Overview Mexicans could be forgiven for thinking they were in hell on earth last year. The economy skidded into recession while drug violence ravaged Juárez and other major cities, leaving more than 5,000 dead. North of the border there was scuttlebutt of Mexico becoming a failed state.
Turns out 2008 may have only been purgatory, this year things have actually gotten worse. As the federal government redoubled efforts to break the back of Mexico’s drug syndicates a crescendo of violence ensued. January was bloodiest month of drug-related violence since President Felipe Calderón came to office in 2006—over 1,000 were killed.
Concentrated crackdowns offered hope of leashing the gangs. The deployment of 45,000 federal troops to 18 locales teetering on chaos, coupled with the arrival of US security aid in the form of the Merida Initiative, produced a sizable drop in violence over the first quarter a year on.
Unfortunately the respite proved seasonal. Several high-profile arrests of drug kingpins this summer spurred a backlash of grisly beheadings and coups de grace. Off-duty policemen, prosecutors, and rival gang members were the usual victim profile. While the scale of the killing had been seen before increasingly innocent bystanders were victimized.
As of this writing, news is emerging that one of the biggest fish of them all, Arturo Leyva, the “boss of bosses” of Mexican drugs, has been killed in a raid by Mexican commandos. The likelihood of indiscriminate gang reprisals certainly has officials waiting to exhale, but the elimination of such a kingpin, as opposed to his arrest, may prove a shrewd tactical, as well as legal, move. Without the chance of bailing out a crime boss there will be less incentive to amp up the violence. And the command structure of the gangs may well be disrupted as result. On a legal front, while Calderón has done a commendable job of organizing raids, the rate of successful prosecution of suspected traffickers in Mexico is lackluster.
The Great Recession The severity of economic contraction stands in marked contrast to the rest of the region. A recent study by the Brookings Institution begins: “With the exception of Mexico, many large Latin American economies have shown a respectable resilience to the global financial crisis.”
The vast majority of government revenues come from the state-owned petroleum industry, remittance payments from Mexicans working in the US, and tourism. All depend heavily on consumption north of the border. As the American consumer went on hiatus, Mexico’s economy went into tailspin, contracting by over 10% from July ’08-’09. Economic performance for 2009 will likely be the worst of any sizable economy.
Heaped atop these ongoing crises, Mexico’s grand surprise this year came in the form of a new infectious disease, the H1N1 strand of influenza. Swine ’09 trained the world’s worries on Mexico. Other nations proved quick to overreact, further ostracizing Mexico in the midst of its woes.
Mexico received latent praise by the CDC and WHO for its handling of the H1N1 outbreak, scarce consolation for the tourism industry no doubt, which saw revenues drop by over 30%. An estimated 100,000 tourism-related jobs were lost as a result. As spring turned to summer and the flu season headed south of the equator, the hysteria around H1N1 gave way to insouciance. By the time the WHO declared H1N1 a pandemic in August, global worries had turned to anticipating the illness’ return in the fall.
Mexico held mid-term elections in July. Apparently what’s old is new again; the centrist PRI that governed Mexico for seven decades, until 2000, staged a death-defying comeback. Beyond the headline of a privival, the election underlined the non-ideological nature of Mexico’s political parties. The ranks of the two major parties, the PAN and PRI, are filled by a precarious group of technocrats and political opportunists. The PRD, the major leftish party in Mexico as recently as 2006, is quickly unwinding. The ‘Green’ party, which gained some 10% of the seats in the July election, has a platform that shies away from environmental advocacy in lieu of supporting a death penalty. This may offer the hope of pragmatic governance in the future, but just as easily may point to a trend of bald party opportunism as opposed to platform coherence.
As a result, it seems professionalization, rather than persona-based politics, is taking hold of the highest echelons of government. For all the hardships Mexico has endured over recent years, a whopping 69% of Mexicans approved of the president’s performance going into the election. This should have helped President Calderón’s PAN. Still the PAN was roundly defeated. If caudillo politics are alive and well in Mexico, as many insist, the phenomenon no longer reaches as deeply into national politics.
The most likely explanation is that while the president is viewed as a politician acting in good faith, the PAN is just as riddled with corruption as Mexico’s other main parties. A well-publicized round-up in the president’s home state of Michoacán led to the arrest of 28 officials suspected of having ties to La familia, a notorious crime syndicate. Two of the ten mayors arrested were PAN members.
In other realms, social policy has oscillated between greater liberalization and conservative retrenchment. Personal drug use of everything from marijuana to heroine was decriminalized in August, a stark response designed to more directly target traffickers. Yet state abortion bans have become so widespread that a federal ban may be in the offing. The fits-and-starts character of social liberalization in Mexico is broadly representative of much of the region.
2010 promises more challenges for Mexico. The economy will almost surely return to positive growth by mid-year and there are already signs that exports to the US are ticking up. The major economic concern is the strength of recovery. Recent statements from high-level policymakers indicate Mexico’s commitment to growth through NAFTA is being redoubled. In my opinion NAFTA promises diminishing returns for Mexico for several reasons, chiefly because the US will plausibly remain an unreliable partner, as Congress’ refusal to allow Mexican trucks on US highways indicates. Instead Mexico should look southward, seeking closer trade ties with Brazil. This would provide Mexican exports a second large market and possibly spur Brazilian FDI to Mexico.
The major security challenge will be localizing drug violence. Extirpating the drug gangs is hopelessly naïve given America’s huge appetite for drugs. A realistic goal should be to decrease the number of gangs operating in Mexico, and try to insulate civilians from the gang’s ire. Seemingly frustrated by haphazard US cooperation, President Calderón signaled a strategic shift in his efforts to reform last month. In a mid-term address he spoke of the need to alleviate Mexico’s poverty. A fight against poverty seems likely to be the hallmark initiative of the president’s last three years in office.
Reforms will need to be strategic and structural in order to put Mexico back on track. Not just to produce signs of recovery next year, but for the economic and security challenges of a new decade.
