The Economics Behind the Weapons

By Samuel Logan -- Southern Pulse

We’ve recently spent some time reviewing the transcripts and fallout from the recent ATF testimony over the blowback from the Fast and Furious program. Latin America’s Moment has a thorough review of the policy side of the story, while La Plaza, a LA Times blog, digs a little deeper into the revelations that while the ATF knew about the guns leaking into Mexico, the FBI and DEA are also at fault for running separate operations that “could have a material impact on Fast and Furious.”

By now, the whole throbbing mess has devolved into a political sword fight. Heads will roll; the “iron river” will still flow into to Mexico, and Central America, another important source of weapons, continues to fly below radars in Washington and Mexico City.

Like drugs, the weapons market is all about supply and demand. The economics favor anyone selling high-powered rifles in Mexico. If we shut down the United States, weapons will flow from Central America. If both are shut, weapons will flow in from the Caribbean, from Europe, China, Israel, etc.

Meanwhile, this media splash reminds us that criminals continue to benefit from the paradoxical need for effectiveness and multilateral cooperation. In 2006, I wrote on how guns and cocaine are one market out of control. What I said then is just as true today, despite any progress President Calderon or the Merida Initiative has made since December of that year:

Tens of thousands of illicit actors propagate a market that proves to be highly lucrative, flexible, and networked. There is no center, no head, no leader to kill.

Latin America’s Moment asks in the 18 July 2011 post, “what else can and should be done?”

I immediately thought of Central America, especially Guatemala and El Salvador. Here is a sub-region that plays a significant role in regional weapons trafficking, but it has managed to avoid detection at the international level - despite the strong links (we're told) between stolen grenades in El Salvador and the grenades that exploded 100 meters from the US Consulate in Monterrey.

Central America’s low-level of attention, and the ongoing Fast and Furious scandal in Washington, support a strong argument: the issue of weapons trafficking is little more than a political pawn surrounded by much more important issues - namely immigration, energy supply, and macro economics - in an ongoing geopolitical chess match between the United States and Mexico.

The criminal system is larger than any one government, and politics always trumps security.

Any efforts to stymie gun trafficking from the United States to Mexico, and from Central America to Mexico, require a matched effort from at least three nations – the United States, Mexico, and Guatemala. All three are currently in one stage or another of a presidential election cycle. The United State is the furthest away (November 2012), with Mexico not far behind (July 2012), though unofficial campaigning started earlier this month after the 4 July 2011 Mexico state gubernatorial elections. Official campaigning in Guatemala began in May, ahead of September 2011 first round elections.

Any tri-lateral discussions held today would not begin to track until after the January 2013 inauguration of the next president of the United States, when the new presidents of each country (whether Obama wins or not) would have to re-seat the issue amid a new political environment, despite what the latest security statistics look like.

…Which brings us back to Fast and Furious. Everyone knows that the ATF is the red-headed step child of the Justice Department, and it’s punching above its weight class by taking on the FBI and DEA. But none of that matters; it's just another squabble between brothers, like the House of Ghosts incident. The deeper the US wades into the muck that is organized crime in Mexico, the more likely we're to be entertained by political blowback.

In a recent event in Mexico City, I learned that Los Zetas – a criminal organization with a strong presence in the United States, Mexico, and Guatemala – spends as much as US$4 million a month on its war with the Gulf Cartel. How much of that cash purchases weapons and ammunition? Once everyone is over the politics, maybe we can get down to business. Rather than remove the weapons used to kill, kill the economics behind the weapons.