MEXICO AS A FAILED STATE: A CONCEPT REVISITED.

"STRATFOR argued March 13, 2008, that Mexico was nearing the status of a failed state. A failed state is one in which the central government has lost control over significant areas of the country and the state is unable to function. In revisiting this issue, it seems to us that the Mexican government has lost control of the northern tier of Mexico to drug-smuggling organizations, which have significantly greater power in that region than government forces. Moreover, the ability of the central government to assert its will against these organizations has weakened to the point that decisions made by the state against the cartels are not being implemented or are being implemented in a way that would guarantee failure.

Despite these facts, it is not clear to STRATFOR that Mexico is becoming a failed state. Instead, it appears the Mexican state has accommodated itself to the situation. Rather than failing, it has developed strategies designed both to ride out the storm and to maximize the benefits of that storm for Mexico.

First, while the Mexican government has lost control over matters having to do with drugs and with the borderlands of the United States, Mexico City’s control over other regions — and over areas other than drug enforcement — has not collapsed (though its lack of control over drugs could well extend to other areas eventually). Second, while drugs reshape Mexican institutions dramatically, they also, paradoxically, stabilize Mexico. We need to examine these crosscurrents to understand the status of Mexico....

The heartland of Mexico is to the south, far from the country’s northern tier. The north is largely a sparsely populated highland desert region seen from Mexico City as an alien borderland intertwined with the United States as much as it is part of Mexico. Accordingly, the war raging there doesn’t represent a direct threat to the survival of the Mexican regime....

On the whole, Mexico is a tremendous beneficiary of the drug trade. Even if some of the profits are invested overseas, the pool of remaining money flowing into Mexico creates tremendous liquidity in the Mexican economy at a time of global recession. It is difficult to trace where the drug money is going, which follows from its illegality. Certainly, drug dealers would want their money in a jurisdiction where it could not be easily seized even if tracked. U.S. asset seizure laws for drug trafficking make the United States an unlikely haven. Though money clearly flows out of Mexico, the ability of the smugglers to influence the behavior of the Mexican government by investing some of it makes Mexico a likely destination for a substantial portion of such funds....

Mexico’s policy is consistent: It makes every effort to appear to be stopping the drug trade so that it will not be accused of supporting it. The government does not object to disrupting one or more of the smuggling groups, so long as the aggregate inflow of cash does not materially decline. It demonstrates to the United States efforts (albeit inadequate) to tackle the trade, while pointing out very real problems with its military and security apparatus and with its officials in Mexico City. It simultaneously points to the United States as the cause of the problem, given Washington’s failure to control demand or to reduce prices by legalization. And if massive amounts of money pour into Mexico as a result of this U.S. failure, Mexico is not going to refuse it.

The problem with the Mexican military or police is not lack of training or equipment. It is not a lack of leadership. These may be problems, but they are only problems if they interfere with implementing Mexican national policy. The problem is that these forces are personally unmotivated to take the risks needed to be effective because they benefit more from being ineffective. This isn’t incompetence but a rational national policy.

Moreover, Mexico has deep historic grievances toward the United States dating back to the Mexican-American War. These have been exacerbated by U.S. immigration policy that the Mexicans see both as insulting and as a threat to their policy of exporting surplus labor north. There is thus no desire to solve the Americans’ problem. Certainly, there are individuals in the Mexican government who wish to stop the smuggling and the inflow of billions of dollars. They will try. But they will not succeed, as too much is at stake. One must ignore public statements and earnest private assurances and instead observe the facts on the ground to understand what’s really going on.

And this leaves the United States with a strategic problem. There is some talk in Mexico City and Washington of the Americans becoming involved in suppression of the smuggling within Mexico (even though the cartels, to use that strange name, make certain not to engage in significant violence north of the border and mask it when they do to reduce U.S. pressure on Mexico). This is certainly something the Mexicans would be attracted to. But it is unclear that the Americans would be any more successful than the Mexicans. What is clear is that any U.S. intervention would turn Mexican drug traffickers into patriots fighting yet another Yankee incursion. Recall that Pershing never caught Pancho Villa, but he did help turn Villa into a national hero in Mexico.

The United States has a number of choices. It could accept the status quo. It could figure out how to reduce drug demand in the United States while keeping drugs illegal. It could legalize drugs, thereby driving their price down and ending the motivation for smuggling. And it could move into Mexico in a bid to impose its will against a government, banking system and police and military force that benefit from the drug trade....

Ultimately, Mexico is a failed state only if you accept the idea that its goal is to crush the smugglers. If, on the other hand, one accepts the idea that all of Mexican society benefits from the inflow of billions of American dollars (even though it also pays a price), then the Mexican state has not failed — it is following a rational strategy to turn a national problem into a national benefit".

George Friedman, "Mexico and the Failed State Revisted," 5 April 2010, in www.stratfor.com.

"Mexico is really an Indian State, where are the elements to support the President's Policy?"

British Foreign Secretary Sir Edward Grey to American Ambassador Walter Hines Page, circa the Spring of 1913.

Just as the original 'Six' of the European Union, have learned to their collective costs the dangers of allowing some of the rather feckless PIGS countries [Portugal, Italia, Greece and Spain] to adopt the Euro, so similarly the USA, has learned, is learning and will learn more in the future the costs involved in residing next to Mexico, in or out of NAFTA. Just as it is now easy to see that the single currency is more of a dead weight, in the absence of a shared fiscal policy, joining or trying to join Mexico to the USA and Canada, is a similarly Sisyphus endeavor. At present, Mexico is not a failed state. Yet. It however may become so, if the levels of violence which currently exist in its borderland regions with the USA were to either grow or alternatively move south, to the Mexico City heartland of the country. The real issue is that au fond, Mexico is a poor (compared to its northern neighbors), backward, Third-World country. With all that implies, i.e. massive corruption, massive violence, minimal to non-existent social services, and, a weak civil society. Given its current rate of economic growth, it might take one hundred years for Mexico to 'catch-up' economically and socially, to the USA and Canada. Until then, Mexico is going to be an exporter of both its poor, backward, illiterate masses & illegal substances, to the USA (Canada appears to be exempted from these particular 'imports'), and, the recipient of remittances in the shape of dollars bills from the profits of the drug trade and monies coming from its illegal immigrants up north. One at this point may innocently ask: is there anything that can change this unfortunate state of affairs? The answer to which is: yes, but. Yes, this state of affairs can be changed, to some extent (not fully of course), by the USA, making a major investment both of time and money, in helping Mexico modernize itself. This is not an argument to merely send large amounts of foreign aid to Mexico. Il va sans doute, that any such move, would have the end result of said funds going into various Swiss and other bank accounts in Europe and elsewhere. Rather, what the Americans should propose is that it is willing to make major structural investments, in Mexico. Investments in both infrastructure and in Mexican industry (particular the oil industry). The means for which would be fifty-fifty Mexican-American combines. Thereby to some extent obviating the dangers of any monies going down the corruption rat-hole, as in the past. The above, 'modest proposal', is not by any means the best or ideal solution to the problem of Mexico. Perhaps there is no 'solution', to this problem as such. Except perhaps building a Berlin Wall and shutting down any and all trade and traffic between the two countries. Something which, while perhaps the most rationale solution to the current situation, is not by any means going to occur. What I propose is a faute de mieux. A modus vivendi. Rien plus. But, in politics as in life, one must make due with the best that is available, and, not what one would like to be able to do. In short, as Furst von Bismarck put it long ago: 'politics is the art of the possible'.