Extortion spurs violence in Northern Triangle countries, which consistently have some of the highest murder rates in Latin America. But it is destructive in other insidious ways as well.
Extortion touches nearly all businesses in the region: from mom-and-pop pupusa stands to multinational corporations. And the economies of these countries suffer as a result.
In El Salvador, the Central Bank estimated in 2014 that extortion cost the nation $786 million, more than three percent of the country’s GDP. It’s likely higher now that the gangs’ extortion networks are more meticulous and entrenched.
Guatemala’s chamber of commerce said in 2017 that businesses pay $30 million annually in extortion fees. In Honduras, extortion resulted in a loss of $200 million in 2015, according to its chamber of commerce. Honduras’ commercial sector alone paid out $27 million to criminal groups.
The street gangs’ rising influence is also partly tied to their ability to control both formal and informal businesses through extortion.
In El Salvador’s capital, the street gangs control territory within the labyrinthine and congested downtown street markets. While they extort vendors, the gangs also provide them with security from other gangs as the authorities often refuse to enter these zones. When San Salvador’s then-mayor Nayib Bukele wanted to modernize and build a new central market area, he chose to negotiate with the gangs. According to an El Faro investigation, Bukele’s administration let the Barrio 18 gang make decisions on vending permits in the newly constructed Cuscatlán market, one of the first flagship projects for Bukele, who is now El Salvador’s president-elect.
It was through such deals that the then mayor was able to intervene in the capital’s main squares and plazas, the report states.
In both El Salvador and Honduras, political parties allegedly often must provide some sort of outlay — sometimes outright cash, other times in the form of benefits — to the gangs to let them campaign in certain territories under their control.
Schools Under Fire
Schools in all three Northern Triangle country are also a primary target of extortionists.
Just to be able to get to their classrooms every day and work unmolested, teachers have been shaken down for as much as $40 of their monthly salary. Such extortion is so commonplace that principals are even forced to collect the money for gangs. The threats come by phone, but more often through gang members who merely leave notes with school administrators.
In San Salvador’s southern districts, 60 percent of teachers were handing over some type of extortion payments, according to one study.
Extortion threats have also shut down schools, and students themselves are often forced to pay out to classmates who are gang members.
The cost goes beyond money. Young people miss out on an education, as thousands of students every year must change schools or drop out altogether.