“Ecuador has become a logistics platform for criminal organizations,” says expert

“What is new is the explosion in cocaine production in recent years in Colombia,” part of which transits through Ecuador, explains Bertrand Monnet, teacher and specialist in the economics of crime.

“Ecuador has become a hub, a logistics platform for criminal organizations that export cocaine produced in the Andes and mainly in Colombia”said Wednesday January 10 on franceinfo Bertrand Monnet, professor at the School of Advanced Business Studies (Edhec), specialist in the economics of crime, author of a video investigation for The world, “Narco Business”, while Ecuador is plunged, according to its president, into a “internal armed conflict” with drug trafficking gangs which has already left at least 10 dead.

franceinfo: does Ecuador concentrate all the conditions to fall prey to violence linked to drug trafficking? ?

Bertrand Monnet: Unfortunately yes. Because Ecuador has become a “hub”, a logistical platform for criminal organizations which export cocaine produced in the Andes and mainly in Colombia. These organizations are certainly Colombian organizations, but also Mexican cartels, notably the Sinaloa cartel, which began to develop several years ago in Ecuador to use it as a zone for exporting drugs to different countries.

What is new is the explosion in cocaine production in recent years in Colombia. It’s more than 25% last year and 700 tons of Colombian cocaine which are exported throughout the world and which, in part, passes through Ecuador. This is what generated a major and fairly new flow of dirty money in the country and which allowed these organizations, in partnership with local organizations which until then were very small, to take control of part of of the state apparatus, particularly within the police force.

Is corruption a facilitator ?

Corruption is the essential tool for all these organizations. This money is very powerful, because it is earned with sadly impressive profitability. Cocaine trafficking represents several thousand percent of profitability for the organizations that practice this activity. They have an almost limitless capacity to penetrate these states given the salary of a police director in a state like this.

You have modeled the financial system of this global drug trade. Does a cartel operate like a multinational, a company with colossal margins, but which kills ?

Their product is a killer product. When I interview Mexican or Brazilian narcos, very often they say: “We just have to wait, we’re like hairdressers. There will always be business for us, because what we ultimately sell is the satisfaction of a vice”. And unfortunately, that’s what they sell without any morality, with total cynicism, as long as it makes no profit. Their product, whether it kills or not, is not their problem. They could sell cars if it was more profitable than drugs, but they don’t hesitate to sell drugs.

There is one stakeholder that is never really analyzed enough: banking havens. Because all these people wouldn’t do this if they couldn’t launder their money.

Bertrand Monnet, specialist in the economics of crime

on franceinfo

And their money is essentially laundered in banking havens, like Dubai, like Panama. And these States are not subject to the pressure that the United States is currently promising to Ecuadorian groups. We talk very little about these banking havens. There’s no real action, there’s no pressure.

The French state is one of the few that has taken up the problem. The Minister of the Interior recently traveled to Dubai to put pressure on the Dubai state to stop protecting illicit financial flows. And a few weeks later, what do we observe? The release by the Dubai state of a French narco who had been arrested, a release which occurred just before his extradition to France. So we cannot speak of real cooperation between banking havens. These are essential cogs in this economy, as Ecuador is today for the logistics part. But unfortunately, nothing is really done against these States.

Does this illegal economy feed into the legal economy? ?

Absolutely, because all these narcos don’t do it for the beauty of the gesture. What they want is to earn money to invest it in the legal economy. And once it is laundered, this money has several destinations. There isn’t really a written strategy. Every organization has its priorities. But very often, and this is where it is very dangerous, these organizations invest in economic sectors that allow them to benefit from the corruption networks that they have set up. And that’s why, generally, they love to invest in construction companies, for example. Because a construction company is potentially a public contract that will be won by influencing the Minister of Equipment.

We see public infrastructures that are built by companies that we call “legal-mafia”.

Bertrand Monnet, specialist in the economics of crime

on franceinfo

That is to say, which are owned by mafia organizations, via funds, via various opaque shareholders still all registered in banking havens, that is to say undetectable. This money is then invested in the legal economy, in construction, in waste treatment, in real estate projects, in the tourism or hotel sector.

With another priority which is, and this is very true in South America, investment in businesses that are legitimate in using cash: supermarkets and all stores. Because they will be able to mix criminal cash with legal cash. Once this scheme is in place, it is unfortunately almost impossible to put an end to the money laundering schemes set up by these large mafia organizations.