By Beatrice E. Rangel
I need to start this column by thanking Armando Armas and Mateo Haydar for their support and guidance in the research that led to these striking results on the degree of plasticity developed by organized crime over the centuries.
Indeed, organized crime has prospered every time the world economy shifts its production methods geographically or technologically.
Ever since the Silk Road emerged as the trade corridor that brought together production and consumption between continents, the strength of economic waves surpasses the regulatory capacities of political institutions. Bags of unregulated territories serve as theatre to illicit activities. And those perpetrating illicits and enriching themselves from those activities take hold of the uncontrolled territory (ies).
In ancient times the voyage from Quanzhou to Xi'an was full of perils arising from bandits that would raid caravans (merchant traders not immigrants) to seize their riches and then hide in remote villages protected by a feudal lord that did not particularly liked the rulers of Quanzhou or Xi'an. And then the goods were sold at some city further to the East along the Silk Road.
Bandits also conducted espionage activities and sold them at very hefty prices while also engaging in paid assassinations and the trade in deadly potions. Those bandits were eventually vanquished or subject to control as the Mongolian empire consolidated itself, Persia became a regional power, Venice ruled the Mediterranean Sea, and Constantinople/Istanbul succeeded Rome as an organizing node for the world economy.
Organized crime had another glorious epoch when America was discovered by the Europeans. This changed the world economic axis both geographically as well as technologically given that Prince Henry of Portugal was convinced to invest in innovative ships.
Pope Alexander VII assigned the newfound territory to Spain and Portugal. This invited trouble. On the one hand it brought havoc to the world balance of power and second left out in the cold economic powers like France, England and Holland.
So, the leftouts organized to participate in what was deemed to be the most significant wealth creation exercise of the 16th century. Knowing that neither Spain nor Portugal would be able to exercise territorial control over the Americas, England, France and Holland turned to adventurous characters that lived between light and darkness to spoil the Spanish-Portuguese American Hackathon.
Pirates, privateers and buccaneers were the labels placed to these adventurers who chose to create their own city in the Kingston Bay. The city was world famed for its bars, brothels and gambling parlors. It was described as the wickedest city in the world. In the 17th century Port Royal competed with Boston as trading post between the Americas and Europe. It all ended in June 1692 when an earthquake and a Tsunami sank the city to the bottom of the Kingston Bay killing about 2,000 people.
Then of course came Sicily whose natural endowments made it the cereal repository for the Middle East and Europe. Accordingly, all European and Asian powers lusted for Sicily and occupation began in the ancient days. The locals decided to get organized to protect themselves. Their organization evolved into what we know as the Mafia. It internationalized at the turn of the 19th century when waves of Italian migration went to the United States where the organization prospered in a way not dreamed by its peasant founders back in Sicily. Again, the world economy had moved from agriculture to manufacturing reducing the economic significance of Sicily whose inhabitants migrated to more prosperous lands.
The debt crisis and the end of the post-World War II economic impetus in Latin America created very serious difficulties everywhere.
Agriculture was hard hit. A substance that was beginning to animate the parties and concerts in the developed countries rose in economic significance. Cocaine became the queen of the night in every distinguished social or entertainment circle and with it organized crime became an economic power.
In a continent where elites shrewdly evade taxation and economic inequality rules supreme thanks to the preservation of the medieval institutional framework created by Phillip II of Spain, the table was served to organized crime.
Add to the mix secular corruption and you can now figure out why the Lords of Samarkand could vanquish organized crime from the Silk Route while Latin American nations coexist with organized crime.
What comes next is truly frightening.
Technology has enabled organized crime to take over fragile nations such as those thriving South of the Rio Grande and the institutional framework that emerged after the Westphalia Peace creates safe havens for its leaders to operate as it enshrines sovereignty. Taken together they explain why Somalia is ruled today by modern pirates and why Venezuela is the modern Port Royal.
Facing this challenge successfully demands concerted international action. Such as that already contemplated in the United Nations Convention against Transnational Organized Crime. But triggering this weapon would lambast the corporativist traditions of Latin America.
Corporativism nurtures itself from strong links among elite sections. Triggering Palermo would make orange the most worn suit color in the region. And the more it takes to face the hydra head-on the fastest the consolidation will be of the Mafia State that resides in Venezuela.Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.
For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.
You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.