Why Lowering US Drug Demand is No Panacea for Mexico Violence

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The idea that reducing drug demand in the U.S. is the key to drastically weakening organized crime in Mexico is misguided; the slow work of institutional reform must come first.

A recent article written by Mark Kleiman for Foreign Affairs, “Surgical Strikes in the Drug Wars,” offers a number of valuable insights and some persuasive suggestions on how to reduce drug demand in the U.S. However, his assumption that this doubles as the best approach to improving Mexican security is ill-founded.

Kleiman bases his analysis of potential demand reduction around the impressive results of programs like HOPE, which was implemented in Hawaii in 2004. While there are many variations, the basic template is simple: drug users in the judicial system are made to undergo random and quite frequent drug testing. Those who fail go straight to jail for a short period of time, as little as two days. However, with the looming prospect of a certain stint behind bars, most of those in the program — up to 80 percent — simply forgo consuming drugs.

Because this plan reduces reliance on costly and often ineffective measures like longer-term incarceration and treatment, it has a very low price tag. And because hard-core users make up a huge chunk of the nation’s drug use, keeping a large proportion of this group clean has the potential to dramatically reduce total drug demand. Indeed, Kleiman estimates that drug use could drop by up to 40 percent if such programs were implemented around the nation. Even if this estimate proves overly optimistic, and even if one concedes that it would still leave behind a drug trafficking industry worth several billion dollars, the low cost of HOPE programs makes it seem well worth the effort.

However, while this would have an immediately beneficial impact on public health in the U.S., it would not necessarily translate into improved public security in Mexico. Although Kleiman’s piece frames demand reduction as as a solution for Mexico, his analysis of the situation there ignores a couple of key elements.

For instance, Kleiman uses little ink discussing weakness in Mexico’s criminal justice system. Instead, he calls for a change of strategy: Mexico, Kleiman says, should develop a system to measure which gangs pose the greatest threat to security, make this public, and attack the worst offenders first. Eventually, with gangs continually punished for behaviors that were beyond the pale, this would help create a more stable, defensive underworld.

This approach, which actually seems to have some commonalities with the philosophy of the Calderon administration (the present focus on the Zetas is based on the belief that they are the worst of a bad bunch), is modeled after successful anti-gang interventions like the famous one in High Point, North Carolina.

While the focus on an intricate and public rubric appears impractical, such a strategy certainly has a sound logical basis. Kleiman’s broader argument, that a radical change in the incentives guiding the behavior of relevant actors is a necessary part of any security solution, is absolutely correct. However, there are some significant differences between the situation in the U.S. and that in Mexico, both with regard to the drug trade and law enforcment, which make it risky to assume that what works in one country will easily transfer to the other.

Unfortunately, the practical implications of such differences are not discussed with any depth. What is most striking is that in laying out his preferred approach to organized crime in Mexico, Kleiman essentially ignores the ability and willingness of Mexico’s crime fighting agencies to implement this strategy. In a country with such a high level of corruption, this is a serious oversight. Policymakers could design the greatest strategy possible, but if a huge chunk of the people charged with implementing it are working for the criminals they are meant to be chasing, it will not succeed.

Kleiman also appears to be writing under the assumption that the violence in Mexico is due exclusively to the drug trade. He writes that “virtually all the revenue of Mexican drug-trafficking organizations comes from sales to the United States.“ From this, it naturally follows that drying up U.S. drug demand would have a direct impact on organized crime in Mexico.

However, Kleiman offers no data to support his assertion, and the available evidence suggests that it is wrong. There is no reliable data on how much revenue gangs get from which illegal activities, but there is no question that the biggest Mexican gangs have expanded far beyond drug trafficking in recent years.

According to a recent study by the Mexican Congress, kidnappings, which can provide perpetrators with tens of thousands or even millions of dollars a pop, have quadrupled in the past five years. Extortion has gone from virtually nonexistent to a major menace in the past decade: the federal government says that the number of extortion complaints jumped from 50 to more than 50,000 in 2007, and the number has presumably risen further since. 

Furthermore, unlike drug trafficking, these crimes necessarily employ the threat of violence against the civilian population. Government authorities pointed to extortion, for instance, as the motivation for the attack on a Monterrey casino that killed 52 people, none of them linked to the drug trade, earlier this month. Elsewhere, the problem is even more pronounced. In Juarez, for instance, an estimated 80 percent of business owners have made extortion payments.

Mexico’s most notorious criminal groups have branched out into other activities as well. Thefts of oil have spiked in recent years, and are projected to lower the profits of Pemex, the national oil company, by some $500 million in 2011. A recent UN estimate pegged the annual revenues of human smuggling, an activity in which organized crime has become increasingly involved in recent years, at $6.6 billion. The counterfeit merchandise industry, where groups like the Zetas have also increased their presence, has grown to the point that six out of ten transactions in Mexico involve a pirated good, according to the Mexico’s Justice Department. The growth of the local drug consumer market in Mexico has also added many millions more to the gangsters’ coffers.

The available evidence suggests that such crimes provide criminal groups like the Zetas with billions of dollars of income.

Mexico’s drug-smuggling networks don’t have absolute control over these underground industries, and drug trafficking remains the trade that delivers by far the highest profit margins. But there is clearly a great deal of money in these alternative activities, and there is a wealth of recent reporting suggesting that they are on the rise. The diversification of the largest criminal groups away from simply trafficking drugs to the U.S. is one of the fundamental changes in Mexican security over the past five years, and any analysis that fails to take this shift into account falls short.

This is not merely an academic point. The existence of alternative sources of income suggests not only that demand reduction is an insufficient approach; insofar as gangs are free to dedicate more resources to kidnapping and extortion, and insofar as such crimes are more harmful to the civilian population, a sudden decline in profits from the U.S. market could well have a negative impact on Mexican security in the short term.

The most urgent task for Mexico is to build the institutions capable of carrying out an effective anti-crime strategy, punishing not just drug trafficking but the constellation of illicit activities that today serve as significant sources of revenue for organized crime. This means constant vetting of security agents (a process that is far behind where it needs to be, despite Calderon approaching his fifth anniversary in office), improving the capacity of the judicial system to arrest and convict suspects, and attacking the political protectors of the drug gangs. These moves collectively will have a more direct impact on Mexican security than even a halving in U.S. drug demand.

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