Paraguay

Paraguay is sometimes called Corazon de America (the Heart of America) because of its central location landlocked in the middle of South America, bordered by Argentina, Brazil, and Bolivia. The country, the second poorest in South America, suffers from deep income inequalities; further, the land ownership inequality is one of the worst in the world, with 10 percent of the population controlling 66 percent of the land and a third of the rural population landless, an inequality that is more frequently referenced in Paraguay's class conflicts than that of incomes.

While many Latin American countries have become involved with drug trafficking in one way or another because of the continent's hospitable environment for the coca leaf, Paraguay has a history of smuggling that predates any serious inroads that the drug trade made into the country. The smuggling of stolen goods has a long history in Paraguay, but from at least the 1950s on, much of the smuggling that built fortunes simply took advantage of the disparity between exchange rates.

Goods could be bought cheaply in Paraguay, from electronics to crop commodities like wheat to timber, and then smuggled across the border into Brazil, where the healthier economy meant higher prices. Similarly, goods smuggled into Paraguay without paying a tariff could be sold for a profit at a lower price than those that had been legally imported.

This history of smuggling, and existing traffic routes, criminal subculture, and networks between smugglers, fences, and corruptible officials, created an infrastructure that could be used by drug trafficking as that pursuit became a growing concern in the early 1980s. Bolivia, one of the world's largest sources of coca leaf, shares a sparsely populated border area with Paraguay; Peru, another major source, is not far away. Furthermore, Paraguay also shares a border with Brazil, the largest consumer market in Latin America for most drugs. Throughout the 1980s, Paraguayan officials made numerous seizures of cocaine, coca paste, and cocaine-processing chemicals that made it clear how widespread the country's involvement in the cocaine trade had become, while European officials seized cocaine [Page 632]shipments arriving on their shores that had used Paraguay as a transit point.

Marijuana production for export (principally to Brazil) had also begun in earnest, and there were persistent claims of military officials involved in the drug trade either receiving a cut to look the other way or sell information, or being more deeply and directly implicated. Paraguay is the second-largest marijuana producer in the hemisphere, in large part because of its economy. The crop yields five times the price of any legal option, and so long as law enforcement is able to make only a few arrests of producers, the risk is not nearly enough to counterbalance the reward. Drug cartels from a dozen different countries have been able to operate in Paraguay because of the persistent political turmoil: though ruled by a civilian government since 1989 (the longest period Paraguay has gone without military rule), there were four coup attempts made against the government in its first dozen years. The leading antinarcotics agency in Paraguay is the National Anti-Drug Secretariat (SENAD), but corruption and the difficulty of border control have prevented it from being especially effective.

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