South America's Triple Frontier, where Argentina, Brazil, and Paraguay meet at a bend in the Paraná River, has long served as a hub of organized crime and narcotics, weapons, and other contraband smuggling. For decades, these borderlands have been home to a large and thriving Arab merchant community. The area first came to Washington's attention following the 9/11 attacks when security experts suspected jihadists were taking safe harbor there. U.S. officials jumped in, with programs to combat criminal activity, improve intelligence, and strengthen rule of law. But they failed to turn up any terrorists. In fact, their interventions did little to curtail the broader lawlessness that plagues the region.
But now, because of an economic downturn, the very group suspected of harboring terrorists might be the one to finally clean up the Triple Frontier. The 965-square-mile area is a landlocked, porous border-zone that combines impressive natural beauty with haphazard urban sprawl. It consists of three main cities -- in addition to Puerto Iguazú in Argentina, the two larger towns are Ciudad del Este in Paraguay, which has population of 300,000, and Foz do Iguaçu in Brazil, which has a population of 260,000. Connecting the two is the "Friendship Bridge," a three-lane motorway with pedestrian walkways on both sides. It spans the tumultuous Paraná River just nine miles south of Itaipú Binational Hydroelectric Dam, the largest operating hydroelectric dam in the world.
Ciudad del Este and Foz do Iguaçu have a thriving cross-border trade -- to the tune of $5 billion annually (much of this is off the books). Ciudad del Este, a warren of shops with advertisements in Chinese, Korean, Portuguese, and Spanish, is the commercial center of Paraguay. Even with minimal customs enforcement, the city brings in more than $30 million in tariff duties every month. The numbers are significant, considering that Paraguay's GDP was $21 billion in 2011.