Social Issues

Drug Policy

  • United States
    What to Watch in U.S. Drug Policy
    Reading through the 2013 National Drug Control Strategy, it is not all that different from recent years past. Drug use remains a serious issue within the United States, with national trends staying fairly steady. Cocaine usage has indeed fallen (from 1 percent of the population to .5 percent), but marijuana usage rose from 6 percent to 7 percent during the same time period—helping to keep the overall monthly drug use levels stable (at over 8 percent of Americans). The biggest changes evident in the Obama administration’s drug policy are rhetorical—defining addiction as a disease, and framing drug use as a public health problem instead of as a moral failing. But the shift in resources—to match these rhetorical changes—is more limited. As you can see in the chart below, money for prevention has increased by just over 10 percent, but spending on local law enforcement continues apace. The budget allocations are, in fact, not much different from ratios under the Bush administration—and aimed at treatment and rehabilitation (in percent of overall money) even less than 2005 levels. 2014 White House Drug Control Budget For real dynamism, you need to look beyond the federal government and its official drug plan to the local and state levels. In 2012 Colorado and Washington voted to legalize recreational marijuana and some sixteen other states and Washington D.C. allow medical marijuana—a number that will surely grow in the coming years. This groundswell may very well spur the national government toward a more fundamental policy shift, as it is forced to grapple with the increasing disparity between the current federal policy and expressed voter wishes. The other outside change that may directly impact U.S. drug policy is the Affordable Healthcare Act (i.e., Obamacare). In the next year it should provide over 60 million Americans with access to mental disorder and substance abuse benefits. Though not sold as such, this new benefit could indeed transform the resource scorecard within the National Drug Control Strategy, matching up better with the recent rhetoric.
  • Americas
    Two Nations Indivisible
    In this book, CFR Senior Fellow Shannon K. O’Neil explains that beyond the narrative of violence that dominates the headlines is a more hopeful Mexico with a globally competitive economy, a rising middle class, and increasingly influential pro-democracy voters—a country the United States should see as a partner, not a problem. Teaching notes by the author.
  • Defense and Security
    Plagued by Crime, Mexico Creates New Police Force
    Since entering Los Pinos last year, Mexican President Enrique Peña Nieto has wasted no time in pushing some of Mexico’s most-needed economic reforms through Congress, but the same has not been true for the government’s security strategy. Last week I spoke with Larry Mantle on KPCC’s “Airtalk” about Peña Nieto’s proposed new police force and what it could mean for the country’s security situation. You can listen here.
  • Mexico
    Mexico’s Drug War
    Despite its booming economy, Mexico continues to struggle with alarmingly high levels of violence linked to drugs and organized crime. This video primer examines the crisis and explores policy options for Mexico and the United States.
  • Defense and Security
    Transforming Brazil’s Favelas
    I got the chance last week to visit the Centro Comunitário Lídia dos Santos (or CEACA), an NGO based in the Rio de Janeiro favela of Morro dos Macacos—once the grounds of a zoo, and now home to some 25,000 cariocas (Rio’s residents). Headed by Dona Anna Marcondes Faria, it is the culmination of nearly fifty years of her work to make the community safer. From initial efforts to bring running water and kindergarten classes to the neighborhood, the two story building now offers a host of after school programs, art classes, professional training sessions, and environmental awareness projects. The goal is not just to teach skills but also confidence. CEACA, along with NGOs in some 450 other communities, have gained the attention and support of Coca-Cola, McDonalds, Walmart, and dozens of other corporations. A recurring theme in the conversations we had with our hosts and guides was change. Visiting the community’s recycling building, the manager Dona Regina da Silva spoke to us about the challenge of gaining residents’ support for the business. In the beginning she worked alone, snubbed by many of her neighbors as the “garbage lady.” Today, some 700 families bring bottles, paper, plastics, and other goods each week to exchange for food tokens, and in the building next door women and youths use the sorted neighborhood trash materials to create beautiful items such as pillows, bags, and placemats (you can see their work here). In the computer lab/classroom, we spoke with a group of teenagers. Asked what they wanted to be when they grew up, the students offered up careers including engineers, architects, and biologists. Our guides said that this was a significant shift from just a few years ago—when the dreams were smaller and the enthusiasm less pervasive. One of the teachers that spoke with us was a past student, back to help the younger generation as she finished up her university degree. Though she said that few of her former classmates had followed her into higher education, they all dreamed of it, another big change from the past. Organizations such as CEARA make a difference by connecting individuals within the neighborhood and preparing them for the broader world. Also important in transforming the futures of Macacos’ residents has been Rio’s broader security efforts. On the streets the blue and black uniforms of Pacifying Police Unit (UPP) troops were noticeable, part of a city-wide effort (now in over twenty neighborhoods) to introduce a permanent police presence into historically gang-run areas. Many Morro dos Macacos residents recounted the isolation they felt before the UPP officers arrived. Not only did they face discrimination from those on the outside when they revealed where they lived, they also found it dangerous to simply come and go, as rivalries between the gangs controlling each favela extended to all residents—whether members or not . Now with the UPP in place, residents can travel more freely. With persistent high inequality and poverty rates, and over a million living in Rio’s favelas alone, these individual steps may be small. But from my few hours there, the Morro dos Macacos neighborhood at least felt to be moving in the right direction.
  • Security Alliances
    Refocusing U.S.-Mexico Security Cooperation
    U.S.-Mexico security cooperation, led by the Merida Initiative, is vital and must continue. But with Enrique Pena Nieto's inauguration, Mexico's political landscape is now changing, and the United States must adjust its strategy and support accordingly. Building on the lessons of the past five years, the United States should work with Mexico to implement the nonmilitary programs envisioned in the current Merida framework, in particular supporting and prioritizing Mexico's ongoing judicial reform, training police officers at the state and local levels, modernizing the U.S.-Mexico border, and investing in local community and youth-oriented programs. The Merida Initiative After Five Years The Merida Initiative was launched in 2007 under the George W. Bush administration, which promised $1.4 billion over three years to "support Mexico's law enforcement in the fight against organized crime." The Obama administration revised and expanded Merida's mission, moving from a heavy emphasis on military equipment to a more comprehensive bilateral strategy that seeks to reduce the role and influence of organized crime. The initiative now encompasses four priorities (called pillars): disrupting the operational capacity of organized crime, institutionalizing the rule of law, creating a twenty-first-century border to speed the flow of legal commerce and stop that of illegal goods, and building strong and resilient communities that can stand up to criminal intrusions. The main problem today is not Merida's design but its uneven implementation, with the gains in some areas offset by minimal progress in others. The United States and Mexico have been most successful in removing drug kingpins. Since 2009, Mexican authorities have captured or killed twenty-five of the thirty-seven most-wanted drug traffickers and substantially disrupted the operations of Mexico's best-known criminal networks. Many of these high-profile arrests resulted from bilateral intelligence and operational cooperation. Advances have been made as well in strengthening the rule of law, most notably the expansion and professionalization of the federal police. But progress has been slight beyond this particular law enforcement body, which represents just 10 percent of Mexico's police forces. Little discernible change has occurred within the justice system. Though a set of 2008 constitutional and legislative reforms set in motion a fundamental transformation of Mexico's court systems, the implementation of these changes has been exceedingly slow, so much so that the shift may not occur by the 2016 deadline, leaving Mexico's judicial future uncertain. On a practical level, rising crime and violence have exposed the weak capacity of the current justice system. With only one or two crimes out of every hundred resulting in a conviction, impunity reigns, providing no effective legal deterrent to a life of crime. Initiatives to modernize the border and build resilient communities (pillars three and four of the Merida Initiative) are even further behind. Though some innovative border management programs, such as the Customs Trade Partnership Against Terrorism—which helps trusted businesses avoid extensive border checks—have improved efficiency, the overall tenor of U.S. policy has been to increase barriers, slowing flows of legal commerce. Financially, investment in border crossings and infrastructure has not matched the exponential increase in trade crossing the border each year. Investment has lagged not only for new construction, but also for basic maintenance on existing infrastructure, leading to overwhelmed and at times downright dangerous facilities (a border crossing roof collapsed in 2011, injuring seventeen people). Stressed infrastructure has also led to traffic jams lasting up to eight hours, and has cost billions of dollars in trade losses, without drastically discouraging or disrupting illegal flows. The building of "resilient communities" too has largely been forgotten. The pillar's ambitious objectives of addressing the underlying socioeconomic and community factors behind rising crime rates have not yet moved beyond a few pilot programs in Ciudad Juárez. Finally, though talking often of co-responsibility in the drug war, the United States has done little to address the domestic factors that affect security in Mexico. The illegal flow of weapons and money southward continues unabated, and U.S. drug consumption remains high. (The 2010 National Survey on Drug Use and Health finds that 9 percent of Americans over the age of twelve used illegal drugs in the past month.) Changing Realities on the Ground As the U.S.-Mexico security cooperation strategy has evolved, so too have the realities on the ground. The most drastic shift is the rise in violence. When the Merida Initiative was signed in 2007, there were just over two thousand drug-related homicides annually; by 2011, the official number escalated to more than sixteen thousand. Violence also spread from roughly 46 municipalities (mostly along the border and in Sinaloa) to some 225 municipalities throughout Mexico, including the once-safe industrial center of Monterrey and major cities such as Acapulco, Durango, and Guadalajara. This increase in violence is not just the direct result of drug trafficking. Criminal organizations have diversified into numerous illicit businesses, including kidnapping, robbery, human trafficking, extortion, and retail drug sales, and as a result prey more directly on the local population. In some places the violence is as much the work of local gangs concerned with rivalries and honor as it is of drug transit. Prioritizing Civilian Institutions and Communities The need to adapt to the changing realities in Mexico coincides with political change. On December 1, 2012, Enrique Pena Nieto became president. During his campaign, he promised to shift the country's current security strategy away from combating drug trafficking toward reducing violence. The United States has an opportunity with this new administration and legislative branch to push past the current limits on security cooperation and implementation. The U.S. government should continue to provide between $250 million and $300 million a year in Merida money. These funds, which are managed by the State Department's Bureau of International Narcotics and Law Enforcement (INL), should prioritize civilian (versus military) law enforcement institutions, and fund training programs and other efforts to professionalize Mexico's police forces and transform its justice system. Long-term sustainable security will only exist when Mexico has a strong civilian-based rule of law, able to take on and punish all types of criminal activity. In addition, U.S. and Mexican joint efforts should concentrate on realizing the other so-far-neglected pillars of the Merida Initiative, particularly modernizing the border and engaging citizens and communities. On the border, the United States should upgrade its roads, bridges, and FAST lanes (express lanes for trusted drivers), as well as increase the number of U.S. customs officers, agricultural specialists, and support staff to help facilitate legal trade and identify and keep out illicit goods. To finance the multibillion dollar cost of modernizing the border, the U.S. Congress should pass the NADBank Enhancement Act (H.R. 2216) or similar legislation, to allow the North American Development Bank to support infrastructure projects in the border regions; currently the bank is limited primarily to environmental initiatives. And it should also reauthorize and refund the Coordinated Border Infrastructure Program, which managed federal funds dedicated for border area roads and infrastructure. In terms of reinforcing local communities, this involves not just particular programs but reorienting U.S. resources and programs in Mexico to focus on state and local law enforcement and justice institutions, where violence and insecurity are most concentrated and devastating. This will mean millions more in funds for the U.S. Agency for International Development's (USAID) community projects and youth programs, as well as INL's training of state and municipal police (as opposed to just federal-level officers). A shift to the local level would also enable policymakers and U.S.-supported programs to recognize and address the varying nature of the violence. In cities such as Ciudad Juárez, local gangs today are perhaps as threatening as transnational drug cartels. USAID should share models developed and implemented in U.S. cities to deal with gang problems, such as those in Boston and Los Angeles and Chicago's Operation Ceasefire initiatives. In addition, it should share the United States' experiences with community policing strategies, alongside basic training and vetting programs that cultivate a close working relationship between law enforcement officers and those they protect. The United States should also move its drug policies away from eradication and interdiction abroad and incarceration at home to greater funding for prevention and rehabilitation, in order to reduce the demand supplied by organized crime. Under the direction of the White House Office on National Drug Control Policy and the U.S. Departments of Health and Human Services, Education, and Justice, new policies should include the expansion of promising pilot programs that deal with addiction, such as Hawaii's Opportunity Probation with Enforcement (HOPE) program, which by swiftly punishing parolees who test positive for drugs has successfully lowered recidivism among a heavy-drug-use population. Though some will prefer to continue an eradication and interdiction–focused international drug control regime, the tens of billions of dollars spent during the now over forty-year war on drugs in Mexico and Latin America suggest the need for a revised policy approach. The outlined initiatives have a greater chance of reducing violence (if not drug flows) in Mexico by strengthening police forces, court systems, and communities. The border improvements, moreover, will likely benefit both the U.S. and Mexican economies, which can have indirect positive effects by providing greater legal opportunities to young people. In the end, Mexico's security will depend on the actions and decisions of Mexico. But there is much the United States can do to help or hinder the process. A transition to a demilitarized justice and a community-focused approach to U.S. security assistance will help Mexico establish more effective and long-lasting tools for combating crime and violence.
  • Economics
    Calderón’s Presidency by the Numbers
    As President Calderón’s sexenio wraps up tomorrow, he will leave office with a mixed legacy. Many have presented interesting analyses of his policies, but this post looks at concrete numbers—development indicators and the like—to see how much did (or didn’t) change over the last six years. Life expectancy rose. Overall life expectancy in Mexico rose during Calderón’s time in office, from 75.8 years in 2006 to 77 years in 2011. This was accompanied by a decrease in child (under five) mortality, from 19 per 1,000 children in 2007 to 17 per 1,000 in 2009, and maternal mortality (dropping from 54 to 50 per 1,000 from 2005 to 2010). Adolescent fertility also dropped from 74 to 65 per 1,000 from 2005 to 2008. And Mexico’s National Council for the Evaluation of Social Development Policy (CONEVAL) reported that the percentage of Mexicans with access to healthcare rose from 59.2 percent in 2008 to 68.2 percent in 2010. Education levels increased, albeit slightly. The expected years of schooling for children rose from 13.2 years in 2006 to 13.9 years by 2011. The average years of schooling for adults also rose from 8 years to 8.5 years in the same time period. The literacy rate improved by 1.7 percent to reach 93.4 percent. Still many rightly question the quality of this greater quantity. Mexico’s Programme for International Student Assessment (PISA) scores (an international test of students academic performance) only moved from an average of 408 (out of 800) in 2006 to 420 in 2009, leaving Mexican students far below the OECD average (of 493) in all three categories—reading, math, and science. Poverty worsened, inequality was unchanged. The number of Mexicans living in poverty increased from 44.5 percent in 2008 to 46.2 percent in 2010, an increase of 3.2 million people, according to CONEVAL. The Socio-Economic Database for Latin America and the Caribbean (SEDLAC) reported that extreme poverty—under two and a half dollars a day—also increased, although only slightly. According to OECD numbers, inequality, as measured by the gini index (an indicator that puts 1 as the most unequal and 0 as the most equal), stayed roughly steady. Nevertheless, common measures of Mexico’s middle class showed improvement. The number of passenger cars per 1000 Mexicans increased from 157 to 191, and the number of cell phone subscriptions grew from 51 to 82 (per 100). More Mexicans logged on to the internet—increasing from 19.5 Mexicans out of every 100 in 2006, to 35.5 of every 100 Mexicans in 2011 (although Mexico still ranks behind peers Brazil and China in its web-connected population). Infrastructure stagnated. The percent of roads that were paved rose only slightly from 33 percent to 35 percent, while the number of kilometers of railroad tracks stayed the same (some 26,700). What did change was the usage of these networks. In 2006, 2.6 million (20 foot) container units passed through Mexico’s ports, but by 2011 this number had risen to 3.6 million. Formal sector jobs increased, but only moderately. As this graph shows, formal sector jobs steadily rose throughout the sexenio (apart from the steep mid-term recession). However, job creation failed to keep pace with the number of Mexicans entering the job market, meaning unemployment also rose from 3.2 percent in 2006 to 5.3 percent in 2010. CONEVAL reports that underemployment is at 8.3 percent. Violence escalated. Murders per capita rose from 9.7 per 100,000 in 2006 to 22.7 per 100,000 in 2010 according to the United Nations Office on Drugs and Crime data. Other crimes (excluding health crimes such as drug consumption or possession) also increased (as reported by Mexico’s Attorney General’s office) from 52 per 100,00 in 2007 to 82 per 100,000 in 2011. There is some evidence that drug-related murders may have plateaued in 2011 and even declined in 2012 (by some 15 to 20 percent the levels of the previous year). Some of these measures were most influenced by world events and outside shocks, including the 2008 world financial crisis and 2009 swine flu outbreak. But others reflect Calderón’s policy choices, and what he was and wasn’t able to do. They also highlight the challenges for the incoming government, and the need to make progress across issues and indicators.  
  • Drug Policy
    Paradigm Shift: Efforts to Reform Drug Policy
    Play
    Director Kerlikowske will discuss the state of global drug policy, including a new emphasis on programs that recognize drug addiction as a disease of the brain instead of a moral failure, trends in drug consumption domestically and internationally, and the diversification of transnational criminal organizations.
  • Drug Policy
    Paradigm Shift: Efforts to Reform Drug Policy
    Play
    Gil Kerlikowske, director of the National Drug Control Policy, discusses global drug policy, including a new emphasis on programs that recognize drug addiction as a disease of the brain instead of a moral failure, domestic and international trends in drug consumption, and the diversification of transnational criminal organizations.
  • Americas
    Countering Criminal Violence in Central America
    Overview Violent crime in Central America—particularly in the "northern triangle" of Honduras, El Salvador, and Guatemala—is reaching breathtaking levels. Murder rates in the region are among the highest in the world. To a certain extent, Central America's predicament is one of geography—it is sandwiched between some of the world's largest drug producers in South America and the world's largest consumer of illegal drugs, the United States. The region is awash in weapons and gunmen, and high rates of poverty ensure substantial numbers of willing recruits for organized crime syndicates. Weak, underfunded, and sometimes corrupt governments struggle to keep up with the challenge. Though the United States has offered substantial aid to Central American efforts to address criminal violence, it also contributes to the problem through its high levels of drug consumption, relatively relaxed gun control laws, and deportation policies that have sent home more than a million illegal migrants with violent records. In this Council Special Report, sponsored by the Center for Preventive Action, Michael Shifter assesses the causes and consequences of the violence faced by several Central American countries and examines the national, regional, and international efforts intended to curb its worst effects. Guatemala, for example, is still healing from a thirty-six-year civil war; guns and armed groups remain common. El Salvador's ironfisted response to widespread gang violence has transformed its prisons into overcrowded gang-recruiting centers while doing little to reduce crime. Even relatively wealthy countries like Costa Rica and Panama are threatened by poor police capacity and significant problems with smuggling and money laundering. Virtually all countries are further plagued by at least some level of public corruption. While hard-hitting or even militarized responses to criminal violence often enjoy broad public support, Shifter writes, Nicaragua's experience with crime prevention programs like community policing and job training for youth suggests that other approaches can be more effective at curbing crime. Shortages of local funding and expertise remain problematic, however, and only large-scale, national programs can effectively address national-level problems with corruption or the quality of the legal system. Moreover, many of the root causes of the region's violence are transnational—the international trade in drugs, guns, and other contraband being only the most obvious example. Multilateral organizations have stepped in to support national-level responses, as have Central America's neighbors. The UN's flagship effort, the International Commission Against Impunity in Guatemala, supports domestic prosecutions of organized criminal gangs and their allies in Guatemala's government. In recent years, the World Bank and Inter-American Development Bank have contributed hundreds of millions of dollars to efforts to improve regional collaboration on anticrime initiatives; last year they pledged $1.5 billion more over the next few years. Colombia and Mexico have both provided advice and training for Central America's police services and judiciary. The United States is also contributing significant resources. Washington now provides about $100 million annually, targeted mainly at drug interdiction and law enforcement, though some funding also goes toward institutional capacity building and violence protection. Still, much more remains to be done, and Shifter offers several recommendations for U.S. policymakers. Strengthening the judiciary and law enforcement services should, he says, be a central goal; the region's ineffective and corrupt legal systems are severely hampering efforts to curb the violence. He also advocates rethinking U.S. policies that contribute to violence in Central America, including drug laws, gun control policies, and immigration rules regarding violent offenders. Countering Criminal Violence in Central America provides important insights into the varied causes of criminal violence in the region. Its authoritative and nuanced analysis acknowledges the strengths and weaknesses of ongoing efforts to address the problem, and it offers thoughtful recommendations on how those efforts might be built on and improved. Despite the daunting complexity of the challenges underpinning the region's growing violence, this report successfully argues that this trend can—and should—be reversed.
  • Defense and Security
    Guest Post: Why Guatemala’s Pérez Molina Is Considering Legalizing Drugs
    This is a guest post by Natalie Kitroeff, a research associate here at the Council on Foreign Relations who works with me in the Latin America program. She received her BA from Princeton University’s Woodrow Wilson School of Public and International Affairs. Guatemalan President Otto Pérez Molina has been acting strange lately. Just one month after his inauguration, he is already ruffling U.S. feathers, and making waves in the politics of the region in unexpected ways. Pérez Molina’s military past and hard-line “mano dura” security policy made many worry that he would backtrack on justice reforms led by the UN Commission against Impunity (CICIG) and the new Attorney General Claudia Paz y Paz. Instead, the new president has come out in support of these institutions. Last week he announced that when CICIG’s mandate runs out in 2013, he plans on extending it for another two years without seeking congressional approval. This preemptive decision was in response to a lawsuit filed last month against Álvaro Colom, alleging that CICIG has no right to be in the country because the executive branch bypassed congress to approve its current mandate. The interior minister followed up by asking CICIG to vet his staff to identify any links they may have with organized crime. Vowing to keep Paz y Paz on board for the foreseeable future, Pérez Molina has also stayed neutral as her office tries former de facto President Efraín Ríos Montt on crimes against humanity charges for his role in the civil war (in which the current president was deeply involved). But after this string of pleasant surprises, Pérez Molina’s most recent about face has drawn annoyance and even anger from the United States. Last Saturday he raised the possibility of legalizing drugs in Central America, saying he’d put the debate on the table in future meetings with regional leaders. He followed through on this promise on Monday, when he discussed decriminalization with Salvadoran President Mauricio Funes (who first agreed to consider the option, and later retracted facing pressure from Washington). The U.S. Embassy in Guatemala responded with a swift condemnation of the proposal. So what is Pérez Molina’s endgame? A popular theory is that he’s trying to pressure the United States into lifting its ban on weapons sales to Guatemala, instituted in 1978 due to the military’s role in human rights abuses during the civil conflict. This makes sense. The president has spoken openly and frequently about his desire to buy U.S. arms, pressing the issue with head of Southern Command Douglas Fraser during their meeting last November (Fraser said the embargo may well be lifted in the near future). Threatening to decriminalize drugs as a last resort solution the problem of organized crime could pressure the United States to offer an alternative: renewed military aid. But Pérez Molina may also be making a more ambitious attempt to alter the long-standing foundations of U.S. relations with Guatemala and Central America more broadly. The six-country region has largely been an afterthought in U.S. security cooperation with Latin America, which has historically centered on the larger economies of Colombia and Mexico. In FY2013 Central America will receive $60 million in U.S. security aid– less than half of the funds destined for Colombia and a third of total aid to Mexico – and of that Guatemala gets a paltry $2 million. Meanwhile, Pérez Molina inherited a country with one of the highest murder rates in the world, and an impunity rate of 95 percent (meaning just 5 in every 100 crimes are solved). The legalization debate is a way of putting Central America – and Guatemala in particular – on the United States’ radar screen. It is also a way of asserting the country’s autonomy from Washington. Pérez Molina joins a long list of leaders calling for decriminalization, including former presidents of Mexico, Brazil and Colombia. In an era of waning American influence in Latin America, he may to be trying to align Guatemala more closely with its regional partners, pulling a country long beholden to the United States out from under its powerful shadow.  
  • Economics
    Can Vázquez Mota Win Mexico’s Presidential Election?
    I wrote a piece on Vázquez Mota and what it means for the Mexican election for Foreign Affairs entitled "Vázquez Mota and the 2012 Mexican Election". In it I argue that she has the potential to upend the presidential race, but only if she can raise her profile and generate enthusiasm in the all important female vote (over half of the electorate). Here is an excerpt: Last Sunday, Mexico’s incumbent National Action Party (PAN) chose its presidential candidate: Josefina Vázquez Mota, who won the party’s primary to become the first female presidential candidate from a major political party in Mexican history. But Vázquez Mota’s triumph was not a coup just because of her gender. She got the PAN nod (only party leaders, known as "militants," actually vote in Mexican primaries), over President Felipe Calderón’s handpicked candidate, Ernesto Cordero. And Vázquez Mota’s victory was decisive -- she took 55 percent of the vote to Cordero’s 38 percent. Despite their differences, President Calderón, her recent rivals, and the party quickly rallied behind her. In the presidential election, which is set for July 1, Vázquez Mota will compete in a three-way race. The current front-runner is the Institutional Revolutionary Party’s (PRI) Enrique Peña Nieto, the telegenic former governor of the state of Mexico; he maintains a twenty point lead in national polls. Voters like him because of his good looks, his fairytale family history (his wife died, then he married a soap opera star), and his public works largesse when in office. He also benefits from the partisan support of 19 of Mexico’s 32 governors. Not only will those governors endorse him, but they will boost Peña Nieto’s campaign with their abundant resources, ensuring widespread local media coverage, packed campaign rallies, and strong get-out-the vote drives. And then there is Televisa, Mexico’s largest media company, which has virtually adopted Peña Nieto; their camera crews are always close by and quick to flatter him. It is Vázquez Mota’s place on the ticket, though, that has the potential to upend Mexican politics. Unlike her two challengers, who are linked to the old guard and old boys’ network, as a woman, Vázquez Mota can claim to be the mantle of change. And she can make that claim even against her own party, which has ruled the country for 12 years, a time of mediocre economic growth and increasing drug-related violence. Of course, as the first female candidate, her election would mark a definitive break with the past. But she also brings substantial political experience as a former minister of education and of social development and, most recently, as head of her party in the lower house. She also proved her knack for campaigning in the PAN primary debates where she outshone her competitors with her clarity and charm. I look forward to your feedback via twitter, facebook or in the comments section.
  • Trade
    Mexico’s Underground Economy and Illicit Money Outflows
    Yesterday Global Financial Integrity released a new report, “Mexico: Illicit Financial Flows, Macroeconomic Imbalances, and the Underground Economy,” which provides an in-depth look at flows of illicit money from Mexico. The study finds that nearly $1 trillion in illicit capital left Mexico from 1970-2010, averaging about $50 billion a year this past decade. Illicit outflows have increased over time – in 1970 only $3 billion of illicit money left the country per year – and experienced particularly large upswings during macroeconomic crises. These flows decreased by more than 50 percent as a share of exports, though this is largely because exports overall increased dramatically as Mexico transformed from a relatively closed to open economy. The report’s most interesting finding is that this illicit capital is not necessarily or mostly drug money. Instead it comes from Mexico’s large underground economy. In these markets the goods being traded are not necessarily in and of themselves illegal. What’s illegal is the under-the-table way that they are bought or sold. The report finds that the vast majority (80 percent) of the money leaving Mexico does so through a method called “trade mispricing.” This is when a company either undervalues exports or overvalues imports, and agrees with its trading partner (for many this is the same entity or owner) to transfer the balance to a bank account abroad. Just as when a restaurant doing cash business fakes the number of customers it receives to avoid paying taxes, companies doctor their trade records to allow money to flow out of a country untaxed. In Mexico’s case, economic liberalization in the 1990s had the unintended effect of promoting this type of capital flight. The explosion of trade around NAFTA provided exporters and importers more opportunities than ever to manipulate the rules of the game. Dealing with this challenge means tackling the informal economy, which both drives and is driven by illicit outflows. Mexico’s regulatory institutions need to catch up to the high volume of trade in the post-NAFTA era, strengthening auditing practices and tax authorities along the way. Another way of chipping away at the underground economy is to shrink the number of people working in it, by creating more formal sector jobs. This is good for workers, who get better social protections in the formal economy, and for businesses, which can get loans and other services needed to grow and expand. More formal sector enterprises will also generate much-needed tax revenue in Mexico (the country with the lowest rate of tax collection in the OECD and among the lowest in Latin America). These extra public funds will pay for more public schools, better roads and stronger police forces, benefiting Mexican society in the long run. The United States also has a role to play in helping Mexico combat money laundering. As the number one destination of illicit funds from Mexico, U.S. banks could make it a lot harder to move money north by improving transparency and reporting more regularly on private deposits. Getting banks to do their part will require deeper cooperation between the United States and Mexico, with tougher rules and regulations on both sides of the border.
  • Brazil
    2011 Trends in Latin America: Shifting Violence
    A stuffed bear hangs from a cross of a child's grave at the children section of the San Rafael cemetery in Ciudad Juarez (Courtesy Reuters). Latin America has the ignominious distinction of being one of most violent regions in world. Though not known for its wars or even (at least violent) border disputes, homicide rates average nearly 20 per 100,000 people. Central and South America are among the most murderous regions worldwide, behind only  Southern Africa. Six of the ten most violent nations in the world are in Latin America, with Honduras and El Salvador claiming the number one and two spots. The biggest headline-grabber this last year has been Mexico, which counted some 12,000 deaths in 2011 and over 40,000 drug related homicides since the start of President Calderón’s term (non-official estimates put these numbers even higher). Though Mexico is not the most violent in per capita terms, this escalation has deeply impacted the country. But the region’s security outlook is not all gloom and doom. Ciudad Juárez, still Mexico’s most violent city, saw its homicides drop by almost half since 2010, to just under 1,700 this year. Given the well-documented inertial effect of violence (i.e. violence tends to breed more violence, ratcheting up the effect over time), this is a doubly encouraging trend. Further south, the Brazilian government rolled out its “Favela Pacification Program” beyond the original pilot (launched in 2008), sending Police Pacification Units (UPPs) to 19 favelas in Rio de Janeiro. Since last year, the city’s homicide rate dropped 13 percent and armed confrontations with police were down by a quarter. Meanwhile, Guatemala enjoyed a relatively peaceful year, with a slight (2.5 percent) decline in murders, bringing its homicide rate under 40 for the first time since 2004.
  • United States
    Trends in U.S. Drug Use
    A pharmacy employee looks for medication as she works to fill a prescription while working at a pharmacy in New York December 23, 2009 (Lucas Jackson/Courtesy Reuters). The U.S. Substance Abuse and Mental Health Services Administration recently released the findings of its 2010 National Survey on Drug Use and Health (NSDUH). The report draws on data collected from face-to-face interviews of 67,500 people aged twelve years or older across the United States (the U.S. government has been conducting this type of research since 1971). Of the many findings in the report, some of the most interesting include: Over 22 million Americans used drugs in the month before the survey; about 9 percent of the population over twelve years old and a slight uptick from 2008 numbers. City-dwellers (9.4 percent) were more likely to use drugs than those residing in more pastoral settings (3.7 percent), and Westerners (11 percent) got high more often than Southerners (7.8 percent). Men were almost twice as likely to use drugs than women, and they liked to smoke pot. And perhaps not unsurprisingly, young people—aged eighteen to twenty-five—were more likely to use drugs (21.5 percent) than other age groups. The most popular drug was marijuana—consumed by over 17 million Americans—and its usage is trending upward. An estimated three million more Americans were toking up in 2010 as compared to 2007. Cocaine, ecstasy and meth use stayed flat or fell over a similar time period. The trends for the non-medical use of prescription drugs are perhaps the most interesting and challenging for current drug policies. An estimated seven million Americans got high on prescription medications in the month prior to the survey; over five million using pain killers. The popularity of prescription drugs is evident in the increasing number of people trying them for the first time each year (some two million), and the doubling of emergency room visits for pain killer abusers from 2004 to 2008. Prescription pain killer abusers seeking publicly funded rehab also tripled from 2002 to 2009. While the conventional wisdom holds that America’s drugs come from Mexico and Latin America, the study shows this is not wholly true. Prescription drugs were almost exclusively created, bought, sold, and consumed north of the border. Over half of those using and abusing prescription drugs received them from a friend or relative. Fewer than 5 percent got them from a stranger or the internet. Just a fraction of these sales then can be linked back to international cartels. When policymakers debate thorny questions of drug use and international drug enforcement, it’s wise to remember that cartels, though formidable, are hardly the only suppliers in a vast American drug market.