Extreme socioeconomic inequality, weak central governments, organized crime, and the vast profits generated by cocaine have inflamed geopolitical instability in Latin America for decades. That confluence of factors has created a fertile environment for illegal armed groups pursuing ideological goals, the substantial earnings that the narcotics trade generates, or both. This is highlighted by the ongoing violent conflict between drug cartels in Mexico, Colombia’s decades-long low-intensity asymmetric multi-party civil war, and the near-failure of strife-torn Venezuela, a country that boasts the world’s largest oil reserves. That along with weak regional governments and deep-rooted socioeconomic inequality produces an ideal climate for organized crime and terrorist organizations to thrive. One non-government armed group taking advantage of the opportunities present in Latin America is the militant Lebanese Shia political organization and U.S. designated terrorist organization; Hezbollah.
The assassination of a prominent Paraguayan organized crime prosecutor in Colombia, who was involved in a series of high-profile investigations into transnational criminal networks operating in South America, sparked fears that organized crime’s power in the region is rising once again. That is fueling further fears of rising regional insecurity and heightened geopolitical risk, thereby impacting foreign investment inflows and economic growth. Even extractive industries are not immune from the fallout, with Colombia’s hydrocarbon sector already under considerable pressure and failing to lift production to pre-pandemic levels.
The tri-border area comprised of Puerto Iguazu Argentina, Ciudad del Este Paraguay and Foz do Iguazu Brazil, has long been fertile ground for organized crime and illegal armed groups. Illicit activities in the region are commonplace with its billion-dollar economy fueled by cocaine smuggling, human trafficking, illegal arms sales, document forgery, and money laundering. The region’s importance as a cocaine trafficking hub has risen with the growing power of Brazilian organized crime groups and increased Bolivian cocaine production, which according to the Whitehouse reached a record of 312 metric tons in 2020. For those reasons, the tri-border region is an ideal location for Hezbollah to scale up its illegal businesses, but it is not the only part of South America where the terrorist organization has established a destabilizing presence.
Hezbollah has constructed a well-oiled money laundering and cocaine trafficking network in Latin America. The militant Shia Islamist political group has been progressively scaling-up illicit operations, notably drug smuggling and money laundering. Analysts estimate that narco-trafficking and money laundering operations raise more money for Hezbollah than any other of its businesses, highlighting how important those activities are to the organization. In fact, narcotics seizures and investigations by European police agencies point to Hezbollah being a leading regional drug trafficking organization that is increasingly dependent on criminal enterprises to fund its operations such as terror attacks.
The U.S. designated terrorist group established a notable presence in the tri-border area to take advantage of the highly profitable illicit opportunities which exist in the region and boost earnings. Between 2016 and 2021 the U.S. Drug Enforcement Administration and Paraguayan authorities progressively dismantled a Hezbollah cocaine trafficking ring operating out of the tri-border area. The Paraguayan prosecutor assassinated in Colombia had previously worked with the DEA on investigations involving Hezbollah. This sparked speculation that not only was his murder an act of a transnational criminal syndicate but that it could be linked to the activities of the Lebanese militant group in South America’s tri-border region.
Aside from the U.S., very few countries in Latin America have truly recognized the threat posed by Hezbollah. Official action against the militant Lebanese organization has been slow to materialize despite Hezbollah being engaged in a wide range of illicit activities in the tri-border area. It took Argentina, the first state in Latin America to do so, until July 2019 to designate the militant Lebanese Shia group as a terrorist organization. That was despite Hezbollah, which is used by Teheran as a proxy combatant in its fight against Israel, murdering 85 and injuring hundreds in the 1994 suicide bombing of a Jewish community center in Buenos Aires. Argentina’s decision was followed by Paraguay in August 2019, then Colombia and Honduras in January 2020.
However, the threat posed by Hezbollah in Latin America is not fully recognized by many of the region’s governments, particularly with the Shia militant group having established a sizable footprint in Venezuela. Shia Iran, which has emerged as a key ally of President Nicolas Maduro’s pariah regime, is also the chief backer of Hezbollah an organization that Teheran uses as a proxy in its conflict with Israel and Saudi Arabia. The financial desperation of Maduro’s autocratic regime saw it, especially after the Trump administration ratcheted-up sanctions in 2019, building close ties with illegal armed groups operating in Venezuela. Those groups control vast swaths of the country and generate considerable income from illicit activities including illegal mining, extortion, and cocaine trafficking. They are not only pivotal political backers of the autocratic Maduro regime but key revenue sources for a fiscally beleaguered government. It is for these reasons that Hezbollah emerged as a crucial source of income for Caracas, which in turn allowed the U.S. designated terror group to establish substantial illicit operations in Venezuela.
The importance of criminal networks to the survival of the crumbling Maduro regime sees authorities not only turning a blind eye to the activities of illegal armed groups but openly supporting and even involved in them. This has allowed illegal armed groups to flourish in the near-failed state with leftist Colombian guerillas and Venezuelan colectivos establishing large-scale operations, notably in those areas with little to no state presence. Hezbollah, because of its close ties with the Maduro regime, has become a major player in illicit activities in Venezuela. One of the terror group’s most prominent supporters is Venezuela’s Minister of Petroleum, Tareck Zaidan El Aissami Maddah, who is of Iraqi Lebanese descent. He, according to Washington, is one of Hezbollah’s main benefactors with his largesse allegedly including providing over 10,000 Venezuelan passports to members of the militant group as well as citizens of Syria, Iran, and Lebanon. It is also alleged by the DEA and U.S. Department of Justice that he is a pivotal figure involved in cocaine trafficking in Venezuela. Those events made Maduro’s Venezuela, like the tri-border area, a transnational hub for illicit activities, notably illegal mining, arms smuggling, money laundering and cocaine trafficking.
While Hezbollah has established a solid footprint in Venezuela, seeing it emerge as a credible threat to security and political stability in northern South America, the terror group is also bolstering its presence in neighboring Colombia. The reason for this is quite simple; Colombia is the world’s largest producer of cocaine. According to the UN Office on Drugs and Crime Colombia’s estimated 2020 cocaine production grew by 8% year over year to a record 1.2 million metric tons or nearly four times that of Bolivia. Colombian illegal armed groups operating in the strife-torn Andean country and neighboring oil-rich Venezuela are the principal sources of cocaine for Hezbollah’s narcotics-trafficking operations.
Colombia’s significant increase in cocaine production is responsible for a sharp uptick in violence in recent years, notably in those regions, like Catatumbo on the Venezuelan border, where coca is the primary cash crop. That has occurred despite Colombia’s government implementing a peace deal with the Revolutionary Armed Forces of Colombia (FARC – Spanish initials), the largest illegal armed group in the country’s decades-long civil war, in 2016. After the FARC demobilized the last remaining leftist guerillas the National Liberation Army (ELN – Spanish initials) moved to fill the void it left in many regions and take control of lucrative coca cropping territory and smuggling routes. That intensified conflict with Colombia’s largest organized crime organization the Gulf Clan as well as smaller dissident FARC groups, who refused to accept the 2016 peace agreement, and other illegal armed groups.
For decades Hezbollah has focused on infiltrating the Lebanese and Shia Arab communities in Colombia, which are primarily centered around the Caribbean port city of Barranquilla and border city Maicao well-known for smuggling. The city of Maicao in the department of La Guajira has the only mosque in the region known, which is known as La Mezquita the third largest such structure in Latin America. The building was designed by Iranian architect Ali Namazi and is a focal point for the Islamic faith and culture in northern South America.
Through its considerable efforts to penetrate Colombia’s Shia community, Hezbollah has gained an influential voice among various Lebanese and Arab familial clans that hold significant commercial and political power in the Andean country. As early as 2004 it was established there was a relationship between FARC and Hezbollah cells for the purposes of cocaine trafficking and money laundering. While the FARC had demobilized by the end of 2017 there were various groups who refused to recognize the agreement, remaining active in their struggle against the state. Those dissidents have expanded significantly over the last two years, recruiting from former combatants and disenfranchised youth, because of President Ivan Duque’s failure to implement the peace deal and Colombia’s worsening economy. That is a key driver of the spike in violence which is impacting Colombia’s hydrocarbon sector with crude oil and natural gas production yet to recover to pre-pandemic levels.
The growing scope and scale of Hezbollah’s operations in South America, notably in Venezuela and now Colombia, has the potential to act as a major destabilizing force within the region. Lawlessness, violence, and chronic socioeconomic inequality have long weighed on economic development in the region. Hezbollah’s growing regional influence bolsters Iran’s presence in Latin America allowing it to challenge regional U.S. hegemony, adding an additional destabilizing force to an already volatile part of the world. Until the power of Hezbollah and other illegal armed groups is curbed and eradicated, considerable uncertainty and risk will continue to weigh on Latin America’s economic development, foreign investment, and the region’s economically crucial oil industry.
By Matthew Smith for Oilprice.com
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