“Mexico’s Moment” – for peace?

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The need for a radical re-visioning of Mexico’s security and peacebuilding strategy is increasing.

Mexico has made the news quite a bit recently. On the one hand, 2013/2014 is being called Mexico’s Moment. Economic reforms are being praised by the international community, Mexico’s S&P credit rating has been raised, and M is the first letter of the next BRICs: the MINTs. On the other hand, while homicide rates appear to have dropped in 2013, vigilantism is increasing – a development that implies a more complex conflict rather than progress toward peace.

In the southwestern state of Michoacan, groups of farmers (and other citizens) have been organizing and arming themselves for more than a year. These fuerzas autodefensas, or self-defense groups, are fighting to protect themselves and their families from the organized crime group Caballeros Templarios, or Knights Templar, who they say have extorted them and brought unspeakable violence to their communities. And it is true that Mexicans across the country need protection: since 2006, the drug war in Mexico has claimed some 70,000 lives.

Meanwhile, this past Monday night in New York City, the Americas Society/Council of the Americas hosted a panel discussion entitled “Mexico in 2014: Political and Economic Outlook.” Panelists Lisa Schineller of Standard & Poor’s, Gerardo Rodriguez of Blackrock, and Gustavo Flores-Macias of Cornell University praised Mexico’s recent labor, tax, telecommunications, and especially energy reforms. The group predicted that these structural changes to the economy may result in “a short-term storm,” as certain interest groups felt inflationary pains (Flores-Macias), but that in the medium to long term economic growth and foreign investment would be significantly stimulated. Schineller noted that the government will have to focus on messaging to the population; she stated that although “the financial markets know it, the economists know it,” the government would need to communicate why these reforms will be good for the people.

The event emphasis was on the economy, with recognition that President Peña Nieto’s administration has focused on economic reforms in it’s first year. But security was discussed as well. Flores-Macias pointed out that “economic performance and violence and crime are related.” Violence imposes an opportunity cost, as an economy may continue to grow amidst violence (a la Colombia) but it is necessary to ask “what growth could happen in the absence of violence.” Indeed, violence always has some negative impact on the economy, as resources are destroyed and efforts are diverted from production to protection, as is the case in Michoacan.

Flores-Macias went on to say that it is time for a new approach to peace and security in Mexico. He noted that the Nieto administration has generally followed the same strategy as the Calderón administration, despite talk of some minor changes, but that militarization increases violence: in states where the military has been deployed to address drug-trade related violence, many indicators of crime and violence rise, including but not only those related to clashes between criminal and military organizations. In response to the question of whether vigilantism is likely to spread, Flores-Macias noted that there are other states with similar grievances and levels of violence as Michoacan, and that the outcome largely depends on whether the federal government is permissive of vigilante groups. Earlier in the day on Monday the Associated Press reported that the Mexican government had reached an agreement to formalize and legalize the groups under the Rural Defense Corp.

Vigilante leader Hipolito Mora told AP that many of the fighters will eventually join police forces under the agreement with the government. Undoubtedly, Mexico needs all hands on deck in building the legitimacy of rule-of-law. But it is much easier to pick up arms than to put them down. The lines of conflict in Mexico has so far been blurry; solidifying them will not make reconciliation easier. And history in Latin America (or anywhere, really) doesn’t suggest that arming civilian groups is a path to peace. Once weapons are disseminated, they tend to be used.

In settings of economic underdevelopment, armed organizations of any kind – government or otherwise – tend to compete with each other for legitimacy and loyalty. Non-state organizations that have provided jobs, schools, donations to the church, social safety nets, and even bribes can leverage significant social and political capital – making them difficult to defeat or disband. And so while vigilante groups may really be brave men at their last wits acting to protect their families, their trajectory can be complex. In his coverage of the situation, Alfredo Corchado rightly questions the sources of funding for the Michoacan groups, especially as their capacity increases, and cites Latin American experts who fear these young groups represent the beginnings of protracted conflict, much like other paramilitary organizations throughout the hemisphere.

I didn’t have the opportunity to ask Mr. Flores-Macias if expects Mexico’s economic reforms to impact the crime and violence, in addition to the impacts of crime and violence on the economics. I’ll put the question to you in the comments. At Monday night’s event Rodriguez noted that no country has ever gotten rich without addressing its institutions. If Neito is committed to the success of his economic reforms, he will have to confront the twin issues of transparency and corruption, and doing so will likely improve the prospects for peace. Similarly, economic growth has the potential to create legal, formal jobs and pull people out of the illicit economy. But Flores-Macias also noted that 20 years after NAFTA (and possibly on the eve of the TPP), wages in Mexico are lower than in China. When the formal economy has little to offer – and recent labor reforms increased flexibility for firms but not security for workers – people often turn to the informal economy. The informal sector makes up approximately one third of Mexico’s economy and includes at least 14 million people.

For foreign investors, it looks like morning in Mexico. But in this moment of reform, is Mexico missing an opportunity? The federal government continues to formalize a policy of meeting violence with violence and is opening the economy in a way that pleases elite analysts and investors. What does that mean for the nation’s farmers, teachers, day laborers, and young people – what some might call interest groups? There is indeed a connection between economics and peace, and as of now it is unclear if it is being fully leveraged.

Business Insider published this series of photographs of the fuerzas autodefensas, illuminating the intensity of their struggle.

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