Mexico's problems are partly a result of its own policies and partly are a symptom of US problems. A core problem is the concentration of wealth in the hands of the political elite and widespread poverty among the indigenous population. The Mexican Revolution, beginning in 1910, brought a major land reform. However, it restricted individual ownership and limited holdings to small and inefficient plots, so did little to alleviate poverty among the peasantry. US interventions during this period added to Mexican resentment that much of the Western United States had been taken from Mexico, feeding a natural skepticism of US intentions toward Mexico.

Mexico's problems are partly a result of its own policies and partly are a symptom of US problems. A core problem is the concentration of wealth in the hands of the political elite and widespread poverty among the indigenous population. The Mexican Revolution, beginning in 1910, brought a major land reform. However, it restricted individual ownership and limited holdings to small and inefficient plots, so did little to alleviate poverty among the peasantry. US interventions during this period added to Mexican resentment that much of the Western United States had been taken from Mexico, feeding a natural skepticism of US intentions toward Mexico.

Although Mexico has had significant oil wealth, little of it has filtered down to the bottom rungs of society despite sporadic land redistributions. Widespread poverty was the underlying cause of years of unrest which were suppressed by an entrenched government and a compliant judiciary during the period of the "dirty war." When President Vicente Fox took office in 2000, he ended seven decades of virtual one-party rule by the Institutional Revolutionary Party (PRI) and announced his government would aggressively investigate and prosecute human rights abuses. Although there were no actual prosecutions, his administration did release an official report listing hundreds of victims of government repression and was able to reduce much of the unrest. But Zapatista rebels, criticizing the bleak living conditions, poverty and alienation of Mexico's indigenous population, remain active in the remote hills of Chiapas province. Chiapas is still mired in poverty and violence, and the Zapastistas are a bleak reminder of how far the nation has yet to go.

Mexican income distribution remains deeply inequitable, particularly among the indigenous population. The country's inability to create sufficient jobs produces high levels of unemployment, forcing many families to send even children into the labor market. Since 2002, despite higher oil prices, poor governance has limited annual average growth to only a little better than 2% and this growth has tended to benefit only the wealthiest Mexicans. Mexico is one of the four most unequal societies in Latin America, itself the most unequal region of the planet. Mexico's poorest 40% receive only about one-tenth of national income. High unemployment, low and stagnant wages, the rising price of food and fuels, collapsing infrastructure, poor public health, and longer working hours are undermining faith in the government. One result is that Mexican President Felipe Calderón has recently set increasing jobs and reducing poverty as his top two priorities in 2010.

The United States plays a key role in this. It is Mexico's top trading partner by far and Americans are the biggest investors in Mexico. The North American Free Trade Agreement (NAFTA) which came into force in 1994 has made Mexico the leading exporter in Latin America, but it also failed to produce expected jobs, though it spurred some additional land tenure modification. But ironically, the small size of typical Mexican agricultural plots made them inefficient and noncompetitive, pushing more than two million farmers off their fields and fostering immigration to the United States, where agricultural workers were needed, partly to support food exports back into Mexico.¹ Immigration in fact is a key aspect of the relationship. Even though Mexico strongly discourages immigration into Mexico, it facilitates immigration out of Mexico into the United States. Infrastructure in smaller border towns is focused on facilitating the flow of immigrants; the Mexican government has even published a 31-page Guide for the Mexican Migrant that advises its citizens on how to sneak into the United States and how they should conduct themselves once they get here. Mexico uses the United States as its safety valve on economic unrest, and so many Americans view Mexico with skepticism. The approximately 10 million Mexican nationals who reside in the United States, many illegally, send back roughly $20 billion a year in remittances. However, with increased US enforcement and the ongoing recession, Mexican immigrants in the United States have recently dropped by as many as one million and remittances have also slumped sharply. The safety valve is losing its effectiveness.

But thanks to the United States, Mexico has had a whole new economic sector open with the drug trade. In a nation where jobs are hard to find, the drug industry now employs perhaps a half million peasants and generates several billion dollars a year in income. But it has also grown to a point that it threatens the Mexican government itself - domestic addiction rates are up sharply, elections have been skewed, tourism is down and at least one billion dollars of oil has been siphoned off from the legal economy. Since President Calderón launched a war on drug cartels in 2007, part of the country is effectively under martial law and some 14,000 people have been killed, particularly local leaders, law enforcement personnel, reporters and judges - anyone who opposes a cartel's efforts or belongs to a rival cartel. These have been grisly murders, deaths often by torture or beheading, even posted on YouTube, powerfully intimidating those who might support the anti-drug effort which is also badly hampered by the widespread corruption that drug money fuels.

The drug problem has clearly been fed from the US side, with the cartels now reaching deep into the United States. In 2008, for example, in Atlanta, authorities confiscated about $70 million in drug-related cash, linked to the two most powerful Mexican organizations: the Sinaloa and Gulf cartels. And while the cartels send their drugs into the United States, they draw their weapons from it. As many as 2,000 weapons a day enter Mexico;² as a result the drug cartels are often more heavily armed than either the police or the army. Now, as the recession produces more and more desperate Americans, black-tar heroin, a cheap and potent form of the drug made in Mexico, has been spreading to cities and towns across the country. There is no end in sight.

Alarmed by the chaos across the border, the Bush administration initiated a $1.4 billion, multiyear aid package for Mexico and Central America, but by the end of 2009, only about two percent of this had actually been spent. More recently, after decades of mistrust and sometimes betrayal, Mexican and US authorities are increasingly sharing sensitive intelligence and computer technology, military hardware and, perhaps most importantly, U.S. know-how to train and vet Mexican agents. The newly robust partnership is still risky, uneasy and freighted with old suspicions. With their almost limitless resources, drug traffickers have corrupted top crime fighters in President Calderón's administration, including the head of the attorney general's organized-crime unit. A cartel spy even penetrated the Interpol office there and claims to have worked inside the US Embassy to steal secrets from the Drug Enforcement Administration.³ So while there are successes against the drug trade, the associated corruption has made the US Congress increasingly skeptical of providing support to Mexico.

Clearly, immediate efforts being taken with intelligence exchanges, border controls, and drug interdiction are necessary. But these are short term efforts and address only the immediate problem of drugs. Such measures do not address the longer term challenge of jobs and income inequality. Broader cooperation, such as resolution of a long-running battle to allow Mexican trucks access to US highways and eliminate associated retaliatory tariffs, is imperative.

Mexico cannot continue to depend on US jobs as the safety valve for the Mexican economy, particularly with high US unemployment that seems unlikely to improve significantly in the immediate future. Mexico has to act on President Calderón's announced tasks of increasing jobs and reducing poverty. Real change in this area will require some basic restructuring of the Mexican economy and will be a critical transformation for the nation. It can only happen with a significant redistribution of wealth to the lower classes from the upper classes which hold political power. Obviously, this will be easier if the economy can be expanded so there is a bigger pie to cut, rather than forcing redistribution of existing wealth. The upper classes certainly have a deep vested interest in holding on to what they have, but they also have a deep vested interest in seeing the nation prosper. And a prosperous Mexico is also clearly of high interest to the United States.

This is not just a question of wealth redistribution, but of power redistribution and overall improvements in governance. The problem of a repressed indigenous population is a common one globally and is now a driving force behind turmoil in Bolivia. This challenge of developing good governance is a major challenge for the United States, the key to global stability in the XXI Century, a core strategic task facing the nation. Mexico, as our neighbor, is the first step, a test case. If we cannot promote good governance in Mexico, we will certainly be hard pressed to do it any where else.

Promoting good governance in any country means pressuring the country to make internal changes. This is a sovereignty issue and can be particularly difficult with Mexico which is very protective of its sovereign rights in regards to the United States; so US pressure can easily be counterproductive and lead not to improvements but confrontation. This, of course, can be a problem with any country that the United States is dealing with.

A central element of promoting good governance is the setting up of agreed standards. The US Millennium Development Corporation (MCC) has had a good bit of experience doing just this, and has developed a comprehensive set of standards based on performance in three broad policy categories: Ruling Justly, Encouraging Economic Freedom, and Investing in People. As described in detail in the standards, each of them is based on a grouping of several independent indicators by such organizations as Freedom House and the World Bank Institute. These standards are used by agreement to evaluate countries requesting assistance under the MCC program, but the standards are universal ones, adaptable to evaluating any nation on an independent, unbiased basis. These are standards that any country can use to demonstrate its good governance to its own citizens as well as to the international community. Life expectancy is a basic measure of how well the nation protects the lives of its citizens. Another useful independent standard is the Gini coefficient, a measure of income inequality.

Using the same kinds of standards we would apply to others demonstrates that if the United States is going to fix the world by promoting Global Good Governance, it has a lot to do to fix America first. The table below shows key indicators for two Nordic countries (Denmark & Norway) which generally rate high on good governance, three European countries (France, Germany, the United Kingdom) which have values comparable to the United States, Canada, Mexico, and two countries supported by the MCC (Nicaragua and Tanzania). The Ruling Justly column shows the Freedom House rating; it is one of six indicators used by MCC. The Corruption Ranking is from Transparency International and shows global rankings - the lower the number, the less corruption. The Human Development Index is from the UN Development Program; the listing shows the index and the ranking in parentheses. The Global Competitiveness Index is from the World Economic Forum; higher figures show a more competitive economy - the United States is second only to Switzerland (rankings are in parentheses). The Life Expectancy figures are from CIA estimates and are in years along with the ranking among 223 regions surveyed. The Gini Coefficient is also from CIA figures; the higher the number, the more inequality there is in income.

 

COUNTRY	Ruling Justly	Corruption Ranking	Human Development	Global Competitiveness	Life Expectancy	GINI Coefficient
Denmark	1.0	1	0.949 (14)	5.46 (5)	78.30 (46)	24
Norway	1.0	14	0.968 (2)	5.17 (14)	79.95 (24)	28
France	1.0	23	0.952 (10)	5.13 (16)	80.98 (9)	28
Germany	1.0	14	0.935 (22)	5.37 (7)	79.26 (32)	28
UK	1.0	16	0.946 (16)	5.19 (13)	79.01 (36)	34
Canada	1.0	9	0.961 (4)	5.33 (9)	81.23 (8)	32
United States	1.0	18	0.951 (12)	5.59 (2)	78.11 (50)	45
Mexico	2.5	72	0.829 (52)	4.19 (60)	76.06 (71)	46
Nicaragua	3.5	134	0.710 (110)	3.44 (115)	71.50 (128)	43
Tanzania	3.5	102	0.467 (159)	3.59 (100)	52.01 (202)	35

 

Mending Mexico is a critical task for the United States, not simply because of the specific problems Mexico causes us, but more importantly as a test case in how to promote good governance in a developing country. Mexico is suspicious of US motives, but so are many other developing countries. Acute Mexican sensitivity to sovereignty issues and the ominous immediate mutual problems do complicate the situation. On the other hand, the Mexican president acknowledges the need for change and Mexico generally accepts the kinds of international standards promoted by the MCC, even in the absence of any formal agreement.

Naturally any US efforts in regards to Mexico should focus on problems of mutual interest -- such as job creation, trade benefits, mutual manufacturing development, drug challenges, and border controls -- and should take every opportunity possible to acknowledge and support positive steps by Mexico. This also requires positive steps by the United States, including addressing the challenges of weapons availability, drug demand, and truck traffic. In fact, addressing basic problems of good governance in Mexico (or any other nation) requires the United States to also demonstrate good governance at home. In this regard, the United States itself has a number of basic problems, including an increasingly dysfunctional Congress, a burgeoning prison population, widespread unemployment, and ineffective immigration policies.

As this table of a few selected countries and indicators shows, the United States does reasonably well on international rankings, but it is typically not near the top. For income inequality it is actually on a par with Mexico. The position of the indigenous population within the United States is also in many ways similar to that in Mexico, though here the indigenous population comprises a lot smaller percent of the overall population, and so is less of a domestic challenge. But it is certainly awkward for the United States to encourage other nations to improve income distribution and the treatment of indigenous populations when our own situation clearly does not set an example.

Using international standards also means that the United States can get support of other democratic nations. This is less applicable to the Mexican case because Mexico is not a member of the European-based Organisation for Economic Co-operation and Development (OECD), but Canada is a NAFTA member, so has a clear incentive to help promote good governance in Mexico. Canada also rates well in almost all governance ratings and has worked hard to improve the position of its indigenous population.

In summary, promoting good governance in Mexico is a key test of US commitment and ability to influence good governance globally.

NOTES:

1. Marla Dickerson, "Placing Blame for Mexico's Ills," Los Angeles Times 1 July 2006.

2. Manuel Roig-Franzia, "U.S. Guns Behind Cartel Killings in Mexico," Washington Post 29 Oct. 2007.

3. William Booth and Steve Fainaru, "U.S., Mexico align against common foe: brutal narcotics trade," Washington Post 22 Nov. 2009.