Intimidation and the extent of the state

By Dave Anderson:

Via NPR:

After she stepped forward last year to take a job no one else wanted because of the drug-related violence � police chief in the Mexican border town of Praxedis G. Guerrero � Marisol Valles was called the "bravest woman in Mexico."

Now, she's the ex-police chief. Valles, 21, was "fired Monday for apparently abandoning her post after receiving death threats,"

The threat of violence has basically denuded a border town of any semblence of public good receipt from the central Mexican government.  Even before this resignation, the writ of the state was very weak as the police force was too scared to actually aggressively patrol or to do its job. 

Intimidation works for the cartels as there is now another argument that the Mexican state can not protect itself, its representatives, or the civilians on the border zone. 

The Penumbra of insecurity

By Dave Anderson:

One of the major sources of hard currency for the Mexican economy is tourism.  Mexico has great beaches, great ruins, and an amazing array of topography.  However, the penumbra of insecurity that has been created by the accelerating pace of cartel on cartel, government on cartel and random violence is inflicting tourism revenue costs on the Mexican economy. 

First, the LA Times writes about Acapulco:

Acapulco is confronting more than the weight of history. The famed resort city has been the scene of vicious fighting among rival drug gangs that has killed more than 650 people in four years, the fifth-highest count for any Mexican city, according to government figures. The toll includes 30 men slain last weekend in and around the city. Fifteen of them were decapitated.

Most of the killing takes place outside the main tourist zone...

the violence at times penetrates the unofficial border between the two parts of the city. Two police officers were slain last week on Miguel Aleman Boulevard, the city's main thoroughfare. Now, truckloads of Mexican troops are in town...

Eagle Speaks passes along the news that the California to Mexico cruise industry is being squeezed by the threat of violence in Mexico:

Carnival Cruise Lines said Thursday it is pulling the last of its ships out of San Diego, and other cruise operators are departing Southern California because of economic woes and tourists' fears over traveling to Mexico....

In the first six months of 2010 just 187 cruises docked in Mexican ports, compared to 290 in the same period in 2008, the Times said.

Remember 2009 was at the height of the US recession so we should have expected to see a low number of cruise landings in Mexico because of low US demand, while 2010 has seen US upper middle class economic fortunes rebound, so the reduction is probably due to concerns on the Mexican end instead of economic factors in the US. 

 

Sending the Army to Mexico (not happening)

By Dave Anderson:

A proposal that is popular sounding and plays to both American fears and American exceptionalism while being both completely impractical AND unrealistic to ever be implemented is a political goldmine.  Governor Perry of Texas looks like he will be mining a vein for rich ore over the border for the next four years as he proposes to send elements of the US military to Mexico:

El Paso Times:

Gov. Rick Perry said deploying U.S. soldiers to Mexico should be one option to curb drug cartel violence in border cities, but only if Mexico invites the Americans.

"I think we have to use every aspect of law enforcement that we have, including the military," Perry said during an interview Thursday with MSNBC. "I think you have the same situation as you had in Colombia...."

The Mexican government has local legitimacy in most areas of the country.  One of the easiest ways for the Mexican government to lose its legitimacy is to invite in a large, visible and uniformed American military presence.  Plan Columbia entailed massive US equipment sales, donations, significant deployment of American Special Forces teams as well as significant deployment of contractors, mercenaries and spies.  The Mexican public may be willing to accept significant equipment infusions but not the rest of Plan Columbia.  So there will not be an invitation from the Mexican government for the US Army or National Guard to patrol the streets of Monterrey or Juarez, or for large scale Special Forces deployments either.

Furthermore, the US Army is finally building a little bit of breathing room back into their deployment schedule as Iraq is now a mission for a large division that is officially a "training and mentoring" mission instead of a corps level mission.  That drawdown has freed up most of another division to go to Afghanistan without completely destroying dwell time.  Special Forces and Special Ops units are heavily involved in Afghanistan, Somalia and Iraq, so their availability is even more restricted than main force units. 

But hey, reality seldom gets in the way of a political gold mine, especially when that political gold mine allows one to have a 'serious' position that is ineffective at anything other than not pissing off key components of the proponent's political coalition.  Advocating sending in the Army while knowing the Army will never be invited allows one to dodge proposals that would significantly harm the cartels in Mexico by crimping their logistics. 

The US could do several things to attack cartel logistics.  However doing those things are either verbotan in Republican circles, or are verboten in all serious bi-partisan policy elite circles.  Legalization in the US would dramatically reduce the black market and smuggling premium for marijuana.  The other way to chase cartel cash flow would be to aggressively go after the money laundering banks.  But to do that, the criminal feelings might be hurt, and they might go Galt on us.  And we can not have that!  The other avenue that the US government could actually do some good for the Mexican people would be to reduce the flow of weapons.  Requiring background checks on gun-show sales and tracking large scale ammunition purchases would crimp this flow, but it is an impossible suggestion for a Republican to make and an invitation for a Democrat to be painted as a cowardly, gun-taking wimp who is not a real American!

So we get political theatre instead. 

 

Men with no options but their guns

By Dave Anderson:

One of the greatest preventable mistakes in Iraq (besides the actual invasion itself), was the disbanding of the Iraqi Army during the summer of 2003.  What had been relatively organized, easily trackable and easily talkable formations of heavily armed men who had status and options in society became instead a dispersed group of men who still were heavily armed, reasonably well trained, and locally embedded but without any status, place or prestige in the NEW (run by AEI and Heritage Hacks) Iraq. The Iraqi Army, and more importantly the Iraqi Republican Guard officer classes became the core of the Sunni Arab insurgencies. 

The argument put forth by Viceroy Bremer and others in support of this policy was that the old Iraqi Army was a repressive Sunni dominated anarcharism and the Sunnis' would be sucking it in the New Iraq.  Instead, the US would stand up the Iraqi National Guard which would be competent, well led and respectful of human rights and democracy (tm).  Whoops --- we got militias and sectarian divisions instead. 

Mexico is facing a similar but much smaller problem.  Over the past few years, the Mexican government has been engaged in a systemic purge of its security forces.  The purges are focused on municipal and other local police forces that the federal government thinks have been captured or corrupted by the various drug cartels.  Federal police and military forces have stepped into the municipal policing role as well as the quasi-counter-insurgency role.  The intermediate term plan is for a new core of local police to be trained and controlled at the state level instead of the municipal level.  The problem with this plan is that it has created a group of thousands of young men who have guns and decent small unit tactics who are now incapable of operating within society.

Borderland Beat passes along a tidbit about these men:

one of the branches of government to acknowledge for the first time what the federal government has consistently denied: the involvement of state sponsored paramilitary groups in the drug war....

"These groups operate outside the law with the knowledge and complicity of the Mexican State," said Senator Ricardo Monreal Avila, parliamentary coordinator of the Labour Party (PT) and one of the main sponsors of the request for information from Cisen. It is thought that thousands of Army desertors, both soldiers and officers, and police officers fired for corruption make up these groups. They are "trained paramilitaries," says the Senator...

Men with guns who have no legitimate options in society will seek illegitimate options and opportunities. 

Mexican paramilitary groups that are duking it out with the cartels are a likely cartel successor group as the experience of Columbia's embrace of right-wing paramilitaries against FARC soon led the paramilitaries to turn into major cocaine smugglers and protectors of the cartels.  Furthermore, the embrace of paramilitaries will further degrade the Mexican state's legiitmacy as more groups and elites re-legitimate non-state actors using violence. 

Updates from Mexico

By Dave Anderson:

Just a couple of updates from Mexico and its drug war. 

Borderland Beat #1:

According to the tally kept by Reforma, the death toll from the drug war passed the 10,000 mark this week, reaching 10,035 killed since the start of the year.

This surpasses 2009's full year record by more than 50%, with almost two months still to go. (On the sporadic occasions when the government has released it�s own statistics they have been significantly higher than the tallies kept by the news organizations.)

Additionally, according to the National Commission of Human Rights, the amount of 2010 Drug War deaths to date is equal to the amount of drug violence deaths registered during the entire six year term of former President Vicente Fox....

The pace of violence is still accelerating in Mexico. This is despite or because of the increasing federal forces that are being committed to counter-insurgency and counter-cartel actions.   Most of the violence is concentrated on the major drug trafficking corridors as the cartels are hammering each other to seize profits and market share.  However, as snippet #2 shows, violence is spreading and could begin to restrict Mexican government hard currency flows.

Borderland Beat #2

Four policemen were murdered on Thursday in two different incidents in the resort community of Acapulco...

In less than 15 days, at least 83 people have been killed by organized criminal groups in the coastal resort that once was considered a vacation paradise for Hollywood stars and foreign tourists....

The Mexican government relies on a few major sources for hard currency; manufacturing exports to the US, oil, remittances and foreign tourism.  If Acapulco and a few other major resort areas that are also smuggling corridors accelerate the pace of violence as well as see the violence spread out of the black market and towards the state, tourism will decrease with the associated loss of revenue. 

Cartels are getting 'desperate:'

U.S. and Mexican police seized a record drug haul of over 30 tons of marijuana smuggled through a half-kilometre-long tunnel under their border in southern California, officials said.
This discovery again shows their growing desperation in the face of heightened border security," said U.S. Immigration and Customs Enforcement (ICE) director John Morton.

 

Yep, so desperate that the cartels are smuggling goods in tractor trailer loads. So desperate that the price of marijuana is in a long term decline as supply easily keeps up with demand. Big busts are an acceptable cost of doing business. What would make the smugglers desperate would have been legal or mostly legal growing and distribution in California which would have massively undercut the black market risk premium that makes smuggling weed a profitable business.

Black market premia

By Dave Anderson:

Mark Kleiman passes along some interesting data regarding the licit versus illicit cost of high end marijuana if California effectively legalizes weed next month with Prop. 19:

Just as important, �medical� cannabis sells at more or less full dope-dealer prices, while if Prop. 19 were allowed to take effect without Federal interference the retail price of high-grade weed would (according to RAND) be about $40 an ounce, more than an 80% discount compared to the current $300. At that price, California cannabis would flood the nation.

A significant fraction of the post-Prop. 19 pot would be in open, commercial production where the owners would be able to use significant capital, machinery, technology and manpower to efficiently grow weed.  Napa Valley would be a decent analogy of a fully capitalized intoxicant production region.  Kleiman thinks that large scale commerical grows would be under significant legal pressure as the federal government will see overt quasi-licit growing as purely drug trafficking.  In that scenario, most of the price drop that one would expect to see from increasing capitalization of an industry as well as increasing scale would disappear.  Instead, the more probable mostly licit growing option would be 25 square foot 'personal patches.' 

If most of the licit gorwing is for "personal" consumption on plots that are large enough to supply several Cheeches and Chongs on a daily basis, the price level will be higher as the mostly licit growers will not be benefiting as much from economies of scale, learning by doing and intensive capitalization of the product.  Instead of Napa Valley as a relevant comparison for intensive, niche agriculture and intoxicant production, we would be seeing home-brewing as a relevant comparison. 

That would leave most of the price decrease in high end weed due to the evaporation of the local cops security premium.  The risk of moving enough weed to supply a dozen daily stoners goes from felony charges to mainly worrying about moving and parking violations.  If distribution at the street level is mostly legal and risk free, the black market has no advantage in providing that service.  The black market will still have a role in marijuana distribution and production, especially interstate distribution but the black market will see a significant revenue squeeze if Prop. 19 passes.

The Juarez TAZ

By Dave Anderson:

A state is supposed to maintain a monopoly on legitimate violence.  The Mexican state has lost its monopoly on legitimate violence in Juarez as local elites, symbolized by the local newspaper are reaching out to the cartels in arranging truces so that their reporters are not targeted:

Borderland Beat has translated:

To the organizations that are disputing the plaza of Ciudad Juarez: the
loss of two reporters of this publishing house in less than two years
represents an irreparable breakdown for all of us who work here and, in
particular, for their families.



We would like it to be known, we are communicators, not psychics. With
that in mind, as information correspondents, we want you to explain,
What is it you want from us? What is it you want us to publish, or stop
publishing? Explain so we can attend these issues.



You are, at present, the de facto authorities of this city. The legal
security commands have done nothing to prevent our colleagues from being
killed in the line of their duties, although we have repeatedly
demanded protection...

The local elites recognize that the Mexican government is unable to protect them.  Their response is to seek protection from the people who actually have power and the capacity to extend or retract protection, namely the cartels.  Juarez is a temporary autonomous zone if this is the case as the de-facto power on the ground is not a central government but non-nation state violent actors.

If the newspaper is able to come to an arrangement with the cartels that results in their reporters protections at a 'reasonable' price, it is a signal to other elites to start cascading their allegiances towards non-governmental armed groups.  At that point, the legitimacy of the Mexican government in Juarez and other smuggling plazas markedly degrades and what was originally an anti-crime/anti-smuggling operation becomes a much more complex counter-insurgency operation. 

Knowledge dissemination in Mexico

By Dave Anderson:

The Mexican military and police disabled a car bomb in Juarez earlier this week.  That is good news, and it is bad news as well.  Reuters has some details:

Local police responding to a call late on Friday
that a person had been executed in an industrial sector of Ciudad Juarez
discovered a car full of explosives near the body, federal police said
in a statement....

There were two more small-scale attacks in August
that investigators said likely used commercial explosives and were
detonated remotely.

For the past few years, most explosive attacks in Mexico have been with manufactured explosives.  Hand grenades, and rifle grenades have been used in both combat and as part of drive-by bombings.  However, it seems that car bomb and IED building knowledge is disseminating across several cartels and other criminal groups in Mexico.  Mexico is awash in commercial and military grade plastic explosives, so once the knowledge and the willingness to use IEDs is present, the ability to make effective IEDs will not be a hard constraint on their use. 

Insurgency in Mexico

By Dave Anderson:

Hillary Clinton is calling reality in the Mexican drug plazas and trafficking corridors by is name; an insurgency against legitimate government control as the space is devolving into either a Hobbesian war of all against all, or a liberterian Mad Max cluster-fuck of non-governmental forces providing localized security and violence legitimation for the population. 

The LA Times has more:

Clinton compared the conflict in Mexico to Colombia's recent struggle against a drug-financed leftist insurgency that, at its peak, controlled up to 40% of that country. She said the United States, Mexico and Central American countries need to cooperate on an "equivalent" of Plan Colombia � the multibillion-dollar military and aid program that helped turn back Colombia's insurgents.

"We face an increasing threat from a well-organized network, drug-trafficking threat that is, in some cases, morphing into, or making common cause with, what we would consider an insurgency," Clinton said in response to a question after a speech at the Council on Foreign Relations in Washington.

The solution proposed by the Secretary of State is a replication of Plan Colombia which was a massive infusion of US equipment for the Colombian security forces and a reasonably successful counter-insurgency campaign that actually used local forces who were culturally and linguistically competent and had enough discipline to hold their fire while dispensing public goods and economic opportunities. Colombia also had the advantage of being able to displace coco production to neighboring states. I think the lack of a clear ideological insurgent force makes this solution set significantly more problematic than it is in Colombia. Additionally, the US-Mexico border will not move, so the proximity to the US is a constant which means the incentive to smuggle is highly unlikely to be displaced to Windsor, Ontario or Cuba anytime soon. The Mexican government disagrees with my assessment on the probability of success of using the Colombia model:

"There is a very important difference between what Colombia faced and what Mexico is facing now," Poire said. "Perhaps the most important similarity � is the extent to which organized crime and narcotics-trafficking organizations in both countries are fed by the enormous and gigantic U.S. demand for drugs."

Foreign Minister Patricia Espinosa said in a radio interview that leftist rebels in Colombia had a political agenda, and established ties with organized crime to obtain resources. In Mexico, the cartels have no political agenda, she said.

The cartels have a very simple political agenda. It is to make as much money as possible by supplying a variety of black and gray markets in the United States and Mexico. The cartels' political agenda is to displace the state's economic control as well as its physical control of key commodities and corridors. That is a political agenda as it is an economic agenda. 

So now the US government is at least recognizing that there is a major problem in Mexico.  It is seeking to use a strategy whose analogy is a moderate success (it has stabilized the Colombian political system without actually decreasing aggregate cocaine production and smuggling.)  The Mexican political system sees their problem as just Al Capone on a massive scale.  And neither government is willing to actually cut the cartels' cash flow by embarking on a systemic defensive legalization of at least marijuana, so we'll spin our wheels for several more years before that is a plausible option. 

Nigerian methods in Mexico

By Dave Anderson:

The Nigerian Movement for the Emancipation of the Nigerian Delta (MEND) group has waged an effective infrastructure sabotage and intimidation campaign in the Nigerian oil production regions.  MEND has consistently shut in 20% to 40% of total possible Nigerian oil production, and thus 18% to 36% of total foreign earnings for most of a decade now.  MEND has used a variety of means to impose its economic will on foreign oil companies and the Nigerian government.  It has used long littoral maritime strikes, basic sabotage that would be familiar to any member of the French maquis, and a targeted kidnapping and intimidation campaign against key foreign and domestic technical workers.  Even when a kidnapping fails, it increases the security costs and friction.  The Nigerian methods of shutting in a major oil industry differs from the Sunni Arab Iraqi method due to its lower reliance on high explosives against a few brittle pipelines.

Zenpundit caught a good piece in the LA Times concerning cartels engaging in Nigerian methods against PEMEX, the Mexican national oil company, and its major natural gas fields:

Now the cartels have taken sabotage to a new level: They've hobbled key
operations in parts of the Burgos Basin, home to Mexico's
biggest natural gas fields.

Forced to defer production and curtail drilling and maintenance in a
region that spreads through some of Mexico's most dangerous badlands,
the world's seventh-largest oil producer has become another casualty of
the drug war.

In May, gunmen wearing camouflage and tennis shoes kidnapped five Pemex
workers as they rode to the front gate of the Gigante No. 1 natural gas
plant in the Burgos Basin. One man was a mechanic, another specialized
in pumps. All were dressed in their crisp khaki uniforms with the Pemex
logo, ready for long shifts. They have not been heard from since.



The kidnappings, plus the reported disappearance of at least 30 other
employees of subcontractors in the same region, have terrorized a
community where jobs on the oil rigs and at the gas wells are handed
down, father to son, for generations....

Ramirez, the senator, said the cartel responsible, probably the Zetas,
may be after technical information to elude the measures Pemex is taking
to guard against the rampant thefts of gas and oil.

A complete shut-in is not the objective of the Zetas (who by the way, seem to be losing the intra-cartel conflict).  A complete shut-in of the northern Mexico oil and gas industry means there is no one else paying for the infrastructure upkeep and immediate pumping costs.  Parasites die or migrate to new hosts when the current host is dead, and the same is the case when an infrastructure attack is too successful as the profitable black market created by a successful campaign disappears. 

Instead, the Zetas or anyone else who is beginning a systemic campaign against PEMEX's production and distribution infrastructure, including its key employees, will be seeking to crimp the flow and divert economic rents into their own pockets.  

Squeezing cash flows in Mexico

By Dave Anderson:

The violence in Mexico is generating significant negative externalties.  Business Week reports that the violence related to the multiple cartel on cartel and government versus the collective cartels wars is having a significant drag on economic growth:

The violence is shaving 1.2 percentage points off the economy annually,
Finance Minister Ernesto Cordero said today. That�s more than the
government�s previous estimate of 1 percentage point....

Moody�s currently rates Mexico Baa1, the third-lowest investment grade
rating. Mexico�s rating was cut one level by Standard & Poor�s in
December and one level by Fitch Ratings in November after tumbling oil
output and the worst recession since the 1930s swelled the budget
deficit....

Violence is shaving 20% to 25% of potential economic growth in Mexico.

And that is before the cartels or any other non-state actors have started to target the Mexican governments' hard currency cash cows of oil exports, light manufacturing exports, tourism and remittances.  Most of the violence has been concentrated at the cartel versus cartel turf establishment and stealing level or the cartel versus government security force strategically defensive level.  

We are starting to see signs of violence spreading out of the major drug cartel home bases and into Monterrey and other major manufacturing cities.  Blockades and bandhs are being used to restrict movement, impose uncertainty taxes and channel security forces into predictable patterns in Monterrey.  Foreign owners, consultants as well as highly skilled Mexican workers are under an increasing kidnapping for ransom threat.  If there are take-downs of the electrical transmission infrastructure that moves power from the hinterlands to the urban core, Monterrey's export engine falters.  If kidnapping for ransom increases, the cost of doing business in Monterrey increases in comparison to safer locations like China. 

The cartels have just begun to innovate and move into the deployment of effective improvised explosive devices.  If they go the path of Sunni Arabs in Iraq, or MEND in Nigeria, they can hammer the internal fuel distribution network as well as elements of the oil export network.  If that happens, both the industrial production of the north is hampered as oil prices spike due to the distribution premium and the Mexican federal budget goes south quickly as oil revenue makes up over a third of the budget.  Car bomb and IED attacks against popular tourist towns would put a significant crimp on that revenue stream as well.

The cartels are already able to exact a fairly significant economic cost.  I do not expect significant escalation from cartels that are relatively happy and successful under the current environment.  However the cartels and other criminal/non-governmental armed actors that believe they are losing under the current rule set have significant and readily achievable escalation options that could inflict significant costs on the Mexican government, population and economy.   

The purpose of violence (Zeta edition)

By Dave Anderson:

I like Borderland Beat, they provide a great round-up in English about the drug violence in Mexico.  However, one of their recent posts concerning both a massacre of migrants and the execution of a Monterrey area mayor posits nihilism or boredom as a motivator of violence. 

Los Zetas have also been implicated in the kidnapping and murder of
Mayor Edelmiro Cavasos Leal (Noticieros Televisa).

What
could Los Zetas possibly gain from both tragedies?

The answer is
very simple, and it doesn�t take a rocket scientist or an expert
criminologist to figure them out: They don�t gain or lose anything and
it�s obvious that they couldn�t care less about it.

Mayor Cavasos
Leal, from Santiago, Nuevo Leon, was simply doing his job (something
most politicians in Mexico don�t do), he chastised local police officers
and cut their salary, unfortunately, what the mayor did not know is
that these officers were also working for Los Zetas. So they kidnapped
an innocent man, who clearly had an enormous amount of potential and
whose presence would have contributed to a brighter future for Mexico
(given the fact that he refused to get involved with any criminal
organization), and executed him.

Let us assume that Mayor Leal was clean and non-corrupt. What would the point of the killing him be? Purely boredom and or nihilism?

Hell no. It is a violent form of messaging aimed at multiple audiences.  The first audience is an internal audience of Zeta foot soldiers.  The message is simple; the Zetas take care of their own and solve problems that are caused by being a loyal foot soldier.  The local cops were operating as look-outs, spotters and low level couriers for the Zetas as well as a rich vein of local intelligence.  The mayor was punishing them for that, and the Zetas took care of the problem.

The second and broader audience is the local political and governmental elite.  It is a very simple message; Don't fuck with us.  Don't do your job (at least don't do it against Zetas.)  Don't be clean, don't be non-corrupt.  The state can not protect you or your family.

Indeed, the state's guardians were involved in the plot against the mayor so it increases the fear, uncertainty and decision paralysis of other local officials who have to make daily decisions to do their job or to look the other way.  The downside risk to this message is that it could provoke a fear reaction from fence-sitters into banding together against the Zetas for their own self-protection, but that is a low probability event over any one assassination.  

Violence is being used strategically to isolate and hollow out the state.  The Zetas, and other cartels, want a hollow state composed of local officials who are either completely co-opted or who know that they should only do their jobs on certain days against certain factions. 

Catch and release or the problems of local intel

By Dave Anderson:

The Washington Post reported earlier this week that the Mexican justice system is basically a stocked trout stream; lots of fish are caught, photographed and bragged about, but are just as quickly released back into the general population:

cases built by prosecutors and police under huge pressure to make
swift captures unravel from lack of evidence. Innocent people are
tortured into confessing. The guilty are set free, only to be hauled in
again for other crimes. Sometimes, the drug cartels decide who gets
arrested.

Records obtained by The Associated Press showed that the government
arrested 226,667 drug suspects between December 2006 and September 2009,
the most recent numbers available. Less than a quarter of that number
were charged. Only 15 percent saw a verdict, and the Mexican attorney
general's office won't say how many of those were guilty.

In Iraq, the US Army and Marines took a massive number of suspected insurgents prisoners.  Most of those prisoners were quickly released either because they were actually innocents who just looked suspicious (i.e. Iraqi) or there was a dysfunctional justice and prisoner system with mass corruption. 

In both cases, the headline numbers looked good as the forces that were trying to impose centralized control and order were scooping up large numbers of either nacro-traffickers, sicarros or insurgents, while the underlying data was horrendous once it is examined. 

A 75% release rate before charges are brought is horrendous.  It indicates a police system that rewards quantity of work instead of quality of work.  Intelligence is sparse as informants or potential informants don't trust the police or at least do not trust the federal police and army to protect them and their families from highly probable retribution.    Poor intelligence means most missions and patrols are effectively pointless as any valuable target knows that they can either evade, or bullshit their way out of a charge or two.  Poor intelligence means the cartels are highly likely inside the police information loop and can initiate contact when and where they want.  If Mexican cartels embrace IED warfare, poor intelligence means they can create effective autonomous zones. 

Catch and release is a fine fish management plan.  It is horrendous as a law enforcement and counter-cartel strategy. 

Most favored cartels and car bombs

By Dave Anderson:

Escalation in violence and expansion of tactics is often the steps taken by a group that is losing a fight.  I have thought that systemic attacks on Mexican state and economic infrastructure would be initially engaged by groups that are losing ground under the current set of rules and norms that limit violence to personal weapons.  

One of the options for managing violence in northern Mexico is for the government to embrace a most favored cartel (mfc).  Since at least April of this year, the Sinaloa cartel has been rumored to be a contender for the spot of the most favored cartel. The argument is that there is a tacit agreement that the MFC and the Mexican government would cooperate with each other to suppress other cartels.  The MFC would agree to divert some of its kickbacks to the relevant governmental elites as well as maintain urban security with a tolerable and much lower level of violence as its competitors would no longer be alive or competing with it. 

If this is true, or perceived to be true by groups that are getting pushed out of their turf and their market space by a combination of Sinaloa Cartel and government pressure, then escalation is a reasonable alternative to surrender and death.  And it appears that the car bomb in Juarez is part of a strategy or at least a PR push to wedge the government from the perceived MFC.  The El-Paso Times has more:

The
unsigned message told the FBI and the U.S. Drug Enforcement
Administration to investigate authorities that support the Sinaloa drug
cartel.

Otherwise, there will be another car bomb placed in Ju�z
to kill federal police, the threat stated.

"If in 15 days, there
is no response with detention of corrupt federales, we will put a car
with 100 kilos of C4," the message read.

100 kilograms of C-4 or more likely commercial grade Tovex plastic explosive is the size of a market-busting, high fatality car bomb that we routinely see in Iraq.  If an attack is aimed at hard target such as a Mexican Army base compound, it should breach the walls and cause significant casualties.  If such an attack is aimed at soft targets such as a market, a park or a soccer field, civilian casualties could be very high.  Either way, if an attack goes off in the next couple of weeks, it is a predictable escalation of violence from losing groups.  From there, economic systems disruption is not too far of a step. 

Mexican car bombs

By Dave Anderson:

A Mexican cartel detonated a small car-bomb in Ciudad Juarez as part of a reasonably well-planned ambushed aimed at Mexican government security forces.  The LA Times has some more details:

Four are killed in what officials call a well-planned trap near a
federal police headquarters. It appears to be the first time traffickers
have used a car bomb since the start of a military-led offensive
against drug cartels.



Drug traffickers have added a powerful weapon to their arsenal,
employing a car packed with nearly 20 pounds of explosives to kill
police officers, Mexican authorities said Friday.

Compared to IRA, Iraqi and Afghani car bombs, a bomb with twenty pounds of C-4 or other military grade plastic explosives is a small bomb.  However, for an initial experiment top create a mobile area denial munition that is easily concealable in an urban environment, a twenty pound car bomb is a significant increase in capability. 

Explosives are common, cheap and reasonably powerful as there are significant mining operations in northern Mexico.  The proliferation of cheap, easy to use and reasonably reliable IEDs, either as roadside bombs or as car bombs would mean the cartels could create belts of IEDs that are tough and expensive to clear. The proliferation of car bombs and IEDs, or at least the perception of that threat should force the police and the Mexican military to engage in far heavier and larger supported patrols that may or may not pass through certain neighborhoods on any regular frequency.  Fewer and noisier patrols means neighborhoods within major contested urban areas are effectively conceded from the state's monopoly on violence and legitimacy. 

If we see a proliferation of car bombs in both numbers and types, the temporary autonomous zones along the Mexican border region will be significantly enlarged and better protected. 

Exchange rates and insurgencies

By Dave Anderson:

Insurgencies and non-state violence directed at state actors is a bloody and slow process if the state has any resiliency and coherence to it.  Insurgents tend to be more lightly armed bands and small groups who are under intense pressure to not form large and highly visible formations.  State security forces often have the luxury of being able to deploy the full resources of a state, including the potential for above-board foreign arms contracts and support, to field forces that are reasonably well armed and supported.  State security forces can easily access crew served and vehicle mounted weapons, med-evac helicopters, intensive surveillance assets and if need be, heavy supporting fires from either air support or artillery.  

The non-state actors are successful if their engagements with state security forces are initiated by the non-state actors, and broken off by the non-state actors.  This means short, sharp ambushes, mine attacks, sniper attacks and other actions where the more lightly armed insurgents control the tempo of contact.  Insurgents are in trouble if they are forced into stand-up fights where the state can use the full panoply of advantages.

Even the best insurgent forces when fighting against a reasonably well supported state security force will take higher losses than they inflict against the security force.  In 2005, the Sunni Arab insurgency in Iraq was able taking between two and four casualties (death or permanent incapacitation) for every permanent casualty it inflicted against the US.  And they were winning as long as they were only fighting a one front war instead of the three front war that they faced in 2007.  1:4 is a decent exchange rate for insurgents and non-state actors fighting against heavily armed regular soldiers.  

Borderland Beat is reviewing some of the Mexican government's security operations against the cartels. One operation in Michoacan has some casualty figures attached to the reporting.  The numbers are not good for the Mexican government:

Troop Strength: 6,500
Casualties and losses:
Government: 
50 soldiers killed
100 police officers killed
Cartel:
500 killed

Let's look at these estimates.  The government is trading 1:3 against a non-state armed group.The 500 cartel deaths have not significantly impaired La Familia's ability to operate or maintain internal cohesion. That strongly implies La Familia is able to mobilize several thousand men if it needed to.  Several thousand men would be a pool that is large enough to absorb significant losses without collapsing.

If there are several thousand non-state actors who are actively working to hollow out the Mexican state's authority, the federal response is insulting inadequate.  6,500 men against 2,000 or 3,000 cartel members is sufficent for the Mexican government to protect some hard targets and to act as a raiding force.  It is not able to secure the population or provide a pervasive security presence that would separate La Familia's hard-core supporters from the sea of quiet supporters and people who know what not to see.  

As long as La Familia and other cartels can generate significant black-market profits and cash flow, and the Mexican government is dispatching penny-packet reinforcements to multiple locations, the cartels have enough firepower to keep the federal response minimized to the point where losing a couple dozen low-level gunmen a month is just a cost of doing business.  The cartels can focus on their primary threat, each other instead.  

 

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. 

Cartel Complexity

By Dave Anderson:

Moving large groups of armed men from their base to a distant operating area is not an easy task.  This is one of the biggest challenges of standing up new armed forces; their soldiers, non-commissioned officers and platoon and company level officers may want to fight, but the organizational structure needed to get them to a fight is far more difficult to build. 

Borderland Beat bears more news that some of the Mexican cartels are able to move large bodies of armed men from their bases to operational areas where they are to engage in search and destroy missions.  In this case, the offensive force had poor route security and was ambushed by another cartel, but this is an indicator of complexity and organizational capacity of the cartels:

unofficial death toll for Thursday morning�s battle between rival organized criminal groups has reached 29 according to reports coming out of the Nogales, Sonora area.

residents of the neighboring towns reported a high number of pickup trucks and SUV�s traveling on the roads leading to Tubutama. By some estimates close to 100 vehicles assembled in Tubutama Wednesday night where X�s were painted on the windows and red cloths were attached to car doors and rear bumpers for identification purposes.


There are rumors that several active and former members of the Nogales police force were present in the group of armed men.

In a stand-up fight, the cartels' gunmen will lose to the Mexican military, but they don't need a stand-up fight to create an atmosphere of pervasive insecurity that can only be alleviated by cooperation with the cartels.

Prohibition and hollow states

By Dave Anderson:

I just want to quote from the Slate review of Okrent's book on Prohibition for a moment:

 Capone was only 25 when he tortured his way to running Chicago's underworld. He was gone from the city by the age of 30 and a syphilitic corpse by 40. But he was an eloquent exponent of his own case, saying simply, "I give to the public what the public wants. I never had to send out high pressure salesmen. Why, I could never meet the demand."

By 1926, he and his fellow gangsters were making $3.6 billion a year�in 1926 money! To give some perspective, that was more than the entire expenditure of the U.S. government. The criminals could outbid and outgun the state. So they crippled the institutions of a democratic state and ruled, just as drug gangs do today in Mexico, Afghanistan, and ghettos from South Central Los Angeles to the banlieues of Paris. 

The illegal drug trade over the US-Mexico border does not threaten to generate more revenue than the US government takes in over a year. However, the drug cartels have revenue that is about an eighth of the Mexican government total annual expenditures. That is a level of funding sufficient to compete for primary loyalties and degrade the effectiveness of governance due to corruption.  

The easiest way to beat or at least engage in significant harm reduction and mitigation of the cartels is to destroy their cash flow.  If the black market in at least marijuana is destroyed by legalization in the United States, the cartels lose half their cash flow.  Losing half their cash flow means they have a much smaller base of revenue to cover their fixed costs which means significantly less money to corrupt civil society.  It also means a more concentrated anti-cocaine, anti-heroin, anti-meth effort as Mexican and US government assets that were previously working on weed cases could focus on the harder drugs.  Defensive legalization is a way to avoid a temporary autonomous smuggling zone on the south bank of the Rio Grande.  It is also a way to significantly decrease the bloodshed and violence in Northern Mexico as well.  

The right question on drugs

By Dave Anderson:

Dr. Steve Taylor at Outside the Beltway asks the right question on US drug policy, even slightly improved Obama drug policy --- does it make any sense to continue on this course?

what we have here is a great deal of effort and money being spent so that the cocaine market can still sell drugs at a cheaper price than it did when all of this started.  People die and billions of dollars exchange hands and it is still possible to get drugs in the United States if one really wants them.  So I would ask, does this stand up to a basic cost/benefit analysis?  Yes, I understand very well that drug addiction is bad and that it wrecks lives.  However, that is happening right now in spite of the billions spent.  Indeed, a lot of lives are being ruined because of the drug war.  America�s cocaine habit (and to a lesser degree Europe�s) funds, for example, the FARC in Colombia and the drug violence in Mexico.  Some people are more than willing to engage in all sorts of bad behaviors if they will make a lot of money in the process.  The appetite for cocaine (and other drugs) in the US coupled with prohibition equals a lot of money to be made.  It means, therefore, a lot of violence to protect that money...

The question becomes:  are we getting what we, as a public, think we are getting from the drug war?  Is it worth the cost or should we have a serious public debate about another way of doing business?

Defensive legalization of at least marijuana should be on the table of options that are politically plausible if not yet politically feasible.  We know through our experience with Prohibition that creating mass black-markets for popular, and comparatively simple to make products increases violence, fragments state legitimacy and does some but insufficient reduction in consumption.  Defensive legalization is a policy set that should produce lower net social costs even as consumption of marijuana and potentially other drugs increase.