2012 – Mexico’s Year of Decision?

Two powerful trends are coalescing in Mexico this year:

1. The transnational criminal organizations (TCOs) of Mexico moving from being drug traffickers (i.e. only moving the products – a business that is dependent on others to supply the products and is more unstable/subject to TCO groups being played off against one another) to becoming drug producers, which could lead to consolidation among the TCOs currently fighting with one another as well as the Mexican government. The drug that the Mexican TCOs have been starting to produce? Methamphetamine.

“What Mexicans can control is the methamphetamine market. What we are seeing in Mexico right now — unprecedented amounts of the seized drug — is reminiscent of what we saw over the past century in the infancy of the illegal liquor, gambling, heroin and cocaine markets: an organized criminal group industrializing production in or control of a loosely organized industry and using that control to set prices and increase its power… From 2010 to 2011, seizures of precursor chemicals like methylamine in Mexico quadrupled, from 400 tons to 1,600 tons. “

(See accompanying video here)

Consolidation in the Mexican criminal industries (and they are really just a form of doing business, as anyone who has watched The Godfather movies can tell you) is not a good thing for the rest of Mexico.

2. Also occurring this year: Mexican national elections and the possible end of Calderon’s strategy to de-fang the TCOs: his fight and reform campaign. President Felipe Calderon cannot run for re-election, and it remains to be seen if Mexico can elect a leader that is willing and able to continue to try to reform a very corrupt civil service.

“‘We are experiencing the consequences of years of indifference to the cancer of crime, impunity and corruption. This scourge became a threat to the peace and well-being of Mexican families and constitutes a challenges to the state’s viability.’ Hence his government’s insistence on systemic institutional reform to strengthen the rule of law.”

Will the TCOs be able to subvert the elections with their drug profits? Or will the Mexican people be willing to stay the course?

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Filed under Developing Nations, Political Risk, Terrorism

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