Saturday, February 23, 2008


As we get closer to Foz do Iguaçu, the Brazilian border town facing Ciudad del Este in Paraguay, I am starting to have doubts.

When we first proposed investigating Latin America’s black market, I knew smugglers and counterfeiters would not necessarily welcome a pesky journalist sticking his nose in their lucrative business. But I also knew it would be unlikely that we’d ever actually find one, making it easier to feign bravery.

But nearly everyone we’ve met so far has cautioned us against merely entering Ciudad del Este.

Depending on who you listen to, the city is controlled by the Chinese mafia, Russian organized crime or Islamic radicals ready to detonate themselves at the first sight of a Westerner.

Bizarrely, the cautionary tales seldom include Paraguayans, although one person suggested that the illicit trade is Paraguay’s revenge for a war the country fought against its neighbors in the late 19th century—one that it lost, resulting in a significant loss of territory.

Not knowing whether carrying grudges is a national trait, I put greater stake in the economic explanation: Facing widespread poverty and few opportunities in the formal economy, the profits to be made from smuggling and counterfeiting are simply irresistible to many.

That said, it is still unclear to me whether Paraguay’s overproducing factories themselves are doing anything illegal under Paraguayan law. They could simply be selling to third domestic parties who proclaim to be buying for the domestic market but then turn around and sell the product elsewhere.

And while Brazilian law enforcement has stepped up border controls in recent years, some believe it is afraid to truly crack down because many Brazilians too benefit from the illegal trade.

Some smugglers apparently pay poor people to travel back and forth between Paraguay and Brazil all day, each time bringing their maximum allowance of cigarettes.

As we near Iguaçu we pass several police stations whose parking lots are packed with cars. “Stolen and intercepted en route to Paraguay,” explains our host.

It's really mine, officer

Half of the vehicles on Paraguay’s roads are said to have been stolen in Brazil. Even a former president reportedly owned such a vehicle.

I still plan to enter Ciudad del Este tomorrow. But I will leave my valuables in our (Brazilian) hotel safe and travel by foot.

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