Frail State, Frayed Relations: Mexico, the United States and the Drug Wars

In 2005, when almost 1,000 people were killed in the rising narcotics violence in Mexico, most people dismissed comparisons with the bloodshed Colombia had experienced in prior years. But by 2008, when 6,000 people died in gangland-style slayings, gruesome torture-killings and full-scale massacres, the violence had crept into the public consciousness and Mexicans began referring to the carnage as simply “war.”

As the death toll rose, so did the level of alarm in Washington. On top of mounting evidence that parts of Mexico were under siege from organized crime and drug traffickers came rising fears the violence would spill over the 2,000-mile shared border with the United States. “The No. 1 issue for the United States in Latin America is going to be Mexico,” said John F. Maisto, a former U.S. ambassador to the Organization of American States and a national security advisor for the region for President George W. Bush.

A U.S. Joint Forces Command report released in late November raised the possibility that Mexico could descend into chaos under a worst-case scenario. An unstable Mexico, the report warned, would translate into “a homeland security problem of immense proportions to the United States,” which would demand a national response.

This February, Dennis C. Blair, the director of national intelligence named by President Barack Obama, added to the alarm with a report to Congress saying the “corruptive influence and increasing violence” of Mexico’s powerful drug cartels “impede Mexico City’s ability to govern parts of its territory and build effective democratic institutions.”

Such talk of Mexico as a potential “failed state” provoked Mexican President Felipe Calderón into vehement and repeated denials that his government has lost control of “any part, any single part, of the Mexican territory,” while lashing out at the United States for failing to curb domestic illicit drug use and illegal arms trafficking to Mexico. Calderón has mobilized 45,000 troops against the drug cartels since he took office in December 2006, most recently militarizing the streets of Ciudad Juarez, which is wracked by bloodshed.

Amid these frayed relations, the Obama administration sprang to action, announcing US$700 million to increase security along the border even before the U.S. president’s planned visit to Mexico in April to meet with Calderón and discuss the full gamut of the bilateral relationship, from U.S. support for the drug war and economics to immigration. But as part of his plan, Obama did not announce plans to deploy 1,000 National Guard troops to the border as Texas Governor Rick Perry recently requested.

Diplomacy aside, the worsening violence in Mexico has enormously complicated a relationship that for the past 15 years has been predicated on the promise of the North American Free Trade Agreement. That 1994 trade and investment treaty closely tied the two economies, with Mexico now the second-largest U.S. trade partner. Some 80 percent of Mexico’s exports, many from American-owned assembly plants, are shipped to the U.S. Mexico receives almost half of its foreign direct investment from the U.S. The authors of the historic pact, which marked the first U.S. trade and investment agreement with a developing nation, never contemplated the possibility Mexico could become something other than a more vibrant state. “This is going to be a problem for economic integration with the United States in the future,” said Jorge Chabat, one of the growing number of security experts in Mexico.

Mexico is far from a “failed state,” agree economists, analysts, politicians and academics on both sides of the border. But Mexico does have “failing states,” provinces along the northern border or in the southwest part of the nation where Mexicans themselves say local authorities can no longer protect them against the violence and intimidation of organized crime.

“Mexico is a state with weak institutions,” said Chabat, a professor of international studies at CIDE, the Center for Economic Research and Teaching in Mexico City. “It is not a country in civil war.”

Despite the bloody carnage in the news, normal life continues: Campaigning for midterm congressional elections has started, thousands still bicycle along Mexico City’s Avenida de la Reforma each Sunday and restaurants are still packed.

Business is divided over the fallout from the violence. The effects if the U.S. crisis are also taking a toll with no economic growth expected this year.

“Consumer confidence is at an all-time low in Mexico,” said Alex Cordero, director of finance for Latin America and the Caribbean at Burger King in Miami. “People are afraid to come out of their houses. It was typically in the northern area, but it has spread to the rest of the country.”

But some conservative businesses, such as Wal-Mart, are seemingly undeterred. The retail giant has unveiled plans to open 25 Wal-Mart stores and Sam’s Club warehouses and another 225 smaller supermarkets in the country this year.

Of the estimated 6,000 deaths last year, the vast majority were members of rival drug gangs. Some 500 of the dead were soldiers or police, while only a fraction, 120 people, were victims caught in the crossfire. But the violence has claimed the lives of infants and children, caused law enforcement officials to quit or flee across the border and created ghost towns abandoned by terrified citizens. The southwestern Mexican state of Michoacan is the flashpoint for the narco-terrorism. In the same state where drug gangs once tossed severed heads into a nightclub, gang members threw grenades into an Independence Day celebration last September, killing eight people.

Security experts and Mexico’s drug enforcement agencies say the government offensive against drug traffickers has sparked the surge in violence as rival gangs fight over control of local distribution in Mexican cities and for the lucrative drug routes to the U.S., especially the key smuggling path from Sinaloa up through Chihuahua to Ciudad Juarez.

The army pressure on drug gangs has meant organized crime has branched out into other illegal activity, from kidnapping to extorting local businesses, according to numerous interviews with Mexicans. Local news outlets in violence-prone states have dropped coverage of the drug violence because of threats and disappearances of journalists.

Security experts also trace the roots of the violence and the threat to the social fabric of some areas of Mexico to the end of the rule by the Institutional Revolutionary Party. Drug trafficking was tolerated, either through complicity or disregard, said Chabat, who is echoed by other Mexican security analysts, including Ernest López Portillo, founding president of the Institute for Security and Democracy in Mexico City.

“Drug traffickers, as well as organized crime, developed and consolidated under the protection of political power,” López Portillo said. The Institutional Revolutionary Party’s loss of power in 2000, when the National Action Party won presidential elections, caused a breakdown in the relationship that kept rival gangs under control. As the violence grew, the tolerance ended.

Mexican drug cartels now control a large share of the illegal trafficking of South American cocaine – along with heroin, marijuana and methamphetamines from Mexico – into the U.S. and the rest of the world. Not only have cartels become transnational, but they are also vertically integrated. Experts say that Mexican organized crime operates in 38 nations, while U.S. National Drug Threat Assessment for 2009 reports say the Mexican cartels control drug distribution in most of the U.S. and have networks in at least 230 American cities.

The earnings from illegal drugs, which the U.S. State Department estimated reach as high as US$25 billion annually, nearly equal or surpass Mexico’s receipts from oil exports and remittances sent home by Mexicans working abroad.

Forbes magazine named illegal drug baron Joaquín “El Chapo” Guzmán to its billionaire list this year, underscoring the vast power of the illicit drug business.

Ordinary Mexicans, who also once ignored or tolerated drug trafficking, also turned against the cartels as organized crime spread. Calderón’s approval rating surged after he deployed army troops against the drug lords and their private armies in his first major step after taking office in December 2006. But the relentless violence is taking its toll. A national opinion poll by the Mexican firm Parametría in September showed that almost 60 percent of Mexicans believe drug traffickers are winning the war; only 35 percent believe the government will eventually be successful; and some 41 percent of Mexicans polled would favor turning to outside forces like the U.S. Drug Enforcement Administration for help.

The U.S. signaled its support for the Calderón government with the 2007 Merida Initiative, a security partnership between the two countries that has provided some US$197 million in aid to Mexico to be spent on surveillance aircraft and equipment, technical assistance for programs fighting corruption, promoting judicial reform, better prisons and anti-money laundering efforts.

For the U.S., a full-scale conflict in Mexico would be deeply unsettling, not only because of the long shared border but because of the deep economic and cultural ties with its neighbor to the south.

Following a recent trip to Mexico, Eliot L. Engel, the chairman of the House Subcommittee on the Western Hemisphere, dismissed the idea of a failed state and said he saw a “a vibrant democracy and a free press.” But the New York Democrat insisted the U.S. must engage Mexico further.

“We need to help Calderón; we need to work very closely with him,” Engel said on a recent visit to Miami. “They [drug traffickers] are lashing out and showing him who is boss.”

Engel called for the Obama administration to return to enforcing the ban on imported assault weapons, an enforcement that was quietly discontinued in 2004 under President George W. Bush. Assault weapons are illegally reshipped to Mexico: 95 percent of the killings in Mexico are carried out with U.S.-purchased or stolen firearms, according to a recent U.S. State Department report.

Some specialists in U.S. policymaking insist that the focus on the fight against narcotics traffickers and organized crime in Mexico should not overwhelm other important aspects of the relationship.

Shannon K. O’Neil, a specialist on Latin America with the Council on Foreign Relations in New York, called the depiction of Mexico as a “failed state” both “inaccurate and potentially harmful.”

This talk “suggests that there isn’t a viable partner for the United States in the Mexican government,” O’Neil said, adding that attention to security problems was important, but “shouldn’t overshadow the other aspects of our relationship.”

Securities experts insist Mexico can overcome its organized crime problems by following the examples of other countries, which have also faced concerns over being “failed states.” One of the key issues is to reform the police forces, both through higher salaries and the use of internal affairs departments to fight corruption.

Edgardo Buscaglia, senior advisor at the United Nations Peacekeeping Training Operations Institute, compared fighting organized crime to a vehicle’s need for four wheels.

According to Buscaglia, Mexico needs to boost the government’s capacity to wage war on the cartels, to dismantle their financial assets – those businesses that launder drug money and provide funds to purchase weapons – to vigorously fight government corruption and to cooperate with international intelligence agenices.

“The main engine driving the four wheels is a national and regional prevention program addressing risk factors that foster the flow of youth and business into criminal groups,” said Buscaglia, a professor of law and economics at the Autonomous Technological Institute of Mexico. “Without these four wheels in place, international experience tells us organized crime cannot be reduced.”

In the meantime, despite numerous government blows to the drug gangs, Mexicans continue to live with the violence and intimidation of organized crime.

“No one is dying for a social cause or for defending the country,” said a journalist in the state of Michoacan, who asked to remain anonymous because of the threat of violence. “There is nothing here but stupid deaths.”