Free trade agreements with Colombia, Panama and South Korea finally passed, after four plus years of delay. My colleague Ted Alden talks about the consequences for the U.S. job market and for the Obama administration’s trade and investment strategy.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
Members of Venezuela's militia and supporters of Venezuela's President Chavez attend a ceremony in Caracas (Jorge Silva/Courtesy Reuters).
Today, chances are Hugo Chávez will face off against Henrique Capriles Radonski in the 2012 October presidential elections. The 39-year-old former mayor of Caracas’s Baruta Municipality (2000-2008) and current Miranda state Governor is leading the opposition candidates, and polling just 2 percentage points below Chávez. He is a lawyer who entered politics at the age of 26 to become the youngest member of the Chamber of Deputies until it was dissolved in 1999.
Capriles appeals to the non-Chavista Left. Following in Lula’s Brazilian footsteps, he has poured money into education and social programs, drawing strong support among the lower classes as well as from a growing contingent of independent voters put off by the Chávez-centered polarization of Venezuelan politics. Comfortable among slum dwellers and businessmen alike – and unafraid to don Chávez’s signature Veneuelan flag jacket– the young candidate has won hearts and minds with his intensity and obvious passion. He has also attracted Chávez’s ire. In 2004, he was arrested for “trespassing, intimidation and ‘violating international principles’” for his involvement in a protest outside the Cuban embassy in the wake of the 2002 attempted coup. The charges were eventually thrown out and two months after leaving prison he was reelected to his post as mayor with 80 percent of the vote.
Yet while a rising star, he faces three major challenges. The first is the divisions within Venezuela’s anti-Chávez opposition. There are other worthy competitors — Leopoldo López, the former Mayor of Chacao Municipality and Pablo Pérez, another young and dynamic governor of the state of Zulia. While one of these — probably Pérez — may give him a run for the nomination, the real test will be whether the opposition can remain united. In the past, their divisions have weakened them perhaps as much as any moves Chávez has made.
The opposition’s track record has gotten a lot better. In the 2008 regional elections they were able to come together, winning governorships in 5 of Venezuela’s 22 states (including the two most populous, Miranda and Zulia). The 2010 Congressional run was their best showing yet. By uniting behind candidates chosen either by consensus or in local primaries, they managed to win the popular vote (52%) — though only 40% of the legislature due to gerrymandering. Signs look good for this coming year, as last month the three major opposition parties signed a pact promising to support the winner in February’s primary.
A second challenge is Chávez’s electoral machinations. While the ballot box itself has not yet been in question, the Chávez administration has repeatedly tilted the electoral playing field — arresting prominent opposition leaders, silencing independent media outlets, and undercutting autonomous institutions such as the National Electoral Council (CNE). The meddling for 2012 has already started, beginning with moving up the election date from December to October 2012. This is likely just the first of many measures to take the wind out of opposition sails.
The third, less analyzed challenge is Chávez’s health. At first brush his potential inability to run for reelection should boost the opposition’s chances. But it could make it all the much harder. Left without a popular candidate, hard-line Chavistas might pull the plug on elections all together. Hugo’s brother Adán has already suggested as much, saying recently, “It would be inexcusable to limit ourselves [PSUV] to only the electoral and not see other forms of struggle, including the armed struggle.” Instead of opening up Venezuela’s political system, Chávez’s absence might put an end to Venezuela’s democratic trappings altogether.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
Police pay became a hot topic of discussion over the past two weeks with the release of a Mexican government report breaking down police salary by state. The disparities are stark — with police officers in Tamaulipas earning monthly salary of just $268, while their counterparts in Aguascalientes bring home about $1,342 a month.
An obvious question is how does this affect crime and violence? The answer is less obvious. Overall, the data shows no straightforward correlation. Patrick Corcoran lays out many other factors that affect public safety, including each officer’s moral compass, the chances of getting caught the severity of the punishment. Daniel Sabet’s study on corruption within the Tijuana police makes this point, laying out the complicated calculus behind an officer’s decision to fall in (or not) with the bad guys.
Still, the graph below of police salary vs. homicide rate by state suggests that police pay does matter. While we see a lot of variation at the low and the middle end of the scale, high salaries and low violence are strongly correlated. The top nine payers– including states that are in drug traffickers’ line of fire (e.g. Baja California) – have relatively few murders per capita. While not the only and last word, this should encourage lagging state governments to rethink their spending priorities.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
Andean protesters shout slogans against the government in Lima (Enrique Castro-Mendivil/Courtesy Reuters).
Last month Peruvian President Ollanta Humala signed the popular consultation law, approved unanimously by Congress in August. This new law will require all public and private investors to consult local indigenous groups if and when their activities may affect their communities or ancestral lands. This is an important democratic step forward, reaching out to citizens who have for years been left out of the political process. In Latin America more broadly, incorporating indigenous communities into politics is a key challenge for consolidating democracy. But these types of laws also have their dangers, specifically potentially negative effects on investment and economic growth. Peru is only the latest of the Andean countries to take on the so-called “indigenous question” — trying to balance economic development with greater social inclusion.
Of its neighbors, Colombia has the longest history and the best track record. It incorporated indigenous consultation into the 1991 Constitution, and then created a Division of Indigenous Affairs in the Ministry of the Interior, as well as offices of indigenous affairs within each of its military commands. To be sure, things haven’t gone perfectly – for instance some indigenous groups accuse President Santos of ignoring their interests in the latest national development plan. But overall Colombia has been successful, enabling a greater voice for all of its citizens while also attracting billions in investment in oil production, coal mining, and other industries.
More cautionary tales come from Bolivia and Ecuador. Both nations have large indigenous populations which historically have been socially and politically marginalized, and excluded from the economic benefits of resource extraction — often by foreign companies — taking place on their land. As these groups have increasingly organized and mobilized, their distrust and animosity has led to conflicts, violence, and the fall of more than one democratically elected government.
Current Presidents Evo Morales of Bolivia, and Rafael Correa of Ecuador have both struggled to balance inclusion with economic development. Morales has perhaps gone the farthest in providing a voice for indigenous groups within the new Constitution, but in return has seen foreign investment plummet. Since Morales’s election in 2006 Bolivia’s natural gas output has stagnated, and proven reserves have shrunk by about a third. In Ecuador, Correa began with the backing of the Confederation of Indigenous Nationalities of Ecuador (CONAIE), but is now at odds with the country’s largest indigenous organization, backing away from many of their demands regarding new mining projects.
While Peru’s indigenous communities have yet to organize politically, there is a growing discontent among these masses, which took a toll on the previous government’s popularity and led to several uprisings around natural resources extraction. The most violent of these – known as the “Baguazo” – occurred during the summer of 2009 in the Amazonian province of Bagua, where 22 indigenous protesters and 12 police officers died in clashes over mining projects in the area.
For Peru, it remains to be seen whether Humala can channel these pent up frustrations positively into the political process without scaring off investment. As the Ecuadorean and Bolivian examples show, more than just rhetoric — or leftist credentials — are needed. But if the new government can pull off this delicate balance, it will help support continued fast paced economic growth.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
At least 27 people were found dead in the Guatemalan village near the border with Mexico last May. Police look at a message written with a victim's blood, which reads: ‘What’s up, Otto Salguero, you bastard? We are going to find you and behead you, too. Sincerely, Z200.’ (Courtesy Reuters).
In the House Foreign Affairs Committee’s recent hearing, “Has Merida Evolved? Part One: The Evolution of Drug Cartels and the Threat to Mexico’s Governance,” Committee Chairman Connie Mack (R-Fla), among others, expressed his support for a U.S. counterinsurgency program (COIN) to fight Mexican drug traffickers. Calling the cartels “a well-funded criminal insurgency raging along our southern border,” Mack said the only way to win the drug war is through an “all U.S. agency” COIN approach, which would require greater U.S. military involvement.
I’d tend to agree instead with this article by Patrick Corocan, which says that sending U.S. troops into Mexico will not provide a long-term solution to the country’s security challenges, first because the nature of narco-violence is distinct from that of an insurgency (so a COIN response to it would be inappropriate) and because of the “practical difficulties” involved in such an approach (including a popular backlash to it in Mexico).
This week the U.S. Senate Caucus on International Narcotics Control released its report, “Responding to Violence in Central America,” which draws attention to the rapid escalation of violence in the region – most of it tied to the ramped up activity of organized crime, as detailed by the Woodrow Wilson Center study I discussed last week. The report offers a number of policy recommendations to deal with the problem, the most critical (and innovative) of which include placing more emphasis on extraditions of drug traffickers to the United States, improving witness protection programs and expanding cooperation between U.S. law enforcement and regional counterparts. It also notes that while U.S. security assistance for Central America has grown over the past three years, it is likely to stagnate – or even decline – in the future, making it even more critical for countries in the region to seek other sources of security funding by reaching out to other donors and to the domestic private sector.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
Governors (L-R) Jose Guadalupe Osuna Millan of Baja, Humberto Moreira Valdes of Coahuila, Texas Governor Rick Perry, California Governor Arnold Schwarzenegger, Jose Natividad Gonzalez Paras of Nuevo Leon, Arizona Governor Janet Napolitano and Eduardo Bours Castelo of Sonora pose as characters from the movie "Terminator" at the 26th Border Governors Conference (Courtesy Reuters).
This week the Mexican state of Baja California will host the two-day Border Governor’s Conference. Started nearly two decades ago, the annual meeting brings together governors from all four U.S. and six Mexican border states to discuss the issues directly affecting their states and citizens. At its height in the early 2000s, the governors and their ministers met not just with each other but also with representatives from Commerce, Homeland Security, the Environmental Protection Agency (EPA), and other departments and agencies to influence border-centered debates in both Washington, DC and Mexico City.
But in recent years the conference has fallen on hard times, a victim of polarizing politics. The 2009 session hinted at the divides, as the governors of Arizona, California and Texas failed to make it to Monterrey due to “scheduling conflicts.” It hit its nadir in 2010 in the wake of Arizona SB 1070. The Mexican governors wrote a letter calling the law “discriminatory [and] racist” and announced their plan to boycott the meeting if hosted, as planned, by Arizona Governor Jan Brewer in Phoenix. Brewer cancelled the conference in retaliation. In the end, Governor Richardson of New Mexico held the meeting, but no other U.S. governors attended, leaving the future of this consultative mechanism in limbo.
The conference also has suffered from a sprawling agenda and size. With its initial successes the agenda items grew, as did the number of participants. In recent years there have been some 25 working groups on topics ranging from wildlife to science and technology. The influx of hundreds of staffers and activists has made the process much more cumbersome, and reduced the intimacy and spirit of cooperation that guided the conference in the past. Reduced in large part to the signing of agreements and photo opportunities, many governors (particularly from the United States), began skipping the event.
As the United States and Mexico search for common ground and mutual solutions to pressing problems, it is time to revitalize this mechanism. It should refocus on practical problems facing the border states and their residents. Rather than covering the gamut, the agenda should be streamlined to emphasize a few vital issues. It must enable leaders to actually meet and discuss the serious challenges facing their states and constituencies, re-energizing the consultative element of the event. Most pressing today is security, where policy so far has been guided from the center, even though the effects are concentrated on the border.
Once refocused, the border governors need to organize better to influence their respective governments, shaping policies that in turn shape the border. One potential model is the Pacific Northwest Economic Region (PNWER), which brings together state legislators, governors, civil society and businesses to lobby the federal government and strengthen U.S.-Canada border security and the region’s economic competitiveness. Another is scaling up the San Diego Association of Governments’s (SANDAG) annual binational conference, which brings together local leaders in California and Baja California to address just one broad agenda item at each meeting – such as the economic impact of wait times at shared border crossings.
As Arizona Governor, Janet Napolitano repeatedly said that one of her closest day-to-day working relationships was with Sonora Governor Eduardo Bours. This reality – that cross-border issues and events strongly affect border state residents’ daily lives — hasn’t changed. Revitalizing the Border Governor’s Conference is one means to address these shared challenges, and reincorporate regional problem-solving strategies into larger U.S.-Mexico debates.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
Narco Killings 2011 Map (Courtesy WM Consulting).
There has been much debate in Mexico about the number of drug-related killings since the start of drug war in 2006. The Mexican government provides an official database that puts this figure at some 35,000. Others, such as Reforma, provide an estimate near the official number — but more current — now totalling some 37,000.
As important as the total numbers is their breakdown. Here, the Mexican government provides some estimates, sorting the murders according to whether they were acts of aggression, executions or occurred as a result of a confrontation. Walter McKay at WM Consulting has built a useful tool by scouring local newspapers in many (but not yet all) Mexican states. This map depicts the murders according to whether the victim was a civilian, politician (or other high profile individual), or law enforcement official, and also shows the sites of car bombs and mass graves. McKay puts the number of deaths as a result of the drug war at some 47,000, significantly higher than the government estimate. As the policy debates continue, these various sources of information will be vital to informing steps forward.
This week the Woodrow Wilson Center released its report, “Organized Crime in Central America: The Northern Triangle”, which has many well researched and written chapters on the accelerated rise of criminal structures over the past three decades in El Salvador, Honduras and Guatemala. To bolster weak rule of law institutions vulnerable to the influence of organized crime in the region, it argues, the U.S. will need to contribute more funds to the region’s security initiatives – even as individual countries play a greater part by collecting more taxes. Though overall the picture is disheartening, this useful study lays out the complex factors underlying the violence in Central America today.
It also shows that while all Central American nations struggle with crime and violence, the real security challenges are in the Northern Triangle – where the magnitude and type of organized criminal operations are unparalleled. This finding questions the traditional blanket regional approach taken by the United States (through CARSI), or the way other Latin American or European countries develop multilateral security initiatives within Central America.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
Container ship sails beneath Golden Gate Bridge en route to port in California (Robert Galbraith/Courtesy Reuters).
Today the Council on Foreign Relations is releasing its independent Task Force report, “U.S. Trade and Investment Policy.” Led by Andrew H. Card — former White House Chief of Staff under George W. Bush – and Thomas A. Daschle – former U.S. Senator and Senate Majority Leader – and directed by my CFR colleagues Edward Alden and Matthew Slaughter, the 22 members took on the increasingly thorny issue of the future of U.S. trade policy.
One of the most interesting discussions within the report is of multinational corporations. While representing less than 1 percent of all companies, they provide nearly a quarter of all private sector jobs, nearly 40 percent of all U.S. capital investment, and conduct the vast majority of research and development. These are the engines of today and tomorrow’s economy – and as such the United States needs to become much more competitive in attracting these corporations to its shores.
Another important discussion involves the increasing skepticism among the U.S. public toward trade’s benefits. The group rightly points out this has occurred not because of the general public’s lack of understanding or “ignorance”, but because of the experience of the average American worker. Over the last ten years –the time frame within which trade became a much harder sell — nearly all American workers saw their real earnings fall. U.S. based export oriented jobs – which in general pay more than domestically oriented ones – haven’t grown, even as the world economy exploded. Inequality too has grown during this time frame. And while the report rightly points out that trade was not the only, or perhaps even the deciding factor behind these shifts, it did play a role. As such, any new policy must take into account and work to enhance the widespread benefits of trade for America’s citizens.
Too often participants in policy debates come out as for or against trade, without defining for what end. Here, the Task Force usefully defines the main goals of U.S. trade and investment policies as “improving American living standards and advancing America’s broader interests.” To better meet this end it provides several concrete recommendations, including prioritizing service sector opening in ongoing trade negotiations, reforming the tax code and removing protectionist regulations on international mergers and acquisitions in order to encourage foreign investment in the United States, streamlining the WTO and creating stronger international trade enforcement mechanisms, and expanding adjustment assistance programs to provide a broader safety net for American workers.
As is often the case in trade oriented debates, Task Force members weren’t able to reach a unanimous consensus on what a better trade policy would look like, and how to get there. It is worth looking at the additional dissenting views section to get a sense of the varied perspectives on the report’s conclusions. Still, everyone did agree to the Task Force’s basic takeaway – that the administration and Congress must revise America’s trade strategy or risk losing out on the enormous potential gains of deeper global engagement. The report is well worth a read, offering insights on how the United States can emerge from the recession and financial crisis a stronger and more capable leader in the international economy.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
Workers harvest soybeans at a farm in Tangara da Serra, Brazil (Paulo Whitaker/Courtesy Reuters).
A recent article by Mariano Turzi argues that soy is the most recent of Latin America’s commodity booms, creating many of the same challenges that metals, minerals, and oil brought in the past. Whether economic booms and busts, populist leaders, or fights between more powerful (e.g. Brazil) and weaker (e.g. Paraguay, Uruguay, and Bolivia) nations in the supply chain, Turzi worries about the fallout for the Southern Cone and its future.
Mexico Evalúa recently released the first study I have seen evaluating the outcomes of Mexico’s New Security Model. The results are mixed, at best. Some of the most fundamental measures differentiating the new security model from its predecessors – such as tracking law enforcement officers and their arms in a national database – have not become universal, and in fact have actually declined in recent years. The huge government outlays – now six times the amounts at the start of Calderon’s term – remain at times unspent and in others poorly accounted for. Accountability in general remains perhaps the biggest challenge. Mexico Evalúa finds it hard to judge these programs from the outside, as few metrics are provided. The military maintains even less oversight than the other security agencies they analyze. But reports such as these are at least a start toward pushing for more openness, evaluation, and in the end, better outcomes.
Finally, the Justice Department’s National Drug Intelligence Center’s annual report shows cocaine prices increased by a third and purity decreased by more than two thirds from 2007 to 2010. This seems to have led to a decline in cocaine use – down by almost a quarter — confirming the findings of the Substance Abuse and Mental Health Services Administration report included in last week’s reads. Less positive, methamphetamine production (north and south of the border) seems to have reached an all time high, driving prices down, while purity has continued its steady climb.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
A man holds a symbol of the Patriot Party during a political rally in Solola (Jorge Lopez/Courtesy Reuters).
Front-runner Otto Pérez Molina won 36% of the vote in first round of Guatemala’s presidential elections on Sunday, and will face off against second place finisher Manuel Baldizón in the second round in November. Though winning the runoff election will not be easy for either candidate (both have to build coalitions to clinch a second-round victory); far trickier will be facing Guatemala’s long list of challenges, topped by insecurity.
Guatemala’s murder rate has more than doubled in the last twenty years, reaching a high in 2009 when nearly 6,500 people were killed – 17 a day — more than in the war zones of Iraq and Afghanistan. Over the past four years the government of Álvaro Colom has been unable to quell the violence or bring its perpetrators to justice. During the campaign the leading presidential candidates advocated a mano dura, or iron fist security policy, with Pérez Molina as its most forceful proponent (his Patriot Party has a clenched fist as its emblem). He even proposed bringing back the notorious military task forces used against guerrillas in the 1980s and 1990s, this time to take on drug traffickers.
It is unlikely this strategy will work. Guatemala’s military today doesn’t have the capacity to ramp up its public safety functions. As a part of the 1996 peace agreements (ending 36 years of civil war) the military agreed to downsize. The current force stands at 17,000 troops (roughly 60 percent less than 1990 levels). Earlier this year, when the government called a state of siege in the northern province of Alta Verapaz taken hostage by traffickers, the military could only send 600 soldiers in to patrol the area – less than one tenth the size of the Mexican military force sent to fight the La Familia cartel in Michoacán in 2006. After the operation, President Colom himself admitted that the military could not match the drug traffickers’ vast resources, noting “just the weapons seized in Alta Verapaz are more than those of some army brigades.”
But the issue is not just one of capacity. Even if the government found the resources to beef up the military, it shouldn’t be the force to take over the fight against organized crime. If deploying the armed forces in Mexico’s drug war is considered controversial, in Guatemala it is decidedly more complicated. The Guatemalan army enjoys considerably less citizen trust than their Mexican counterparts due to their long and ignominious involvement in the country’s brutal civil conflict. The U.N. truth commission report (whose findings Pérez Molina questions) deemed the war a genocide, and blamed the army for 93 percent of the massacres of innocent civilians that occurred. Breaking the peace accords’ promise to keep the military out of citizen security would be a step backward to a past many would rather not revisit.
Growing evidence too suggests the military itself may well have ties to organized crime. Reports from the UN peacekeeping mission in Guatemala (MINUGUA), and a number of NGOs show that long standing military ties with the criminal groups that today work with Mexican and Colombian drug traffickers. The Kaibiles, an elite special operations force, trained some of the Mexican soldiers that would later become the Zetas, and many former Kaibiles now work full time for the cartels.
If the army is not the right choice for improving security, the only alternative is the National Civil Police (PNC). Unfortunately, the PNC faces many of these same challenges: a lack of manpower, resources, and public trust. Furthermore, the U.S. and the Guatemalan government have tried a number of times, and on the whole failed to reinvent the PNC in the past.
Still, trying again is the least bad alternative. And there are a few hopeful signs from the past year. With new wiretapping, plea bargaining and seized assets laws in place (in no small part due to the work of CICIG), the police have arrested some high-ranking drug traffickers and suspects in high-profile murders. With human rights leader Helen Mack at the helm of a new police reform initiative, some observers are more optimistic about the chances of finally building a professionalized Guatemalan police force.
As the U.S. and other countries in the region look to begin working with the new administration, security assistance – including Mérida funds — should focus on strengthening the national police (and court systems). Despite the PNC’s past failures, and Guatemala’s weak institutions in general, the issue of security is simply too important to let fall by the wayside, or worse, into the wrong hands.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
