The background to Mexico’s fight against the drug cartels

 Mexico's geography in the Press  Comments Off on The background to Mexico’s fight against the drug cartels
Apr 202010

The following paragraphs come from a Stratfor Geopolitical Intelligence Report about Mexico’s fight against the drug cartels, Mexico and the Failed State Revisited, by George Friedman, published on 6 April 2010. The link above is to the full text of the report.

Mexico’s Core Problem

Let’s begin by understanding the core problem. The United States consumes vast amounts of narcotics, which, while illegal there, make their way in abundance. Narcotics derive from low-cost agricultural products that become consumable with minimal processing. With its long, shared border with the United States, Mexico has become a major grower, processor and exporter of narcotics. Because the drugs are illegal and thus outside normal market processes, their price is determined by their illegality rather than by the cost of production. This means extraordinary profits can be made by moving narcotics from the Mexican side of the border to markets on the other side.

Whoever controls the supply chain from the fields to the processing facilities and, above all, across the border, will make enormous amounts of money. Various Mexican organizations — labeled cartels, although they do not truly function as such, since real cartels involve at least a degree of cooperation among producers, not open warfare — vie for this business. These are competing businesses, each with its own competing supply chain.

Typically, competition among businesses involves lowering prices and increasing quality. This would produce small, incremental shifts in profits on the whole while dramatically reducing prices. An increased market share would compensate for lower prices. Similarly, lawsuits are the normal solution to unfair competition. But neither is the case with regard to illegal goods.

The surest way to increase smuggling profits is not through market mechanisms but by taking over competitors’ supply chains. Given the profit margins involved, persons wanting to control drug supply chains would be irrational to buy, since the lower-cost solution would be to take control of these supply chains by force. Thus, each smuggling organization has an attached paramilitary organization designed to protect its own supply chain and to seize its competitors’ supply chains.

The result is ongoing warfare between competing organizations. Given the amount of money being made in delivering their product to American cities, these paramilitary organizations are well-armed, well-led and well-motivated. Membership in such paramilitary groups offers impoverished young men extraordinary opportunities for making money, far greater than would be available to them in legitimate activities.

The raging war in Mexico derives logically from the existence of markets for narcotics in the United States; the low cost of the materials and processes required to produce these products; and the extraordinarily favorable economics of moving narcotics across the border. This warfare is concentrated on the Mexican side of the border. But from the Mexican point of view, this warfare does not fundamentally threaten Mexico’s interests.

(to be continued) “This report is republished with permission of STRATFOR” © Copyright 2010 STRATFOR.

An overview of the geography of drug trafficking in Mexico forms part of chapter 20 of Geo-Mexico: the geography and dynamics of modern Mexico. Buy your copy today!

Mexico tried to prevent Americans from migrating to Texas

 Other  Comments Off on Mexico tried to prevent Americans from migrating to Texas
Apr 092010

In recent years, considerable attention has focused on the US government’s efforts to stem the flow of Mexicans migrating north of the border in search of jobs. But there was a time in history when the boot was, so to speak, very much on the other foot.

In the early 19th century, shortly after gaining her Independence from Spain (1821), Mexico’s territory extended considerably further north than it does today. It included modern-day Texas, as well as many other parts of what later became US territory.

The first British Chargé d’Affaires in Mexico was Sir Henry George Ward (1797-1860). Ward entered the diplomatic service in 1816, and first visited Mexico in 1823, as a member of a British government commission assessing the desirability of establishing trading relations following Independence. The following year, he married Emily Elizabeth Swinburne, who accompanied him on his return to Mexico in 1825 in his role as Chargé d’Affaires.

Map of Mexico, 1824

Two years later, Ward wrote a detailed description of how he saw Mexico. Mexico in 1827, which contains illustrations by his wife, was an early appraisal of the fledgling Mexican Republic, and was published on his return to the UK. Ward’s book provides numerous details of trade, mining, economic activity and topography, as well as pointing out many errors in Alexander von Humboldt’s earlier classic work Political Essay on the Kingdom of New Spain (1811).

Ward, a skilled diplomat, arrived only a few months before his American counterpart Joel Poinsett. (Poinsett, after whom the poinsettia is named, was the first US minister to Mexico). Ward was not only anti-Spanish, but also decidedly anti-American. His main goal, apparently, was to try to prevent the USA from expanding its territory at the expense of Mexico. The British diplomat believed that the incorporation of Texas into the Anglo-American states was inevitable unless the Mexican government could stem the wave of immigrants flooding southwards into the region. (How times have changed!)

The Mexican government was relatively unstable at this time, with frequent changes of leaders and some inconsistency in policies. Ward summed up the political situation that he encountered as one in which, after 13 years of civil war, the form of government had still not been determined, with great differences of opinion existing with respect to the desired degree of central authority. He found it difficult to conceive of any country less prepared than Mexico for the “transition from despotism to democracy”.

While both men were acting on behalf of their respective countries, Ward acted as a moderate balance to the interventionist politics of Poinsett. He promoted the signing of a UK-Mexico treaty of friendship, trade and migration, but the UK gradually lost influence in Mexico despite Ward’s best efforts. Meanwhile, Poinsett was trying his hardest to purchase Texas. His meddling in Mexican politics antagonized the government of Vicente Guerrero to the point where his recall was demanded in 1829.

The British Chargé d’Affaire’s greatest concern was that the USA might one day gain control over Texas ports. This would put them only three days away by boat from Tampico and Veracruz (Mexico’s main trading port) and mean that Mexico was vulnerable to invasion. Ward’s worst fears in this regard were realized later in the nineteenth century (the Mexican-American War of 1846-1848).

Original article on MexConnect.

The changing political boundaries of Mexico are described in chapter 12 of Geo-Mexico: the geography and dynamics of modern Mexico. Buy your copy today!