1. Mexico in the 21st
Century: An Emerging Power or a Failed
State
Josh Knox
Dissertation submitted to the School of Social Science, University of
Aberdeen, as partial fulfilment of the requirements for the degree of
MSc Strategic Studies
2. Abstract.
In 2006, Former President Felipe Calderon, called for a military offensive on the War on
Drugs and the cartels which run them. This War has turned Mexico into a hot bed of
violence and claims of being a Failed State. Many believe that Mexico appears to be
developing into a Failed State status, which has been identified by Robert Rotberg, as
criminal organisations expand throughout the nation and the rates of homicides and
widespread corruption have escalated in multiple regions
The 2012 election win for President Enrique Peña Nieto introduced a new forward thinking
for Mexico based on prosperity and an emergence from the former shadow that had once
loomed over the Institutional Revolutionary Party of old. Leading Economist Jim O’Neil has
spoken of the emergence of a strong Mexico, labelling them in his acronym of MINT
countries which are likely to develop into major economic players in the next fifty years.
This study examines three key areas; Political and Bureaucratic, Human Security and the
Economy. Specifically, issues which included the positive impact of necessary government
wide reforms, why such reforms were essential to Mexico, the actions taken to improve the
economy its transfer towards an emerging powerful economy, and the issues of human
security and rights that are negatively impacting the country.
The study determines that Mexico is not a failed state and will not fail. The negative issues
that impact Mexico are currently been addressed, whilst at the same time, its emergence as
a prospering economic power and promotion to a full democracy has contributed towards
its growth. Despite significant human security failings and further damaging security
situation within localized areas, evidence suggests that Mexico demonstrates national
durability and prosperity.
3. Table of Contents
Declaration I
Acronyms and Abbreviations II
Introduction 1
Failed States 3
M.I.N.T Nations 4
Chapter 1. Political and Bureaucratic failings and Reforms 6
Education Reforms 7
Television and Telecommunication Reforms 9
Judicial Reforms 10
Regional Reforms 11
International Relations 12
Chapter 2. Human Security Issues 15
Organized Crime and Criminal Violence 17
Armed Conflict and Intervention 18
Mass Crime and Genocide 21
Health and Development, Resources and Environment 21
Human Rights and Good Governance 22
Chapter 3. An Emerging Economy of Economic Chaos 26
NAFTA 26
The War on Drugs 27
Economic Reforms 30
Conclusion 34
Bibliography 37
4. I
This dissertation has been composed by the author, and has not been accepted in any
previous application for a degree; the work has been done by the author and all quotations
and sources of information acknowledged.
Signed …………………………… Date . . . . . . . . . . . . .
5. II
Acronyms and Abbreviations
ACS - American Citizen Service
B.R.I.C. - Brazil. Russia. India. China
CELAC - Community of Latin American and Caribbean States
GDP - Gross Domestic Product
G -20 - Group of twenty leading economic countries
M.I.N.T. - Mexico. India. Nigeria. Turkey
NAFTA - North American Free Trade Agreement
OAS - Organization of American States
OECD - Organisation for Economic Co-operation and Development
PAN - National Action Party
PRD - The Party of the Democratic Revolution
PRI - Institutional Revolutionary Party
SNTE - Mexican National Education Workers Union
UN - United Nations
UNASUR - Union of South American Nations
6. 1
Introduction
Former Director of Central Intelligence, General Michael Hayden, described Mexico’s
increasing violence as, on par with Iran and Iraq, and as a greater threat towards United
States national security.1
Furthermore, he described Mexico’s inability to control such
violence, as spiralling towards a failing state, something that is not in the U.S interest, with a
border that stretches across 19,330 miles2
. Former Goldman Sachs Economist, Jim O’Neil,
who coined the term BRIC (Brazil, Russia, India, China) nations, during the mid-90’s, has
further composed MINT (Mexico, Indonesia, Nigeria, Turkey) as the next emerging powers
within 50 years3
. Mexico currently stands tied between great peril as a failed state, and
enormous prosperity as an emerging power, as “probably the most competitive producing
nation in terms of low valued-added stuff like autos.”4
Mexico has aimed to resolve its
previous economic hurdles and found markets in which investors have looked to the
country to provide goods for. This said Mexico has been overshadowed by the worlds press
reporting the amount of violence escalating in the country. This was caused by Former
President Felipe Calderon’s call for a military offensive in 2006, a War on Drugs on the
cartels further maintained by President Nieto furthering this belief.
Mexico’s history started as a historical legacy. From the Mayans to the Aztecs, and to its
eventual conquest by Spain, and eventual independence, Mexico was once seen as a
promising modern nation. However following colonialisation and long drawn out wars over
its borders, Mexico’s independence resulted in authoritarian rule, developed throughout
the majority of the 20th
Century by the Institutional Revolutionary Party who held 70 years
of dominance over the Mexican people5
. A lack of democratisation, closed economy, and
bureaucratic failings caused heavy damage, including financial crisis and the world’s largest
foreign debt6
. This was before the signing of the North American Free Trade Agreement
(NAFTA) encouraged further democracy and a neo-liberal economic outlook, encouraged by
1
Newman, A (2010) “U.S. Military Warns of Mexico’s Collapse,” The New American,
http://www.thenewamerican.com/world-mainmenu-26/north-america-mainmenu-36/691
2
Beaver, J.C (2006) U.S. International Borders: Brief Facts. CRS Report for Congress
3
Jim O’Neil, (2014) MINT: The Next Economic Giants
4
Ibid...
5
Crespo, J.A (2004) The Party System and Democratic Governance in Mexico. Policy Papers on Americas
Volume XV, Study 2
6
Ibid...
7. 2
the United States. Although growth was slow, many believe that now is “Mexico’s
Moment”7
. However, democracy for the country has come at a price, and Mexico’s internal
issues and security problems are yet to be resolved.
The premise of this dissertation will aim to look at Mexico from two angles; one which
shows its major flaws, failings, and weakness; the second being economic prosperity,
reforms, moving forward, and promoting a democratic state is Mexico’s future. Mexico’s
increased homicide rates, alongside that of further criminal violence, have caused the
regions within the country to fall into cartel rule and racketeering. Following the rise,
further reports of brutality, has led to the interest in the capability of these organisations to
infiltrate Mexico’s government and judicial branches and the extent that they will go, to
ensure the protection of their organisations. Alongside mass corruption, there have been
multiple cases of human rights abuse, generated by the increased presence of a military
force on the streets. Criminal organisations and violence are not the sole issue that is
affecting the government, but a desperate need for reforms, alongside a weak democracy
that is young in comparison to its neighbours. However, this has led for further progress to
be made; reforms have been created with future elements to combat corruption on all
levels of government and security. These issues shall be addressed throughout, as the
monograph will split into three sections; Bureaucratic and Political, Human Security, and
finally an Economic Outlook. A conclusion has been made exposing, adjudicating the
arguments for and against the potential failure of the state, and also of its ambitions as a
future emerging power. The monograph will describe where Mexico has been failing, why it
will not descend into failed state statues, and the possibility of Mexico creating a stronger
democracy through an emerging economy and reformed elements of the State.
Mexico’s key focuses seem to resolve around its new democratic system and a “pact for
Mexico”8
, outlining its reforms packages to further its ambitions within the state and
towards potential investing foreign companies and nations. This said, Mexico, following
Calderon’s offensive stance on the war on drugs, has continued to increase military pressure
with the added aid from its border with the United States. Current President Nieto aimed to
increase military action and for the Mexican police to take back the land lost to cartels. This
7
Harcourt, T (2013) Mexico’s Moment. The Globalist
8
Sada, A (2013) Explainer: What is the Pacto por México? www.as-coa.org
8. 3
caused reforms to be put in place, to create further pressure on the government to show
results. Mexico’s reforms will be the basis of the first, chapter which aims to cover the
rebuilding of a country in need of restructuring.
The second chapter will focus largely of the negative effects caused by Mexico’s problems
with organised crime, its issues in protecting those within its borders, and the changes that
have been made. Mexico holds the highest homicide rates of any country, and is host to
multiple organized criminal groups who have gained control of regions and corrupted all
elements of government for their own profit and security.
Failed States.
Robert Rotberg’s hypothesis of Failed States are presented and used throughout this
monograph from his books, ‘When States Fail, Causes and Consequences’9
and ‘State Failure
and State Weaknesses in a Time of Terror’10
. Rotberg’s focus is based around crucial
political goals, how countries effectively deliver them, what makes a country fail, and how
countries are inherently affected by failed elements. Determining these strengths and
weaknesses have been divided within each chapter, emphasising Mexico’s current, possible,
and future status. Rotberg states that, “Nation-States fail when they are consumed by
internal violence and cease delivering positive political goods to the inhabitants”11
. The
state may hold a seat in the United Nations and function as a sovereign entity in regional
and world politics, but as the countries people are concerned, the state fails by its inability
to perform functions adequately. “Thus, failed states are those with political entities in
international politics that supply deficient qualities and quantities of political goods and,
simultaneously, no longer exercise a monopoly of violence within their territories.”12
Mexico currently fights internal violence; however, the country manages to deliver positive
political goods, ensuring by this qualification, that Mexico is not a failed state. “Yet the
country exhibits many characteristics of a “weak” or “captured state”, where the state itself
is manipulated by other actors --- in this case organized crime organisations.”13
Mexico does
however; maintain attributes of a Failed Status, which can be seen as a contributor towards
9
Rotberg, R (2006) When States Fail. Causes and Consequences
10
Rotberg, R (2003) State Failure and State Weaknesses in a time of Terror
11
Rotberg, R (2006) pp 1
12
Ibid... pp. 4
13
Pedigo, D (2010) The Drug War and State Failure in Mexico
9. 4
regions and cities which have become failed due to the government’s inability to promote
political goods to its people.
The strengths and weaknesses, which Rotberg focuses on, relates significantly towards the
Mexican political system where inequality and corruption play a large role within the
headlines. Rotberg looks closely at the political systems, believing that; “it is on the
effective delivery of the most crucial political goods that strong states can be distinguished
from weak ones, and weak states from failed or collapsed.”14
While Mexico suffers from
deprived human security, concerns such as human rights issues, criminal organisations,
armed conflict, and intervention are also in evident. Rotberg has argued that states are
“unable to establish an atmosphere of security nationwide, and often struggling to project
power and official authority.”15
Alongside that of Rotberg’s theory, ‘Foreign Policy Failed State Index’16
as a source, assists in
describing elements of what makes up a failed state, however, the source does not take into
account the structure in which countries have been ranked.
Mexico and MINT
The emergence of Mexico as a promising economic power arises through Jim O’Neil’s
acronym of MINT nations17
. His previous contribution of the BRIC nations of powerful
economic states was profound, and now the MINT nations (Mexico, Indonesia, Nigeria, and
Turkey) have been described as the second generation of global economic players to watch
in the next fifty years18
. “The MINTs share some common features. They all have big and
growing populations with plentiful supplies of young workers.”19
O’Neil believes that
Mexico, as one of these nations, has the greatest prospects with large natural resources, a
relatively new democracy, and a strategic position between the global hegemon of the
United States and their Latin American counterparts. Mexico has begun to open up its
borders to further trade links and foreign investment, whilst at the same time attracting
investment for its youthful population, and its ability to control levels of inflation and
14
Rotberg, R(2006) pp.6
15
Ibid... pp.7
16
State Index found at; www.foreignpolicy.com/failedstates2013
17
O’Neil, J (2014) MINT: The Next Economic Giants
18
Elliot, L (2014) Mint condition: countries tipped as the next economic powerhouses. www.theguardian.com
19
Ibid...
10. 5
interest rates, making it the most desirable trade link in Latin America. The country is not
lacking in the ability to prosper economically. Mexico’s rise within the region as a producer
nation has rivalled that of China, whilst holding vast amounts oil reserves within the Gulf of
Mexico, alongside having a strategic geographical location into the North and South
American Markets. Mexico still rides a wave of economic optimism as it recovers from
financial crisis in 2009, although growth has stagnated over the past two year, it has not
hindered Mexico’s major ambitions and buoyancy. There will be further emphasis on
Mexico’s economy covered in the third chapter.
11. 6
Governmental and Bureaucratic Failings and Reforms.
Although gaining independence in the early 1800’s Mexico has suffered from American
imperialism, lost land from wars over areas which border the United States, tough
dictatorships following the PRI governments’ strength over its people and a lack of
democratic rule which had damaged the nation severely. After the signing of the NAFTA, in
1994, the PRI began to release key regional areas of government and further democratise
Mexican politics which kept them in power for over seventy years. These powers would
develop through neo-liberal policies and U.S. pressure which allowed the country to further
democratise, and for the PRI government to lose power for the first time in the year 1997
and lose their first election in 2000.20
Subsequently, further democratic principles
established following the introduction of NAFTA, there were changes to Mexico’s various
branches of government. Attempts throughout the twelve years that the PRI were out of
government to pass legislation were largely met with parliamentary deadlock. However,
multiple parties developed, further democratic processes became available, and elections
grew fairer and more accessible to all citizens. Simultaneously, companies and foreign
investment began to penetrate the expanding Mexican markets. In spite of this, there were
still wide spread bureaucratic corruption and shortcomings within the country. This chapter
will describe and break down the major reforms made by the current President Nieto, as
well as his predecessor Felipe Calderon, whilst focusing at the countries countless failings
and how Mexico approaches such issues. This will then be followed by looking at Mexico in
the international arena, the countries promising stance in regional and international
organisations, and also their short falls that are having negative impacts, condemning
Mexico’s ability to perform as a prospering nation.
The most effective improvement towards Mexico’s Governmental and Bureaucratic failings
has arose through the “Pacto por México”21
, signed the day of President Nieto’s
inauguration into office. The pact included views from two opposing parties; the PRD and
PAN. These parties however, are not a coalition; the parties instead aim to solve major
congestion and breakdowns of bills, which prohibited Mexico in the past, through the
parties’ cooperation. Furthermore, the pact allowed members from each party to sit
20
Vale, B (2010) The Weakening of the PRI Regime in Mexico
21
Sada, A (2013) Explainer: What is the Pacto por México? www.as-coa.org
12. 7
together to discuss further the motions and bills, detailing ninety-five separate goals to be
made before the mid-term elections in 201522
. “The pact focuses on three key pillars;
strengthening the Mexican State, achieving economic and political democracy and engage
citizen participation.”23
Previous issues, between the executive branch and congress
deteriorated following the release of the PRI authoritarian rule and the impact of fair free
elections. Although met with international acclaim, an imbalance led to a dramatic decrease
in the majority in congress in 1997,24
the first time in seventy years, causing increased
stalemates, and the inability to pass bills effectively in congress. This crucial pact allowed
Mexico to improve its bureaucracy, democracy, and confidence towards the countries
people within the political sphere.
Mexico’s turbulent political system, although more democratic, has allowed for many to
believe it was developing into a failed state. Rotberg describes a failed state as where
“political and bureaucratic corruption and ineptitude are extreme”25
. Mexico could be seen
as such, prior to the “pact”. Undemocratic principles were exchanged to ensure bills were
past, yet corruption became increasingly involved and was used as force. The legitimacy of
the state came into question by opposing parties who argued that elections were becoming
illegal and unfair. This soon created a rise in protests and violence throughout the streets of
Mexico’s major cities. Following such the in-coming President Nieto sought to bring parties
together to ensure Mexico would improve its political and bureaucratic image and make key
reforms to allow it to prosper.
Education Reforms.
One of the key reforms made, focuses on the education system, largely based on a
centralized format which has forced stagnation and the inability to improve. Mexico’s
education system has struggled due to the power of the SNTE Union. This is seen through
teachers being paid extremely high wages, even more so than the President and politicians,
22
Further information on the “Pacto por México” can be found at www.pactopormexico.org
23
Consulado General De Mexico en Toronto. Pacto por México
24
Preston, J (July 8
th
1997) Mexico’s Governing Party loses Control of Congress, ending 7-decade Monopoly.
www.nytimes.com
25
Rotberg, R (2003) pp 9
13. 8
whilst the system itself has not improved26
. “Mexico’s ambitions to become a top world
economy are being held back by a corrupt education system controlled by powerful union
boss known as “the teacher” who politicians fear to cross.”27
The further increase of the “Ni-
Nis”, (the non-educated and unemployed) has caused for major improvements in reforming,
and developing education across the country. Nepotism, corruption, and inefficiency, have
been commonplace alongside that of high levels of bullying within Mexico’s education
system. It is Rotberg’s belief that the “need for an effective educational system is necessary
when defining whether a state is failed or failing.”28
He believes that when a state fails,
systems such as education will become privatised, however in Mexico, the state has no
interest in doing so. Additional capital has been injected into adjusting and reforming the
educational system, however many argue that money is not the main priority as, Mexico has
the highest levels of education spending in the OECD, as a percentage of GDP, and more of
that money goes to teacher salaries than in any other OECD country.29
Further development
for a nation that is young in comparison to many global and regional hegemons is a major
necessity for the country. Mexico’s educational struggle has led to government reforms
taking more responsibility for teacher certification, individual evaluations, and salary
decisions. President Nieto has aimed to fight the Teachers Unions who have taken to the
streets in their thousands to condemn the reform, as they fear that such restructuring will
not be enacted swiftly enough. Others argue that schools out with the cities will not accept
further responsibility for managing resources, curriculums, and utilizing staff correctly.30
In
spite of this, the reform produces a greater foundation for a countries democratic rule,
where education becomes the forefront to create a better standard of living, where a
youthful population is vastly increasing.
Alternatively, Hecock believes that prospects for educational reform still remain bleak in
Mexico, and that “education in Mexico will continue to stagnate, and younger generations
will bear the burden.”31
Reform is necessary for Mexico’s schools, whilst on the other hand,
26
Hecock, R.D (2014) Democratization, Education Reform, and the Mexican Teachers Union. Latin American
Research Review Vol.49 No.1
27
Factbox: Facts about Mexico’s education system. www.reruters.com
28
Rotberg, R (2006)
29
Llanos, Johanna (2013) Mexico: Education Reforms under Siege. www.hcreo.com
30
Carlos Ornelas, (2000) "The politics of the educational decentralization in Mexico", Journal of Educational
Administration, Vol. 38 Iss: 5, pp.426 - 442
31
Ibid...
14. 9
so is the infrastructure on which they stand. A census taken in 2013, published in April
2014, stated that forty-one percent of Mexico’s 207,682 schools have no sewage system,
and thirty-one percent have no potable water32
. There are currently thirty-nine thousand
teachers in Mexico unaccounted for, who still routinely pick up their pay cheques, and yet
are not turning up to teach.33
These continuous issues are amongst many of those causing
further disruption, and becoming an increasing concern over Mexico’s failing younger
generations’ educational system. This can lead to a domino effect for several other domestic
matters if such reforms are not carried out.
Telecommunications and Television.
A prominent area within Mexico, where governmental failing has occurred in the transition
of powers towards further privatisation, is within the telecommunication and television
sector. Sold to the privileged and opaque relationships for a heavily subsidized cost in the
mid 90’s, the telecommunication and television sector is owned and controlled by some of
the wealthiest men in the world, due to a monopolised structure in Mexico.34
Carlos Slim,
currently ranked the second richest man in the world35
, holds over 80% of
telecommunications, under America Movil, within Mexico, whilst multi-millionaire Riccardo
Silanas, heads TV Aztec (a fee-paying station). With such prominent interests and holdings,
these companies have had the ability to win multiple court cases in order to retain
dominance within the market36
. This is carried out through the corruption of the judicial and
political systems with donations, whilst further pressure from the use of lobbyists in
congress. Many Mexicans argued that these issues will further increase the divide between
the rich and poor, whilst also prohibiting competition in the market. These ideas led to
reforms expanding the governmental power as well as the creation of the Federal
Telecommunications Institute. The Institute functions as the telecoms sectors exclusive
anti-trust agency, and will set up regulators to ensure fairness amongst the companies.37
The government will also ensure that advantages towards political parties will no longer
occur, whilst time shared for broadcasts will be put in motion. The issue involving
32
Arreola, C (April 2
th
2014) Census of Mexican schools finds Major Problems. www.latina.com
33
Harrup, A (April 1
st
2014) Some Mexican Teachers Pick up Pay, but don’t teach. www.wsj.com
34
Malkin, E (March 7
th
2014) New Rules to Reshape Telecom in Mexico. www.nytimes.com
35
Forbes Rich List 2014
36
Luhnow, D. Harrup, A (2011) Court Slams Carlos Slim. www.wsj.com
37
Madrazo, A (2013) Telecommunications: Mexico’s New Reform. www.americasquarterly.org
15. 10
telecommunications has risen due a the service that citizens struggle to afford. “Times could
have been much better for Mexico if only the country’s telecom sector weren’t so over-
priced and inefficient.”38
However, previous Mexican governments’ attempts to create a
reform have been unsuccessful, largely due to corruption within government itself. This
allows America Movil and Mexico to carry on serving telecommunication services for such a
high price39
. Reforms could not have materialised soon enough for the people, as well as
being successfully passed through government. These reforms have also included:
abolishing long-distance phone charges, ability for customers to switch phone companies,
and also actions to ensure companies do not monopolise either markets.40
The positive
reform is seen as a necessity to improve economic prosperity towards the Mexican people,
improving their standard of living, and in effect, lessen the views of a failed nation.
Judicial Reforms.
The Judicial branch in any government is seen as a leading element to a strong democratic
institute, where law can be interpreted, a mechanism for resolution of disputes, as well as
the equality of justice across the country.41
Within Mexico, issues of corruption, bribery,
and cartel pressure, has damaged the judicial system where concerns across the board have
forced the gradual implementation of reforms since 200842
. These reforms will include
changes made to ensure Mexico’s greater transparency, accountability, and due process.
The key reforms which occurred during the 2008 passing reforms in congress are as follows:
1) The introduction of new oral, adversarial procedures, alternative sentencing, and
alternative dispute resolution (ADR) mechanism
2) A greater emphasis on the rights of the accused;
3) Modifications to police agencies and their role in criminal investigations;
38
(May 29
th
2013) Tackling Mexico’s Dysfunctional Telecom Sector: The First steps towards Reform
39
OECD statistics have shown Mexico to have one of lowest mobile subscribers and the lowest fixed line per
100 inhabitants. www.oecd.org
40
The Economist (July 12
th
2014) Slimming Down. Telecoms in Mexico
41
Shirk, D.A (2009) Criminal Justice Reform in Mexico: An Overview
42
Seelke, C.R (2013) Supporting Criminal Justice System Reform in Mexico: The U.S role
16. 11
4) Tougher measures for combating organized crime.43
These reforms towards Mexico’s judicial system aim to improve the countries bureaucratic
system, which has failed many who judge the country as “mischaracterization that a suspect
is “guilty until proven innocent” in Mexico.”44
Mexico’s reforms have ensured, that further
efforts to combat the rise of illegal activity including drug trafficking, human trafficking, and
cartel wars included in organized crime are increased and promoted. Throughout the
reforms, Mexico’s constitution has been altered to promote democratic ability, and further
strengthen the police and judicial system to combat the rise of organized crime45
.
Rotberg’s theory on failed states addresses the importance of the justice system and
adequate policing, whilst a failed state deems that this cannot be provided. It can be argued
that, previous to reforms made, the level of corruption within the sector has left the system
to fail when addressing organized crime. Furthermore, the lack of transparency within the
judicial sector, as well as those wrongly accused, or have been deemed guilty until proven
innocent, has weakened Mexico’s ability to control the system. This has allowed corruption
to be used as manipulation throughout all the sectors of the law within the country.
Reforms are due to be completed by 2016, however, since the lack of ability in numerous
states outside of major cities their regions, many of those which cartels have gained large
levels of control, in completing and implementing such reforms, the judicial sector has yet to
see improvements being made.
Regional Reforms.
Additional reforms have been made by the President that includes Regional government
reforms. This allows the re-election of members of congress, along with more federal
oversight on elections to ensure they are fair to each party.46
The regional government
reforms are important for Mexico to ensure greater democratic practice for the Mexican
people, who have been wary of governmental structure. The failure to overhaul previous
structures of the institution may have had a damning effect on “Mexico’s moment”47
and its
43
Shirk, D.A (2011) Justice Reform in Mexico: Change & Challenges in the Judicial Sector
44
Ibid...
45
Shirk, D.A (2009)
46
Wilkinson, T (2014) Mexican political parties at impasse over key reforms. www.latimes.com
47
The Economist (2012) Mexico’s Moment.
17. 12
efforts to become a rising power. The reforms aim to guarantee that institutions will be
capable of handling modern complex challenges, whilst forcing out the issues of crime and
corruption that have taken hold in regional areas greatly damaged by the cartels and
organized crime. Electoral reforms have been approved by lawmakers and were signed by
the President in January 2014. “So far, what is approved will permit re-election of Senators
and Federal deputies allowing them to stay in office for twelve years”48
. The ability for the
three major parties to agree on such electoral reforms has shown Mexico’s ability to
produce a modern democracy, the capability to cooperate, and head towards becoming a
major player in the 21st
century. However, reforms have recently been held up due to the
PAN party accusing the PRI of preventing such reforms as it will weaken their control in
government.49
Promoting further democratic principles are key aims to rid the failed state
status and that Mexico has held illegal and illegitimate elections. Rotberg states that
“Nation-States fail because they are convulsed by internal violence and can no longer
deliver positive political goods to their inhabitants”50
furthermore that “Nation-states exist
to provide a decentralized method of delivering political goods to persons living within
designated parameters”51
. These reforms allow for greater transparency within regional
politics, and boost the democratic ability for those outside the central cities in Mexico and
therefore provide more successful political goods to all its citizens.
International Relations
Mexico’s relationship with its bordering nations and in the international scene, have
elevated its status towards an emerging power, as it balances its relationship with the global
hegemon of the United States and the surrounding Latin American countries. Mexico is a
founding and active member of various hemispheric fora which supports regional, political,
and economic cooperation within Latin America.52
The significant political international
organisations which Mexico have an active involvement in are as follows; The Organisation
of Americas (OAS), The United Nations (UN), Association of Caribbean States(CELAC) and
48
Lage, F (2014) Mexico’s Electoral Reforms begin to take Shape. Democracy Speaks
49
Wilkinson, T (2014)
50
Rotberg, R(2006)
51
Ibid…
52
The Library of Congress Country Studies; CIA World Factbook
18. 13
The Rio Group (The Community of Latin American and Caribbean States),53
with which they
hold their own position, and have abstained from decisions that affect neighbours and
partners. Mexico holds observer status, most importantly in UNSAUR and the Andean
Community important links to South America54
. This is greatly important to Mexico’s
growing ambitions economically and politically, into becoming a regional hegemon in Latin
America. Rotberg believes that an important element towards a nation avoiding a failed
status is its involvement with relations within international organisations, the ability to grow
links with regional and global countries, and through economic and bureaucratic relations.
After the signing of the NAFTA in 1994, many believed that Mexico had sided with its North
American allies, whilst choosing to grow apart from its Latin American states. However,
with the change in economic prosperity across the globe, most importantly to Brazil, Mexico
has continued to build ties south of its border, allowing the country to become a more
influential player in regional structures. “Already influential in the G-20 and other
multilateral organizations, Mexico could become even more of a power broker in global
institutions and help construct new international financial, trade, and climate-change
accords.”55
Until now, Mexico’s inability to control the civil conflicts and corruption within
its borders has had a negative impact on its role in various other organisations, most notably
Amnesty International and Human Rights groups but also the United Nations56
. This has
deemed Mexico to be failing because of such areas as human rights and the protection of its
citizens. Nevertheless, as previously expressed, Mexico is in the middle of major reforms
with which comes prolonged development, in the hope to create a stronger political order,
which appeals to nations globally when trading and investing in the markets.
Chapter Summary
It is evident that within Mexico’s government strategic reforms are taking action to improve
society and the political and bureaucratic sphere. These reforms however are too young to
tell if, and when they will be implemented successfully into their areas and how successful
they will be. It is a step forward towards a prospering successful state. There are still
53
Mexico’s Participation in International Organisations www.indexmundai.com
54
Ibid...
55
O’Neil, S.K (2013) Mexico Makes It. A Transformed Society, Economy and Government. Foreign Affairs
Article
56
www.cmdpdh.com United Nations condemns Mexico’s use of Military facilities for arraigo and torture
19. 14
important issue that Mexico must address within its borders, these reforms will not have an
immediate affect within the regions currently under control by the cartels and whilst
improvements are essential it may take several years for the implementation to be judged
by the people. This has therefore led to poor approval ratings for President Nieto, who is a
year away from mid-term elections and who will look towards re-election to ensure reforms
are applied into legislation. It is therefore essential for Mexico’s belief in their moment that
reforms are applied and for the calls of “failed state” are banished.
20. 15
Human Security.
Key security failings in Mexico arose predominantly from the war on drugs between multiple
cartels with a strong economic and population base and the previous governments
weakened by historic inequality and a centralized political structure. Drug trafficking-related
violence in Mexico, had been the cause of a reported sixty thousand deaths over the course
of Calderon’s presidency. Another twenty-five thousand individuals reportedly went missing
over that period, however not all of them due to the criminal activity of the cartels, but also
of local gangs spread across the country.57
Yet, this is not the solitary reason for Mexico’s
security short comings, but this a major issue that has affected all elements of Mexican
society. This chapter aims to look at the issue of Mexico’s security failings based on
Rotberg’s theory on failed states and the impact it plays on Mexico’s emerging power
attributions. Rotberg’s arguments evolve around security failings; therefore the chapter will
focus on elements of Human Security and also Military and Governmental failings that have
impacted the worsening security position, and preventing Mexico developing an influential
status amongst its neighbours. Rotberg explains that, “Nation states fail because they are
convulsed by internal violence”58
. Mexico has been ranked one of the highest countries of
internal violence, and therefore has contributed to further human rights abuse cases, as a
result of military presence to deal with the severity of the issue, several Amnesty
international reports.59
However, the military pressure and presence carried over from the
previous government of President Calderon, has continued through the young President
Nieto with further military stationed on the streets of Mexico. As a result of security failings
the issues have been at the forefront of the governments’ agenda.
“Human security becomes a focus in times of violent conflict but also in instances where
countries are technically at peace.”60
Mexico is a country at relative peace, yet it suffers
internally as it fights a vicious conflict between the government and organized crime in
which human security failings are abundant. It is this focus on the individuals on the ground,
which are affected by the harsh realities of government failure. The Human Security
Initiative, set up by the United Nations to define the concept of human security and its link
57
Statistics found on; www.drugpolicy.org/drug-war-statistics
58
Rotberg, R (2006) Causes and Consequences pp
59
Amnesty International Annual Mexico Report 2013
60
Human security initiative
21. 16
to the individuals and communities around the world, defines Human Security in various
forms, these are:
Organized crime and Criminal Violence
Armed Conflict and Intervention
Genocide and Mass Crimes
Human Rights and Good Governance
Health and Development
Resources and Environment61
Using these elements as a basis, an assessment can be made on Mexico’s collective security
failings as “Mexico is not a failed state, but a security failure rooted in the development of
the modern Mexican state.” 62
Covering the support of these arguments, Rotberg’s theory
explains that, “criminal gangs take over the streets of the cities. Arms and drug trafficking
become more common. Ordinary police forces become paralyzed.”63
These issues that the
government are currently attempting to reform are changing due to the Mexican police
force to losing focus on the people, and becoming more corrupt as the cartels continue to
grow more influential within their regions. Mexico agrees that the issue of security failings
lies within Human Security and the development agenda post-2015, however the effects
and damages need to be addressed a lot sooner.
Human Security deficiencies have occurred under the pressure of the “Mano Dura” policy
of the Mexican government, declared by former President Calderon, and what people
outside Mexico address as, ‘The War on Drugs’. From the crucial issue of Drug trafficking,
cartels have branched out to various other endeavours such as; human, organs, and
weapons trafficking,64
while continuing kidnappings and extortion. This has further forced a
need for action to ensure Mexico is not descending into a failed state. The damaging effect,
which this trafficking has caused, is at the forefront of the PRI government’s belief that
61
ibid
62
Kenny, P et al (2012) Mexico’s Security Failure: Collapse into Criminal Violence
63
Ibid...
64
McGee, S et al (2009) Mexico’s Cartel Problem: A Systems Thinking Perspective
22. 17
military intervention is the solution, one which has been questioned due to the lack of
success of the process in other Latin American nations65
. “The yearly economic impact of
the violence to the Mexican economy is estimated to be equal to 27.7 percent of its GDP,”66
this consequently has had great impact on Human Security issues, and the implications that
this has on Mexico’s ability fulfilling its role as a rising economic power. This chapter has
been split into Human Security categories, previously laid out by the Human Security
Initiative.
Organized crime and Criminal Violence
Organized crime and criminal violence is the greatest concern to the current PRI
government, due to the increased presence across the border, the ability for Cartels, and
criminal gangs to operate within the system and gain a level of control in several regions in
Mexico. Fear has spread through the media with the news of Mexico’s continuous killings,
kidnappings, and ground attacks between cartels and the military. Continuous actions are
being carried out by different cartels, or by smaller criminal organisations currently on the
streets of the towns and cities. These vicious conflicts have resulted in damaging Human
Security in Mexico, placing more pressure on the government to increase police the military
activity to combat these issues, while suffering from the cost of lives lost and those injured.
Recently, President Nieto has called for further military presence on the streets to “purge
corrupt police”, and control violence in regions. This includes the North-Eastern Tamaulipas
where improvements have been made against the cartels that are at war for the control of
drug trafficking routes into the United States67
. The unprecedented rise in crime over the
past five years has contributed towards Mexico’s instability within the economic markets,
due to lack of control of territory important as trade routes. Rotberg’s analogy of a failed
state believes that the inability to control a countries borders as well as the regions within
the borders, contributes to the ongoing argument that Mexico is falling into such a
category68
. Criminal penetration of the state is on the rise and has stemmed into
controlling important segments of state institutions. Cartels are seen to have in certain
65
See, Failing Grades: Evaluating the Results of Plan Colombia by Adam Isacson
66
Hellema, M (2014) Mexico showing the importance of including human security in the post-2015
development agenda
67
Agence France-Presse (May 14
th
2014) Mexico ups military presence to curb cartel violence
68
Rotberg, R (2006)
23. 18
regions, gained an element of control over the judicial sector, allowing immunity to
members, an element that was uncovered after arrests were made by vigilante groups
which when handed over to the police and released within days without any charges.
Cartels primarily focus on drug trafficking, human trafficking, and weapons trafficking. Since
the turn of the century, there has been a rise in the trafficking of many women and children
across the U.S border which has caused major concerns in the relations between the two
countries and for border security. This has allowed profits to be made by organised crime
cartels in Mexico as they are sold into prostitution or used as drug mules. This is an
increasing concern for the Mexican government, who are calling for further emphasis on
preventing further trafficking issues, and making clear distinctions between crimes caused
by the Cartels and other criminal organisations.69
There has also been in recent years a
surge of cartel movement in stealing natural resources such as oil and gas;70
this has
exposed that the cartels are spreading their sphere of commerce into multiple different
markets. Within oil and gas there is money to be made and the increase in siphoning may
lead to further issues for the Mexican government to prevent criminal expansion.
Armed Conflict and Intervention
Within Mexico Human Security issues have arose through armed conflict and intervention,
both of which are involved in attempts to curb the war on Drugs as well as cartel powers
with which control such elements of governance in regions where government has not been
able to control. The key focus of intervention within Mexico is under a joint operation with
the United States, also known as, “The Merida Initiative”71
. Under this initiative Mexico,
“between 2008 and 2014, invested some $68.3 billion of its own resources on security and
public safety,”72
whilst at the same time, the United States passed, in congress, an
69
Cicero-Dominguez, S.A (2005) Assessing the U.S.-Mexico Fight against Human Trafficking and Smuggling:
Unintended Results of U.S. Immigration Policy. Northwestern Journal of International Human Rights. Vol 4.
Issue 2
70
Grillo, I (March 9
th
2011) Stolen Oil: A Gusher of Cash for Mexican Drug Cartels. www.time.com
71
U.S Department of State. The Merida Initiative
72
Mexico’s security budget totalled roughly $10.2 billion in 2013 and $11.5 billion in 2014. It includes funds
allotted for the Judiciary; Interior Ministry, Ministry of Defense, Attorney General’s Office, the National Human
Rights Commission, and transfers to the states and the municipalities in each state. Government of Mexico,
“Mexico’s Fight for Security: Strategy and Main Achievements,” June 2011. Marciel Reyes Tepach, El
Presupuesto Público Federal para la Función Seguridad Pública, 2012-2013 and 2013-2014, Cámara de
Diputados, March and December 2013.
24. 19
investment of $2.4 billion.73
Money seems insignificant in securing further intervention
against cartel groups, however, the issues which lie behind the judicial branch of the
Mexican government, which have been covered further in the previous chapter.
The intervention of the United States has caused further armed conflict within Mexico.
Joint armed response is aimed to control the cartel advance from spreading across the
border, as well as supplying military hardware, technology and intelligence to the Mexican
forces. The key aim for the Merida Initiative is based on four key pillars. These are:
1. Disrupting the operational capacity of organized criminal groups
2. Institutionalizing reforms to sustain the rule of law and respect for human rights
3. Creating a 21st century border
4. Building strong and resilient communities 74
This intervention has aimed to control the armed conflict and mass crimes75
, arising
throughout the nation. This includes drugs, weapons, human trafficking, and smaller crimes
from criminal organisations either working separately, or with the cartel groups. These
mass crimes are spreading throughout Mexico’s cities, towns, and villages. Internationally
on the other hand, these crimes are spilling over into the bordering states of America as
well as into Central America where it is believed that many cartels are working within these
countries borders.
Intervention has also been a result of Mexico’s inability to control the violence. The mass
media effect, which has largely covered the extent of violence, has pushed public opinion
for further U.S involvement. This has led to continuous actions by the U.S and joint attacks
on Cartel gang members. This has been largely successful in capturing key criminals;
however, in doing so, has created a power vacuum as well as dividing the cartels over
leadership, furthering violence.76
73
Seelke, C.R. Finklea, K (2014) U.S.-Mexican Security Cooperation: The Merida Initiative and Beyond.
Congressional Research Service
74
Four Pillars of the Merida Initiative outlined in the plan between the U.S and Mexican Government
75
Mass crimes are multiple crimes taking place within the same region by the same group.
76
Note the capture of Cartel boss Mario Ramirez of the Gulf Cartel in 2013 caused a power vacuum.
25. 20
Following the original four pillar strategy, the inauguration of President Nieto set up 6
pillars77
in order to calm military presence on the streets, in the hope to cool the violence.
Nieto has excelled in his claims and following statistics released by his government show
that Nieto decreased the levels of mass crime and violence.78
On the other hand, a rise in
various other crimes, have seen the cartels spread their influence into different sectors. The
involvement of the United States continues to have an impact; however, questions arising
from both nations on dealing with the surge of transnational and national crime
organisations sweeping through Mexico and Central America, are yet to be fully answered.
Vast amounts of crimes have continued where “organized crime related homicides
continued to trend downward, extortion and kidnappings surged.”79
The U.S’s involvement
is mainly directed towards the war of drugs, yet, in order to prevent further damage, they
must look for alternatives to fighting the organisations, not simply the drug trail, as the
issues of human and arms trafficking begins to spill across the border.
Vigilantly groups have been set-up across Mexico in an effort to contain and bring down
many cartel groups. Known as “Autodefensas”80
, these groups have surfaced and armed
themselves to prevent further control been taken, demonstrating the countries inability to
maintain control of its people. Currently, they operate openly in 13 different states and at
least 68 municipalities.81
“Criminals and gangs have become more brazen and violent than
ever, and the police and the government are either absent, corrupt, or themselves working
with the criminals.”82
These Autodefensas are deemed illegal however the Mexican
government has agreed a deal with certain areas to set up a community style police force,
however many vigilante groups still remain and self-policing areas within Mexico.83
77
Six Pillars : (1) Planning (2) prevention; (3) protection and respect of human rights; (4) coordination; (5)
institutional transformation; and (6) monitoring and evaluation
78
79
Seelke, C.R. Finklea, K (2014)
80
Asfura-Heim, P Espach, R.H (2013) The Ride of Mexico’s Self-Defense Forces. Vigilante Justice South of the
Border. Foreign Affairs
81
Ibid...
82
Ibid...
83
Hale, G.J. (June 23
rd
2014) Autodefensas, Vigilantes and Self-Policing in Mexico: Civilian Dominance over
Public Safety Policies? Small Wars Journal
26. 21
Mass Crime and Genocide
Mass crimes in Mexico have already been identified through cartel involvement in
kidnappings, murders, and extortions. Not solely based on the number of cartels such as
Sinaloa, Knights Templar, Gulf Cartel etc., but by the bodies they employ. They then create
smaller gangs who are controlling the streets and fighting ground battles against other
vigilante groups, amongst themselves and the military. These vast amounts of crime have
affected all elements of society where extensive numbers of graves have been found.
Kidnappings are rife, deaths occurs on daily basis by gun crime, and theft and extortion are
widespread. These graves are found along the roadside and are said to be the bodies of the
cartel members who have been killed due to ground wars, and have been labelled
genocides. These have occurred within the states of Veracruz84
, San Fernando, and multiple
other areas that are believed to be under cartel control.85
Human Rights and Good Governance.
Mexico’s War on drugs has caused many human rights organisations to condemn the
actions of the government’s policies over how it deals with suspects. Cases of electric
shocks, asphyxiations, and threats towards family members, are amongst the vast amount
of issues from the Mexican forces.86
Furthermore, cases have been put to courts of forced
confessions and further torture. The misconduct on all levels of the judiciary, have caused
many human rights groups and the people of Mexico, to take a stand against the
government in protests resulting in further fighting on the streets. Widespread use of
arbitrary detention, torture, and ill-treatment used to obtain information and confessions
from suspects, whilst under interrogation.87
It is well known throughout Felipe Calderon’s
government and still ongoing under President Nieto that these actions are occurring. This
has brought on further issues involving “journalists and human rights defenders who
continue to face attacks and threats as a result of their work”88
. Rotberg argues that grave
human rights issues can lead nation-states into peril, and the likelihood of failing. Mexico
84
The Guardian (2014) Mass grave containing 28 bodies discovered in eastern Mexico
85
Grillo, I (2010) The worst massacres and mass graves in Mexico’s Drug War. Los Angeles Daily News
www.dailynews.com
86
Vivanco, J (2013) Mexico: President’s Disappointing First Year on Human Rights
87
Castillo, E.E (May 2
nd
2014) UN: Torture of Detainees Common in Mexico. Agence France-Presse
88
Amnesty International (2013) Human Rights challenges facing Mexico. Amnesty International memorandum
to President Enrique Pena Nieto
27. 22
has made insignificant movement in creating a more secure area for those who are
detained, and those that suffer through threats and attacks from the military. As an
emerging power these violations must be addressed in order to secure security, and
influence foreign investment into the country.
Added damage of human rights violations can deteriorate Mexico’s governance standing.
Although already under disrepute, reforms have been placed in order to reverse the failings
of the judicial branch on all sectors, to ensure free and fair trials. “Only 15 soldiers have
been convicted out of the 3,671 investigations launched by military prosecutors into alleged
human rights violations by soldiers against civilians from 2007 to June 2011.”89
This figure is
expected to rise each year, as the government fails to take hold of corruption and the
Mexican military. The war on drugs is not the only issue affecting human rights, human
trafficking has become a considerable concern, as the cartels begin to spread their illegal
activities. Many women and children from poorer backgrounds, within smaller towns and
villages, have been subjected to cartels forcing them into prostitution across Mexico, whilst
others have acted as drug mules, crossing the borders into the United States90
. The
government finally took action towards these atrocities by passing the first federal law on
human trafficking in 2012, “a global issue, human trafficking is one of the most lucrative
forms of crime after drug and arms trafficking”91
.
Health and Development, Resources and Environment.
The issue of Human Security does not lie just on the balance of organized crime and the war
on drugs. Issues such as health, development, and the environment are also causes of
concern towards the PRI government. Mexico’s indigenous people have struggled to survive
within Mexico with seventy-two percent of its indigenous population living in extreme
poverty conditions92
. Various languages are spoken in multiple different regions in
Mexico93
, although reforms have been made addressing the education system, for many of
89
Corcoran, K (November 9
th
2011) Mexico Drug War: Human Rights abuses on all levels of Authority Report
Says. Associated Press
90
O’ Connor, A (July 27
th
2011) Mexican cartels move into human trafficking. Washington Post.
91
UNODC (2011) Reinforcing Mexico’s response to human trafficking: President Calderon recognizes role of
Blue Heart campaign
92
Underwood, C (Aug,16
th
2014) 72% of the Indigenous Population in Mexico live in Extreme Poverty
Conditions www.wsj.com
93
Approximately 72 languages are spoken within Mexico
28. 23
the indigenous people who are older and have not had the benefit of being educated, these
are irrelevant. Although global steps were made by the U.N as well as several other
international organisations, the reforms on Mexico’s native people have done very little to
impact their wellbeing and standard of living. Within local cultures, the Mexican
government have allowed for internal policing, which is headed usually by the elders, with
which the communities abide by. With the rise of cartel power, this strategy of policing
begins to break down. Rotberg’s theory suggests; “that failed states are tense, deeply
conflicted, dangerous, and contested bitterly by warring factions […] occasionally, the
official authorities in a failed state face two or more insurgencies, varieties of civil unrest,
different degrees of communal discontent, and a plethora of dissent directed at the state
and at groups within the state.”94
Unrest amongst the indigenous people has increased
vigilante groups of their own to protect their people. Alongside that, the presence of cartels
is forcing their own influence upon regions which were usually run by village elders95
.
Although Mexico has not failed as a state, these are worrying aspects that prevent it from
prospering internally and deterring human rights.
The Mexican government needs to further address the countries health, environmental and
security issues that mainly affect the indigenous people. These people are amongst those
that are at risk in environmental areas. Environmental security has long been an issue for
Mexico, especially because the country holds vast amounts of natural resources within its
borders and off-shore. For example, oil and natural gas as well as mining and forestation.96
Mexico’s pollution levels have consistently been on the rise, whilst at the same time, so are
the countries ever growing problems with widespread erosion, deteriorating agricultural
land, and deforestation. Issues involving waste and raw sewage polluting the rivers are
abundant within the large cities of Mexico.97
Rotberg’s theory does not analyse the
necessity for environmental or indigenous security, however, it is essential in looking at
Mexico’s failure to control within its borders, and to protecting its people.
94
Rotberg, R (2006)
95
Pelzer, T (February 3
rd
2014) Community self-defense groups confront Mexico’s drug cartels.
www.peoplesworld.org
96
https://www.cia.gov/library/publications/the-world-factbook/geos/mx.html
97
Ibid...
29. 24
The gap in inequality within indigenous area is continuously growing, and with that comes
the harsh realisation that Mexico’s policy is in desperate need of change to secure the
future of its vast population. Within its environmental issues, Mexico suffers greatly from
its inability to control its industrial needs. Recent issues have arisen with a copper mine,
“following a spill of contaminated waste water […] restricting water supplies in some cities
and towns in the northern part of the country”98
. This shows the deficiency in Mexico’s
ability to control health and safety risks that are affecting the wellbeing of the people and
the dangers towards the environment. Furthermore, issues involving deforestation and oil
spills have shown weaknesses in the countries inability to protect its natural resources that
are currently being attacked and tapped into. Actions have been taken to fight against
criminal organisations that have taken to stealing oil from the state controlled Pemex.
However, the government confirmed that the prominent Zeta Cartel, have become involved
in the stealing and selling of Mexico’s oil, an issue of great concern as oil is a major part of
the Mexican economy.99
Chapter Summary
The issue of Human Security is a major problem within Mexico’s society. It is not solely the
actions of the criminal organisations but also that of the military and the government who
have been called upon to prevent such actions from occurring and to promote security
within its borders. Human rights groups have campaigned and the Mexican people have
taken to the streets on the issue of how the military have approached the matters;
however, the belief by many is that a hard line must be taken to stop the spread of crime as
well as the cartels. Foreign intervention has been widely accepted as somewhat of a
success as the capture of several top cartel leaders have been made while the actions of the
military have curbed the presence of cartels in other regions across Mexico, however mass
crimes are still occurring whilst the issue of numerous mass graves and genocides are being
uncovered.
Mexico has largely ignored issues towards indigenous people however their issues will need
to be addressed as Mexico’s diverse population aims to promote further transparency.
98
(Aug,11
th
2014) Mexico imposes water restriction following toxic spill from copper mine.
99
Castillo, R (Aug, 8
th
2014) Mexico topples Oil Theft Ring, But Cartel Threat Lingers Over State Petroleum
Company. Vice News. www.vice.com
30. 25
Within the environment actions are been addressed however like many prospering
economies the environment is not top of the agenda.
31. 26
An Emerging Economy or Economic Disorder
Mexico’s rise to a prominent world power hinges on their economic prosperity. Mexico has
joined the ranks of an economic elite when they struck “black gold” with large oil reserves in
the Gulf of Mexico as well as large natural mining resources, overtaking China in supplying
smaller industrial products to the United States markets, and reforming its economic
policies, both internally and externally.100
Trade agreements, such as NAFTA between the
countries North, and further trade relations to its South American partners, increasingly
with Brazil101
, has allowed for Mexico’s economy to gradually grow. Mexican government
has also begun to push through reforms in energy and tax, have helped Mexico rise through
the ranks to become Latin Americas’ second largest economy102
. Mexico’s economy has hit
boom and bust over the past decade due to its close alignment with the United States, and
hence felt the pressures in 2008-09, to a record high over 2012.103
With the introduction of
President Nieto, many believed it could be “Mexico’s Moment”, however, an attempt to
push through major reforms that would promote the country to greater democracy across
the nation, improvements towards the standard of living, and internal and external trade
have left many sceptical that they are still promoting inequality and further endorsing the
rich and privileged. Growth is necessary to Mexico’s promotion to an elevated status and
with that, change will be essential. This chapter will focus heavily on Mexico’s economic
prosperity in the 21st
Century, including the effects of NAFTA previous to the turn of the
century, the War on Drugs, the new PRI government and major reforms through the deal
“Pacto por México”, and finally to “Mexico’s Moment”. ‘Failed State’ theory will be included
to justify that Mexico is more of an economic world player than that of a state crumbling
into failure.
Prosperity in Mexico’s economy has been brought up by key economist, Jim O’Neil, who
coined the “MINT” nations, who in the next fifty years, are believed to become the
emerging economic powers with their rich natural resources and greater promotion of
100
Cattan, N (2012) Mexico Replaces China as U.S. supplier with no wage Gains: Jobs www.bloomberg.com
101
Goforth, Sean (2011) Mexico Fills Void in South American Free Trade Agenda.
www.worldpoliticsreview.com
102
Mallén, P.R (February 8
th
2014) Will Mexico Surpass Brazil as Latin America’s largest Economy? Steadier
Growth and Credit Ratings suggest the Answer is Yes. www.ibtimes.com
103
Mexico has suffered due to its close ties towards the U.S economy.
32. 27
democracy. With this belief, and the increasing focus on Mexico’s economic interests, many
have taken a vested interest in investment opportunities and the push to further open
markets. Mexico’s key source of export, although previously believed to be in decline, will
arise through “black gold”, found in the large oil and natural gas reserves in the Mexican
gulf104
. Due to Mexico having maintained nationalising its natural resources, significant
issues have been raised that there is an inability to produce the vast amounts that private
companies would be able to. Mexico has been understood to have its economy is
dependent on its natural reserves, yet, with a push for further movements towards greater
neo-liberal policies a push into further markets may curtail the dependency on natural
resources.
NAFTA.
NAFTA was created on the 1st
of January 1994 to promote trade benefits between Mexico
and the United States.105
The promise of NAFTA to the Mexican people was that it would
stimulate economic growth, increase the standard of living to the wide middle class, whilst
closing the inequality gap between rich and poor106
. Mexico had suffered significantly
under the PRI government of seventy years, their authoritarian rule and the inability to
promote economic growth including several economic crises occurring, which brought the
country to near economic collapse107
. The promises made were vital to promote the support
for the bill to pass through both governments and congress; it nonetheless has not lived up
to its hype, which the Mexican people longed for. Twenty years on and statistics show that;
“Out of 20 Latin American countries (South and Central America plus Mexico), Mexico ranks
18th, with growth of less than 1% annually since 1994”108
. Further issues have resulted in
the failed promise behind an influx of job opportunities in all sectors. NAFTA had promised
to increase the pace for the demand for jobs in a young population; “unprecedented growth
in trade increasing productivity and a surge in both portfolio and foreign direct investment
104
U.S. Energy information administration. (April 24
th
2014) Country Analysis of Mexico
105
Information on NAFTA found on www.naftanow.com
106
(2013) NAFTA’s Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement
107
Economic crises included the peso collapse, Latin American debt crisis and the 1970 crisis previous to
NAFTA.
108
Weisbrot, M (2014) NAFTA: 20 Years of regret for Mexico. www.theguardian.com
33. 28
have led to an increase of five hundred thousand jobs in manufacturing from 1994-2002.”109
However, to keep up with demand, this has not been effective due to loss in jobs within
sectors such as agricultural, where due to the importation of cheap corn and grain from the
U.S., Mexico now imports one third of its corn from the United States110
. This caused a
negative effect to employment opportunities, and dependence on imports rising from seven
percent in the early 1990s to thirty-four percent in the 2000’s111
. The impact of NAFTA has
also led to further dependence on the United States markets as the Mexican economy was
largely impacted by the economic crisis in 2008, and furthermore the housing crisis in early
2000. It has not just been negative towards NAFTA, as the Mexican government have grown
in relations with North America and its partners, but has also grown stronger trade routes in
Central and South America and globally with stronger trade into Europe and Asia. “Mexico
has been NAFTA’s chief beneficiary,” not solely on economic value, but also political
commitment to open markets, and free trade agreements required for a successful
economy.112
An increase of export trade has amplified Mexico’s presence within NAFTA,
while the countries continue to expand their trade with each other. NAFTA has positively
built Mexico’s economy, increasing its trade significantly with its North American allies
whilst promoting free trade with multiple other nations. The nation is increasing many
people’s beliefs in the MINT nations, that Mexico will provide an economic hub for the
future.
The War on Drug’s.
Mexico’s battle against criminal organizations over the war on drugs has seen a catastrophic
number of homicides, ground battles occurring throughout multiple regions, an increase of
military presence across key states, and an evident impact on the economy113
. The war on
drugs had a damaging effect on Mexico and drawn the country into developing failed state
elements, laid out by Robert Rotberg. This chapter aims to look at the effect the conflict has
109
Audley, J.J et al (2004) NAFTA’s Promise and Reality. Lessons from Mexico for the Hemisphere. Carnegie
Endowment
110
Wise, T. A (2012) The Cost to Mexico of U.S Corn Ethanol Expansion. Tufts University
111
Wise, T.A. (2010). Agricultural Dumping Under NAFTA: Estimating the Costs of
US Agricultural Policies to Mexican Producers. Washington, Woodrow Wilson
International Center for Scholars
112
The Economist (January 4
th
2014) Deeper, better, NAFTA
113
Nava, J.P (2010) Narco-Crime in Mexico: Indication of State Failure of Symptoms of an Emerging
Democracy? School of Advanced Military Studies
34. 29
had on Mexico’s economy in a time where promoting further foreign investment is a key
concept for government.
“Cartels undermine the rule of law. Instability alienates current investors and deters
potential investors or business-owners.”114
This negative impact further creates instability
amongst local governments, who are targeted, and in some cases controlled by, cartel
groups in order for them to run their illegal activates without the threat of been caught.
Illegal trade cannot be taxable and therefore revenue is lost. In previous governments, it
was said that the PRI government had often taxed the cartels a fee to be allowed to trade
illegal narcotics, whilst the government turn a blind eye. After Felipe Calderon’s push for
military involvement, the cartels began to fight back, increasing their activity whilst creating
a wider force of Mexican bodies to defend their trade routes. Mexico’s youthful population
known as “Ni Ni’s”, have been targeted and paid highly for their service to the cartels,
undermining the government, and forcing many into criminal underworld. This largely
affects the Mexican employment rate and increases their spending on internal defence to
ensure that regions are protected from illegal activity.
However, Mexico’s tourism sector has not been largely affected by the damages caused by
Calderon’s War. Tourism is Mexico’s fifth largest source of foreign revenue115
, and in many
areas, such as Acapulco, have been hotbeds for cartel activity and violence. Many tourists
are sceptical of travelling to these areas as well as areas towards the regions bordering the
U.S, which are important to the cartels as routes for trade. Cartels do not usually target the
tourists, however, due to wars for control or against the military. There have been incidents
where some have been to be caught by the cross fire, have been involved kidnapping, car-
jacking, and/or extortion.116
The U.S state department has placed Mexico on a travel risk list
that includes nations such as North Korea, Yemen, and The Democratic Republic of Congo117
, although this does not seem to hinder tourism in the country. Another issue is based on
114
Gray, C (2010) the Hidden Cost of the War on Drugs. Stanford Progressive
115
Arrioja, J.E (2013) Tourism Seen Jumping to No.3 Mexico Cash Source by 2018. www.bloomberg.com
116
Tovrov, D (2012) Is Mexico’s Drug War Hurting Tourism. www.ibtimes.com
117
Ibid...
35. 30
employment, as in many tourists hotspots there is no industry to work within, and so many
rely on continued levels of tourists.118
Although the War on Drugs has largely had a negative effect on Mexico, many have
suggested that the economy would shrink if the trade was to be largely damaged. With the
amount of money entering into the country, worth $6 billion from trade to the United States
alone119
, a positive impact has been created for those who spend the money on lavish
goods120
. Additionally, the money made by the drug cartels, although split into several
different banks and accounts, is believed to have allowed the Mexican government
breathing space during the economic crisis in 2009121
. The damaging effect of the ‘War on
Drugs’ has promoted several areas of Mexico’s economic sector albeit illegally. “The sheer
size of the drug economy, the role it plays in keeping the country financially solvent and the
insatiable greed and corruption of government officials”122
, have allowed for Mexico to
thrive and become a war that the government will never win. The impacts has been both
positive and damaging towards the Mexican economy therefore Mexico may have to look to
the future to further combat cartel control whist gapping the economic hole that the
organizations have left.
Economic Reforms.
Multiple reforms have been devised by the Government of President Nieto, but none more
important than towards the energy sector, which many economists see as the defining
measure into Mexico’s prominence as Latin Americas’ hegemon. Mexico’s energy sector
has been nationalized since the discovery of oil and controlled by the state oil firm PEMEX, a
monopoly they have held for several decades.123
Therefore, Mexico has not reached its full
potential in discovering and harvesting their large supply of the natural resources. Mexico is
118
Wilson, T.D (2008) Economic and Social Impacts of Tourism in Mexico. Latin American Perspectives Vol 35.
No.3
119
Keefe, P.R (Jun 15
th
2012) How a Mexican Drug Cartel Makes its Billions www.nytimes.com
120
Gray, C (2010)
121
Rajeev S,(December 12
th
2009) “Drug money saved banks in global crisis, claims UN advisor,” The Guardian,
122
Redmond, H (2013) The political economy of Mexico’s Drug War. Isreview.org
123
Coballasi, J. Tagle, E.G (2008) Petroleos Mexicanos (PEMEX) Standard & Poor’s. Ratings Direct
36. 31
the eighth largest oil producer in the world, with oil reserves producing over one hundred
and ten million barrels.124
“Mexico’s energy reform will bring the country “enormous benefits”, and will be a “game
changer” for the nation’s role in the global economy.”125
These reforms laid out by
President Nieto signed into law with twenty one component parts, and aim to not just
change PEMEX, but transform Mexico’s hydrocarbon sector, electricity sector, and private
investors126
. “Mexico’s energy reform will allow foreign investors to participate, production,
processing and transportation of oil and gas in the country.”127
Some of these reforms will
begin to lay out plans for oil fields in the Gulf of Mexico to be bid for by private and foreign
investors, looking to involve themselves in Mexico’s resurging markets. Many foreign
investors from independent companies in the U.S and South America have demonstrated
interest, whilst technology companies have also expressed interest in advancing the oil
fields already in place by PEMEX. This suggests that Mexico could increase their output with
further foreign investment. PEMEX has historic value to Mexico, being nationalized
following oil workers’ strike, and has also been a source of employment to the people after
replacing the U.S and British oil companies in 1938.128
Furthermore, Nieto’s reforms ensure
not, just billions of dollars in investment, but an end to decades-long monopoly of PEMEX,
whilst at the same time allowing further competition for Mexico to raise additional strategic
position within Latin America. By opening up Mexico, the country can expects large
investment in infrastructure allowing what they expect to be around $600billion.
Fiscal reforms made in President Nieto’s first term were based on the issue of tax overhauls.
Mexico’s tax system has come under extreme pressure to reform to ensure that the
Mexican people are continuously paying their taxes, as well as contributing to providing a
strong internal economic base. Nieto describes, “Tax reform is a social reform”129
, deeming
that everyone will benefit from the impact of reforms from the current government. The
overhaul includes, “simplifying of the tax’s code while reorganizing public spending to make
124
Hillsberg, A (2014) Top 10 Oil Producing Countries in the World: Where’s the Greatest Petroleum
Dominion? www.financesonline.com
125
Casey, M (2014) Mexico poised for an ‘energy renaissance’ following reforms
126
Negroponte, D.V (2014) Mexico’s Energy Reforms become Law. www.brookings.edu
127
Fei, L (August 13
th
2013) Mexico Further opens energy sector. Global Times
128
Iliff, L (2014) Mexico’s Pemex adjusts structure to compete with Private Companies. www.wsj.com
129
Torres, N Arce, J (2012) Mexico’s Pen Nieto ‘likely’ to win tax reform by end of-2013
37. 32
it more transparent and efficient.”130
However, many argue that the President’s tax reforms
have, “not gone far enough to ensure the large percentage of Mexicans pay little or no
income tax, find ways of avoiding the VAT by under invoicing or paying cash, are not liable
for inheritance or wealth taxes and in general put the country at the bottom of the OECD list
of fiscal revenue as a percentage of GDP.”131
A further issue within Mexico, is the inability
for the government to ensure that everyone is paying their tax. “In a country where buying
and selling good without government intervention is woven into the culture, regulating and
collecting taxes from a vast array have of often highly mobile vendor remains a daunting
challenge”132
The reform has been seen as a light reform, showing movement towards a promising
democracy. However, the tax system needs tighter reforms for the government to continue
to prosper into a promising democracy. Previous reforms made by the governments in
power, have been heavily targeted towards the upper-middle class. This is no different, as it
seems that the President has elected to use lighter reforms than what was first outlined. An
outcome that is no surprise due to the amount of protests currently on the streets of
Mexico City, where the “Pacto por México” is currently affecting all social classes across the
country. Other issues involved Mexico “failing to improve income distribution in a country
where the richest 10% earn 19 times as much on average as the poorest 10%.”133
Distribution of wealth is a major concern to Mexico as the widening divide between classes,
is becoming more prominent since the privatisation of many sectors of government. A
report by the OECD has ranked Mexico as one of the worst countries struggling with income
inequality amongst the thirty-four nations,134
a divide which is continues to grow.
President Nieto also plans to raise the tax intake of Mexico, which currently stands below
that of Latin Americas average. This has developed into the middle class to create a
disturbance as he attempts several more tax reforms. Many believe that it will bring three
benefits to the country; “First, by emphasising income tax rather than extending value-
130
Montes, J (2013) Mexico Set to Unveil Tax-code Overhaul. www.wsj.com
131
Rozental, A (2013) How important are Mexico’s Proposed Tax System Reforms? Brookings.
132
Quinn, Dale (2013) Up to 60% of Mexico’s workers don’t pay taxes and the government doesn’t dare go
after them. Quartz www.qz.com
133
Montes, J (2013) Mexico Set to Unveil Tax-Code Overhaul. The Move could prove Politically complicated in
a slowing economy
134
www.OECD.org (2012) Society at a Glance – OECD Social Indicators
38. 33
added tax, the reform is modestly redistributive. Second, it ends special treatment for
certain industries—a big source of tax avoidance. Third, it attempts to offer something
tangible in return for the sacrifice of paying: a universal pension system and limited
unemployment insurance.”135
However, with several pressure groups in uproar over the
reforms, President Nieto will have a difficult time in ensuring bills are passed through
legislation, whilst trying to maintain opinion rates.
Chapter Summary.
Within the economy, Rotberg argues that; “rapid reductions in incomes and living standard
indicated the possibility of failure early enough to be noted, and for preventive measures to
have been attempted.”136
It can be argued that, since the inauguration of President Nieto
and his ‘Pacto por México', preventative measures have been put in place because of
Mexicos’ suffering through the economic crisis, and further damage caused by military
action over the war on drugs, such measures are allowing Mexico to pursue positive
economic recovery. Mexico’s economy, although stagnated at the moment, has the
potential to reach its true value and become a dominate economy as believed by Jim O’Neil
shown through the MINT countries. Mexico’s economy has continued to promote itself and
can only grow with fiscal and energy reforms promoting further competition and investment
into important sectors. Mexico must also address its internal tax issues, where greater
emphasis on collection would promote greater income. Within NAFTA, trade between the
countries has continued to evolve, whilst at the same time promoted Mexico’s economy to
expand its markets globally. The economy has currently remained stagnant, yet, Mexico’s
Moment appears to be around the corner. Movement towards reforms, and continuous
trade with the country, is still being hampered by the demon of the War on Drugs and the
negative effect it has on multiple cooperation’s and countries who look into investing in the
Mexican market. Mexico is a prospering economy re-building and re branding itself towards
markets across the world. Its economy will only grow, as long as the country remains on its
current course promoting democratisation, freeing up its economy to further neo-liberal
policies.
135
The Economist (September 14
th
2013) It’s a dog’s Life. Fiscal reform in Mexico
136
Rotberg, R (2006)
40. 35
Conclusion
The Final chapter will attempt to draw together the conclusion that Mexico is on its way to
becoming a prosperous economic power, as well as a fully democratic nation state. The
belief that Mexico is destined to fail is unfounded, where necessary steps are being taken to
address the major elements for success, and modify these where necessary. Judgement will
be made based on these issues which have been laid out in the previous chapters, as well as
their effects towards the future of Mexico. It will also provide an analysis of Mexico’s future
and ambitions within the coming years.
State failure in Mexico is possible. With the countries its inability to control the people
within its own borders, multiple towns, villages and cities out with the major areas labelled
as “failed” or “captured”, grow increasingly wary of governments and criminal organisations
that are starting to own and run every perspective of the country. Corruption and bribery
are still inherent within the political and judicial branches of government. This is not to say
however, that Mexico will become a failed state, nor will it have its cities or regions
completely lost to the cartel powers. Mexico still “applies a uniform rule of law, enables the
populace to participate in free and fair elections, and provides essential services to the
population.”137
The Mexican government continues to develop an approach towards the
issue of criminal organizations, as they expand further throughout Mexico, and continue to
develop their illegal activities. Mexico lacks the ability entirely to counter the threat on its
streets, whilst it focuses the countries efforts towards drug trafficking, and those that led
them. They fail to recognise the issues that are affecting their own people on the streets, in
the local towns, and villages. Further military intervention is essential to stem the control of
criminal organisations, whilst the threats of human and weapons trafficking must be
addressed, as the cartels widen their commerce, a major issue on the border with the U.S.
138
Mexico has gradually democratized since its independence and evolved significantly from
its former authoritarian government to produce a multi-party system, holding free and fair
137
Nava, J.P (2010) pp42
138
Shahani, A (June 14
th
2013) Human Trafficking in Mexico. www.americasquarterly.org
41. 36
elections139
, and allowing for the people to improve its sustainability in the face of, “High
rates of urban crime and the rise of criminal syndicates.”140
Mexico’s key reforms and goals have been placed in the direction for improvements when
involving a young democracy ridding itself from its authoritarian past, and promoting
further changes in an effort to flourish. Reforms are necessary to pursing future prospects
within the judicial sector, and will ensure increased pressure is directed towards the
criminal organizations whilst attempting to purge the corrupt elements that have haunted
the central government. This has been via force and bribery, of which many within the
police departments and local governments, have become accustomed to by the cartels,
integral to their illegal operations141
. While education and regional reforms aim to
construct further democratic principles, the television and telecommunication reforms
allow for a fairer system and stem a monopolised structure.
As previously mentioned, the issues arising from human security are abundant, further
pressure on the government to improve human rights abuses, develop resources to
maintain and improve rights to indigenous people, and the environment will help to
improve good governance across the spectrum. Organized crime remains the key issue in
Mexico and its inability to control this has severe consequences towards it ambitions,
further ties with its neighbouring countries has allowed for intervention into restricting the
ability for the cartels to spread whilst the critical weakness across the border with the U.S
must also be addressed with regards both the cartels and illegal immigration.
Furthermore, Mexico’s economic stance has started to recover after the economic crisis, in
which they were largely damaged by strong ties towards the United States and the H1N1
virus which harmed the tourism sector. Ties within NAFTA have had a mixed effect on the
Mexican economy allowing growth in trade and manufacturing, but empty promises have
hampered employment and damaged the agriculture sector. The promotion of NAFTA has
allowed for Mexico to improve trade relations on a broader scale, trading not just within the
Americas, but globally. Economic reforms will further promote investment from foreign
nations towards Mexico’s natural resources creating competition. Mexico’s economy hit a
139
Nava, J.P (2010) pp43
140
Rotberg, R (2006) pp 9
141
The Economist (May 19
th
2011) A state-by-state guide to graft www.economist.com
42. 37
four year low in 2013, with many considering that ‘Mexico’s Moment’ had been and
gone142
. However, the passing of energy reforms, an increase in trade relations, and a more
competitive Mexico within the markets, may allow for the economy to bounce back and
rival Brazil in the near future as the regional hegemon.
For Mexico to fail would require a deterioration of essential government sectors, including
that of the economy, judiciary branch, and the military. These sectors have in fact grown
within the past decade and have been supported in their ambitions for Mexico to perform.
Mexico is in need for further reforms, in particular towards its judiciary sector and within
regional politics as corruption is rife. Furthermore, the need for a more prominent military
presence within cartel regions, alongside that of intervention from the United States in
order to stem organized crime, will ensure such failed elements will be confronted. Mexico
is not a state destined for failure, nor will it in any case fail as it stands. The countries
ambitions to emerge on a global scale may take time, however their continued
advancements towards democracy and open markets drives such desires.
142
The Economist. (March 22
nd
2014) The Man from MIT. www.economist.com
43. 38
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