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Matthew Smith

Matthew Smith

Matthew Smith is Oilprice.com's Latin-America correspondent. Matthew is a veteran investor and investment management professional. He obtained a Master of Law degree and is currently located…

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Ecuador on the Brink: Spiraling Violence Threatens National Stability

  • The assassination of a presidential candidate and a record homicide rate underscore Ecuador's dramatic slide into violence, with gangs like Los Choneros and Los Lobos driving much of the chaos.
  • Despite President Noboa's efforts, including a state of emergency and deploying the military, violence continues unabated, raising doubts about the effectiveness of these measures.
  • Overcrowded prisons, endemic corruption, and a booming cocaine trade between Colombia, Peru, and Ecuador contribute significantly to the country's security challenges, complicating efforts to restore order.

Ecuador, a tiny South American country of around 18 million, stands on the precipice of disaster. The Andean country, once considered an island of peace in a violent region, has emerged as a hotbed of cocaine trafficking, crime and violence. During last year’s 2023 national election, a presidential candidate, for the first time in Ecuador’s history, was assassinated. Cocaine-fueled violence, murders, and kidnappings are surging across Ecuador, with President Daniel Noboa seemingly incapable of stemming the tide. In response to the latest wave of violence, President Noboa announced a state of emergency, declared martial law and deployed the military to confront criminal bands on the streets. This is not only impacting a fragile economy and crisis-bound oil industry but sparked fears Ecuador could become a failed state.

Despite vowing to crack down on crime, President Noboa, along with Ecuador’s military and police, appear incapable of reining in the violence engulfing the tiny Andean country. During 2022, Ecuador’s homicide rate surged to 25.9 murders per 100,000 inhabitants, a startling near fivefold increase over 2018 when there were 5.7 murders per 100,000 head of population. While 2022 was Ecuador’s most violent year on record, that year’s murder rate will be eclipsed by 2023. Data from official sources shows there were at least 7,592 murders during 2023 compared to 4,426 a year earlier, a nearly twofold increase, indicating Ecuador’s 2023 homicide rate hit an all-time high of 41.9 murders per 100,000 people. Latest estimates put the 2023 homicide rate even higher at 46 murders per 100,000 head of population. Those startling numbers not only make Ecuador’s homicide rate the worst in South America, even surpassing a lawless Venezuela but among the highest globally.

Even after President Noboa’s pledge to restore order, 2024 has started as Ecuador’s most violent year yet. Not only have armed gang members stormed onto the streets to confront the military and police in pitched battles, but they are also kidnapping civilians and extorting businesses. Nearly a month ago, Ecuador’s most powerful gang kingpin José Adolfo Macías Villamar, known as Fito, leader of Los Choneros escaped from prison allegedly with assistance from guards. That was followed by another gang leader Fabricio Colon Pico of the Los Lobos, escaping days later. It is those two gangs that are the key protagonists responsible for most of the cocaine trafficking-related bloodshed and violent organized crime occurring in Ecuador.

Los Choneros pioneered the movement of large volumes of cocaine along the coast from Colombia’s southern port of Tumaco, situated in a cocaine-producing hotspot, to Guayaquil, Ecuador’s largest city and port. The gang, whose power base is situated within Ecuador’s prisons, built close ties with Mexico’s powerful Sinaloa cartel and Eastern European organized crime groups. Los Choneros used the vast income cocaine trafficking generates to rapidly expand as well as corrupt Ecuador’s law enforcement, judiciary and National Assembly. The criminal band’s strength declined after a brutal 2020 gang war saw archrivals Los Lobos emerge victorious to become Ecuador’s leading criminal group. Los Lobos, which built an alliance with Mexico’s Jalisco New Generation Cartel, is further strengthening its position by diversifying into other illicit sources of income, including illegal gold mining, kidnapping and extortion, as a means of insulating them from offensives against cocaine trafficking.

Los Choneros and Los Lobos are among the nearly two dozen gangs President Noboa declared terrorist organizations that are to be neutralized by the military. Ecuador’s president declared a 60-day state of emergency (Spanish) on January 9, 2024, when he deployed over 22,000 soldiers onto the streets and implemented a nighttime curfew. Those events sparked a surge in violence as gang members clashed with police and detonated bombs in the streets of major cities, notably Guayaquil and Quito. They went as far as storming a television studio in Guayaquil and seizing control of several prisons where officials were taken hostage, and some guards were reportedly executed. While that spasm of violence has ended, tensions are still bubbling away with the complex issues behind Ecuador’s surging crime difficult to tackle successfully despite President Noboa’s promises.

It is in Ecuador’s sprawling complex of overpopulated prisons where the roots of the current security crisis can be found. Former President Rafael Correa, who received eight years in prison for corruption, launched a law-and-order crackdown which caused inmate numbers to swell. To house the rising prison population, which was placing considerable pressure on aging, overcrowded and dilapidated facilities, Correa ordered the construction of mega-prisons with the institutions designed to house thousands of inmates. Swelling inmate numbers saw prisons filled to overcapacity, housing 6,000 prisoners or more, creating a fertile breeding ground for gangs. Those developments, along with a lack of state resources, leading to the warehousing of inmates, forced prison officials to cede authority to gangs. Those bands took advantage of the situation to increase their numbers, in many cases through forced recruitment, and boost income from extortion, drugs, kidnapping and murder.

Those conditions were exacerbated by Correa’s successors, President Lenin Moreno and Guillermo Lasso, who slashed prison resources even further. The fallout from those policies was magnified by the pandemic, where a sharp uptick in poverty triggered a spike in crime, causing inmate numbers to swell filling Ecuador’s already heavily strained corrections system to beyond capacity. Heightened poverty, declining opportunities and increasingly harsh sentences for minor crimes bolstered the popularity of Ecuador’s gangs, particularly for impoverished youths with no clear future. By early 2023, after years of increasingly deadly riots had swept through Ecuador’s prisons, it was widely acknowledged the corrections system was in a state of crisis, with Quito having lost control of its penal facilities. A fragile state, weak institutions, dysfunctional law enforcement, poor governance and endemic corruption allowed powerful gangs to readily build a strong presence outside of the prisons.

Into that already volatile mix, add vast quantities of cocaine and the considerable profits generated by trafficking the narcotic. Ecuador is wedged between Colombia and Peru, which are the world's largest manufacturers of cocaine. It is by virtue of this geography that Ecuador, despite not growing the coca plant that produces the essential precursor alkaloid required to manufacture cocaine, emerged as a shipping hub for the narcotic during the mid to late 1990s. As the volume of cocaine produced in those neighboring countries expanded, greater amounts of the narcotic were being shipped through Ecuador and its Pacific ports, notably Guayaquil. Booming cocaine production in Colombia and Peru, with all-time highs reported yearly since 2018, has seen Ecuador flooded with the narcotic, especially as interdictions in Colombia rose to record levels.

As the seizure of cocaine shipments from Peru and especially Colombia grew along with production ramping up to record levels, hitting an all-time high in both countries for 2022, Ecuador found itself awash in cocaine. The country’s large Pacific ports, Guayaquil and Esmeraldas, coupled with an export-focused economy, make Ecuador an attractive transshipment hub, particularly for cocaine being shipped to Europe. Indeed, the United Nations Office on Drugs and Crime (UNODC) identified Europe as one of the fastest-growing primary consumer markets for cocaine. Europe’s importance for cocaine traffickers has expanded considerably over the last decade, with consumption soaring compared to the U.S., where it declined as other drugs, notably opioids, gained ground. Soaring large-scale cocaine interdictions in one of Europe’s busiest ports, Antwerp, attests to this development with some of the continent’s largest seizures in recent years being found in banana shipments from Ecuador.

On paper, President Noboa is making significant headway (Spanish) with his crackdown resulting in over 5,600 arrests and a notable decline in violence. The question, however, is whether such a resource-intensive reactionary strategy is sustainable. Latest indicators show Quito’s measures are already failing, with a fiscally strained government unable to continue financing such a costly operation. That extreme fiscal weakness is underscored by a push to substantially decrease the government payroll (Spanish), increase the VAT by three percentage points to 15% and delay the payment of January 2024 government salaries until February. Clearly, intelligence sharing and cooperation with the U.S. (Spanish) as well as neighboring countries is insufficient to support the current measures and tamp down violence over the long term. President Noboa has a limited window of opportunity to deal with Ecuador’s security crisis, with his term ending in May 2025.

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By Matthew Smith for Oilprice.com

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