Colombia Safety Notes – September 2024

Two articles published this week on Colombia provide critical context for the investment and security environment there. Bloomberg’s Matthew Bristow reports on the ELN attacks on oil infrastructure at the Venezuelan border. Elizabeth Dickinson of the International Crisis Group writes a New York Times op-ed on the Gaitanistas of Gulf Clan at the Panama border. Read both articles. Here are seven takeaways:

Criminal gangs taxing local businesses creates profit, crime and strategic challenges.

In addition to the core point of the Bloomberg article highlighting the ELN attacks on oil infrastructure, the criminal groups are increasing the cost of doing business in Colombia.

Bloomberg:

The ELN’s extortion has made Arauca one of the most expensive places to do business in Colombia, according to Juan Ricardo Ortega, the company’s CEO. The ELN sets fire to trucks and buses that enter its territory without permission. Even when large companies don’t make payments to the group, its subcontractors have little choice, driving up the price of everything from transportation to security services, Ortega said.

News from the newspaper:

The Gaitanistas’ drive for territorial domination is financially motivated. After taking over an area, the group monetizes every aspect of life. Businesses located on Gaitanista-controlled land must pay taxes or face violent consequences. Farmers told us they were forced to pay for every cow they owned or sack of potatoes they produced. Even development projects are extorted, with the Gaitanistas taking a percentage of government infrastructure contracts. The group also levies taxes before migrants cross the Darién Gap, which was crossed by more than half a million people last year.

This is a security problem that goes beyond the war on drugs.

Note the lack of cocaine in both articles. Drug production and trafficking is not a driving factor in the violence, nor is it a significant part of the financial income cited for either group. Yes, both are involved in cocaine trafficking, but it is a very limited part of their operations and primarily a business of opportunity. If cocaine were to disappear tomorrow, neither would be significantly affected. These are not drug cartels masquerading as rebels like the FARC was and is today (the various FARC factions still fighting are heavily involved in cocaine production and trafficking). The ELN and Gaitanistas organizations operate in a post-drug war environment and they are thriving. Ending the “drug war” will not magically bring security.

Boundaries are important.

Even if drug profits are not the primary source of income, many of the extortion schemes and other illicit trafficking activities exist because these groups operate so close to borders, ports, and infrastructure that is critical to the logistical supply chain. It’s an obvious point that’s been made before, but it’s worth repeating.

Criminal gangs use social investments to gain local support and launder extortion money.

Both groups invest in local infrastructure and services to gain support from the local population.

News from the newspaper:

A favorite method is for social organizations sympathetic to some of the ELN’s goals to organize strikes to pressure a company to pay for projects such as building a road or a health center. The guerrillas then get credit for bringing investment to areas abandoned by the government, while also pocketing a cut.

Bloomberg:

Alarmingly, many large corporations and landowners have come to favor the Gaitanistas because they offer protection from other armed groups that may kidnap, steal, or extort with less discipline. This symbiosis gives the Gaitanistas deep and permanent roots in society.

Colombia’s security challenge revolves around real territorial control

This map of InSight Crime shows the territorial control of the various criminal groups in Colombia. It is important to distinguish that territorial control here means something different than when you see similar maps of Mexico. In Mexico, there are violent cartel organizations that control drug trafficking routes and extortion networks in many places, but the government has parallel control over most major municipalities, etc. In some cases in Colombia, this is actual territorial control. The ELN and Gaitanistas control territory where the government has minimal presence, and these groups have the “monopoly on violence” in the region.

Understanding the differences in the way criminal groups manage territory is important to understand why the security context is so different and why companies may be more willing to invest in Mexico, where violence is in many cases worse than in Colombia.

Petro’s security policy isn’t working, but we may not know why.

A recent report from Colombia Risk Analysis highlighted an Invamer poll that found 85% of Colombians believe the security situation is deteriorating and 66% believe Total Peace is on the wrong track. The security failures are a drag on his government’s popularity (see my column last week about the first two years of Petro’s term) and prevent him from achieving other goals.

The big question worth asking is: Is this a strategic failure or an implementation failure? Or is it both or is it neither? It could honestly be any of those four options. Maybe total peace is a strategy that can’t work in any format. Maybe Petro’s lack of focus combined with a bad mix of sticks and carrots in negotiations is to blame. And it could be that total peace is a strategic failure and Petro is just bad at governing, but putting that aside for a moment, these groups would win under almost any other strategy or leader because security is hard and these groups have the financial resources to keep fighting.

The lack of security is hampering the Colombian economy.

The government should work harder to understand why its security policy is failing, because the “tax” on businesses operating in criminally controlled areas is holding back foreign and domestic investment. It is a negative spiral. Businesses are reluctant to invest because of the security situation; the security situation will not improve without greater investment that meets the needs of the population and allows the government to be present. Breaking that paradox between security and investment should be at the top of the government’s agenda if it wants to be successful in the next two years.