Dollarization Or Mexicanization, What Caused The Narco Crisis In Ecuador?

Mica for cartelinsider.com

The escape of “Fito”, the leader of “Los Choneros”, led to Ecuador declaring a state of exception that quickly transformed into an internal armed conflict and, hours later, into a “war”, as recognized by President Daniel Noboa. However, academics and politicians clash in determining the reason for the violence driven by drug trafficking in the country: dollarization or “Mexicanization”.

The images circulating on social media of the situation in Ecuador are alarming; shootings, murders, kidnappings, burning vehicles, car bombs, and the taking of a television channel’s facilities caused terror in the streets and the promise of President Noboa to “not give in to these terrorists”.

However, the increase in violence in Ecuador is not new: since the arrival of the Sinaloa and Jalisco New Generation Cartels (CJNG) in the country -2021 according to documents hacked from the Ministry of Defense- the number of homicides has gone from two thousand 496 to four thousand 859 in 2022 and to seven thousand 592 last year.

Some security and economics experts argue that “weak” institutions and the lack of stronger laws against organized crime promoted the establishment of Mexican cartels in the country, further fueled by the adoption of the dollar, which makes it easier for criminal organizations to launder money.

“For Ecuadorian economist Juan Pablo Jaramillo, the presence of criminal groups has intensified since the government of Lenin Moreno (2017-2021) disbanded military intelligence to combat narcotrafficking; this, combined with the adoption of the US dollar as the national currency in 2000 as a measure to control inflation, has left the country in the hands of drug traffickers.”

In the issue of dollarization, Gustavo Bolívar, former candidate for mayor of Bogotá, also agrees, who in his social media answered the question “Why is Ecuador overrun by drug trafficking?”:

Data from the Ecuadorian Observatory on Organized Crime indicates that drug trafficking is the main activity of organized crime in the country (23%), followed by money laundering (17%), corruption (16%), and arms trafficking (10%).

The one who bet on ‘Mexicanization’ was the dean of the Faculty of Economics and Administration at the University of the Americas in Quito, Vicente Albornoz, during an interview for TN network.

Albornoz remembered that drugs are not manufactured in Ecuador and that their problem with drug trafficking is due to their proximity to Peru and Colombia, two of the three main cocaine producers in the world, in addition to the ‘Mexicanization’ of Ecuador.

The dean explained that with the emergence of fentanyl in the American market, Colombian and Peruvian traffickers had to open new routes and find consumers for their product in other parts of the world, finding in the Port of Guayaquil their connection with Europe and Asia and in the local banana industry the perfect setting to distribute the drug.

“To control these new routes, the country became ‘mexicanized’ through alliances with the Sinaloa Cartel and CJNG; massacres, attacks, and assassinations appeared that have been tormenting Mexico for years.”

The Mexican cartels found a “weak state” and took advantage of it, as recognized, “the drug trade unleashed violence by having more hands in a smaller business,” but it has nothing to do with dollarization: “perhaps it simplifies the lives of drug traffickers because they don’t have to change dollars, but only as a secondary and marginal factor.”

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Mica

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