In Mexico, Crime Is Bigger Than a Crime Boss

The alleged end of the tunnel through which Mexican drug lord Joaquin "El Chapo" Guzman Loera could have escaped from the Altiplano prison, at a house in Almoloya de Juarez, Mexico, on July 12. (YURI CORTEZ/AFP/Getty Images)

The July 11 escape of the notorious Sinaloa crime boss, Joaquin "El Chapo" Guzman Loera, from a maximum-security prison in Mexico has drawn considerable Mexican and international media attention. While the brazen and elaborate nature of the escape will add to the lore already surrounding Guzman, the escape itself carries little significance for organized crime in Mexico — though it will place a momentary strain on coordination between U.S. and Mexican law enforcement. The forces that drive the evolution of organized crime and their impact on society in Mexico are simply greater than any single crime boss.

Do Or Die For Mexico’s Neglected Oil Sector

The Mexican government softened some rules on the bidding process for new oil tracts in an effort to placate private oil companies who had complained about too many restrictions. With the changes, the Mexican government gets rid of caps that would limit oil companies to bidding on only a certain number of contracts.

There were other tweaks to the auction terms that would sweeten the pot for bidding companies. Exploration companies will now be able to have more of their exploration costs recovered, with the possibility of seeing a 125 percent return for their costs if an oil discovery is commercialized. In return, oil companies will pay higher taxes to the Mexican government if their profits balloon beyond a certain threshold.

After months of scandals, new rules in Mexico to tackle corruption

One day, it’s police and soldiers killing civilians. The next, top government officials lapping up perks of wealth and power.

Demonstrators hold images of some of the 43 missing students from a teachers’ college during a protest to mark the six-month anniversary of their disappearance in Mexico City in March. (Marco Ugarte/AP)

After months of scandals and public outcry, the administration of President Enrique Peña Nieto has endorsed new anti-corruption measures that many hope will begin to rebuild Mexicans’ lack of trust in their government.

Industrial Expansion Will Strain Mexico's Water Resources

Much like its northern neighbor, Mexico is not water scarce when viewed as a whole. But unequal water distribution has led to significant water stress in several parts of the country. Supply has been further strained by poor infrastructure, pollution and overuse — partly attributable to inefficient management and a growing population. Still, Mexico is positioned to experience significant economic growth because of its proximity to the United States and the likely expansion of its manufacturing sector as the country's population increases.

Recent changes to the constitution to encourage much-needed investment in the country's energy sector will further aid the faltering sector. Asymmetrical distribution and increased competition for limited water resources, however, could temper Mexico's potential for growth. Growth is still possible without addressing the problem, but it must be dealt with if Mexico hopes to fully utilize its geographic advantages, especially in the industrial and manufacturing sectors. In addition to the other obstacles that must be addressed, Mexico will need to make policy and behavioral adjustments to overcome its current water scarcity issues.

Yes To Mexico, No To Ukraine, Maybe To Offshore Fracking

As Ukraine ushers through tax legislation designed to prop up political-business elite and alienate outside investors, Mexico finally passes secondary legislation to implement sweeping oil sector reforms and open up the sector to foreign investors.

On 6 August, the Mexican Senate voted 90-27 to pass the delayed secondary rules that will make energy sector reform a reality and end the 76-year state monopoly on oil and gas held by Pemex.

Examining the Terrorist Threat from America's Southern Border

On July 21, Texas Gov. Rick Perry announced he was deploying 1,000 members of the Texas National Guard to the Mexican border to help strengthen border security. The move is the latest in a chain of events involving the emigration of Central Americans that has become heavily publicized -- and politicized.

Clearly, illegal immigration flows are shifting from Arizona and California to Texas. In fiscal year 2013, the Rio Grande Valley Border Patrol sector surpassed Tucson as the leading sector for the number of apprehensions (154,453 in Rio Grande Valley versus 120,939 for Tucson). Also, between fiscal 2011 and 2013 (all Border Patrol data is recorded by fiscal year), the number of "other than Mexicans" -- mostly Central Americans -- apprehended in the Rio Grande Valley sector increased by more than 360 percent, from 20,890 to 96,829. (By comparison, the Tucson sector apprehended 19,847 "other than Mexicans" in 2013. Significantly, minors constituted a large percentage of the "other than Mexicans" apprehended in the Rio Grande Valley in 2013: 21,553 (compared to 9,070 in Tucson sector). However, the majority (84 percent) of those labeled Unaccompanied Alien Children by the Border Patrol are teenage minors and not younger children.

Energy Reform in Mexico Continues to Present Risks

So dear to Mexican society is the legacy of Lázaro Cárdenas’s 1938 expropriation of the country’s oil sector that it is still celebrated annually as a national holiday. Perhaps it is no surprise, then, that new liberalizing constitutional reforms of the sector, which promise to reopen the sector to foreign investment, have been controversial.

Petróleos Mexicanos (Pemex), the Mexican national oil company, was given a monopoly over the sector subsequent to the expropriations. Mexico’s oil has historically been in conventional, easy to access reservoirs and, as such, Pemex has proven relatively stable, if inefficient, in its production of such resources.

Mexico Moves to Reform Its Energy Sector

A bill to reform Mexico’s energy sector passed both houses of Mexico’s Congress this week, bringing President Enrique Pena Nieto’s promised overhaul of the state-owned oil and gas industry a big step closer to becoming reality.

Mexican army has taken control of major port in effort to combat drug cartel

This strategic port has been a major moneymaker for the powerful Knights Templar drug gang, which extorts millions from the city’s businesses and smuggles in meth-making chemicals from Asia.

View Photo Gallery — Lazaro Cardenas, Mexico, has one of the busiest ports in Latin America. But has business slowed since troops pushed out the drug trade?

But President Enrique Peña Nieto’s decision this month to deploy troops to Lazaro Cardenas marks a new attempt to sever the cartel’s economic lifeline by putting a stop to its criminal activities here.

Mexico Makes It

Mexico City 

The rapid growth of Mexico’s manufacturing and services sectors arguably makes it the economic powerhouse of the Post-China 16. Shannon O’Neil warns, however, that if the country wants to build on its success, it needs to address a number of familiar problems, most notably its struggle with organized crime.

By Shannon K O'Neil for Council on Foreign Relations (CFR)

Four tons of cocaine confiscated by U.S. authorities off the California coast; 35 bodies dumped by the side of a busy Veracruz highway in broad daylight; an attack by gunmen on a birthday party in Ciudad Juárez killing 14, many of them teenagers: tragedies like these, all of which occurred over the past two years and were extensively covered by the media, are common in Mexico today. 

Mexico's Zetas Are Not Finished Yet

During the question-and-answer portion of our quarterly Mexico Security Monitor webinar, we were asked a question pertaining to the current status of Los Zetas. The question was something to the effect of: "Some Mexican media outlets and analysts claim that Los Zetas have been dismantled as an organization and are now little more than a 'ragtag operation.' Why do you disagree with that assessment?"

This question apparently came in response to our quarterly cartel report (an abbreviated version is available here), in which we wrote that despite the leadership losses suffered by Los Zetas, including the arrest of their leader, Miguel "Z-40" Trevino Morales, there were no signs that other leaders were challenging the current leader and Miguel's brother, Omar Trevino Morales. We also wrote that we believed Los Zetas have maintained their operational capabilities in terms of drug smuggling and other criminal activity, and that they have retained the ability to defend their operations and to continue conducting offensive operations deep in their rivals' territory.

In Mexico, self defense groups battle a cartel

An audacious band of citizen militias battling a brutal drug cartel in the hills of central Mexico is becoming increasingly well-armed and coordinated in an attempt to end years of violence, extortion and humiliation.

View Photo Gallery — In central Mexico’s hills, a battle against a drug cartel: An audacious band of citizen militias is making strides against the oppressive Knights Templar drug gang — something they say federal forces have not managed to do in a decade.

What began as a few scattered self-defense groups has spread in recent months to dozens of towns across Michoacan, a volatile state gripped by the cultlike Knights Templar, a drug gang known for taxing locals on everything from cows to tortillas and executing those who do not comply.

Understanding Pena Nieto's Approach to the Cartels

Mexican President Enrique Pena Nieto's approach to combating Mexican drug cartels has been a much-discussed topic since well before he was elected. Indeed, in June 2011 -- more than a year before the July 2012 Mexican presidential election -- I wrote an analysis discussing rumors that, if elected, Pena Nieto was going to attempt to reach some sort of accommodation with Mexico's drug cartels in order to bring down the level of violence.

Such rumors were certainly understandable, given the arrangement that had existed for many years between some senior members of Pena Nieto's Institutional Revolutionary Party and some powerful cartel figures during the Institutional Revolutionary Party's long reign in Mexico prior to the election of Vicente Fox of the National Action Party in 2000. However, as we argued in 2011 and repeated in March 2013, much has changed in Mexico since 2000, and the new reality in Mexico means that it would be impossible for the Pena Nieto administration to reach any sort of deal with the cartels even if it made an attempt.

U.S., Mexico: The Decline of the Colorado River Read more: U.S., Mexico: The Decline of the Colorado River | Stratfor

Summary

An amendment to a standing water treaty between the United States and Mexico has received publicity over the past six months as an example of progress in water sharing agreements. But the amendment, called Minute 319, is simply a glimpse into ongoing mismanagement of the Colorado River on the U.S. side of the border. Over-allocation of the river's waters 90 years ago combined with increasing populations and economic growth in the river basin have created circumstances in which conservation efforts -- no matter how organized -- could be too little to overcome the projected water deficit that the Colorado River Basin will face in the next 20 years.

Analysis

In 1922, the seven U.S. states in the Colorado River Basin established a compact to distribute the resources of the river. A border between the Upper and Lower basins was defined at Lees Ferry, Ariz. The Upper Basin (Wyoming, Colorado, Utah and New Mexico) was allocated 9.25 billion cubic meters a year, and the Lower Basin (Arizona, California and Nevada) was allotted 10.45 billion cubic meters. Mexico was allowed an unspecified amount, which in 1944 was defined as 1.85 billion cubic meters a year. The Upper and Lower basins -- managed as separate organizations under the supervision of the U.S. Bureau of Reclamation -- divided their allocated water among the states in their jurisdictions. Numerous disputes arose, especially in the Lower Basin, regarding proper division of the water resources. But the use of (and disputes over) the Colorado River began long before these treaties. 

Evolving U.S.-Mexico Relations and Obama's Visit

When U.S. President Barack Obama travels to Mexico on May 2, he will arrive amid a period of sweeping transformation in the country. Embroiled in myriad political battles and seeking to implement an extensive slate of national reforms, Mexican President Enrique Pena Nieto's administration has been focused almost solely on internal affairs. Meanwhile, after years of delay, the U.S. Congress has been debating gun control and immigration reform -- two issues of serious interest to the Mexican government.

JEWEL SAMAD/AFP/Getty Images

U.S. President Barack Obama (R) with Mexican President Enrique Pena Nieto

U.S.-Mexican relations are strategically important to both countries, and Mexico's period of transition has created opportunities for each to reshape the partnership. And although U.S. media attention has focused primarily on bilateral security issues ahead of Obama's visit -- namely cooperation in Mexico's drug war -- the Pena Nieto administration is working with Washington to re-orient the cross-border conversation to one centered primarily on mutual economic possibility. 

Mexico’s President Limits U.S. Role in Fighting Drug Trade

In their joint fight against drug traffickers, the United States and Mexico have forged an unusually close working relationship in recent years, with the Americans even regularly conducting polygraph tests on elite Mexican security officials to root out anyone who had been corrupted.

But shortly after Mexico’s new president, Enrique Peña Nieto, took office in December, American agents received a clear message that the dynamics, in which Washington has held the clear upper hand, were about to change.

Mexico's Drug War: Balkanization Leads to Regional Challenges

Balkanization of Cartels

Since the late 1980s demise of the Guadalajara cartel, which controlled drug trade routes into the United States through most of Mexico, Mexican cartels have followed a trend of fracturing into more geographically compact, regional crime networks. This trend, which we are referring to as "Balkanization," has continued for more than two decades and has impacted all of the major cartel groups in Mexico. Indeed the Sinaloa Federation lost significant assets when the organizations run by Beltran Leyva and Ignacio Coronel split away from it. Los Zetas, currently the other most powerful cartel in Mexico, was formed when it split off from the Gulf cartel in 2010. Still these two organizations have fought hard to resist the trend of fracturing and have been able to grow despite being affected by it. This led to the polarized dynamic observed in 2011 when these two dominant Mexican cartels effectively split Mexican organized crime in two, with one group composed of Los Zetas and its allies and the other composed of the Sinaloa Federation and its allies.

This trend toward polarization has since been reversed, however, as Balkanization has led to rising regional challenges to both organizations since 2012. Most notable among these is the split between the Cartel de Jalisco Nueva Generacion and the Sinaloa Federation. The Sinaloa Federation continues to struggle with regional crime groups for control in western Chihuahua state, northern Sinaloa state, Jalisco state and northern Sonora state. Similarly, Los Zetas saw several regional challengers in 2012. Two regional groups saw sharp increases in their operational capabilities during 2012 and through the first quarter of 2013. These were the Cartel de Jalisco Nueva Generacion and the Knights Templar.

Mexican Anarchists Are Blowing Up Scientists

An Anarchist terror group calling themselves "Individuals Tending Toward Savagery" (ITS) has recently claimed responsibility for a high profile attack on a scientist two years ago, and made several death threats, according to reports.

Dr. Ernesto Méndez Salinas, a biotechnology expert, was shot and killed in 2011, but until this admission his death was largely attributed to the general rise of violence in Mexico, and even later attributed to a rash of car jackings.

Constraints Facing the Next Mexican President

Enrique Pena Nieto will be sworn in as Mexico's next president Dec. 1. He will take office at a very interesting point in Mexican history. Mexico is experiencing an economic upturn that may become even more pronounced if Pena Nieto's Institutional Revolutionary Party administration is able to work with its rivals in the National Action Party to enact needed reforms to Mexico's labor, financial and energy laws.

Another arrestor to further expanding Mexico's economy has been the ongoing cartel violence in Mexico and the dampening effect it has had on outside investment and tourism. Pena Nieto realizes that Mexico's economy would be doing even better were it not for the chilling effect of the violence. During his campaign, he pledged to cut Mexico's murder rate in half by the end of his six-year term, to increase the number of federal police officers and to create a new gendarmerie to use in place of military troops to combat heavily armed criminals in Mexico's most violent locations.