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.
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.
A general view of Sao Paulo, the biggest Latin American city (Paolo Whitaker/Courtesy Reuters).
A new piece by Eduardo Guerrero in Nexos looks at the growing problem of extortion in Mexico. Differentiating it from drug trafficking, he finds it more brutal and violence, and argues it is on the rise for three reasons: fragmentation of cartels, displacement of crime rings (and their response to expand into new territories), and finally rampant impunity for such acts.
Drug abuse in the United States is on the uptick overall, though use of “harder drugs” seems to be down, according to a recent study by the Substance Abuse and Mental Health Services Administration (SAMHSA). Marijuana use has increased some 20 percent over the last four years, particularly among young people. Today more than one in five Americans aged 18-25 get high on a regular basis. On the other hand, rates of methamphetamine and cocaine abuse have been steadily declining since 2006.
The World Economic Forum released its Global Competitiveness report this week, which measures competitiveness based on twelve benchmarks that include “basic requirements”, such as institutions, “efficiency enhancers” such as market size, and “innovation and sophistication factors”, such as innovation. Among Latin American countries, Mexico had the biggest boost in the rankings, moving up 8 spots from 66th to 58th, and improving on 10 of the 12 categories (its only drop was in macroeconomic environment). Brazil also made gains, up 5 places to 53rd overall (due largely to the size of its internal market and its sophisticated business environment), and Chile remains at the top of the region and the 31st most competitive nation worldwide. Central American countries such as Guatemala, El Salvador and Nicaragua registered steep declines in their ratings, due to weakening institutions and rising insecurity, while Argentina and Venezuela remained generally unchanged, but near the bottom of the list at 84th and 124thoverall, respectively.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
Argentine President Fernandez waves to supporters after hearing the first results of the nationwide primary election in Buenos Aires (Enrique Maracarian/Courtesy Reuters).
The Pew Research Center released the results of a wide-ranging public opinion poll based on interviews with some 800 Mexicans (the study is part of their larger Global Attitudes Project). It finds strong continued support for military – 83 percent favor their role in the drug war – and for U.S.-Mexico security cooperation, with nearly 3 in 4 Mexicans supporting U.S. training and weapons for national security forces. Calderón, despite an economic recession and ever more bloody drug war, still enjoys the confidence of a majority of Mexicans, with 57% saying they view his political influence in a positive light. While these numbers look bad vis-à-vis past Mexican presidents entering their last term in office, other Western Hemisphere leaders (Barack Obama and Sebastian Piñera, for example) would be quite pleased with such levels of support.
A recent survey of the Guatemalan judiciary, on the other hand, paints rule of law institutions in a much more more troubling light. The Plaza Pública study shows that overall Guatemalans see judges as corrupt, controlled (by vested economic interests and other political elites), and inefficient.
This Cefeidas Group report provides an update on the Argentine elections, where Cristina Fernández de Kirchner looks even more likely to win a second term in the October 23rd election, due in part to the weakness of the opposition.
On a different note, Rolling Stone has an in-depth and well written article about La Barbie, a native Texan who rose to become the top drug kingpin in Acapulco. The behind the scenes narrative of his rise and fall shows why going after kingpins will not, on its own, make Mexico safer.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
U.S. Republican presidential candidate Michele Bachmann gestures beside Mitt Romney during the Republican presidential debate in Ames (Courtesy Reuters).
As primary election season gets underway, the Republican hopefuls have had little to say about Latin America. But there have been a few hints though from the leading candidates as to what they see when they look south – particularly with regard to Mexico.
Michele Bachmann is the most cut and dry so far. She opposes immigration and the legalization of undocumented migrants, and calls for the deployment of troops in south Texas. The Minnesota congresswoman wants to wall the border off completely, saying “As president of the United States, every mile, every yard, every foot, every inch will be covered on that southern border.” When Bachmann felt the need to strengthen her foreign policy chops last spring, she flew to Colombia and Mexico with the House Intelligence Committee – her first trip abroad to a country other than Israel (which she has visited multiple times courtesy of pro-Israel interest groups). Upon returning, she expressed strong support for the drug war.
Mitt Romney and Rick Perry have more nuanced takes – in part because they have more extensive experience in and with the region. Romney has a long history working in Latin America, as his firm Bain Capital invested extensively in Central and South America. On the campaign trail, he lauds those governments with business friendly policies, pointedly contrasting them to those with less open markets (e.g. Venezuela and Cuba).
During the 2008 electoral race Romney became increasingly tough on immigration , and even tougher on border enforcement, running ads attacking John McCain for his “soft” stances. His hardened views have caused somewhat of a family drama as many of his relatives (no, not from the Huntsman branch) live in northern Mexico and have openly criticized him, saying that “I don’t think Mitt understands the causes of illegal immigration.”
Rick Perry, the newest addition to the field and the now front-runner has little interest in Latin America, but does have a long history with Mexico. On immigration, the Texas governor is considerably more progressive than many of his peers. Perry’s record suggests that he supports the DREAM act and similar reforms, given that he approved a law allowing undocumented high school graduates in Texas to pay state tuition. He has even thrown his weight behind a guest worker program for Texas.
But Perry is increasingly vocal and tough on border security. Among the most outspoken critics of Obama’s border policy, he has repeatedly raised alarm bells about violence spilling over from Mexico into the lone star state, and asked for the deployment of military troops and predator drone in response. Unlike Bachmann, Perry has remained firmly opposed to the border fence, calling the idea “ridiculous on its face.”
This early in the season, most candidates and campaigns are focused on domestic issues. Those foreign policy issues at the forefront – Afghanistan, Libya, or Syria – aren’t necessarily a club Latin American nations would want to join. But many do bemoan the lack of interest and understanding of the rest of the Western Hemisphere by these presidential hopefuls.
Latin America should in fact matter more. The region is among the U.S. fastest growing trading partners, creating American jobs with each purchase. With over half a trillion dollars worth of goods going back and forth, Latin America is second only to Asia – and growing much faster – in terms of total trade with the United States. Its largest nations play important roles in multilateral organizations from the G20 to the United Nations Framework Convention on Climate Change (UNFCCC), helping the United States and others resolve difficult global challenges. And finally, according to the latest census 50 million Americans – 1/6 of the population – are descendants of these nations, many still with close ties to their original homes. Ignoring Latin America or alienating Latin Americans only adds up to a missed opportunity, both for the Republican Party and for the country.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
A customs officer is handed a passport by a motorist at the San Ysidro border crossing (Fred Greaves/Courtesy Reuters).
The U.S. debates over Mexico’s drug war increasingly focus on spillover violence. Border state governors Rick Perry and Jan Brewer insist that Mexican cartels are hitting their states hard, portraying the border as a lawless “war zone” in which the drug cartels and illegal Mexicans incite “terror and mayhem” on a daily basis. In stark contrast, Customs and Border Protection (CBP) Commissioner Alan Bersin and Homeland Security Secretary Janet Napolitano contend that the border has never been safer.
The statistics bear out the latter position. A recent study based on FBI figures shows that violent crime in cities within 50 miles of the border is consistently lower than state and national averages. The robbery rate in the Texas border region, for example, remained at least 30 percent lower than the state average for every year in the past decade. The data also show that the number of kidnapping cases in border areas dropped by more than half since 2009. This doesn’t mean that bad things don’t happen – they do. But they happen less frequently along the border, on average, than in other parts of the United States. Despite local politicians’ concerns and rhetoric, the border is more secure than in the past, and in fact safer than the rest of the country.
But the downward trend in border violence does not mean that the Mexican drug war hasn’t had spillover effects on the United States. Among the most troubling is corruption. Local newspapers recount the stories of public officials engaged in foul play; from the South Texas county Sheriff Conrado Cantú, who took bribes from drug traffickers, to Columbus, New Mexico Mayor Eddie Espinoza, charged with operating a gun smuggling ring in connection with Mexican cartels. Available data also show a rise in corruption within the ranks of the border patrol. Since the reopening of the Homeland Security Bureau’s internal affairs unit in 2003 – in and of itself a reflection of the increased risk of corruption within the agency – cases of corruption against law enforcement officials on the border have more than doubled. Tales of CBP agents turning a blind eye to, and sometimes actively aiding drug traffickers smuggling narcotics, arms and migrants across the border abound.
The increase in corruption reflects the lure of drug money and the CBP’s institutional weaknesses. Doubling the border patrol’s numbers in less than a decade made it more vulnerable to corruption, diluting the once highly disciplined force with less experienced and committed newcomers. The border patrol administers lie detector tests to only 10 percent of applicants, more than half of which fail — raising serious concerns about the capability, and even intentions, of many of its new hires.
Other spillover effects are positive for the United States – namely increasing economic activity. Seemingly every day new restaurants, stores, and private schools are opening in border towns, serving clients that once traveled further south. Many attribute Texas’ strong real estate market to the influx of Mexican citizens eager for greater peace and stability. In the spring of 2008, when foreclosures hit record highs across the United States, real estate agents in El Paso reported steady sales of houses and apartments worth more than $100,000. The President of the Greater El Paso Association of Realtors, Dan Olivas, attributed the stability of the El Paso market to “a substantial number of people from Juarez coming over to buy properties for security reasons, for fear of kidnappings, extortion, and cartel violence.” This El Paso trend has continued, and spread more broadly.
Not only do Mexicans buy homes, but many are bringing their businesses north. Immigration consultants say inquiries from Mexicans for EB-5 investor visas – which cost $500,000, and require that applicants’ create at least 10 jobs in the U.S. within two years – have doubled in recent years. Mexico has quickly risen the ranks to become one of the top recipients of these visas.
Mexico’s drug war is indeed affecting the United States – but mostly in ways that politicians overlook, misunderstand, or (more cynically) choose not to recognize. The current policy prescriptions – a higher and longer border wall, more boots on the ground and predator drones overhead – won’t slow seeping corruption, nor bolster the beneficial economic ties. Unfortunately, the wrong diagnosis means also the wrong policy prescriptions, hurting both countries in the process.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
It is becoming increasingly possible that 2011 will be the year that Mexico truly began opening its closed economy. Though political reform seems to have failed and efforts to centralize Mexico’s many police forces stalled, the political system has taken important steps in the last several months that could establish a more open and level economic playing field. What is most interesting, and perhaps hopeful, about these developments is that all three branches of government are throwing their weight behind freer markets.
First, in mid-April, the executive branch through the regulatory Federal Competition Commission, or CFC issued the largest fine for monopolistic behavior in Mexico’s history. As I discussed in an earlier post, Telcel was slapped with a $1 billion penalty for inordinately high interconnection fees. What’s more, the fine marked the second sanction against the telecommunication giant – one more strike, and the government is legally allowed to break up Telcel for good.
The legislature was the next to flex its muscles against domestic conglomerates. Following on the heels of the Telcel ruling, both houses of the senate unanimously approved a number of changes to anti-trust laws designed to foster competition. The reform put in place harsher punishments for those found guilty of monopolistic practices, who can now be fined up to 10 percent of their profits and in the most serious cases (price fixing falls under this umbrella) face 10 years in jail. They also awarded more power to the CFC, including the right to conduct unannounced raids of companies under investigation.
Now the judiciary is jumping into the fray. Pushed by business groups, the public prosecutor’s office launched last month a criminal investigation into Héctor Osuna, former vice-president of the telecom regulator COFETEL, and his colleagues. Investigators suspect that COFETEL executives engaged in back door legal maneuvering to grant Telmex (owned by Carlos Slim) access to the television market on unfair grounds. Specifically, they believe that Osuna intentionally delayed ruling on Telmex’s request for a television concession past the specified deadline – despite his own admission that “for us there was never evidence that [Telmex] had complied with its requirements” — which technically counted as a tacit approval of the request. The result of the investigation is not just vital for Telmex, which would gain substantially by entering the television market, but also for the judicial branch, whose scorecard against national giants hangs in the balance (though the courts have defended more open markets before, notably in 2007 when the Supreme Court struck down a media law that stifled competition).
To be sure, these recent actions are mostly directed at the business interests of just one individual — Carlos Slim. On the other hand, if used more broadly, the new legislation and legal precedents could be real game changers for the Mexican economy. Either way, this is the first time we have seen such a serious full court press for more open markets and sectors in Mexico — and all three branches of government deserve credit for that.
It is becoming increasingly possible that 2011 will be the year that Mexico truly began opening its closed economy. Though political reform seems to have failed and efforts to centralize Mexico’s many police forces stalled, the political system has taken important steps in the last several months that could establish a more open and level economic playing field. What is most interesting, and perhaps hopeful, about these developments is that all three branches of government are throwing their weight behind freer markets.
First, in mid-April, the executive branch through the regulatory Federal Competition Commission, or CFC issued the largest fine for monopolistic behavior in Mexico’s history. As I discussed in an earlier post, Telcel was slapped with a $1 billion penalty for inordinately high interconnection fees. What’s more, the fine marked the second sanction against the telecommunication giant – one more strike, and the government is legally allowed to break up Telcel for good.
The legislature was the next to flex its muscles against domestic conglomerates. Following on the heels of the Telcel ruling, both houses of the senate unanimously approved a number of changes to anti-trust laws designed to foster competition. The reform put in place harsher punishments for those found guilty of monopolistic practices, who can now be fined up to 10 percent of their profits and in the most serious cases (price fixing falls under this umbrella) face 10 years in jail. They also awarded more power to the CFC, including the right to conduct unannounced raids of companies under investigation.
Now the judiciary is jumping into the fray. Pushed by business groups, the public prosecutor’s office launched last month a criminal investigation into Héctor Osuna, former vice-president of the telecom regulator COFETEL, and his colleagues. Investigators suspect that COFETEL executives engaged in back door legal maneuvering to grant Telmex (owned by Carlos Slim) access to the television market on unfair grounds. Specifically, they believe that Osuna intentionally delayed ruling on Telmex’s request for a television concession past the specified deadline – despite his own admission that “for us there was never evidence that [Telmex] had complied with its requirements” — which technically counted as a tacit approval of the request. The result of the investigation is not just vital for Telmex, which would gain substantially by entering the television market, but also for the judicial branch, whose scorecard against national giants hangs in the balance (though the courts have defended more open markets before, notably in 2007 when the Supreme Court struck down a media law that stifled competition).
To be sure, these recent actions are mostly directed at the business interests of just one individual — Carlos Slim. On the other hand, if used more broadly, the new legislation and legal precedents could be real game changers for the Mexican economy. Either way, this is the first time we have seen such a serious full court press for more open markets and sectors in Mexico — and all three branches of government deserve credit for that.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
A worker at a luxury cowboy boot factory works on pairs of boots in the central city of Leon (Courtesy Reuters).
An IMF report published this week lauds the Mexican economy’s health, and credits robust fundamentals and good policy choices for its success in weathering the storm of global economic crisis. With even more positive news, a recent study by the Mexican government shows that FDI is still pouring in despite violence, and is actually going to the most dangerous areas. But this doesn’t mean that violence is not having an effect on the economy. In this Americas Quarterly article, Dora Beszterczey and I argue that violence actually has the greatest economic impact on small and medium sized companies, not the multinationals and domestic conglomerates that receive FDI inflows. At this local level there are signs that heightened violence is taking its toll, increasingly forcing entrepreneurs to pack their bags in search of a safer business environment.
There are a number of interesting profiles of Peru’s new drug chief Ricardo Soberón in the news this week. As I talked about in the past, security issues related to drug trafficking and organized crime will be a huge challenge for Humala. While El Comercio harshly criticizes the choice, Soberón’s academic bonafides and more inclusive approach (he favors eradicating rural poverty before coca plantations, and wants to engage the coca growers movement in the national dialogue about drug policy) may enable the new Peruvian administration to balance their promises of social inclusion with a more comprehensive security policy. For those interested in a more sweeping view of drug policy in the history of U.S.-Peru relations, Paul Gootenberg’s book Andean Cocaine: the Making of a Global Drug is well worth a read.
Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.
