- The Washington Times - Thursday, September 25, 2008

ANALYSIS/OPINION:

ANALYSIS/OPINION:

COMMENTARY:

Mexico, which along with Canada is America’s hemispheric free trade partner, has become home to countless drug cartels. The country is awash in the blood of assassinated police, bureaucrats, drug lords and innocents. Kidnappings this year could reach 1,000. Mexico is nearly incapable of controlling its social and economic destiny, similar to the near-fatal 1980-90s Colombian crisis.

What caused such trouble for a country that has exported 10 percent of its poorest citizens to the United States and experienced a significant economic surge induced by the North American Free Trade Agreement?

The facile answer is that Mexico, like most Latin American nations, has a history of sharp economic cycles. The so-called peso crisis in 1994 occurred just a month after Carlos Salinas de Gortari, considered one of the best presidents in the 71-year reign of the Institutional Revolutionary Party (PRI), left office. As the peso devalued by nearly 100 percent, the Mexican economy crashed and President Clinton orchestrated a $50 billion bailout.

The PRI’s downfall came with election of Vicente Fox of the National Action Party (PAN) and, perhaps coincidentally, the huge influx of narcotics traffickers, mainly Colombians.

Many Mexicans, foreign investors, vacationers and retirees had a false sense of the state of the economy and society. Much of the rosy glow came from markedly increased trade with the United States: Legitimate exports increased an average of 15 percent faster during the first years (1994-2000) of NAFTA than in the six prior years, while foreign investment increased threefold annually. For the period 1994-2005, foreign investment totaled $170 billion, nearly 63 percent from the United States.

In addition, tourism steadily increased, Mexican government programs encouraged their destitute countrymen to cross the Rio Grande illegally and there were enormous cash infusions from drug exports to the north. The flows of illegal immigrants and contraband narcotics are interrelated: Informed sources estimate 12 percent to 20 percent of illegals have criminal records, many of them drug-related.

The drug cartels’ power has grown geometrically in the last decade. The competitive organizations indulge in deadly battles among themselves. Since President Felipe Calderon launched the first serious effort to curb the narcotics industry less than two years ago, more than 5,000 murders have been reported (Wall Street Journal columnist Mary Anastasia O’Grady observed this exceeds by nearly 1,000 the American military killed in Iraq since March 2003).

The events of May 8 were sadly exemplary of narcotics-related violence. The Sinaloa cartel murdered the federal police chief, Edgar Millan Gomez, and the anti-kidnapping director in Mexico City. Hours later, the Gulf cartel assassinated the son of the Sinaloa cartel’s leader in Culiacan. That one of Mexico’s senior security officials could not be protected, combined with information Mr. Calderon is on multiple cartel hit lists, give analysts grave concern.

Presidential succession because of a vacancy is time-consuming and inefficient. The Senate, where Mr. Calderon’s PAN heads a fragile coalition, initially elects an interim president and subsequent national elections choose a permanent successor. There are no time limits and if prolonged politicking develops, dissent could become rebellion, fueled by competing drug cartels and condoned by corrupted officials.

George Friedman, founder of geopolitical analysis group Stratfor, summarized Mexico’s potential slide into failure: “There comes a moment when the imbalance in resources reverses the relationship between government and cartels. Government officials, seeing the futility of resistance, effectively become tools of the cartels. Since there are multiple cartels, the area of competition ceases to be solely the border towns, shifting to the corridors of power in Mexico City. Government officials begin giving their primary loyalty not to the government but to one of the cartels. The government thus becomes both an arena for competition among the cartels and an instrument used by one cartel against another.”

In the Mexican states bordering the U.S., the mayhem is out of control, despite President Calderon having sent some 40,000 extra army troops to Chihuahua and Sonora states. The army, numbering fewer than 200,000, remains ill-trained and undermanned. The federal police force, numbering some 25,000 troops, is thinly stretched throughout the country. Both have been significantly corrupted by the drug gangs.

Last week, a grenade attack killed seven citizens and wounded more than 100 civilians celebrating Mexico’s Independence Day in northern Morelia, forcing cancellation of the national parade in Mexico City. With U.S. intelligence, logistical support and determination by the Calderon administration, the narcotics industry could be brought under enough control so that Mexico moves back from the brink. Doing so will take prolonged effort and significant cost in blood and treasure. The newly announced national police force, for example, will take at least three years to be operational.

Although the leading political group on the extreme left, the Party of the Democratic Revolution (PRD), is at the point of disintegration, its candidate in 2006 presidential elections remains one of the most popular figures in the country. Known as AMLO, Andres Manuel Lopez Obrador refuses to recognize Mr. Calderon’s narrow victory and delights in obstructing government, its drug wars and efforts to liberalize the economy.

Pemex, the state-owned oil monopoly is the world’s fifth-largest petroleum enterprise and contributes up to 40 percent of government revenues. Its oil output has steadily diminished as corruption has mounted and its leftist unions have created appalling inefficiencies.

Mr. Calderon has pushed for Pemex’s privatization, to modernize operations and enable foreign involvement in oil exploration, but AMLO has blocked this move, which could have significantly increased Mexican oil production and earned needed additional foreign exchange.

It is critical for both Mexico and the United States that Mr. Calderon succeed in stabilizing society and the economy while discouraging the narco-traffickers. Mexican-based drug gangs have made tentative incursions into the Southwestern United States, are relatively well-represented in Southern California and may spread north.

Unless a major military and police effort — recruitment, training and modernization — is undertaken, limited success can be expected, barring a major U.S. mission, whether monetary or military.

Until U.S. customers greatly curtail consumption and/or drug prices are sharply reduced - the unlikely legalization of drug consumption could deal a lethal blow to the narcotics trade - diminished Mexican drug slaughter is all that can be envisioned for the foreseeable future. Simply put, the drug lords will continue the fight to control the $40 billion to $50 billion Mexican narcotics industry.

John R. Thomson analyzes geopolitical issues in developing countries. He welcomes reader comments at thomson.john.r@gmail.com.

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