Mexican cartels are now heading into the area to recruit, cut deals, and look for new distribution points, according to Panamanian and US officials. And Panama is not alone.
As Mexico's increasingly brutal drug war captures the world's attention, violence from that country's clashing drug cartels is seeping south, putting the whole of Central America at risk, officials say. At the same time, the region's role in land shipments of cocaine has grown as countries have clamped down on air and sea routes.
"Mexico is increasingly looking for routes into Central America," says Edwin Guardia, a top official at the drug prosecutor's office of Panama. "We need to put the brakes on the trafficking so that Panama remains a safe place – and so that we don't become like Colombia was 20 years ago and like what Mexico is experiencing today."
Mexican President Felipe Calderón has sent tens of thousands of security forces across Mexico to wrestle back control of swaths of the country marred by shootouts, beheadings, and death threats. The immediate result has been more violence, with the number of murders reaching more than 6,200 last year. Mexican officials tout this as a sign of success: Groups are splintering under pressure and fighting one another, they say.
Another result, they say, has been the southward reach of cartels as they are forced to diversify into less-risky areas – from relocating marijuana-producing operations to Guatemala to holding negotiations in Panama.
With its proximity to Mexico, Guatemala is bearing the brunt of the pressure, as major drug-trafficking organizations compete for routes into Mexico. There, large firefights have broken out and whole regions of the country are controlled by organized crime. Mark Schneider, senior vice president of International Crisis Group in Washington, who recently carried out a fact-finding trip to Guatemala, says that Mexico's Gulf cartel has moved into territory once dominated by the Sinaloa cartel. "What you have is the same kind of turf battle you are having at the northern border of Mexico," he says.
But their presence reaches all the way down Central America's spine – from Honduras to Panama.
In Panama, the number of Mexicans arrested in drug-related violence shot up by 56 percent between 2007 and 2008, according to the drug prosecutor's office.
Drug traffic through Central America 'ballooned'
At the same time, the methods for transporting drugs from South America to the US market are constantly evolving, and today Central America is playing a key role. The US National Drug Intelligence Center reported that less than 1 percent of the 600 to 700 tons of cocaine estimated to flow from South America to the US in 2006 transited through Central America, while the rest passed through the Pacific or Caribbean to Mexico. "Since then," wrote Stephen Meiners of the consulting group Statfor in a recent report on Central America's new role in the drug trade, "land-based shipment of cocaine through Central America appears to have ballooned."
Cocaine seizures are increasingly made off the Pacific coast, where large quantities are stashed in semisubmersible vessels that don't require refueling before reaching Mexico. In 2007, for example, Panama seized 66 tons of cocaine – the highest amount in recent years, including the largest maritime seizure on record – more than 17 tons.
Mr. Meiners says that US cooperation with governments in the region to better monitor such sea and air routes has shifted smugglers' attention to land. Routes might start in Panama and head up the Pan-American Highway through Costa Rica; drugs might then enter Nicaragua via horse or foot at remote crossings as they move north to Mexico.
US officials agree that air and sea interdiction efforts have made land routes more attractive – even if the shipments are small, such as the six kilograms (13 pounds) of heroin and three kilograms (6-1/2 pounds) of cocaine interdicted in Panama City.
"[Cocaine flow] was always on the outside," says a US government source in Panama who spoke on condition of anonymity for security reasons. "They were taking it up the maritime routes, or flying over Panama. Now it's landing in Panama."
It has caused an uptick in violence and threatens to turn Panama, which was once merely a transit country, into another front line in the drug war. Security is now voters' No. 1 concern, opinion polls say. "Today, Colombians are selling the drugs and Mexicans are distributing them," says Mr. Guardia, the Panamanian official.
Central America more vulnerable than Mexico
US officials are starting to publicly acknowledge Central America's vulnerability. "We're looking at what happens south of Mexico as well, because that's just as important as what's happening on our border," Thomas Harrigan, chief of operations for the Drug Enforcement Administration, told reporters recently.
Central America plays a much smaller role in the drug trade than Mexico does, but it's more vulnerable to corrosion from drug trafficking because its institutions are weaker, says Lainie Reisman, who specializes in research on gangs in Central America at the Washington Office on Latin America, a think tank. "Central America is the meat of the sandwich squeezed between Mexico and Colombia, and it has very little institutional capacity to deal with significant challenges."
Money under the Merida Initiative, the US aid program for Mexico that also includes funding for Central America, will provide Panama with a new fingerprint-information system, police training, and social programs, such as antigang measures. Guardia's office has also been working with the national police since last year on new efforts to crack down on drug sellers.
Consultant Meiners warns against governments pushing too hard, as it risks retaliation. That's not a worry for nations like Panama, which lacks a standing army and is in a poor position to take on cartels.