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The Mexico Tragedy

from the magazine

The Mexico Tragedy

America’s southern neighbor confronts metastasizing violence and institutional corruption that threaten its future. Spring 2019
Politics and law
Economy, finance, and budgets

Will Mexico ever become a healthy democracy—more law-abiding and better governed, more prosperous and free? The question is as enduring as it is hard to answer. Few nations have inspired such a mixture of love, fear, and revulsion—a perennial sense that it has come so far, yet has so far to go.

The world enjoys Mexico: the country welcomed nearly 40 million tourists in 2017, sixth most of any nation, surpassing Germany and the United Kingdom for the first time. Mexicans enjoy themselves: they love their fiestas, and surveys show them satisfied with their family lives. Many things are moving in the right direction. Infant mortality rates have declined; life expectancy is up. GDP per capita has risen. The middle class has slowly grown, and illegal emigration to the United States precipitously declined. Billions of dollars of remittances from Mexicans living in the U.S. have helped reduce rural poverty. Shielded from foreign competition for decades, Mexican companies now thrive in the global economy. Exports have increased from 13.4 percent of GDP in 1994, when the North American Free Trade Agreement took effect, to 37.9 percent of GDP in 2017, and they have shifted from raw materials to manufactured goods. Support for NAFTA has doubled since 1994, from 45 percent to 90 percent, an all-time high.

Mexican elections have been free and fair since the Institutional Revolutionary Party (PRI) lost its 70-year hold on the presidency in 2000. The military has shifted allegiance from the party to the elected government. Macroeconomic policy has steadily improved since the 1970s and 80s, when successive presidents overspent and bankrupted the country. A cadre of university-trained economists has professionalized the treasury department. The press is freer. The arts are flourishing.

Yet political dysfunction and the resulting feebleness of many government institutions threaten to destroy all this progress. Adding to the worries: the landslide victory in July of a president, Andrés Manuel López Obrador, who is a creature of the system at its worst. “There are two Mexicos—the good Mexico and the bad Mexico,” says José Luis Berrondo, chairman and CEO of the appliance maker Controladora Mabe, S.A., one of the nation’s most admired companies. “The problem,” he adds, “is that the bad Mexico is winning over the good Mexico.”

Since the country’s birth, the barbarism in Mexican life has been its shape-shifting, dog-eat-dog lawlessness—an enduring contempt for shared norms and an allegiance to personal power that in recent decades has expressed itself in waves of violent crime. And whereas ten years ago, most crime came from drug cartels on the U.S. border, the problem has since metastasized nationwide. In cities and villages, from north to south and sea to sea, an ever-evolving, ever-replenishing population of thieves, extortionists, kidnappers, drug traffickers, cheats, and assassins has besieged society, defying or co-opting governments at every level. Mexicans’ ingenuity and ambitions, long stifled by their self-dealing political class, are finding an outlet in outlawry.

Consider the agility of the drug trade. Mexicans have supplied the U.S. with illegal substances for more than a century—beginning with marijuana and heroin between the world wars, then Colombian cocaine in the 1980s, methamphetamines a decade later, and now fentanyl, by way of China. What began as a small, locally controlled business has evolved into a multibillion-dollar industry dominated by large networks that clash and collude with one another and with the state. Violence intensified after the PRI’s defeat in 2000 scattered power among competing factions. It grew still worse after 9/11 prompted the U.S. to harden the border.

A six-year campaign by the Mexican military broke up the largest cartels and captured or killed 25 of the 37 most wanted capos, but the victory was Pyrrhic: Mexico’s murder count during the period doubled, as the cartels fought more fiercely among themselves and moved into new businesses and regions. The return of the PRI, which won back the presidency in 2012, brought no relief. The homicide rate under President Enrique Peña Nieto reached 26 per 100,000 people in 2017, the highest ever recorded in Mexico, and higher than any country with 50 million people or more except Brazil. (The U.S. homicide rate in 2017 was 5.3 per 100,000.) Support for Peña Nieto collapsed after 43 student teachers were kidnapped in 2014 by police in Guerrero and delivered to a local gang, who killed and incinerated them.

The numbers shock. More than 135,000 people have been killed since 2012. More than 1,300 clandestine graves have turned up since 2007. More than 37,000 people are reported missing. More than 600 soldiers have been killed in the drug war. At least 130 politicians and nine journalists were killed preceding the elections in July. And the violence is indeed spreading. Murder rates have risen in 26 of the country’s 32 states. In 2014, 152 municipalities accounting for 43 percent of Mexico’s population reported at least one execution-style murder per month; in 2017, the number grew to 262 municipalities and 57 percent of the population. Villages have become worse than cities: 40 percent of the population lives outside metropolitan areas but suffers 48 percent of homicides.

Most killings remain tied to the drug wars, but a growing share comes from robbery, assault, extortion, and kidnapping. “Mexico is no longer a world of cartels and capos,” says Alejandro Hope, a security specialist based near Mexico City. Organized crime networks control territory to varying degrees in 19 states and the capital, but much less of their profits comes from the U.S. drug market, which has become more competitive. The biggest new business is stealing oil from the state-owned energy company, Pemex. Mexico has the largest, most efficient black-market fuel-distribution network in the world, Hope says. In Puebla, reported thefts from pipelines spiked from 15 in 2000 to 1,533 in 2016. Guanajuato—emblematic of the good and bad Mexico—ranks third among states in job creation, thanks to its auto industry, and first in homicides, due to murders tied to fuel thefts from refineries.

Train robberies and carjackings are more frequent. Robbery of cargo trucks has jumped 180 percent in two years. Coca-Cola and Pepsi refuse to send delivery trucks into parts of Acapulco because so many have wound up stolen and burned. The rate of reported house robberies reached an all-time high of 179.4 per 100,000 homes in 2017. More than 80,000 people were reported kidnapped. Some 5,000 children have been abducted between 2007 and 2018, 40 percent from the states of Puebla and Mexico, where human-trafficking bands are known to operate. Illegal immigration to the U.S. from Mexico has fallen in the last decade because more people have been killed making the trip, dissuading others from trying. The notoriously violent Zetas gang got into the extortion business in 2009 and killed 72 migrants and their smugglers a year later because they were unable to pay the $2,000 “toll” per head (on top of the $5,000 smuggler’s fee) to ensure their safe passage across the border.

Crimes against the state are unrestrained. In Guadalajara last year, thieves stole 39 kilometers of cable from the lights on the city’s major highways, 36 transformers, and hundreds of steel plates used in highway dividers. The city spends thousands of dollars per week just to replace the electrical cables stolen from public schools.

All told, the government reports 33.6 million crimes with a victim in 2017, an all-time high. Most victims were women. Only one in 6,000 crimes ends in a conviction. Columnists bemoan “the hydra of impunity . . . grand queen of our country”—the monster Mexico has never slain.

We live in a state of war in the most cruel Hobbesian vein,” observes Guillermo Valdés, former director of Mexico’s National Intelligence Agency. “For three decades, the democratization of access to political power has been accompanied by the disintegration of public security. The vast majority of people don’t believe the government will protect them, so they protect themselves as best they can.”

Mexicans spend an estimated 1.65 percent of the country’s GDP on home security—changing locks, installing alarms and window bars, buying guard dogs, hiring bodyguards. In 2017, nearly 80 percent reported feeling unsafe in their neighborhood, the highest rate ever recorded. “Whether you’re getting robbed at the bank with the collusion of the teller, or raped on your way to work, or stripped of your cell phone on the bus, crime is an almost daily occurrence,” says Valdés. Thirty years ago, I quit my job as a foreign correspondent in Mexico City because I got tired of writing about death and disaster. The stories coming out of Mexico today make those days seem quaint.

Even amid the violence, Mexico’s middle class has grown, per-capita wealth has increased, and millions have visited the country from around the world. (EDUCATION & EXPLORATION 1/ALAMY STOCK PHOTO)

“We have lost confidence in the day-to-day because at each moment we are exposed to some new horror,” says Imelda Rodríguez, promoter for the Network of Groups of Parents in Pain. “The horror, the hopelessness, the anger, the abandonment, the disgust, disdain, hatred, humiliation, incredulity, fear—it’s a context that invades your house, the street, family, friends. It is . . . breaking the basic and symbolic bonds of elemental co-existence.”

The jurist José Elías Romero writes: “Criminal organizations by some estimates command as many as 400,000 recruits, which would make them the largest army in the country. They have infiltrated the basic institutions of the state—the police, the Army, the courts, the banks, businesses, even the schools. They meddle in elections. Against this rebellious, numerous, impetuous, well-armed, well-financed, and cunning enemy, the government appears naïve, unarmed, unfunded, diminished, static, weak.”

The state spends barely 0.9 percent of GDP on public safety. (Colombia, whose murder rate Mexico’s surpassed for the first time last year, spends more than four times that.) According to international norms, a country needs three police for every 1,000 people. Mexico has just two. Peña Nieto cut security spending by 25 percent. He thought that the solution to the security crisis was to improve coordination between municipal, state, and federal forces. The real problem is incapacity at every level. Police were undereducated, underpaid, and corrupt when I lived in Mexico three decades ago, and they remain so. Barely half have finished high school. Nearly half earn less than 10,000 pesos (US$489) per month. Strikes protesting poor pay and working conditions are frequent. Lacking credible police, the state has had to deploy the military against organized crime.

López Obrador (he goes by AMLO) has refused to increase spending to fight crime. His campaign slogan was Abrazos sí, balazos no! (“Hugs, not bullets”). He has called for a truce with the cartels and amnesty for broad classes of criminals (including drug carriers and small marijuana growers). His plan to end violence would rely 30 percent on using force to fight crime and 70 percent on creating jobs for youth and the poor. Evidence shows that his premise is wrong: a recent study of 18 Latin American countries (Marcelo Bergman’s More Money, More Crime) found a positive correlation between rising per-capita income and lawlessness. The way to fight crime is to fight criminals.

Mexico’s other problems have not changed much since I wrote about them ten years ago. (See “Helping Mexico Help Itself,” Autumn 2009.) Political parties, state governments, and the interests that control them remain closed off and corrupt. Political weakness keeps producing economic weakness: GDP growth averaged 2.23 percent between 2000 and 2008 and 2.17 percent between 2009 and 2017. The informal economy—businesses not registered with the state—still employs more than half the country’s workforce and produces less than a quarter of its wealth. Tax collection remains the lowest among 40 countries studied by the Organisation for Economic Co-operation and Development. Student knowledge of reading, math, and science remains the lowest among the 29 OECD nations.

What have changed are the teams vying for power, and their policies. Since 2000, the country has gone from a one-party dictatorship, ruled by a president with kinglike authority, to a multiparty democracy ruled by presidents so weak that governors and union leaders behaved like barons, back to a one-party regime led by a president with more power than ever. AMLO and his coalition, the National Regeneration Movement (MORENA, its Spanish acronym), command absolute majorities in Congress and in 19 of 31 state legislatures—enough control to impose their agenda with little constraint.

“According to international norms, a country needs three police for every 1,000 people. Mexico has just two.”

Even before taking office in December, AMLO announced that he would cancel Mexico City’s new $13.6 billion airport, Peña Nieto’s signature project—more than a third complete—and Mexico’s largest public investment in 50 years. The decision, which drove down the peso and the stock market and hurt the country’s credit rating, will likely cost the government more than the construction itself. AMLO called the airport a symbol of excess and corruption, but as one columnist retorted: “To cancel something because there was corruption would mean you’d have to cancel Mexico’s entire infrastructure.” More likely, AMLO shelved the project to humiliate his predecessor, signal a break from past policies, and show business leaders that he will not be dictated to.

MORENA, a hodgepodge of pols defected from other parties, has also reversed Peña Nieto’s reforms of public education, including a requirement that teachers take competency exams. The teachers’ union, which supported AMLO’s election, opposes the exams and anything else that might hold educators accountable for student achievement. Reforms that improved productivity in the energy sector by opening it to more private and foreign investment have also been weakened.

The big questions are whether AMLO will change the constitution to allow presidents to run for reelection—they now serve one six-year term—and how much he will weaken the independence of key institutions, such as the Bank of Mexico and the courts, when they frustrate his desires to spend money, redistribute power, or curb rights. He is a cunning politician and a micromanager—personally ascetic, untraveled outside Mexico, fluent only in Spanish. He is closer in spirit to the pragmatic statists of the 1960s PRI than to the socialists of Venezuela. “AMLO is a longtime insider who pretends to be an outsider,” says Luis Rubio, chairman of the Center of Research for Development in Mexico City. “He wants to make the government the centerpiece of all decisions.”

Pessimists say that the nation voted as a democracy to end democracy. “Thirty years of work to construct a democratic country and a free market have come to an end,” Mexican economist Macario Schettino wrote after AMLO set up a fraudulent public referendum against the new airport, the way the old PRI used to rig elections for its candidates. “Mexico’s Constitution and Mexico’s federalism have always been fake,” says René Bolio, a former senator for the conservative National Action Party, which, like the PRI, was decimated in the July election. “AMLO’s word is what will prevail, not the laws and processes. It might work—but it’s not the way that we dreamed.”

Legal perversions predate AMLO, of course. A 2014 law compelling parties to nominate equal numbers of men and women for elections has led to a phenomenon known as Juanitas—women who participate as candidates, only to resign after their election to give way to men. In July, the governor of Chiapas ordered more than 40 women elected to various local posts to cede them to their male alternates. The women obeyed, and the voters didn’t rebel. Fifty amendments to the Constitution were passed on a single night in 2013 and ratified by 17 state legislatures in less than ten days. The package of reforms, many of which AMLO is now abandoning, was put together by six people who weren’t even congressmen, on behalf of three parties that have all but disappeared from Congress since their defeat in the July elections.

According to the World Values Survey, the percentage of Mexicans who say that most of their countrymen can be trusted has fallen from 34 percent in 1990 to 11 percent in 2017, the lowest rate ever recorded in Mexico and among the lowest rates in the world. Four in five Mexicans say that almost everyone in municipal government is corrupt. The reason that 90 percent of the people believe in NAFTA while 89 percent don’t believe in one another is that NAFTA has been the people’s most reliable source of well-paying jobs—and the only sphere of activity governed by the rule of law. Investor disputes and complaints under NAFTA are resolved not by the host country but by an international tribunal. “NAFTA’s importance was 100 percent political,” Rubio says. “Its whole purpose was to isolate the ‘modern’ side of the economy from the political environment and its dilapidated structures. It gave investors the certainty they needed that the rules of the game would be clear and wouldn’t change.”

Herein lies the dilemma for the United States. The Trump administration wants U.S. businesses to invest more at home and less abroad. It wants to reduce the power of offshore tribunals to decide disputes affecting the United States. And it wants Mexico to mature as a democracy and strengthen the rule of law. The administration pushed for changes to NAFTA that it hoped would accomplish these ends. But the U.S. also wants Mexico to fight the drug cartels, discourage illegal immigration from Central America, create more and better jobs for its people, and remain politically stable. Achieving the second set of goals will be easier if Mexico’s economy grows faster; but the new trade agreement, which weakens the tribunals, runs the risk of discouraging the investment on which faster growth depends. So long as Mexicans have little reason to trust their own laws and institutions, U.S. firms will drive a harder bargain before committing to ventures.

The best way that the U.S. can help Mexico is to help itself: first, by keeping its own economy healthy; and second, by saying no to drugs. Exports have been Mexico’s only engine of growth for 20 years, and they are entirely dependent on U.S. industrial growth. Nothing has created more good jobs for Mexicans than good manufacturing jobs for Americans. Whatever replaces NAFTA would do well not to change that. The illegal drug trade, meanwhile, has been a catastrophe for both countries. Violence from the cartels is one of the leading causes of death in Mexico; drug abuse is one of the leading causes of death in the United States. Mexicans are killing one another for the privilege of selling Americans the means with which they kill themselves. “There is no diving board without the swimming pool,” Mexicans say—no supply without demand. If the U.S. can’t cope with this scourge, how can our weaker neighbor?

A better understanding of Mexico would help. AMLO has shown little inclination to prosecute the drug war with the assiduousness of his predecessors because the tactics that the U.S. has promoted to fight that war have made things worse. “The policy of arresting or killing gang leaders was premised on the notion that you catch the head and get rid of the body,” Rubio says. “That assumes you have a police force that can take care of the body. That’s the case in the U.S., but not in Mexico. Instead of one band disappearing, lots of new ones, much more violent, sprang out.” The U.S. will need to lead with smarter strategies. If it does, AMLO has shown that he is strong enough and shrewd enough to follow, so long as he can build the autocracy he wants.

The irony is that AMLO may prove to be a better president for U.S. interests than for his own people. “It is easier to negotiate with someone who has all the power,” Bolio observes. “If Mexicans don’t care about our freedom and democracy, why should you?”

Resignation is realism in Mexico. The country breaks one’s heart.

Top Photo: More than 135,000 people have been killed in Mexico since 2012; more than 1,300 clandestine graves have turned up since 2007. (PLANETPIX/ALAMY STOCK PHOTO)

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