Summary
Violence in Mexico is on the rise, multiple reports show, stoking alarm both inside and outside the country. Though violence doesn’t have inherent geopolitical significance, it becomes significant when it has the potential to fundamentally alter a country’s economic trajectory, political system and international relations. In the case of Mexico, reports of increasing violence, particularly organized crime-related violence, merit a closer look because Mexico is an emerging market and harbors ambitions to get out from under the thumb of the United States.
The violence in Mexico also raises the issue of the potential for spillover into the U.S., since this would likely lead to a redefinition of the bilateral relationship. Other places in the world have higher rates of violence than Mexico, but greater scrutiny is placed on Mexico because of its proximity to the U.S. and the impact violence may have on Mexico’s emergence as an economic power.
Rising Violence and Drug Trafficking
To understand the potential impact, we must first understand the types of violence in Mexico. Media reports focus on intentional homicides as well as kidnappings, extortion and armed robberies. In tracking homicides, Mexico distinguishes between homicides in which the perpetrator intentionally seeks the death of the victim and homicides that result from reckless or negligent behavior without the intention of causing death.
Intentional homicides set a new record last year. The previous record of 22,409 was set in 2011. The number of intentional homicides had declined each year since then, but the trend reversed in 2015. In 2017, there were 25,339 intentional homicides, a 23 percent increase from the previous year and 13 percent higher than the old record.
Drug trafficking organizations are often blamed for the rise in violence in Mexico. The official statistics do not differentiate between drug- or organized crime-related killings and other homicides, but some types of homicides are characteristic of the criminal and drug trafficking organizations, or DTOs, in Mexico. Homicides involving guns – which was about two-thirds of the homicides in 2017 – have a high probability of being related to organized crime or drug traffickers. Extortion and kidnapping, along with human trafficking and sales of stolen cars, are also associated with DTOs. It is not a coincidence that the states with the most homicides and kidnappings per month and the greatest increases in homicides per month are those with a strong presence of drug trafficking activity. The high-profile victims are typically journalists and politicians, who are attractive targets for organized crime groups. Further, anecdotal evidence of mass graves, dismembered bodies, decapitations and bodies found with narco messaging all point to the work of DTOs.
Homicides in Mexico do not occur uniformly across the large territory. Baja California, Guerrero, Mexico state, Veracruz and Chihuahua rank as the most violent states with the highest incidents of intentional homicide. Other states with high homicide totals are Sinaloa, Michoacan and Jalisco. In other states, such as Colima, the number of registered homicides are low, but they have a dramatic effect due to the small population. Colima registered 93.6 deaths per 100,000 people in 2017. Baja California Sur ranks second with 69.1 deaths per 100,000 people. For perspective, the national homicide rate in Mexico is about 20.8 per 100,000 people. Other states that have lower homicide rates have noted a faster increase in those rates. Last year, intentional homicide cases rose 550 percent in Nayarit, 116 percent in Aguascalientes and 118 percent in Quintana Roo. Overall, 26 of Mexico’s 32 states recorded an increase in homicide rates in 2017.
As for kidnappings and extortion, the number of reported incidents has increased in the past two years, but not as quickly as homicides. Both peaked in 2013, with 1,688 kidnappings and 8,213 extortion cases, and then dropped significantly over the next two years. However, since 2015, the number of reported incidents has slowly increased. In 2017 there were 1,484 reported kidnappings and 5,649 extortion cases, both surpassing 2016 totals. Meanwhile, local human rights organizations and other observers say there is reason to believe these incidents are under-reported. Given the nature of extortion and due to anomalies observed in the data from Mexico state, those organizations may be correct.
Drug Trafficking Organizations and Organized Crime
The main reasons for the spike in violence are the splintering, restructuring and growing competition among the DTOs and other organized crime groups in Mexico. This fragmentation had its roots in the presidency of Felipe Calderon (2006-12), who from day one adopted an aggressive stance on drug cartels. His “kingpin strategy” focused on killing or imprisoning the heads of major cartels, which followed a hierarchical model with strong familial and neighborhood ties.
Calderon’s approach led to a surge in homicide rates from 2006 to 2011 because it created power vacuums within groups and provoked turf wars and cycles of revenge killings. In addition, security operations began targeting these illegal groups. Over the past 11 years, Mexico’s military, which has more training and better equipment than local police, has become more involved in fighting organized crime.
The current criminal organization landscape is exceptionally fluid. Many groups operate more on a local cell-based level, and their association with other groups may shift with business interests. Many of these groups not only are involved in drug trafficking but also engage in other profitable crimes, including kidnapping, assassination, auto theft, prostitution, extortion, money laundering, software piracy, resource theft and human trafficking. Some criminal organizations have incorporated areas of specialization. For instance, some DTOs on the U.S. border have assumed the role of toll collectors, exacting payment from other traffickers, while other organizations specialize in sourcing cocaine from South America. Still others focus on transit routes within Mexico and other ways to either facilitate the drug trade or augment their profits through lower-risk activities.
The number of large DTOs jumped from four in 2006 to nine in 2017, and another 45 smaller organized crime groups have been identified. Their structure is more like a consortium, where groups are different sizes and specialize in various business activities. For example, La Linea and Los Aztecas are two distinct local criminal groups that fall under the umbrella of the Juarez cartel.
Though the Sinaloa cartel is the largest and most powerful DTO in Mexico, the Jalisco New Generation cartel, which broke off from the Sinaloa cartel in 2010, has become formidable over the past two years. In a short time it has grown and strengthened enough to compete for space, resources and markets. Given the increasing overlap of territories and resources, clashes with other DTOs become more frequent and intense. This is also the case for smaller groups that may act independently or fall under larger DTOs. Some of these groups stay in the drug business, while smaller, local criminal groups remain engaged in other criminal activity such as the illicit gasoline trade. When Mexico’s current president, Enrique Pena Nieto, assumed office in December 2012, security officials estimated there were 80 to 90 smaller criminal groups in operation. The latest estimates put the number at 45, which means there still are many players competing for business in the black market.
Economic Impact
Mexico needs to address the violence of DTOs for domestic economic reasons and to maintain its relationship with the United States. Violence and crime cost Mexico approximately 18 percent of its gross domestic product, according to a 2017 report by the Institute for Economics and Peace. The figure factors in a wide range of related costs, including spending on security by the government and businesses and lost income due to a homicide in the family. In terms of government spending, the institute estimates that Mexico spends 6.8 percent of its GDP to help contain violence nationwide.
Growing violence may also discourage investment, according to the Bank of Mexico. The bank recently ranked Mexico’s security as 5.5 on a scale of 1-7, with 7 representing the greatest risk to investment. Private sector estimates indicate that investments may fall by up to 5 percent because of violence, with impacts already being noted anecdotally.
Despite those warnings, a large-scale exodus of companies from Mexico in response to violence has not occurred. Many businesses there understand the security risks and factor in those costs. The point at which violence becomes intolerable will largely depend on the companies’ ability to operate profitably over the long term. Any prolonged decline in revenue or absence of investment would, of course, hurt the economy.
Relations With the U.S.
In terms of foreign policy, the violence in Mexico will primarily affect its relationship with the United States. Besides their shared border, the U.S. is the main destination for Mexican-produced opium and for cocaine transited through Mexico, and is the source of illegal weapons for Mexico’s DTOs. Drug trafficking between the two countries dates back to the early 20th century when the first opium shipments from Sinaloa made their way into the United States. Shortly thereafter, alcohol flowed to the U.S. in the wake of the Prohibition Act of 1919. The products and tactics for doing business may have changed, but not the business of smuggling.
The Mexican DTOs are the major wholesalers of illegal drugs in the United States and are increasingly gaining control of U.S. retail-level distribution through alliances with U.S. gangs. Street gangs continue to work with Mexican DTOs in Mexico, along the southwest border, and throughout the United States. These relationships are based more on location and personal and business ties than on strict affiliations with a given gang.
Mexican DTOs conduct business with a much lower profile in the U.S. than they do in Mexico to avoid engaging with security officials. The Drug Enforcement Administration’s 2017 National Drug Assessment notes the absence of significant spillover violence in the United States. Violence that does occur is infrequent, localized on the southwest border and mostly among traffickers. Mexican DTO activity in the United States is mainly overseen by Mexican nationals or U.S. citizens of Mexican origin. Those operating in the United States often share familial ties with, or can be traced back to, the natal region of leading cartel figures in Mexico.
The U.S. and Mexico have worked closely together on border security, particularly since the Sept. 11 terrorist attacks. But current tensions surrounding trade and immigration policies between the two countries make border security cooperation less straightforward, and the ability to strengthen such cooperation is no longer a singular issue. There is minimal spillover violence right now, but any change that causes spillover violence to rise would have massive political and geopolitical effects. The U.S. government is already studying measures for increased border controls and justifying them by vilifying Mexico. An actual spillover of violence would empower those in the United States advocating tighter border security. Right now, the U.S.-Mexico border allows for the relatively easy, free flow of trade and persons. A strong, controlled border would redefine the basic structure of this bilateral relationship.
The U.S., for its part, can try to pressure Mexico to take stronger action or pursue particular security measures. The point of leverage for this would not be a wall, as President Donald Trump has urged, since that would not be effective or practical. President Richard Nixon effectively shut down the U.S. border for several weeks in September 1969 in an attempt to stem the flow of drugs. The closed border killed local business but did little to impact the drug flow.
Perhaps more effective for the U.S. would be to limit or hinder remittances. Remittances to Mexico from people in the U.S. help to sustain or augment household income nationwide. The most recent figures from the Bank of Mexico show that from January to November 2017, remittances totaled $26.1 billion, and the year is poised to see a record high. But the move could backfire. Remittances play an even more important role in households of poorer states – Michoacan, Guerrero and Oaxaca, for example – so cutting off remittances runs the risk of driving more desperate people to join criminal groups and creating controversy within the United States. Still, remittances are a powerful card to play and may be used as a tactic with other bilateral issues, such as NAFTA, that have a greater overall impact on the U.S.
Security Options
Though it is in Mexico’s interest, particularly its economic interest, to stop drug-related violence, the key question becomes: What can the Mexican government do? The short answer is: not much. There are several strategies the Mexican government could pursue, but it faces severe constraints that will limit the effectiveness of any approach.
One obvious strategy is putting an end to criminal groups’ illicit financial activities, primarily drug trafficking and other black market activities, including fuel sales and human trafficking. The problem is that these groups have many alternative routes and means of conducting their business. Shutting down one route, point of entry or source of materials is merely a logistical problem for a criminal group. Criminal organizations have many financial resources as well as experience in logistical planning. To be effective, the government would need to conduct multiple large-scale shutdown operations simultaneously. This would be an extremely costly and difficult endeavor. The government and security forces simply don’t have the manpower and resources to conduct a sustained and effective operation of this magnitude.
Extra resources would have to come from outside the country, and the country best positioned in terms of funding, skills and expertise is the United States. But Mexico cannot accept large-scale U.S. support – especially in manpower – on its own soil. History has proved to Mexico that it must be wary of any foreign presence, that of the U.S. above all others. The government cannot risk the country’s sovereignty or increased dependence on the U.S. Therefore, from Mexico’s position, cooperation with the U.S. is best limited to primarily border cooperation, along with selective training, weapons supplies and funding.
Similarly, the idea of tackling violence by eliminating corruption is a purely theoretical option since it is no secret that, generally speaking, local police and government officials are also corrupt. Prosecution is not guaranteed and is often lax when pursued. Attempts to remove corrupt members of local police departments nationwide have failed, which in part explains why the military has assumed domestic security responsibilities. Though the targeted elimination of high-profile corruption is possible, completely cleaning the system of it is impossible without totally dismantling everything and rebuilding from the ground up.
The Mexican government faces fewer constraints in crafting regulatory frameworks for tacking criminal groups. The main obstacles the government faces here are political in nature. The current government did pursue judiciary reforms and domestic security legislation to better combat criminal groups. Both measures have been severely criticized by various political and special interest groups, citing confusion in the judiciary reforms and vagaries and loopholes for abuse of power in the domestic security legislation. Though regulatory changes fall squarely within the power of the government, the public reaction and associated political costs prevent drastic changes and full enforcement.
A final possible strategy would be to focus more on quelling violence rather than eliminating or reducing criminal activity in the country. The violence Mexico currently experiences is a symptom of the competition between criminal groups. In theory, removing this competition – in a sense creating a monopoly – would eliminate the violence that competition produces. This would involve the government aligning or tacitly supporting a dominant drug trafficking group or cluster of groups, ultimately diminishing competition. This is not a novel strategy but it certainly is a highly controversial one. It compromises the government’s power over criminal groups, and there are no guarantees that the monopoly would hold. Not to mention it’s morally questionable and wouldn’t be feasible until at least 2019. Mexico holds presidential elections on July 1, and the sitting president cannot run for re-election. A new government will be inaugurated on Dec. 1. Criminal groups will have no incentive to negotiate with the outgoing government.
Conclusion
The rise in violence in Mexico is geopolitically significant because of its potential to affect the trajectory of Mexico’s economic development and basic framework of its relationship with the United States. Given the political and resource constraints facing the Mexican government, this level of violence will likely continue to rise in 2018. During this time, anecdotal evidence will provide a strong measure of the economic impact – as will statistics, though they inherently capture the past over the present. The United States will be closely watching for any increase in spillover violence. Though the current levels do not threaten the U.S.-Mexico relationship, a sharp rise – combined with the political climate in the U.S. and tense relations over NAFTA negotiations – would help set the stage for a strong U.S. reaction that would redefine the relationship.
