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  HOME | Opinion (Click here for more)

Beatrice Rangel: What the Follow the Money Principle Tells Us about the Crisis in Venezuela
Former Venezuela Presidential Chief of Staff Beatrice Rangel follows the drug money coming into Venezuela and explains why it will be difficult for the corrupt regime to leave voluntarily.

By Beatrice E. Rangel

Most people, particularly those laboring in the financial services naively thought that anti-money laundering regulations would suffocate organized crime.

Two decades after the adoption of the Palermo convention, however, one cannot say that either crime nor corruption money are on their way out.

To be sure, they are both rising thanks to the existence of nowhere lands on earth where government is nonexistent and gangs of all nature rule the geographical space. These nations are regarded as rogue states.

A nation or state is labelled a rogue state when it routinely breaks international law thereby posing a threat to the security of other nations. These states are the necessary havens to money flowing from illicit activities such as drug and human trafficking, corruption and counterfeiting.

A quick look at the value of these activities facilitates understanding the growing influence and dissemination of rogue states.

Total earnings for drug traffickers worldwide in 2016 were between $426 billion and $652 billion (USD), making it the second most lucrative illicit market measured after that of counterfeit and pirated goods -- which are estimated to generate as much as $1.13 trillion annually.

Organized crime accounts for 1.5% of global gross domestic product and is worth around $870 billion and of that, drugs account for 50% of international organized crime income. These figures look challenging when compared to the Latin American and Caribbean GDP for 2015 which was 5.33 trillion USD.

Indeed, the United Nations has estimated the value of the Latin American Drug Earnings to represent half that of the world or between $ 213B USD and $326B USD.

This represents between one quarter and one third of the region's GDP. Given that the lion's share of these revenues are earned by organized crime in Colombia and Mexico, these two countries could be benefitting from an income stream between $200USD and $300USD.

This brings us directly to the Venezuelan crisis. The country has increasingly become a key link in the Colombian value chain. As such Venezuela has to retain the current regime to protect this income. Most people seem to be truly astonished at the cruelty and nonchallance displayed by the country's regime in quelching the civic protests for elections and the rule of law.

The country's ruling elite seems oblivious to international pressures and is rapidly marchig towards the creation of a tailor made constitution that consecrates totalitarianism. No heed is, of course, paid to the U.S. Department of State warnings or the European Parliament's condenations of the move or even the threat by the Latin American Parliament to sue the Venezuelan ruling elite at the International Criminal Court on acccount of gross human rights violations.

The reason for this defiant attitude is to be found in the money trail. Illict trade earnings represent such benefits to the Venezuelan government officials that they would rather act as an overt rogue state than surrender a flow of money that truly is the newfound El Dorado for them and their families. They also know that there are enough financial institutions in the world ready to do business with any kind of nation and that once they change the institutional famework, it can be claimed that Venezuela's decisions are legal. This will keep some windows in the financial system open and the international community debating whether Venezuela is or fails to be a rogue state. Meanwhile the country will continue to enjoy the status of a nation state when it really is a crime haven.


Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.

For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.

You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.



Also by Beatrice Rangel in her Latin America from 35,000 Feet series

Beatrice Rangel: Rio -- Demystifying the Olympic Games

Beatrice Rangel: The Luddite Syndrome in the Americas

Beatrice Rangel: Venezuela's Unexpected Transition

Beatrice Rangel: We Now Have a Wider Canal But Has Our Wisdom Expanded???

Beatrice Rangel: From Brexit to Tesla, Progress is Made by Leaders!!!

Beatrice Rangel: As the World Goes Latin, Latin America Gets Logical

Beatrice Rangel: On the Difficulties of Fighting Barbarism in Latin America

Beatrice Rangel: The Impending Age of Housekeeping!!!!

Beatrice Rangel: What Happened to All Those Rosy Forecasts for Latin America?

Beatrice Rangel: On Dialogue and the Rules of Geopolitics in Latin America

Beatrice Rangel: The Ides of Wisdom in Venezuela

Beatrice Rangel: On the Discreet Charm of Populism

Beatrice Rangel: Three Ladies in Distress

Beatrice Rangel: Trump, Lula, Kirchner and the Last Tupi-Guaranis

Beatrice Rangel: Time for Departures in the Americas

Beatrice Rangel: A Contrarian View on the Panama Papers

Beatrice Rangel: Brazil's Lady in Her Labyrinth

Beatrice Rangel: Back to a Divided Home!!!

Beatrice Rangel: A Historical Take-Off in the Americas??

Beatrice Rangel: A Skipped Journey, a Reaffirmation and a Clearing of Path in the Americas

Beatrice Rangel: The Demise of Civility in the Americas!!

Beatrice Rangel: The Americas from Boutros Boutros-Ghali to Ban Ki Moon

Beatrice Rangel: The Pope's Difficult Stopover in the Americas

Beatrice Rangel: Farewell to The “Diplomacy of Reason”

Beatrice Rangel: 2 Diseases in Latin America -- Different Prescriptions, Very Different Outcomes

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Beatrice Rangel: When Crime Meets Glory

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Beatrice Rangel: Are the Americas Ready for President Trump?

Beatrice Rangel: On Predictions of War & Global Confusion

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Beatrice Rangel: Marijuana & Latin America's Next Trade Corridor

Beatrice Rangel: Of Burning Airplanes & Argentinean Tsunamis

Beatrice Rangel: The Good, the Bad, and the Ugly in the Americas!!

Beatrice Rangel: Buena Vista's Magic Covers the Americas

Beatrice Rangel: Pride and Perjury in the Americas

Beatrice Rangel: Trompe L’oeils Proliferate in the Americas

Beatrice Rangel: The Economic Consequences of Peace in Latin America

Beatrice Rangel: Colombia, the FARC & the Makings of Gangland in Latin America

Beatrice Rangel: When Extreme Weather Meets Extreme Politics Calamities are Bound to Happen

Beatrice Rangel: When Ladies Hit 70

Beatrice Rangel: About Uninformed Elites and Gullible Leaders

Beatrice Rangel: On US-Engineered Soft Landings in Cuba and Venezuela

Beatrice Rangel: On the Many Ways Cecil Matters

Beatrice Rangel: Blue Moons Lead to Extraordinary Happenings in the Americas

Beatrice Rangel: On Why Embassy Openings Do Not Necessarily Herald Different Policies

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Beatrice Rangel: When Markets and Manners Crash

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Beatrice Rangel: An Infuriated God & An Environmental Crusader Mark the Summer Solstice

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Beatrice Rangel: The Ugly Americas

Beatrice Rangel: How FIFA Corrupted the Beautiful Game in the Americas and World

Beatrice Rangel: Could the US RICO Act Be Applied to Latin America?

Beatrice Rangel: On the Discreet Charm of Commodities for Latin America

Beatrice Rangel: The End of the Chinese Free Lunch in the Americas!!

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Beatrice Rangel: Of a White Knight for Three Latin American Ladies in Distress

Beatrice Rangel: Withdrawal Symptoms?

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Beatrice Rangel: Easter Miracles in Latin America and the World

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Beatrice Rangel: Killing Me Softly -- the Obama Administration’s Legacy in Latin America

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Beatrice Rangel: Of Thunderous Silences, Quiet Noises and Flash Backs in Latin America

Beatrice Rangel: Latin America's Dangerous Exports to Europe & the Demise of an Old Fox

Beatrice Rangel: Of Sweet Deals, Sugar Daddies, Direct Mail & Obama’s Care

Beatrice Rangel: Of Latin American Singing Birds, Femme Fatales & Empty Shelves

Beatrice Rangel: When Flying Dragons & Rage Infusions Turn Against Their Latin American Masters

Beatrice Rangel: Holy Haberdashery!!! Is Fire Building Under the Surface in the Americas??

Beatrice Rangel: 2015 -- A Year for Balance in the Americas???

Beatrice Rangel: Pope Francis Looks at the Americas In His Christmas Remarks

Beatrice Rangel: The Paint Brush Hanging from the Wall in Latin America

Beatrice Rangel: A Future for the Americas??

Beatrice Rangel: Going Forward, Going Backward -- It's the Americas!!

Beatrice Rangel: An Eerily Familiar Week in the Americas

Beatrice Rangel: Tale of Two Walls

Beatrice Rangel: Across the Americas, We the PEOPLE

Beatrice Rangel: Across Latin America, The Populist Beat Goes On!!

Beatrice Rangel: Oh My, The Patron of the Eternal Feminine Has Left Us!!!

Beatrice Rangel: Communism from China to Cuba Finds Corruption!!!

Beatrice Rangel: From Rio to Hong Kong Discontent Taps the East to Find a New Way

Beatrice Rangel: Will Latin America Miss the Broadband Development Target?

Beatrice Rangel: Kissinger’s World Order and Latin America

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Rangel: While US is Away, Latin America Rethinks Development Paths

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