The Mexican Cartel Conundrum: Policy Reform is More Effective Than Waging War

The Mexican Cartel Conundrum: Policy Reform is More Effective Than Waging War

Jacob J. Kim

It’s been over a year and half since “El Chapo” Guzman’s capture in January 2016 but cartel violence in Mexico continues to be stubbornly high. Progress from five consecutive years of improvements in peace since 2011 were dramatically reversed in 2016,[i] and there were over 12,155 homicide investigations in the first half of 2017.[ii] The steadily devolving situation has raised public awareness that the problem cannot be simply solved by stopping individuals or groups, as this merely shifts the balance of power to others eager to fill the void. This much has been proven since 2006, and it is more important than ever that authorities not repeat the mistakes of the past.[iii] Cartels are born from greed but they are also byproducts of Mexico’s flawed policies; as long as effective reform is not fully implemented, they will continue to taint every aspect of society, politics, culture, and economy.

An Ineffective Strategy

President Felipe Calderón’s war on drugs, which still continues today, has been largely ineffective in decreasing cartel activities. Mexico’s federal government has spent more than $54bn on security and defense since 2007. After years of armed conflict and over 200,000 people killed or missing, cartel drug trafficking remains today a flourishing enterprise that rakes in between $19bn and $29bn annually from U.S. sales. That doesn’t mean the war against drugs hasn’t accomplished anything. Plenty of high-profile arrests like that of “El Chapo” and drug busts have garnered national and international praise, garnering much-needed support from the public and from partners with deep pockets like the United States.[iv]   But like the Lernaean Hydra of Greek mythology, cartels seemingly regenerate a couple heads for every head chopped off. They have splintered, regrouped, and adapted to become more ruthless and cunning than before.

Making Matters (Arguably) Worse

Not surprisingly, the war on drugs has wrought havoc on Mexico’s economy and society. The economic impact of violence is estimated to be from $150bn to $200bn per year, with government expenditures on violence containment steadily rising since 2003. If the government did not have to spend so much on violence containment, more funding would certainly be available for other important sectors such as health, economy, and education. Although violence fell from 2011 to 2015, it has seen a significant uptick since 2016, erasing any hope of the federal government saving up to $407bn in “peace dividend” funds up to 2020.[v]

Use of federal police or military troops produces dubious results, as evidenced by a recent firefight in Mexico City. From one perspective, federal forces moved in and efficiently accomplished the mission of killing a notorious cartel boss known as “El Ojos”. From another perspective, their aggressive actions inspired scores of poverty-stricken denizens in Tlahuac to join the cartel and fill the power vacuum left by “El Ojos”. Supporters of the slain drug lord set fire to vehicles and rioted while fearful business owners shuttered their stores and schools closed. Afterwards, more than a thousand people attended the funeral of the cartel leader.[vi]  In a society where narco-trafficking is glorified and advertised as the only way out of poverty, an all-out war against cartels may inadvertently increase the number of cartel members and have a negative overall impact.

Perhaps more significant is the invisible impact- the fear of violence -that causes investors, entrepreneurs, scholars, scientists, and businesses to flee from Mexico. The specter of cartel violence and “war zones” like the incident in Tlahuac understandably makes the growth of any industry difficult. Experts say that the Mexican economy’s inability to grow dynamically is a direct reflection of their inability to participate and invest in complex industries such as aerospace and software development. Fear of violence is depriving Mexico of its most valuable human capital- those with the intellect and skill for advanced industries to grow.[vii]

Policy Reform: A Multi-Pronged Approach

There is no single course of action that can eradicate the scourge of cartel violence. Police and military action by themselves have a limited effect and should be combined with a multi-pronged approach that includes economic, defense, and education reform.

Increase military and police salaries. There’s something very wrong with underpaying the forces that risk their lives and the lives of their families to fight cartels. Despite federal reform to improve pay and benefits, the average federal police officer and Soldier struggles to save enough to advance in society. The average entry-level pay for a state police officer is approximately $588 a month according to a 2016 government report.[viii] Privates in the military earn approximately the same amount as the police average, and volunteers earn even less. [ix][x] These paltry salaries make the police and military highly vulnerable to corruption and therefore not as effective. Luis Ernesto Derbez, a 2018 presidential candidate, proposes over a 200% raise in police entry-level pay to $1,410 a month in addition to better healthcare and education benefits for families of police. Such incentives can significantly decrease police acceptances of bribes and increase morale and long-term loyalty to the government.[xi] Similar changes must be made to the military to increase its effectiveness against cartels.

Fully implement the National Anti-Corruption System and anti-corruption laws. Mexico made huge strides in fighting corruption by approving the creation of the National Anti-Corruption System (NAS) in 2015 and passing legislation in 2016 that required public officials to disclose assets, interests, and tax compliance. By design, NAS is regulated by a citizen board and has autonomous prosecution and investigative capacities. It also has the ability to coordinate between state and local authorities to combat corruption.[xii] Now, more than a year later, the NAS and anti-corruption legislation remain largely ineffective as politicians and their allies delay the nomination of an anti-corruption prosecutor or specialized judges, and even President Pena Nieto seems relatively unconcerned with the lack of progress. The importance of fully implementing NAS and anti-corruption laws cannot be overstated; widespread corruption detracts between 2% to 10% of Mexico’s GDP and undermines law and order in almost every level of society. The absence of an independent, autonomous, and powerful investigative body and makes it too easy for cartels to bribe public officials and gives cartels a license to operate with relative impunity.[xiii]

Raise basic education requirements and teaching standards. Poor education and low graduation rates, particularly in areas of poverty, are some of the main reasons why young Mexicans embark on a life of crime. Student performance in Mexico ranks among the worst compared to other Organization of Economic Cooperation and Development countries. High percentages of Mexican students do not reach basic level math and reading skills and more than half of young adults aged 25-64 are high school dropouts. The Education Reform Bill of 2013 attempted to improve the situation by implementing teacher evaluations, a merit-based pay and promotion system, tests for teachers entering the field, and more federal oversight. However, the powerful National Union of Education Workers (SNTE) has resisted the changes, claiming that they unfairly tie instructor job security to student test scores.[xiv] It is becoming increasingly obvious that the SNTE is more concerned for individual welfare than the greater good. Regardless of the SNTE’s ability to strike and bring schools across the nations to a standstill, the government should forcefully implement sweeping changes. All citizens should be required to graduate secondary education at a minimum, and local and federal subsidies must be available to provide financial support for poor families and dilapidated schools. Instructors that resist reform or do not meet minimum scores on periodic evaluations should be fired and replaced, no matter how painful that process is.

Promote competition and subsidize complex industries. Powerful monopolies have crippled Mexico’s economy for decades, causing poor Mexicans to pay more for everything from beer to telephone service. It’s a rigged system that allows little to no room for the entrepreneur and small business trying to grow. Cartels have thrived in this environment because they can bribe the few at the top, recruit from the many poor at the bottom, and extort anyone who fears that violence will ruin business. A constitutional amendment signed by President Peña Nieto in 2013 created a regulatory agency with the authority to sanction or split up telecom companies engaged in monopolistic practices.[xv] Although the effects of this reform have been muted by powerful actors, there’s no question that it was a step in the right direction.[xvi] Now, the federal government should apply the same anti-monopoly reform to other industries such as food and beer while subsidizing the growth of complex industries such as aerospace and software development. Prices of goods decrease as competition increases, and the growth of complex industries may entice some of the smartest minds to return to Mexico to help create a brighter future.

Conclusion

The solution to decreasing cartel violence lies more in economic, defense, and education reform than the use of armed warfare by underpaid forces. Cartels seem to be at the heart of all of Mexico’s problems. In truth, they are byproducts of decades of poor government policies, persistent poverty, and systemic greed. This article has described some of the reforms already implemented by the Mexican federal government that can take Mexico in the right direction. Government officials with courage must continue to lead the charge to fully implement decisive reform, even if it means their careers and livelihoods are endangered. Meaningful policy reform is the only way to a cartel-free future.

End Notes

[i] Mexico Peace Index 2017. Vision of Humanity, http://visionofhumanity.org/indexes/mexico-peace-index/ (accessed July 22, 2017).

[ii] “Mexico violence peaks with over 2,200 murders in June.” Al Jazeera. July 22, 2017. http://www.aljazeera.com/news/2017/07/mexico-violence-peaks-2200-murders... (accessed July 25, 2017).

[iii] Winter, Brian. “This Main is Brilliant. So Why Doesn’t Mexico’s Economy Grow Faster?” Americas Quarterly. http://americasquarterly.org/content/man-brilliant-so-why-doesnt-mexicos... (accessed July 25, 2017).

[iv] Lakhani, N., & E. Tirado. “Mexico’s war on drugs: what has it achieved and how is the US involved?” The Guardian. December 8, 2016. https://www.theguardian.com/news/2016/dec/08/mexico-war-on-drugs-cost-ac... (accessed July 26, 2017).

[v] Ferreras, Jesse. “Mexico’s Drug War Has Hurt The Economy Just Like It Has Hurt People.” The Huffington Post Canada. May 3, 2016. http://www.huffingtonpost.ca/2016/05/03/mexico-drug-war-economic-costs_n... (accessed July 26, 2017).

[vi] Agren, David. “Mexico City has mostly been spared from grisly drug violence. Now that may be changing.” The Washington Post. July 26, 2017. https://www.washingtonpost.com/news/worldviews/wp/2017/07/26/mexicos-cri... (accessed July 20, 2017).

[vii] Woody, Christopher. “How an overlooked impact of Mexico’s drug violence is holding back its economy.” Business Insider. March 19, 2016. http://www.businessinsider.com/drug-violence-and-economic-complexity-in-... (accessed July 21, 2017).

[viii] Graham, D., & A. Barrera. “Mexico must pay police much more to end violence: presidential candidate.” Reuters. July 28, 2017. https://www.reuters.com/article/us-mexico-politics-idUSKBN1AC3CP (accessed July 24, 2017).

[ix] “Revelan la tabla de haberes SEDENA.” VMC Agencia Informativa. June 23, 2016. https://agenciainformativavmc.com.mx/15025-2 (accessed July 29, 2017).

[x] “Escala Salarial Personal Militar 2017-2018.” Escalas y Convenio. March 14, 2017. http://convenioscolectivo.com.ar/escala-salaria-personal-militar/ (accessed July 29, 2017).

[xi] Graham, D., & A. Barrera. “Mexico must pay police much more to end violence: presidential candidate.” Reuters. July 28, 2017. https://www.reuters.com/article/us-mexico-politics-idUSKBN1AC3CP (accessed July 27, 2017).

[xii] Rios, Viridiana. “Mexico Wins: Anti-Corruption Reform Approved.” Mexico Institute. July 12, 2016.  https://www.wilsoncenter.org/article/mexico-wins-anti-corruption-reform-approved (accessed July 28, 2017).

[xiii] Agren, David. “Mexico leaders’ pledges fall short as graft remains ‘heart of the political system’.” The Guardian. July 19, 2017. https://www.theguardian.com/world/2017/jul/19/mexico-corruption-politica... (accessed July 26, 2017).

[xiv] Canedo, Ana. “Mexico’s Education Reform: What Went Wrong?” Georgetown Public Policy Review. March 10, 2016. http://gppreview.com/2016/03/10/mexicos-education-reform-what-went-wrong/ (accessed July 30, 2017).

[xv] Madrazo, Alejandro. “Telecommunications: Mexico’s New Reform.” Americas Quarterly. 2013. http://www.americasquarterly.org/content/telecommunications-mexicos-new-... (accessed July 31, 2017).

[xvi] Estevez, Dolia. “Carlos Slim’s Legal Challenge of Telecom Reform to be Decided by Mexico’s Supreme Court.” Forbes. July 4, 2017. https://www.forbes.com/sites/doliaestevez/2017/07/04/carlos-slims-legal-... (accessed July 31, 2017).

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Comments

Will there ever come a time for us to realize that policy change in the US is as necessary as policy change in Mexico? As long as demand continues from a US market that is willing and able to pay, Mexico's drug cartel issue will go on. This is not, and has never been, a Mexican problem that spilled over into the US, it is an American problem that spilled over into Mexico.

Supply does not create demand, demand creates supply. Always been that way.