Some scenarios for Mexico

By Dave Anderson:

Mexico is in trouble. It is facing a significant narco-insurgency that is threatening the state's monopoly on legitimate force, there are cartels (La Familia for instance) that are taking the Capone model for Chicago as an instruction manual, and its hard currency earning sectors are either in decline, or are highly correlated with the conditions of the US economy. I don't think a collapse is likely, but one of the following scenarios is how things will play out in Mexico over the next decade.

1) Total Victory and re-consolidation of state control:

The cartels are crushed in decisive action, and there are no other organic organized crime groups that are willing to fill the market void. The crushing happens by a combination of military, social service and citizen militia actions. This would allow the Mexican government to use its newly centralized police forces to reassert control in the temporary autonomous zones along the US border.

This scenario is highly unlikely as the black market for narcotics in the United States is too damn large. A precondition for this scenario is the United States engages in systemic legalization of at least marijuana and a blind eye towards meth production in its own borders. At that point, the fixed costs of maintaining smuggling routes are borne by a much smaller revenue stream of heroin and cocaine smuggling.

2) Detente between state and most-favored cartels.

The start of the 2006 drug war marked the end of a policy of collusion between segments of the Mexican elites and certain favored cartels. Restoring an unstated policy of most favored cartels would dramatically reduce the level of violence over the intermediate and long term.

the Juarez campaign was being squeezed by a combination of Sinoloa pressure and government pressure. Further east along the border, the anti-Zeta push seems to have at least tacit Mexican government support.

Borderland Beat reports that some of the cartels believe the Mexican government is seeking to have a 'most favored cartel' that can act as a quasi-protostate on the northern border, manage the drug cash flow and manage a low level of violence.

This is a fairly likely scenario as it would produce a fairly stable equilibrium for the interested actors. The government would see a decline in violence in the north as the combination of government military forces and local cartel gunmen who are conveniently re-branded as patriotic militiamen take out competing cartels. After competing cartels are suppressed, the cartels that remain have regained market share and some pricing power as their competition has been crushed while the government does not have an eighteen sided war going on.

3)  Whack a mole forever

Another likely scenario.  Things continue as they are as the Mexican military and police continue to win most stand-up fights with cartel gunmen, occasionally cartel leadership is arrested/executed/disappeared, and nothing changes.  There is too much cash flow for interested actors not to step in whenever there is an economic openings that is caused by one or another current cartel being downsized, eliminated or merged with another group.  Splinter groups, factions and rival gangs continue to emerge and use the barrel of a gun as their primary negotiating and dispute resolution technique.  

4)  Limited Systems Disruption

I'm somewhat surprise that cartels that are on the losing ends of state-cartel tag teams have not adapted the strategy of cutting off the state's ability or willingness to sustain a large scale military presence in the north by going after critical infrastructure.  Attacks on the oil production and export infrastructure, electrical transmission, water treatment and sewage systems would force the Mexican state to redeploy its forces to cover infrastructure that is needed for daily economic life in the cities. 

Under this scenario, cartels that think they are losing their turf would use systems disruption as a wild-card as well as an escalation threat.  If the campaign was successful, more and more of the Mexican Army and police will be back, while if the campaign fails, the cartel is still eliminated.  It is a different, but relatively low risk move for someone who thinks that they are playing a losing hand under the current norms and rule sets.

5) Meltdown and rush for the border:

This is the least likely scenario, although the costs are so high, it needs to be taken seriously.  The cartels continue to hold their own, but the system disruption genie gets out of the bag.  Splinter groups figure that they can create their own arbitrage points to collect security rents if they blow-up and break critical infrastructure.  At some point, some groups decide that they need the form of a state
without the structure of a state, and begin a concentrated siege of
Mexico City by attacking water, electricity and oil infrastructure that
goes into the city.  If the siege is successful, five to ten million
people are out of water, power and fuel within a few months, and they
begin a rush to the border

Violence spreads between many groups, and the Mexican state is seen as ineffective in providing security.  Militias form to support local strong men and the state hollow out. Refugee movements provide large pools of people who are looking for protection and new sources of primary loyalties.

Wrap-up

I think the most likely scenario is a combination of continuous whack-a-mole and detente with several most-favored cartels.  There is too much money involved in the smuggling of narcotics into the United States for effective suppression to work.  As long as that is the case, someone will supply the US market with what it wants, and the solution is to manage the supply problems instead of suppressing them out-right.