Why Uruguay’s Pot-Growing Neighbor Paraguay Won’t Follow Suit

Uruguay became the first country in the world to legalize the cultivation, sale and consumption of marijuana on Tuesday.

But don’t expect South America’s biggest pot-grower, Paraguay, to follow that path any time soon.

The landlocked country produces most of the weed consumed in nearby Brazil and Uruguay, and a 2013 report by the U.S. Department of State called it a “major drug transit country and money laundering center.”

That hasn’t translated into momentum for legalization. Instead, the country has seen a growth in government corruption tied to the drug trade.

Paul Gootenberg, a sociology professor at the State University of New York, Stony Brook, is an expert on the Andean drug trade.

“Paraguay is fast becoming the regional cannabis exporting power,” Gootenberg said in an email. “In Uruguay’s case, a small vulnerable neighbor, is trying to protect or insulate themselves from the damage that comes from these kinds of illicit trades.”

In Paraguay, the official government line is that the Uruguayan legalization will fail because the flow of pot across the border won’t stop. That’s what Paraguay’s drug czar Luis Rojas predicted in August.

“The situation is not going to change,” he told the Spanish-language news agency EFE. “The Uruguayan market is going to receive the marijuana that they produce and they’re not going to stop receiving the marijuana produced in Paraguay.”

But is Paraguay’s stance on marijuana legalization because they want to prevent trafficking? Or because narcos are so embedded in government?

Part of the reason for legalizing pot in Uruguay — one of the safest nations in Latin America — was to combat the possible drug trafficking from Paraguay, as well as related violence, according to Geoffrey Ramsey, a researcher with the Open Society Institute.

“In terms of Uruguay, there has been an alarming rise in violent crime, and this is a way to address that, or at least it’s being sold that way by the government,” he said. “That’s going to be a big thing to watch.”

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Uruguay hasn’t experienced the same drug violence that has plagued countries like Mexico and Colombia, but one-third of its prisoners are incarcerated for narcotics charges, and the country serves as a transit point for marijuana and cocaine from Paraguay and Bolivia.

Although the weed is coming from Paraguay, that country’s president, tobacco magnate Horacio Cartes, has said that he won’t legalize any drugs.

He’s also faced allegations that he’s tied to the narco trade.

When he ran from president earlier this year, he had to explain why a plane carrying marijuana and cocaine was found on his ranch in 2000.

And a 2010 diplomatic cable published by Wikileaks shows that Cartes — not yet president — was the target of an investigation by the U.S. Drug and Enforcement Administration (DEA).

U.S. officials said the DEA had uncovered a money laundering operation in the Tri-Border Area (TBA), a hotbed for contraband where Paraguay meets Argentina and Brazil.

According to the cable, DEA agents had “infiltrated CARTES’ money laundering enterprise, an organization believed to launder large quantities of United States currency generated through illegal means, including through the sale of narcotics, from the TBA to the United States.”

The Paraguayan government may be skeptical of pot legalization at the moment, but it doesn’t mean they’re taking a totally one-sided approach.

“I believe that this is really a utopia,” Rojas, the drug czar, said in August. “But, well, we’re going to be analyzing.”