Web Chat: Mexico’s Drug Wars

On September 8, Vanda Felbab-Brown answered questions about Mexican drug violence and its implications for the United States in a live web chat moderated by Seung Min Kim, assistant editor at POLITICO.

12:30 Seung Min Kim: Good afternoon everyone. We’ll be chatting with Brookings expert Vanda Felbab-Brown on the drug violence in Mexico and its implications for the U.S. Welcome, everyone.

12:31 Vanda Felbab-Brown: Good Afternoon.

12:31 [Comment From Shawn: ] With Mexico currently suffering from the same sort of drug-related violence that plagued Colombia during the 1980s, do you agree with those that say they must build a law enforcement capacity and not rely solely on military force?

12:32 Vanda Felbab-Brown: The violence levels in Mexico are serious, and they are unfortunately getting worse. Nonetheless, while Colombia in the 1980s may be an appropriate comparison, Colombia in the 1990s is less so — as the country’s contestation over the drug trade was outright and escalating, but prior to civil war.

12:35 Vanda Felbab-Brown: Law enforcement is an appropriate and necessary component of the response package. There is also a role to be played for Mexico’s military, especially in areas where Mexican police are particularly weak or corrupt. But law enforcement — both police and the military — should rarely be the sole response to acute crime, especially in Mexico. Employing other tools – such as socio-economic policies, enabling civil society, and focusing on multi-institutional development in Mexico are absolutely critical components of the policies. In fact, an appropriate way to think of the struggle in Mexico is to think of it as a competition in statemaking between the state and organized crime over societal allegiance.

12:35 [Comment From Gigi: ] The U.S. and Mexico discussed a four-pillar strategy that looks at taking on drug trafficking organizations, building rule of law, border security, and strengthening communities. How do you rate the strategy? Does this have a chance of success?

12:37 Vanda Felbab-Brown: The new U.S. policy in Mexico — called Beyond Merida — is exactly such a multifaceted strategy that recognizes the importance of tools other than law enforcement and the military. It includes broader institutional development and the integration of civil society into the process. However, while the inputs on the U.S. side now are very much improved, the outcomes in Mexico have so far not registered palpable improvements.

12:38 [Comment From Bill in Va.: ] While reports of Mexican drug gangs taking over parts of U.S. border areas seem ludicrous, is it so farfetched that, eventually, some cartel will start to operate on the U.S. side?

12:39 Vanda Felbab-Brown: The Mexican DTOs [drug trafficking organizations] are on a systematic campaign to control territory in Mexico and smuggling routes into the United States and parts of the border. In some municipalities in Mexico where state presence has traditionally been weak, they are often particularly strong, such as in the North of Mexico and along the border.

12:42 Vanda Felbab-Brown: The Mexican DTOs also already operate on the U.S. side of the border — in fact, they are the major wholesale distributors of drugs into the U.S.. More and more, they also attempt to franchise & control retail level distribution by handing out licenses to individual pushers. Mexican DTOs operate in about 240 U.S. cities. But they are strikingly less violent on the U.S. side than in Mexico. One of the reasons is the strength of U.S. law enforcement — both in terms of the absence of corruption and in terms of capacity, such as intelligence – both strategic and tactical.

12:42 [Comment From Ryan : ] Is it true that Mexico blames the U.S. – our desire for drugs and our supply of weapons – for the violence? And if so, is this blame warranted?

12:44 Vanda Felbab-Brown: Clearly, the United States is a big player in Mexico, including in terms of what the drug and organized crime market looks like. The United States is the major consumer in the region — though demand is growing worldwide, including in many countries that previously used to be only transshipment areas. Argentina, for example, has approximately the same per capita consumption as the United States.

12:44 Vanda Felbab-Brown: The United States is also the major supplier of arms, including small arms for the illegal arms trade.

12:45 Vanda Felbab-Brown: And finally, the profits are mainly accumulated in the United States and then laundered or smuggled out of the U.S. into Mexico.

12:46 Vanda Felbab-Brown: However, one of the important developments over the past several years has been the growth of the unprecedented level of cooperation between the U.S. and Mexico. The United States government has acknowledged joint responsibility — and the Obama Administration has committed itself to reducing demand, focusing on stopping the illegal arms trade by checking trains and cars, and by focusing on anti-money-laundering measures.

12:49 Vanda Felbab-Brown: The reality, however, is that all these three things do not account for the violence in Mexico. The Mexican drug market is acutely violent right now — and has been over the past 5 years or so. In many ways, the violence reflects the hollowing out of Mexico’s law enforcement and a set of policies that the government of Mexico decided to adopt toward organized crime, such as the interdiction of high-value targets, the head capos, without having the necessary law enforcement tools. Prior to these two developments, in the mid-1990s, the demand was still in the U.S., the money and the weapons were still flowing through the U.S., but the violence was nowhere near where it is now.

12:50 [Comment From Heather Scott: ] What do you think the economic impact of the violence will be?

12:54 Vanda Felbab-Brown: The violence has already had economic impact — in multiple ways. In the most badly affected communities, such as Ciudad Juarez, a major outmigration and internal displacement has taken place, while ordinary shops and restaurants have shut down.

Another impact is the narcos’ systematic effort to expand into other illegal and informal economies and even into the formal economy by extorting businesses. Both politically, with respect to state-making, and economically, this is a highly undesirable development since it could potentially give the narcos a far greater social base and provide livelihoods and socio-economic goods to a far greater segment of Mexico’s population than they have by simply participating in a fully illegal economy. Forty percent of Mexico’s economy is informal and if the DTOs come to control an important segment of that, that will be bad.

12:56 Vanda Felbab-Brown: Other economic impacts have included greater expenditures on security for U.S. firms. That said, foreign direct investment, including that from the United States, has not yet registered significant drop-offs. But it is hard to judge how much of that is due to the resilience of FDI despite the negative security trends and how much of that resilience is driven by high transportation costs that push against outsourcing into Asia. China’s ability to outcompete Mexico has been one of the key factors in preventing the growth of the Mexican economy, especially in a way that generates jobs.

12:58 Vanda Felbab-Brown: Other negative economic effects have included the geographic expansion of the violence — especially lately to Monterrey, the business and industrial hub of Mexico. Expansion into tourist areas, such as Cancun and Acapulco and possibly elsewhere — already taking place — would make the economic effects worse.

It is imperative that the government of Mexico stop subscribing to the narrative that the violence is tolerable because it’s the narcos killing each other. It also needs to make street security and violence reduction a critical component of its strategy.

12:59 [Comment From Gretchen: ] How does the violence on the border affect the immigration debate and vice versa? Do tougher laws like Arizona’s help or hurt? And should the federal government act?

1:01 Vanda Felbab-Brown: In many ways, the federal government has not been in the driver’s seat on immigration policy. Like his predecessor, President Obama has committed himself to immigration reform, but is finding little traction in the Congress, and there is frankly little chance that an immigration bill could be passed this year, or even before the end of this administration.

1:02 Vanda Felbab-Brown: Facing multiple social challenges, states and local communities have as a result taken the immigration issue into their own hands, often by resorting to dramatic measures, the apex of which has been the Arizona law. These measures are often also been justified as preventative steps to avoid violence spilling into the United States.

1:03 Vanda Felbab-Brown: But there is a good reason to doubt that such measures will help anti-organized crime measures. In fact, it is likely to undermine them.

1:06 Vanda Felbab-Brown: One of the reasons why the United States has been so effective in dealing with organized crime and keeping it from becoming too violent and deeply influencing the life of the community on the street is that there is a robust exchange between the community and police. One of the most effective innovations in law enforcement — based on lessons from both patrolling the streets and counterinsurgency — is community police. The idea that the local community trusts and cooperates with police, volunteers intelligence, and is willing to provide testimonies in the court is incredibly important. A lot goes into developing such trust, including effectively protecting witness and engaging with civil society.

1:07 Vanda Felbab-Brown: However, if as a result of the Arizona and other immigration laws the local Hispanic community is antagonized, this essential cooperation between the community and the police will be deeply undermined. And yet the Hispanic community in the U.S. is a key actor in helping U.S. law enforcement prevent the emergence of violence like we see in Mexico because the DTOs are Mexican.

1:08 [Comment From Dale: ] What impact do you think the legalization of drugs, such as California’s vote this November on marijuana, would have on drug violence in Mexico? Some people are saying it could drastically reduce violence in Mexico.

1:09 Vanda Felbab-Brown: The legalization question entails two different parts: one is what if the US/California legalizes, the second one is what if Mexico legalizes. And indeed, the voices for the legalization of marijuana in Mexico are growing, and include, for example, former President Vicente Fox.

1:11 Vanda Felbab-Brown: Countries may have a good reason to legalize. These could include shifting the focus of law enforcement from users to organized crime or better using public health tools to deal with addiction rates (though legalization is likely to increase use to some extent; how much is the big and difficult to estimate issue) or with secondary public health problems.

1:12 Vanda Felbab-Brown: But there are good reasons to be skeptical that legalization in either the U.S. or Mexico would reduce the violence. In fact, it could make it worse. Indeed, Mexico’s legalization – if it were to take place — would be more viable if law enforcement capacity increased and the capacity to corrupt or intimidate the state and society were suppressed.

1:12 Vanda Felbab-Brown: Why?

1:15 Vanda Felbab-Brown: There are reasons to doubt that the DTOs would simply go bankrupt or just take the loss of up to 60% of their income lying down.

Instead, they would try to develop their own marijuana fields in areas that the state in Mexico does not control or where its presence is limited & impose smaller taxes to undercut legal production in Mexico or in the U.S.. But if either place legalized, imposing strong taxes would be one way to mitigate the increase in consumption — in the same way that cigarettes are treated, example, thus setting an opportunity for a gray/illegal economy along side the legal one – just as we have with stolen cars or smuggled cigarettes.

1:17 Vanda Felbab-Brown: The DTOs would also intensify their struggle over the smuggling of other illegal commodities, such as other drugs – cocaine and meth for example – and undocumented migrants. And very dangerously, they’d be even more motivated than now to take over the informal economy, franchise it, and extort the legal economy. All of this would keep their money flowing and could greatly increase their political power while not reducing violence.

1:18 Vanda Felbab-Brown: Legalization is not a panacea. It is not an escape from the institutional development of its law enforcement that Mexico needs to do, nor from devising social policies that integrate vast segments of the population that still persist in poverty and social marginalization into the state and its formal institutions. These Mexicans need to come to see that a better future lies with the Mexican state, not outside it.

1:19 [Comment From Fred Schellenberg: ] Congressional oversight requires State Department reporting on what has been accomplished under the Merida Initiative. Many times the reporting focuses on how much money has been obligated under contract and how much of each contract has been liquidated (paid off), and what deliveries have been accomplished. Clearly these are metrics of progress, what are other metrics that are realistic and measurable that you would suggest? Why?

1:20 Vanda Felbab-Brown: Indeed, such reporting is often what takes place within the U.S. government and other government contracts. One reason is that displacing inputs and outputs is far easier than establishing causal links, measuring policies’ effectiveness, and estimating attributable outcomes.

1:21 Vanda Felbab-Brown: The measures should reflect the goals and design of the policy. For example, in Beyond Merida, one objective is building resilient communities.

1:21 Vanda Felbab-Brown: So the question is, resilient to what? To being dominated and intimidated by crime, to participating in crime, and experiencing high, or increasing addiction rates.

1:23 Vanda Felbab-Brown: The measures should not simply be how many of the $30 million dedicated to this pillar were burned or how much the government of Mexico has actually spent under the 100 Days of Juarez, but whether people are safer on the streets — the absolute necessary precondition for both employing sustainable and effective socio-economic strategies and for allowing for deep police reform.

1:26 Vanda Felbab-Brown: Another measure could be whether people have greater access to microcredit not provided by the DTOs. Whether they feel they can sell tortillas on the zocalo without paying a fee to the DTOs. How much of the actual expenditures are congealing to systematic urban, neighborhood by neighborhood development, rather than haphazard unintegrated handouts spread randomly through a city and accruing as political benefits to either local politicos or even the narcos themselves without systematically improving the life of the community.

1:27 [Comment From Dale: ] With the recent murder of 72 immigrants from other countries on their way to the U.S., the violence has now become more than a bilateral issue, impacting other countries throughout Latin America. What role do you see for multilateral organizations in trying to address this issue?

1:29 Vanda Felbab-Brown: There are certainly good reasons to strengthen bilateral and multilateral cooperation. Mexico can for example learn from Colombia in terms of police reform, even though other lessons may not be well applicable at all. It can also learn from Colombia what can go wrong in cities that originally appear promising, such as the recent deterioration in Medellin or Bogota. It can learn from how Brazil deals with its favelas — including often what does not work.

1:30 Vanda Felbab-Brown: Inevitably, such cooperation is difficult and includes difficult trade-offs and reasonable worries, such as intelligence leakage. Inevitably, the US-Mexico cooperation will remain the primary one.

1:30 Seung Min Kim: And that’s it. Thanks for joining us and a special thank you to Vanda for her responses.

1:30 Vanda Felbab-Brown: My pleasure.