Guinea Bissau: President Assassinated

Mexico's El Universal reported (from an EFE news clip) this morning that the president of Guinea Bissau was assassinated in an explosion on 1 March.

Guinea Bissau is a western African nation long plagued by the drug trade, corruption, and civil unrest. It's difficult to pin down a specific actor in this assassination. But it's nearly certain that the country will now become - more than ever - an ideal spot for moving drugs from South America into Europe.

More on Guinea Bissau's role as a transit nation here.

Border Surge and Unintended Consequences in Spain

A colleague of mine who writes for Latin American Thought recently sent over an interesting article from El Espectador, a Colombian print weekly.

The article outlines how Colombian organized crime has installed itself inside Spain.

Citing the recent murder of a Sr. Leonidas Vargas, killed while resting in a hospital bed in Madrid, the author pointed out that in the past the assassin would have been sent from Colombia - most certainly on his way home before the Spanish authorities could respond to the crime. Today, however, the assassin probably didn't even leave Madrid, asserts the author. I completely agree.

For years now, Spanish police have done away with the idea that Colombian assassins travel from Colombia to do their work in Spain. Today, these men live and work in Madrid, perfectly blending in with Madrid's business class.

The are called "debt collectors," and are sent to force their targets to pay a drug trafficking debt - often marked in dollars - with their own life.

"You pay or you die."

There is very little about this scenario that we haven't seen in Latin America. There is even little novelty of this occurrence in Spain, especially for those of us who follow the trends of Latin American drug trafficking.

But what I find interesting is how Spain may become over time a new battle ground for rival trafficking groups who seek to use the Iberian peninsula as a spring board into the rest of Europe.

Until now, we haven't seen blood shed between the Colombian and Mexican drug trafficking organizations (DTOs). There is a business agreement in place, one forged many years ago. But this agreement considers only the movement of product into the United States. When the EU is under consideration, all bets are off.

Spain becomes a more important transit country when we consider Venezuela's role in moving bulk quantities of cocaine from Colombia to Europe, as much of it flows through Spain.

Spain is a stopping point on the drug route from Western Africa into the EU, and places such as Guinea-Bissau and Senagal, which have become reception points for drugs flowing out of Brazil and Argentina.

Finally, if all the talk of a "border surge" turns into reality, then we will see Spain, again, become a hot transit zone.

The Colombians are already in place. And I recently read that street gangs such as the Mara Salvatrucha are heavily networked throughout Spanish cities. What, then, will happen once the Mexicans come into town?

A spike of violence in Spain on the heels of any border surge, I think, would be the text book definition of unintended consequences.

The International Element of Argentine Domestic Problems

The recent food riots in Haiti were just the tip of an iceberg that extends as far south as Argentina. Brazil and Argentina are the world’s top producers of soy, after the United States, and Argentina is the world’s top wheat producer.

Both countries are under increasing pressure to reduce exports to safe guard the economy and the county’s own food stuffs. But Argentina is in a very difficult position where the government is at the beginning of what may prove to be a long and nasty process of readjusting food supplies, prices, and the balance between international demand and local needs. It will be a process felt across the world.

The 30-day truce between farmers and the Argentine government will end on 2 May. So far, negotiations have not gone well, as farmers are reluctant to pay even higher export taxes – the third tax hike on soy, for example. As the personal grudge the Kirchners have against the Argentine mega-farm aristocracy wages on, it is likely further disruptions in export for meat, soy, and wheat will continue into the near future.

Argentina’s internal wheat demand is some five million tons a year. It produces 15 million tons of wheat annually, exporting ten.

The battle over food exports in Argentina and the spike in food prices world wide has exacerbated a far deeper problem the country has with inflation. The country’s Agricultural Minister recently resigned, in part, due to his decision not to be a member of an administration that actively works to hide the truth about inflation.

As the real value of the Argentine peso against the dollar continues to slip, food prices in Argentina will rise. It is one thing to work a month and not be able to buy a luxury item. It is entirely another to work full time and not be able to buy food.

Expect the situation in Argentina to rapidly decline into street-level protests, perhaps even riots if the prices continue to scale up. The effects Argentina’s internal problems will have on the international level will be felt in the poorest countries most dependent on Argentine wheat. West African countries are at the top of this list.

Well aware of the situation in Argentina, Brazilian President Lula announced on 25 April that his country will increase wheat production to reduce dependency on Argentina. Lula’s announcement is in part politics, but it also reveals his take on the Argentine crisis. It is one the Brazilian leader expects will not improve for months, perhaps even years, to come.

Meanwhile, Venezuela simmers. Chavez said on 24 April that one day Venezuela will be a food exporter. Today, however, it is one of the region’s few net food importers. Chavez is likely worried about supply from Argentina as well as international food prices in general as his price controls may slip as government subsidies are not able to keep up with the rising price of food.

If price controls on the retail side do slip, many Venezuelans would find themselves waiting in long lines for basic foodstuffs only to realize they can’t afford them now – not an ideal combination for stability.

Brazil will again take the lead to do what it can to fight the rising cost of corn, wheat, soy, and other foodstuffs, as demonstrated by its recent donation of money for food to Haiti. But Brazil cannot act alone. If Argentina is unable to meet the world’s demand for wheat and soy, the ripple effect will reach from the middle class outlets in the United States to the smallest market in West Africa and beyond.