The Nature of the U.S.-Mexico Drug War: Equal Responsibility, Unequal Costs

“Drugs will be at the top of the agenda. It will dominate the agenda because the drug fight is all that Calderón talks about, all that he thinks about.” – Jorge Castañeda, Mexico’s former Secretary of Foreign Affairs.

Trapped

Mexico is suffering. Thousands of its citizens are trapped in the unyielding currents of the drug war, unable to escape the relentless stream of violence, poverty, and despair tearing through the country. The drugs, the crime, and the acts of brutality flow in a complex cycle between neighbors: Mexico and its putative, half-sympathetic, and part-time North American collaborator, the United States.

Though both countries share responsibility for perpetrating the drug war, their respective roles within the conflict are sharply different. This is graphically evident in the death tolls connected to the Mexican phase of drug violence. Although one should recognize the tragedy of the seventy-nine United States citizens who have died due to drug violence in 2009, one should also realize that in the same year, Mexico, as reported by El Universal newspaper lost 7,724. For the United States, this war is an accelerating national security threat, but for Mexico, the extensive, violent system of drug cartels is an escalating national disaster.

Thus, Jorge Castañeda, for all his disservices to his nation, might have struck the nail on the head this time: drugs have been and will continue to be the main focus of President Calderón, and for good reason. Unlike the U.S., Mexico cannot compartmentalize the drug issue into a contained corner of its national agenda. The drug predicament permeates the boundaries that separate it from other national issues and can be found at the root of most of the country’s economic and social woes. It exists due to the policies and the easy rhetoric of both the U.S. and Mexico, yet the majority of the cost overwhelmingly falls on the shoulders of the latter. As it stands, Mexico is struggling with the burden of an inherent injustice while Washington episodically dabbles in an often misguided strategy that barely touches the perils suffered by its southern neighbor.

Economics 101

According to the National Drug Intelligence Center, the Drug Trafficking Organizations of Mexico and Colombia generate $17 billion to $38 billion every year. What’s more, this figure is rapidly increasing. Shannon O’Neil of the Council on Foreign Relations reports that in 1990, only 50% of the U.S.’s cocaine entered illegally from Mexico, while today, that figure has ascended to a troubling 90%. Such a drastic increase in illegal activity is occurring despite a corresponding increase in the Calderón administration’s crackdown against the massive cartel network. With these measures in place, the situation begs the question: What is causing such an unceasing growth in an illicit market whose eradication is the highest priority of hemispheric governance?

The answer lies in the simplest of economic fundamentals: supply and demand. As in any market-based industry, suppliers adjust the quantity produced to a price that is determined by competition and demand. When demand is higher, price goes up and the quantity produced increases. Furthermore, when demand for the product is inelastic, as is the case with addictive drugs, increases in price minimally affect the quantity desired, and this leads to augmented opportunities to increase profitability. Thus, the allure of a reliably lucrative industry with an enormous income potential will consistently outweigh the risks associated with the illegal operations that such a trade requires.

Therefore, while the pulse of the drug war runs rampant through the venation that stretches across the border, its heart lies principally in the United States. The latest National Survey on Drug Use and Health completed in 2008 reveals that approximately 14.7% of individuals in the United States consume cocaine. This is up from 14.5% in 2007 and 13.8% in 2005. Demand inspires supply, and without it, the issue of the drug market would never have grown to the volume at which it currently registers. Yet although the war on drugs is inextricably linked to the United States, the challenge of constantly living with its disastrous consequences is faced primarily by Mexico, where tortured corpses are routinely uncovered and entire cities are put under siege.

The Cost of Fear

On top of the danger created by the drug cartels, the people of Mexico also suffer from the effects of a crumbling economy. Mexico has the second largest economy in Latin America and the thirteenth largest in the world, but its orthodox industries are strangled by the war on drugs. Reports of violence and the high cost of paying for security and damage control have greatly altered international perceptions of Mexico, especially in regards to tourism.

Mexico relies on tourism as its third most important enterprise after oil and remittances, and the United Nations World Tourism Organization (UNWTO) ranks Mexico as tenth in terms of international tourist arrivals. Though the industry generated $11.3 billion in 2009, the UNWTO calculated the yearly growth from 2008 at -5.2%. Tourism is indeed one of the hardest hit of Mexico’s industries, a testament to the lethal effectiveness of the the daily gun battles that take over the country’s urban streets. Bloomberg Businessweek has quoted the chief economist at J.P. Morgan Chase in Mexico City, Gabriel Casillas, as saying, “Violence is having a significant impact. I’ve talked with investors who have had big projects in tourism and construction and they’ve decided not to do them.” Of course, tourist enterprises and a roster of pistoleros tend not to mix.

Furthermore, recent travel warnings by the U.S. State Department accompanied by gory reports in the media have discouraged U.S. and other international visitors from choosing Mexico as their tourist destination. The State Department’s “travel warnings” differ from the less condemning “travel alerts” because they recommend that U.S. citizens avoid an entire country altogether. Although the State Department has good reason to suspect that dangers such as felonious assaults and homicide could affect anyone south of the border, the Department’s action further illuminates the often unintended yet pervasive injustices that unfortunately define the troubled relationship between the two nations.

The text of the travel warning states, “While most victims of violence are Mexican citizens associated with criminal activity, the security situation poses serious risks for U.S. citizens as well.” Mexican nationals not only endure the full reality of a drug war that continually engulfs new participants and often generates victims who are accidentally caught in the crossfire of drug attacks, they also have to confront crippling economic repercussions. Meanwhile, the United States, despite the fact that it shares a heavy responsibility in kindling the drug war, continues to demonstrate its ability to strategically avoid the bulk of the costs.

A War Declared

The violence that has reigned down upon Mexico as a result of the drug war has left immeasurable damage in its aftermath. Although the danger has only now begun to spill over into the southernmost U.S. border cities, the vast majority of the drug war occurs on the Mexican side of the line. Immense drug cartels span Mesoamerica from the east to the west coasts. The largest of these drug syndicates, the Sinaloa Cartel, encompasses much of the region along the Pacific coast as well as the U.S.-Mexico border from Tijuana to Ciudad Juaréz. In the northeast lies the Gulf Cartel, and violence has become increasingly lethal as these two networks and their smaller competitors grapple over territory and power.

Not only has violence intensified between and among cartels, but ever since President Calderón took office and the U.S. and Mexico introduced the Mérida Initiative, the conflict has been further propagated by the use of a dramatically enhanced combative approach. After Calderón’s inauguration in December of 2006, the new President immediately deployed 6,500 troops to the Pacific Coast region of Michoacán. Now, according to a World Policy Journal article by Tomas Kellner, the war on drugs involves 45,000 Mexican troops – in other words, a quarter of the country’s total armed forces has been committed to this heightened militarized strategy.

The United States has complemented this belligerent approach by instating the Mérida Initiative in October of 2007. Although recent adaptations to the plan have included the concept of increasing domestic efforts toward reducing the demand for drugs, the Department of State still intends for this agreement to be used mainly “to provide equipment and training to support law enforcement operations and technical assistance for long-term reform and oversight of security agencies.” In a Government Accountability Office Report to the U.S. Congressional Committee on Foreign Affairs regarding the funding for Mérida, it is noted that “the annual counternarcotics and related law enforcement assistance to Mexico increased from about $57 million from 2000 through 2006 to $400 million for fiscal year 2008.” Now, in 2010, the government has pledged $450 million for the Initiative to continue much in the same vein.

Despite the fact that the increased support for the Mérida Initiative exemplifies a greater understanding by the U.S. of the responsibility it should share with Mexico in seeking a solution to the drug crisis, providing a modest amount of financial assistance to the armed forces of Mexico is both a small and rather misguided action. Its ineffectiveness is tied to the Calderón administration’s policy, but the negative consequences of the approach fall directly on the people of Mexico who have not viewed Mérida with great enthusiasm.

All Wars Bring Violence

Evidence of the ineffectiveness of using force as the principal means to contain the drug cartels can be seen in the path of violence over the past three to four years. Since Calderón began his armed campaign against the drug cartels, 23,000 individuals have perished. As reported by La Reforma newspaper, 2007 experienced a death toll of 2,274, and by 2008, that figure had vaulted to 5,207. Yet even these figures look modest in comparison to the 7,724 in 2009. To compare, the BBC reported the number of civilian deaths in Iraq at 4,497. This implies that he number of fatalities occurring just outside the U.S. border exceed those of war zones in the Middle East.

The problem with using military force is that it typically ends up disrupting cartel networks rather than eliminating them. When a cartel leader is removed from the system, rival and subordinate gang members rush to fill the void, causing power transitions that are inevitably fraught with violence. Furthermore, seeking to eradicate members and products of the drug world attacks a symptom of the problem rather than its core. Roderic Camp, a government professor at Claremont McKenna was quoted in a Bloomberg article saying, “I don’t see any end in sight. Citing how many drugs they seize or how many drug cartel leaders they kill, it just doesn’t alter the flow of drugs, which only can be altered by us.” This is indeed the reality; the U.S. cannot let itself believe that it is properly invested in the drug war simply because it sends a relatively modest sum of money that unintentionally finances the deaths of thousands of Mexican soldiers and civilians.

A recent LA Times article suggests a different approach to weakening the drug war currents. No individual possesses the power to curb the drug conflict. Based on this thesis, attacking the cartel leadership only multiplies the hydra’s heads rather than reducing it. The article quotes James Morton, a secretary of the U.S. Immigration and Customs Enforcement, who realizes, “Simply arresting people won’t be a full solution. We have to completely undermine the organizations as businesses, and to do this we have to identify, seize and forfeit their profits.” Although identifying the money flow will prove difficult in a cash-based economy, staunching the drug network depends upon taking such steps that will lead to more systematic and comprehensive changes. By striving to reduce demand for the product as well as denying suppliers access to cash, the profitability of the drug industry will decrease. At that point, the extreme risks members endure in order to play the market will no longer have high, predictable returns, thus rendering participation in the drug trade far less attractive.

A Ticking Clock

The increasing pervasiveness of the drug war continues to concentrate Mexico’s suffering. Its path of devastation weaves through the country in a route so complex and all-encompassing that no aspect of society remains unaffected. Mexico’s fate falls in the cold hands of economics that fuel the destructive drug market. Moreover, the nation that consistently pays for the consequences of the war is not the nation in which the heart of the problem lies. Without a completely coordinated and properly focused effort on the part of both Mexico and the U.S., no amount of sacrifice will ever be able to satiate the war’s appetite for destruction. What level of violence is required to cause the United States to reach its boiling point and finally recognize the nature of its responsibility in shaping a solution? The longer this realization takes, the more complex drug networks will have to become and the more both countries will have to pay in dollars and blood.