When the first packets of cocaine fell by mistake on some rural communities near Retalhuleu along Guatemala's southern coast, no one knew what the white powder was for. Some tried painting their fishing boats with the substance. Finally the intended recipients arrived and paid a measly $20 for each kilo.
     Today, no one around Retalhuleu would be fooled. If cocaine falls again from the sky it will demand a much higher price.
     Like the peasants who live next to the scores of small airstrips on Guatemala's coast that provide perfect conditions for narcotraffickers, Central America's role in the world of drugs has grown more sophisticated. According to a recent European-funded study, the region is no longer a simple transhipment point on the narcotic road north. The region's countries are today full partners, offering the complete range of narcoactivities: production, shipment, warehousing, consumption, and profit laundering.
     According to the project's coordinator, Guatemalan researcher Edgar Celada, Central America's "geographic fatalism" predestined it to some kind of role in the international drug trade. Stuck between suppliers in the south and consumers in the north, it was natural that the region would develop a significant role in at least the transhipment of drugs.
     This was exacerbated by the military conflicts of the eighties, which provided "the umbrella under which narcotrafficking grew," according to Celada. A major example of this was the U.S.-backed contra rebels, whose planes flew weapons south and drugs north. Yet high-ranking military officials in several countries also found the narcodollars too easy to resist.
     With the end of the cold war, the region's generals have found in drugs the "perfect excuse to maintain themselves in roles that don't rightly belong to them," Celada said. Combatting drugs, largely "a discourse produced for sale in the north," is fueling a "remilitarization of the region, reversing the trend begun with Esquipulas," the 1987 accords that laid the foundation for ending the region's armed conflicts.
     The U.S. is seeking agreements with regional governments that would give U.S. agencies the right to operate on foreign territory. In exchange for such permission--what many claim would violate national sovereignty--the U.S. is offering stepped up military assistance.
     The U.S. is also trying hard to convince Panama to let it keep 3,500 troops at a proposed multinational anti-trafficking center in the canal zone. According to Herasto Reyes, an investigative journalist for the Panamanian daily La Prensa, this would amount to "putting the mouse to watch over the cheese." Reyes claims the only thing achieved by the 1989 U.S. invasion and subsequent removal of Gen. Manuel Noriega was the "democratization of narcotrafficking into an activity that didn't implicate just one dictator."
     The resulting boom in narcoactivity in Panama can be seen throughout the economy. New highrise residences ring the Bay of Panama, yet many apartments are empty, their fictitious rent providing a way to sanitize dirty money. On the other side of the isthmus, the Colon Free Zone provides a perfect laundry for narcoprofits. A recent investigation by the Royal Canadian Mounted Police found 166 Free Zone businesses were laundering drug money.
     The region's presidents signed a heralded agreement in October to reform banking laws--eliminating, for example, the guarantee of secrecy for account holders--in an attempt to cut down on money laundering. Yet national legislatures have to approve the regulations. Observers expect few results from legislators given that political campaigns have become a fruitful way to launder drug money. In Honduras, criminals can simply buy their way onto candidate lists. Accusations of politicians using dirty money in campaigns have also been made recently in Panama, Costa Rica, and Guatemala.
     The investment evidently pays off. In Honduras, legislation against money laundering spent three years before Congress. After considerable international pressure, legislators approved it on December 15, but not before stripping the law of much of its teeth.
     Such official reluctance to fight narcoactivity isn't surprising. Officials of the Fiscalia del Estado in Tegucigalpa claim they have clear evidence that several members of Congress are transporting illegal drugs in their vehicles, yet the immunity granted all legislators prohibits law enforcement officials from searching those vehicles.
     Many of those cars are fancy. Jesús Martínez Suazo, the dean of the law school at the Universidad Nacional Autónoma de Honduras, said in November that Honduras was a "shameless country" because it could boast more Mercedes and BMWs per capita than any other country in Latin America. He said most those cars came from the "new rich" who earned their wealth through money laundering and corruption.
     In Guatemala, according to investigator Mario Maldonado, drug traffickers no longer conform to the stereotype of "pistoleros with mustaches." He said they're now "executives and respected businessmen who earn their wealth hiding cocaine in shipments of broccoli or cut flowers."
     Or chocolate. In August, Guatemalan police started arresting members of the "German connection," a ring of narco-executives that used shipments from the Nestlé factory in Antigua to hide drugs bound for Europe.
     Guatemalan farmers have long grown poppies that were shipped into Mexico for conversion into heroin. Yet investigators claim a processing lab has now been installed near Tacaná. It's an open secret, but police are unable to do anything about it. If they did, nothing would come of it. Guatemalan courts are famous for losing evidence and delaying trials until captured narcocriminals can escape.
     When a cut of the profits fails to convince judges to cooperate, fear usually works. In 1994, Epaminondas González, the president of the Court of Constitutionality, approved the extradition of Lt. Col. Carlos Rene Ochoa Ruiz to the U.S. to face trial on drug charges. When González was assassinated, the surviving members of the Court quickly overturned the extradition request and set Ochoa free to pursue his business pursuits. He was jailed again in May after being caught peddling 30 kilos of cocaine in the parking lot of a Guatemala City shopping center.