Foreign Policy Blogs

Year in Review

Year in ReviewFourteen months ago forecasters had Mexico slated for ongoing recession in 2010, unsurprising given the 7% contraction Mexico experienced in 2009 and the sparse signs of consumer demand increasing in the U.S. Instead, third quarter figures have Mexico on track for 5.3% growth this year. Manufacturing is up almost 10% year-over-year, and rising oil prices are also bolstering the country’s balance sheet. By macro-metrics, Mexico smartly rebounded from the economic doldrums of 2009.

Still, surging drug-related violence accounts for the generally dour headlines about Mexico. From January to November, 12,456 people were killed in Mexico, making 2010 the most violent year since President Calderón declared war on the drug gangs. Pundits, notably Jorge Castaneda, a former foreign minister of Mexico, question whether the government should be taking on the traffickers at all. Others have pointed toward a bias in the drug war—while the government has marked significant coups against most syndicates it left one of the most powerful gangs, the so-called Sinaloa cartel led by the notorious ‘Chapo’, relatively unscathed.

The biggest surprise in 2010 was the success of Cancun climate change conference. In the months leading up to the meeting, delegates and analysts summarily predicted Cancun would be a waste of time. Not so. When the conference concluded in early December, the world’s major emitters of greenhouse gases had inched closer to a new framework to reign in anthropogenic climate change. No hard pact was forged at Cancun. But four potentially significant agreements emerged from the meeting; 1) Provisions—known as REDD (Reducing Emissions from Deforestation and Forest Degradation)—were made to protect tropical forests. Essentially countries will be paid to preserve their tropical forests; 2) $100 billion will be allocated for a fund to help fight climate change, though more details are unclear; 3) A fund for the distribution of proprietary technology to curb climate change will be created; and 4) A deal to monitor progress on nation’s commitments will be put in place.

Cancun was by no means a scintillating success, and the agreements coming out of it are tenuous. But it shows that all the major pieces in the climate change puzzle now recognize that climate change now poses a threat to global welfare and international cooperation involving all major emitters is needed.

Part of the credit for the Cancun conference goes to President Calderon for tapping his foreign minister, Mexico’s highest-ranking diplomat, to preside over the conference, instead of the energy minister, as is often the case. In the lead up to the conference, Espinosa sedulously worked with different delegations to craft a balanced agreement to set the stage. Once the conference started she didn’t flee the spotlight. Most notably, she took a firm line against Bolivia when its delegation threatened to derail consensus on the various agreements in the last days of the meeting. At the conference’s conclusion Espinosa urged delegations to consider Cancun “not as an end…but as a beginning.” China’s delegation praised her efforts, and Chinese state-run media has been vocal in dubbing the conference a success. India’s delegate Jairam Ramesh praised her as “a goddess.” I consider her the person of the year.

2011 is likely to continue two discordant trends: economic growth will continue and so will violence. Increasing tourism to Mexico, manufacturing, and tentative forecasts for oil prices at relatively high levels (above $75 a barrel) will form the basis for economic growth. One factor that hasn’t received enough attention that I believe is likely to contribute to growth in the coming years is Chinese investment in Mexico. Since 2009, Chinese investors have begun investing in maquiladora operations for production of low-cost Chinese cars. With factory wages in Mexico on par with those in China “near sourcing” is likely to accelerate.

Meanwhile, the gore is likely to continue in 2011, especially along the corridors in northern and central Mexico where the narcos operate. None of the major drug syndicates have been dismantled as a result of the war on drugs, though La Familia has seen its leadership take on an unhealthy supply of lead in the past year. The government could keep arresting gangsters and killing them in shootouts but political cooperation from the White House and Congress is needed to interdict arms from heading south and slow demand for drugs in the States.

 

Author

Sean Goforth

Sean H. Goforth is a graduate of the University of North Carolina-Chapel Hill and the School of Foreign Service at Georgetown University. His research focuses on Latin American political economy and international trade. Sean is the author of Axis of Unity: Venezuela, Iran & the Threat to America.