers to the “shrinkage” of distance on a global scale through the emergence and thickening of “nets of connections” – economic, technological, social, political and environmental. Of course, as many sceptics have noted, the recent transformations in the world system are by no means completely new. What is novel about them in the contemporary period are their extensity, intensity, velocity and impact on states and societies around the globe. Russian transnational criminal organisations – like other international criminal and terrorist networks – have been able to exploit the increased ease of international travel, the liberalisation of emigration policies, the expansion of international trade, the spread of poorly secured high technology communications systems, and the under-regulation of international financial networks – via sophisticated money laundering techniques – to extend their criminal enterprises well beyond the borders of their own country.

For historically weak states such as ours in Latin America and the Caribbean, our accelerating insertion into the global economy over the last several decades, with particular intensity in the post-cold War era, has generally required painful fiscal austerity measures on the part of national governments and a severe “downsizing” of the State in general. Under the banners of the “Washington consensus” and neo-Liberal market reforms, state penetrative, extractive and regulatory capacities throughout the region (never particularly strong) suffered dramatic erosion in the aftermath of the 1982 regional debt crisis. As a result, state authorities in the 1990s often found themselves bereft of the financial and institutional resources essential for combating the rise and expansion of transnational organised criminal activity within their national territories.

Law enforcement agencies throughout Latin America and the Caribbean remain woefully inadequate, underfunded and corrupt. Courts and prison systems are outdated and overwhelmed. In several countries, high-level political corruption has continued, or even worsened in many cases, despite the belief that wholesale liberalisation would – once the initial transition phase had been completed – “. . . reduce the range of illicit and concealed profit opportunities available to the holders of political power”. Ill prepared as they were in the past to combat transnational organised crime, following almost two decades of reforms most states in the region are even less capable today.

The tendency of reforms to exacerbate the gap between rich and poor in many Latin American and Caribbean countries and to heighten the poverty and misery of those subordinate classes not effectively linked to export sectors – the principal “losers” in the processes of globalisation – quite predictably has generated rising resistance to globalisation among the disadvantaged and intensified popular demands for policy reforms and fuller democratisation across the region. Yet, in the context of globalisation, the scope of autonomous state action in most developing countries is significantly constrained and ameliorative policies are often viewed as inefficient and unacceptable.

Confronted with the overwhelming power of globalised production and international finance, including heavy international debt burdens, most Latin American and Caribbean are in an invidious position. Blacklisted by the OECD for providing tax havens in seeking to support legitimate financial trade; too small and expensive to create export economies; indigenous banks being cut off from the international markets; heavily taxed; saddled with one of the highest cost of living indexes and high inflation, these countries are precariously placed that unless they get support from the international community rather than obstacles, they could become the Frankenstein we all fear.

George Connolly is a Finance and Technology professional.