Mexico: On the Road to a Failed State?

[silenius]

Source: http://www.stratfor.com/weekly/mexico_road_failed_state

Mexico: On the Road to a Failed State?
May 13, 2008 | 2035 GMT

Edgar Millan Gomez was shot dead in his own home in Mexico City on May 8. Millan Gomez was the highest-ranking law enforcement officer in Mexico, responsible for overseeing most of Mexico's counternarcotics efforts. He orchestrated the January arrest of one of the leaders of the Sinaloa cartel, Alfredo Beltran Leyva. (Several Sinaloa members have been arrested in Mexico City since the beginning of the year.) The week before, Roberto Velasco Bravo died when he was shot in the head at close range by two armed men near his home in Mexico City. He was the director of organized criminal investigations in a tactical analysis unit of the federal police. The Mexican government believes the Sinaloa drug cartel ordered the assassinations of Velasco Bravo and Millan Gomez. Combined with the assassination of other federal police officials in Mexico City, we now see a pattern of intensifying warfare in Mexico City.

The fighting also extended to the killing of the son of the Sinaloa cartel leader, Joaquin "El Chapo" Guzman Loera, who was killed outside a shopping center in Culiacan, the capital of Sinaloa state. Also killed was the son of reputed top Sinaloa money launderer Blanca Margarita Cazares Salazar in an attack carried out by 40 gunmen. According to sources, Los Zetas, the enforcement arm of the rival Gulf cartel, carried out the attack. Reports also indicate a split between Sinaloa and a resurgent Juarez cartel, which also could have been behind the Millan Gomez killing.


Spiraling Violence

Violence along the U.S.-Mexican border has been intensifying for several years, and there have been attacks in Mexico City. But last week was noteworthy not so much for the body count, but for the type of people being killed. Very senior government police officials in Mexico City were killed along with senior Sinaloa cartel operatives in Sinaloa state. In other words, the killings are extending from low-level operatives to higher-ranking ones, and the attacks are reaching into enemy territory, so to speak. Mexican government officials are being killed in Mexico City, Sinaloan operatives in Sinaloa. The conflict is becoming more intense and placing senior officials at risk.

The killings pose a strategic problem for the Mexican government. The bulk of its effective troops are deployed along the U.S. border, attempting to suppress violence and smuggling among the grunts along the border, as well as the well-known smuggling routes elsewhere in the country. The attacks in Mexico raise the question of whether forces should be shifted from these assignments to Mexico City to protect officials and break up the infrastructure of the Sinaloa and other cartels there. The government also faces the secondary task of suppressing violence between cartels. The Sinaloa cartel struck in Mexico City not only to kill troublesome officials and intimidate others, but also to pose a problem for the Mexican government by increasing areas requiring forces, thereby requiring the government to consider splitting its forces - thus reducing the government presence along the border. It was a strategically smart move by Sinaloa, but no one has accused the cartels of being stupid.

Mexico now faces a classic problem. Multiple, well-armed organized groups have emerged. They are fighting among themselves while simultaneously fighting the government. The groups are fueled by vast amounts of money earned via drug smuggling to the United States. The amount of money involved - estimated at some $40 billion a year - is sufficient to increase tension between these criminal groups and give them the resources to conduct wars against each other. It also provides them with resources to bribe and intimidate government officials. The resources they deploy in some ways are superior to the resources the government employs.

Given the amount of money they have, the organized criminal groups can be very effective in bribing government officials at all levels, from squad leaders patrolling the border to high-ranking state and federal officials. Given the resources they have, they can reach out and kill government officials at all levels as well. Government officials are human; and faced with the carrot of bribes and the stick of death, even the most incorruptible is going to be cautious in executing operations against the cartels.


Toward a Failed State?

There comes a moment when the imbalance in resources reverses the relationship between government and cartels. Government officials, seeing the futility of resistance, effectively become tools of the cartels. Since there are multiple cartels, the area of competition ceases to be solely the border towns, shifting to the corridors of power in Mexico City. Government officials begin giving their primary loyalty not to the government but to one of the cartels. The government thus becomes both an arena for competition among the cartels and an instrument used by one cartel against another. That is the prescription for what is called a "failed state" - a state that no longer can function as a state. Lebanon in the 1980s is one such example.

There are examples in American history as well. Chicago in the 1920s was overwhelmed by a similar process. Smuggling alcohol created huge pools of money on the U.S. side of the border, controlled by criminals both by definition (bootlegging was illegal) and by inclination (people who engage in one sort of illegality are prepared to be criminals, more broadly understood). The smuggling laws gave these criminals huge amounts of power, which they used to intimidate and effectively absorb the city government. Facing a choice between being killed or being enriched, city officials chose the latter. City government shifted from controlling the criminals to being an arm of criminal power. In the meantime, various criminal gangs competed with each other for power.

Chicago had a failed city government. The resources available to the Chicago gangs were limited, however, and it was not possible for them to carry out the same function in Washington. Ultimately, Washington deployed resources in Chicago and destroyed one of the main gangs. But if Al Capone had been able to carry out the same operation in Washington as he did in Chicago, the United States could have become a failed state.

It is important to point out that we are not speaking here of corruption, which exists in all governments everywhere. Instead, we are talking about a systematic breakdown of the state, in which government is not simply influenced by criminals, but becomes an instrument of criminals - either simply an arena for battling among groups or under the control of a particular group. The state no longer can carry out its primary function of imposing peace, and it becomes helpless, or itself a direct perpetrator of crime. Corruption has been seen in Washington - some triggered by organized crime, but never state failure.

The Mexican state has not yet failed. If the activities of the last week have become a pattern, however, we must begin thinking about the potential for state failure. The killing of Millan Gomez transmitted a critical message: No one is safe, no matter how high his rank or how well protected, if he works against cartel interests. The killing of El Chapo's son transmitted the message that no one in the leading cartel is safe from competing gangs, no matter how high his rank or how well protected.

The killing of senior state police officials causes other officials to recalculate their attitudes. The state is no longer seen as a competent protector, and being a state official is seen as a liability - potentially a fatal liability - unless protection is sought from a cartel, a protection that can be very lucrative indeed for the protector. The killing of senior cartel members intensifies conflict among cartels, making it even more difficult for the government to control the situation and intensifying the movement toward failure.

It is important to remember that Mexico has a tradition of failed governments, particularly in the 19th and early 20th century. In those periods, Mexico City became an arena for struggle among army officers and regional groups straddling the line between criminal and political. The Mexican army became an instrument in this struggle and its control a prize. The one thing missing was the vast amounts of money at stake. So there is a tradition of state failure in Mexico, and there are higher stakes today than before.


The Drug Trade's High Stakes

To benchmark the amount at stake, assume that the total amount of drug trafficking is $40 billion, a frequently used figure, but hardly an exact one by any means. In 2007, Mexico exported about $210 billion worth of goods to the United States and imported about $136 billion from the United States. If the drug trade is $40 billion dollars, it represents almost 20 percent of all exports to the United States. That in itself is huge, but what makes it more important is that while the $210 billion is divided among many businesses and individuals, the $40 billion is concentrated in the hands of a few, fairly tightly controlled cartels. Sinaloa and Gulf, currently the strongest, have vast resources at their disposal; a substantial part of the economy can be controlled through this money. This creates tremendous instability as other cartels vie for the top spot, with the state lacking the resources to control the situation and having its officials seduced and intimidated by the cartels.

We have seen failed states elsewhere. Colombia in the 1980s failed over the same issue - drug money. Lebanon failed in the 1970s and 1980s. The Democratic Republic of the Congo was a failed state.

Mexico's potential failure is important for three reasons. First, Mexico is a huge country, with a population of more than 100 million. Second, it has a large economy - the 14th-largest in the world. And third, it shares an extended border with the world's only global power, one that has assumed for most of the 20th century that its domination of North America and control of its borders is a foregone conclusion. If Mexico fails, there are serious geopolitical repercussions. This is not simply a criminal matter.

The amount of money accumulated in Mexico derives from smuggling operations in the United States. Drugs go one way, money another. But all the money doesn't have to return to Mexico or to third-party countries. If Mexico fails, the leading cartels will compete in the United States, and that competition will extend to the source of the money as well. We have already seen cartel violence in the border areas of the United States, but this risk is not limited to that. The same process that we see under way in Mexico could extend to the United States; logic dictates that it would.

The current issue is control of the source of drugs and of the supply chain that delivers drugs to retail customers in the United States. The struggle for control of the source and the supply chain also will involve a struggle for control of markets. The process of intimidation of government and police officials, as well as bribing them, can take place in market towns such as Los Angeles or Chicago, as well as production centers or transshipment points.


Cartel Incentives for U.S. Expansion

That means there are economic incentives for the cartels to extend their operations into the United States. With those incentives comes intercartel competition, and with that competition comes pressure on U.S. local, state and, ultimately, federal government and police functions. Were that to happen, the global implications obviously would be stunning. Imagine an extreme case in which the Mexican scenario is acted out in the United States. The effect on the global system economically and politically would be astounding, since U.S. failure would see the world reshaping itself in startling ways.

Failure for the United States is much harder than for Mexico, however. The United States has a gross domestic product of about $14 trillion, while Mexico's economy is about $900 billion. The impact of the cartels' money is vastly greater in Mexico than in the United States, where it would be dwarfed by other pools of money with a powerful interest in maintaining U.S. stability. The idea of a failed American state is therefore far-fetched.

Less far-fetched is the extension of a Mexican failure into the borderlands of the United States. Street-level violence already has crossed the border. But a deeper, more-systemic corruption - particularly on the local level - could easily extend into the United States, along with paramilitary operations between cartels and between the Mexican government and cartels.

U.S. Secretary of Defense Robert Gates recently visited Mexico, and there are potential plans for U.S. aid in support of Mexican government operations. But if the Mexican government became paralyzed and couldn't carry out these operations, the U.S. government would face a stark and unpleasant choice. It could attempt to protect the United States from the violence defensively by sealing off Mexico or controlling the area north of the border more effectively. Or, as it did in the early 20th century, the United States could adopt a forward defense by sending U.S. troops south of the border to fight the battle in Mexico.

There have been suggestions that the border be sealed. But Mexico is the United States' third-largest customer, and the United States is Mexico's largest customer. This was the case well before NAFTA, and has nothing to do with treaties and everything to do with economics and geography. Cutting that trade would have catastrophic effects on both sides of the border, and would guarantee the failure of the Mexican state. It isn't going to happen.


The Impossibility of Sealing the Border

So long as vast quantities of goods flow across the border, the border cannot be sealed. Immigration might be limited by a wall, but the goods that cross the border do so at roads and bridges, and the sheer amount of goods crossing the border makes careful inspection impossible. The drugs will come across the border embedded in this trade as well as by other routes. So will gunmen from the cartel and anything else needed to take control of Los Angeles' drug market.

A purely passive defense won't work unless the economic cost of blockade is absorbed. The choices are a defensive posture to deal with the battle on American soil if it spills over, or an offensive posture to suppress the battle on the other side of the border. Bearing in mind that Mexico is not a small country and that counterinsurgency is not the United States' strong suit, the latter is a dangerous game. But the first option isn't likely to work either.

One way to deal with the problem would be ending the artificial price of drugs by legalizing them. This would rapidly lower the price of drugs and vastly reduce the money to be made in smuggling them. Nothing hurt the American cartels more than the repeal of Prohibition, and nothing helped them more than Prohibition itself. Nevertheless, from an objective point of view, drug legalization isn't going to happen. There is no visible political coalition of substantial size advocating this solution. Therefore, U.S. drug policy will continue to raise the price of drugs artificially, effective interdiction will be impossible, and the Mexican cartels will prosper and make war on each other and on the Mexican state.

We are not yet at the worst-case scenario, and we may never get there. Mexican President Felipe Calderon, perhaps with assistance from the United States, may devise a strategy to immunize his government from intimidation and corruption and take the war home to the cartels. This is a serious possibility that should not be ruled out. Nevertheless, the events of last week raise the serious possibility of a failed state in Mexico. That should not be taken lightly, as it could change far more than Mexico.

Reputation Comments on this post:

Good article about an important issue. Thanks for posting this.

[Expat98]

I think it's more than coincidence that this escalation in violence and these killings of senior officials are coming just when the $1.4 billion Plan Merida is being debated in the U.S. Congress. Someone is trying to convince Congress that the Mexican government and military have lost control of their country, and they need to be funded for a Colombia-style war against the drug cartels. (Or trying to make it politically impossible for Congress to vote against the funding.)

[silenius]

Originally Posted by Expat98

I think it's more than coincidence that this escalation in violence and these killings of senior officials are coming just when the $1.4 billion Plan Merida is being debated in the U.S. Congress. Someone is trying to convince Congress that the Mexican government and military have lost control of their country, and they need to be funded for a Colombia-style war against the drug cartels. (Or trying to make it politically impossible for Congress to vote against the funding.)

Yes, that is what stratfor is for: spinning the wheel into the desired direction.

[Expat98]

I am familiar with Stratfor, and I generally agree with you. However, after reading this, I have to say that it's a GREAT article.

According to many geopolitical gurus, the primary trend of the 21st century will be (as we are already seeing now in many places) the disintegration of state authority into fractionalized competing groups in failed states.

I think this article hits the nail on the head in saying that there is a very real danger of Mexico becoming a failed state. It also points out at the end that legalization of drugs would hurt the cartels more than anything.

But given the one-track thinking of the U.S. government and its complete unwillingness to even consider any approach to dealing with drugs other than "war", you are right that ultimately this article will end up "spinning the wheel in the right direction", i.e., towards the funding of Plan Merida. In this case, I don't really see that as a fault of the article though....the problem is with the way that U.S. politicians think.

[entheogensmurf]

While unrealistic it sure would be nifty if Mexico legalized the majority of drugs, forcefully take over the production and became distributors.
That'd allocate an immense resource to dig that scary country out of the hell they are tumbling into
Initially there would be blood spilled but it's not like they aren't already suffering at the hands of gangs (I'm not familiar with the violence from the government itself).

[Expat98]

Check this out:

Three Mexican police chiefs request U.S. asylum as drug violence escalates

The Associated Press

Wednesday, May 14th 2008, 10:42 AM

WASHINGTON —Three Mexican police chiefs have requested political asylum in the U.S. as violence escalates in the Mexican drug wars and spills across the U.S. border, a top Homeland Security official said.

In the past few months, the police officials have shown up at the U.S. border, fearing for their lives, according to Jayson Ahern, the deputy commissioner of Customs and Border Protection.

"They're basically abandoned by their police officers or police departments in many cases," Ahern said.

Ahern said the Mexican officials — whom he didn't name — are being interviewed and their cases are under review for possible asylum.

In the most recent high-level assassination, a top-ranking official on a local Mexican police force was shot more than 50 times and killed.

Drug-related violence killed more than 2,500 people last year alone in Mexico.

"It's almost like a military fight," Ahern said Tuesday. "I don't think that generally the American public has any sense of the level of violence that occurs on the border."

As the cartels fight for territory, this carnage spills over to the U.S., Ahern said — from bullet-ridden people stumbling into U.S. territory to rounds of ammunition coming across U.S. entry ports.

U.S. humvees retrofitted with steel mesh over the glass windows patrol parts of the border to protect agents against gunshots and large rocks regularly thrown at them.

At times agents are pinned down by sniper fire as people try to illegally cross into the U.S.

Mexico's drug cartels have long divided the border, with each controlling key cities.

But over the past decade Mexico has arrested or killed many of the gangs' top leaders, creating a power vacuum and throwing lucrative drug routes up for the taking.

President Felipe Calderon, who took office in December 2006, responded by deploying more than 24,000 soldiers and federal police to areas where the government had lost control.

Cartels have reacted with unprecedented violence, beheading police and killing soldiers.

In general, violence along the U.S. border has gone up over the years.

Seven front-line border agents were killed in 2007, and two so far in 2008.

Assaults against officers have also shot up from 335 in fiscal 2001 to 987 in fiscal 2007.

There have been 362 assaults against officers during the first four months of 2008, according to Border Patrol statistics.

The pattern has been that when more security resources are deployed along the U.S. border, violence against officers spike in response.

Most assaults are along the San Diego and Calexico, California, border, as well as the Arizona border near Yuma and south of Tucson.

[enquirewithin]

Some countries never learn.

U.S.-trained forces reportedly helping Mexican cartels
By STEWART M. POWELL

Houston Chronicle

http://www.chron.com/disp/story.mpl/...n/5780470.html

WASHINGTON — As many as 200 U.S.-trained Mexican security personnel have defected to drug cartels to carry out killings on both sides of the border and as far north as Dallas, Rep. Ted Poe, R-Humble, told Congress on Wednesday.

The renegade members of Mexico's elite counter-narcotics teams trained at Fort Benning, Ga., have switched sides, contributing to a wave of violence that has claimed some 6,000 victims over the past 30 months, including prominent law enforcement leaders, the Houston-area Republican told the House Foreign Affairs Committee.

The slaughter has gained urgency amid high-profile assassinations of law officers in Mexico since May 1, claiming six senior officers, five of them with the federal police.

Poe held aloft a dramatic, poster-board-size photograph that he said showed guerrilla-style commandos crossing into the United States.

He said the Department of Homeland Security had documented "over 250 incursions by suspected military forces" into the United States over the past decade.
"I was surprised to hear that the United States has trained Mexican forces and some of those have deserted and become the reason for these attacks," Poe said.

The U.S.-trained Mexican security personnel have "switched sides and became assassins and recruiters for the Mexican drug cartels."

Poe, a former prosecutor and criminal court judge, issued the allegations in an unsuccessful effort to persuade the House Foreign Affairs Committee to revamp President Bush's Merida Initiative.

Bush's blueprint calls for $1.4 billion in training, equipment and law enforcement assistance to Mexico and Central America over three years.

Bush also is seeking $500 million in emergency assistance for Mexico this year as part of the supplemental war spending measure.

Democrats have included only $400 million of Bush's request in the $161 billion war spending measure.
Poe tried to require the Bush administration to evenly split spending between the United States and Mexico rather than sending the entire amount south of the border.
"It seems as though the United States has a history in some cases of giving support (to Mexico) and that support turns around and is used against the very people we're trying to protect, in this case, us," Poe said. "We have no assurance that the equipment we're sending to Mexico won't be turned over to the drug cartels and used against us."

Rep. Michael McCaul, R-Austin, also tried to persuade the Democratic-controlled panel to shift part of the Mexico-bound spending to the United States to bolster law enforcement efforts on the border. McCaul, a former federal prosecutor who specialized in counter-terrorism, called border drug violence "an imminent security threat right on our doorstep" that deserves the same effort as the war on terrorism in Iraq and Afghanistan.

The 50-member panel, led by Rep. Howard Berman, D-Calif., largely endorsed the Bush administration's version of the proposal, expanding assistance beyond Mexico and Central America to include the Caribbean nations of Haiti and the Dominican Republic.

Berman referred Poe's and McCaul's proposed changes to the House Judiciary Committee, saying their plans for greater spending by U.S. law enforcement along the border fell within that panel's jurisdiction.