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Time to look beyond Mexico drug violence

01:39 PM

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Take a look at this BBC article written just before the election:

News about Mexico in the past few years has been dominated by gruesome drug violence. But as Mexicans prepare to elect a new president on 1 July, David A Shirk of San Diego University’s Trans-Border Institute argues for an end to overly negative views of the country:

If Mexico were a stock, now might be the time to buy. The country has been severely under-valued in recent years.

Despite high rates of crime and violence elsewhere in Latin America, the media tend to focus relentlessly on Mexico’s drug war.

The murder rate is nearly 20 homicides per 100,000 inhabitants, but this is significantly lower than in Brazil, Colombia, and Puerto Rico.

And the Central American nations of Belize, Guatemala and Honduras have murder rates nearly twice that of Mexico.

Still, because of exaggerated fears that Mexico is becoming a “failed state” or sliding into a “narco-insurgency,” many tourists and investors have shied away from the country.

And these fears in turn fuel often unfounded concerns about Mexico.

When five burned bodies were found in the Arizona desert earlier this month, the local authorities were quick to blame spillover violence from Mexico.

Post-mortem reports now indicate that the incident was probably something that is, unfortunately, more typical of the US: a murder-suicide in a troubled marriage.

Bad press

Mexico’s public relations problems have not been limited to security.

Three years ago, Mexico bore the brunt of the global H1N1 or swine flu crisis.

Some reports initially called it the Mexican influenza, even though the epidemic may well have started elsewhere in North America.

And in the latest wave of panic among global investors, the Mexican peso took an unexpected dive this month.

Mexico is a major holiday destination for US tourists
With some opinion polls showing increased support for Andres Manuel Lopez Obrador, the leftist candidate, the peso’s value dropped by 12% from its long, stable 13:1 ratio against the dollar.

But for long-term Mexico observers, things are not as bleak as they might first appear.

According to the latest analysis by the Trans-Border Institute, drug-related homicides were down by some 19% compared with the same time last year.

If this pattern continues, 2012 will see fewer drug killings than in the two previous years which saw admittedly high levels of violence with some 15,000 and 16,700 murders respectively.

Such a change would be welcome in itself but it would also reflect that there is much more to Mexico than drug violence.

While Mexico is on the list of travel warnings issued by the US state department, along with Iran, Algeria and Syria, it is still the number one destination for US citizens travelling abroad.

There were more than 20 million visits by Americans last year.

And an estimated one million US citizens reside permanently in Mexico.

Consumers

Mexico is also of growing economic importance. It needs to improve its energy sector, but it is the seventh largest oil producer and the third biggest oil supplier to the US market.

More US export-based jobs depend on Mexico than on any other country except Canada.

Mexico has seen an expansion of its middle class in recent years
And Mexican investors now own major US brands like Dairy Fresh milk products, Entenmann’s pastries, and Thomas’ English Muffins.

Even the New York Times is part-Mexican, with billionaire Carlos Slim owning about 7% of the company and rights to buy up to 16%.

This all reflects the growing buying power and role of Mexican investors in the international economy in recent years.

The purchasing power of Mexicans is also set to grow in the coming decade.

Mexican income levels, currently around $13,000 (£8,350) per capita, have grown modestly but they have grown.

Shifting population dynamics and better employment opportunities in Mexico have also begun to reverse outbound migration, a major change on the last three decades.

Challenges

To be sure, Mexico is entering a time of some uncertainty.

The presidential election is likely to see the return to power of the Institutional Revolutionary Party, which ruled the country for 71 years.

Its candidate, Enrique Pena Nieto, benefits from a unified party apparatus, telemetric looks, and weak rivals in Mr Lopez Obrador and Josefina Vazquez Mota of the governing party.

The presidential candidates have had two televised debates
For some, the PRI is unfit to take back the reins of power, given concerns about corruption within its ranks.

An alternative view is that the PRI’s alleged corruption allows it to negotiate with drug traffickers and restore order.

Both views are probably over-simplified.

Mexican voters have a lower tolerance for corruption than in the past, and with drug gangs fragmented after years of fighting it would be harder to strike a deal with them.

Mexico is unlikely to turn back the clock on democracy or fall prey to the fiery populism that has taken hold elsewhere in the region.

While security remains a problem, the drop in drug-related killings is promising.

Mexico was arguably the Greece of the 1980s and 1990s, suffering excruciating debt and monetary crises. But Mexico, which hosts the G20 summit next week, is Greece no more.

The country is likely to continue to grow economically, reduce poverty, and nourish its small, but expanding, middle class.

Regardless of who wins on 1 July, it is time to change the conventional exceedingly bearish outlook on Mexico.

Visa: BBC News

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