Chile, which shares borders with Peru and Bolivia and generates more than 30 percent of its gross domestic product from international trade, has become the fastest-growing hub in South America after Brazil for international narcotics transshipments and money-laundering enterprises.

Colombia's drug-trafficking establishment also is burrowing deeper into its political institutions. The United Self-Defense Forces of Colombia (AUC) paramilitary, which has admitted earning up to 70 percent of its income from the drug trade, claimed that during congressional elections in March,
candidates sympathetic to the AUC won 35 percent of the legislature, or 98 seats in the Senate and House of Representatives.

Also, Colombian police and security services believe that at least 14 senators and three deputies representing 12 departments in Colombia's largest drug-producing areas answer directly to drug-trafficking groups. But the actual number of corrupted Colombian legislators likely is much higher.

Additional analysis from STRATFOR.com can be found at http://www.stratfor.com.

This article is reprinted with permission from the publisher.