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2012 August 30 Thursday
CIA Agents Shot In Mexico Were Fighting Drug Cartels

The United States is (rightly) treating Mexico as a failed state. Of course, the US government would deny treating Mexico as a failed state. But the US is (correctly) acting as if the Mexican government can't control its own sovereign territory.

MEXICO CITY — The two Americans who were wounded when gunmen fired on an American Embassy vehicle last week were Central Intelligence Agency employees sent as part of a multiagency effort to bolster Mexican efforts to fight drug traffickers, officials said on Tuesday.

The US sends military aid and training to the Mexican government because it has partially lost sovereign control. This loss of control makes Mexico a failed state. That CIA agents could get shot by Mexican federal police makes sense because the loyalties of Mexico's institutions have become corrupted by drug cartels.

We should make it extremely difficult for drugs and people to cross the US-Mexican border. Mexico would be better off if we did.

By Randall Parker    2012 August 30 09:14 PM Entry Permalink | Comments (7)
2011 October 09 Sunday
True Paramilitary Groups Operating In Mexico?

Paramilitaries operating outside the law in Mexico to kill drug cartel members?

MEXICO CITY — Top Mexican security officials said Thursday that there is no evidence that true paramilitary groups are operating in Mexico, countering video boasts by a shadowy group of masked men who asserted responsibility for the torture-murder of 35 alleged drug cartel members last week.

Mexico looks to be following Colombia's path. Recall that the Los Pepes paramilitary group in Colombia played a big role in bringing down Pablo Escobar. Mark Bowden wrote a book about it. Los Pepes may have been funded in part by rival drug cartels. But the CIA or US special forces probably helped Los Pepes too. Here's a Borderland Beat discussion forum debate on whether Mexico needs paramilitaries to hunt down and kill their drug lords. Los Pepes went around killing people who supported Escobar in any way. So people just doing white collar services for Escobar got offed. Given the extensive corruption of Mexico such severe measures might be the only way to bring down the drug lords and stop the violence.

By Randall Parker    2011 October 09 11:06 AM Entry Permalink | Comments (3)
2011 August 29 Monday
Upper Class Exodus From Mexico Begins

A Washington Post piece looks at a trend of affluent Mexicans moving to the United States to escape violence. Will Mexico's upper class shrink so far that it will get into a vicious cycle and spiral downward?

SAN ANTONIO — For years, national security experts have warned that Mexico’s drug violence could send a wave of refugees fleeing to the United States. Now, the refugees are arriving — and they are driving BMWs and snapping up half-million-dollar homes.

Tens of thousands of well-off Mexicans have moved north of the border in a quiet exodus over the past few years, according to local officials, border experts and demographers.

Some of the middle and upper classes who are staying are opting for embedded tracking devices to make it easier to find them if they get kidnapped. But range limitations make this a questionable approach unless someone can signal and get a very quick response right as they are being kidnapped.

We should discourage Mexicans from fleeing. They need to stay and fight. We have a vested interest north of the border in making Mexico become more, not less, stable. The US should escalate its own fight against the criminal groups in Mexico while at the same time making the border far harder to cross.

By Randall Parker    2011 August 29 09:20 PM Entry Permalink | Comments (29)
2011 July 31 Sunday
Mitt Romney's Relatives In Dangerous Mexico

Mitt Romney's ancestors fled to Mexico for some years back in the 19th century. A Washington Post article takes a look at the few dozen Romneys that still remain in Colonia Juarez Mexico. A third of the population of 500 are traced back to the United States. The violence in Mexico is a present danger to the Romney clan and other Mormons of Colonia Juarez.

Meredith Romney was opening the gate to his sprawling cattle ranch in the Sierra Madre mountains two years ago when he was ambushed by three men in ski masks. They clubbed him with their pistol butts, put a hood over his head and stuffed him in the back of a sport-utility vehicle as his wife and grandson looked on. Then they drove him deep into the mountains.

“They told me, ‘We’ve been watching you for a month,’ ” Meredith said.

He was marched down a canyon and tied up in a cave for three days, until the family paid an undisclosed sum to get him back. “I just figured my time was up,” Meredith said, shaking his head. “I later found out they’d kidnapped 18 people and killed 14 of them.”

Corrupt local officials who shake down honest businesses and who are in cahoots with big criminal gangs. Scared people.

The kids are kept in-doors much more and they all travel much less.

“We’re sort of like sitting ducks down here, but nobody wants to leave,” said Jeff Romney, whose friend, a local ceramic artist, was kidnapped, tortured and killed recently; he was found with his genitals severed and stuffed in his mouth. This month was the first time in a year that Jeff had driven from El Paso to see his parents

Another Washington Post piece looks at how the rising violence in Mexico is cutting the flow of illegal aliens from Central America headed to the United States. They get kidnapped, robbed, raped, killed. The article has details.

The soaring number of attacks on migrants in Mexico, and the widely dispersed news of their barbarity, is discouraging many Central Americans from even attempting the trip to the United States, according to immigration officials, human rights advocates and the travelers themselves.

Illegal drug flows thru Mexico are a large part (but not the only part) of the problem. If the US is going to continue to keep recreational drugs illegal (and I think parents and grandparents will continue to demand this) the US government ought to try much harder to stop that flow. The US ought to build a formidable barrier along the entire US border with Mexico. This will help insulate us from the violence and reduce the drug flow. It will also decrease the amount of violence in northern Mexico. This should be combined with heavy searching of cargo traveling across the border to cut the land-based drug flow. If the north of Mexico ceases to be a useful drug movement staging ground then it will become a relatively less violent place. We'll also benefit from a smaller number of impoverished people in the US than would otherwise be the case.

By Randall Parker    2011 July 31 06:14 PM Entry Permalink | Comments (13)
2010 August 07 Saturday
Drug Cartels More Powerful In Mexico

Brenda Walker points to an LA Times story about comments made by Mexican President Felipe Calderon where Calderon describes the growing challenge of the Mexican drug lords to the Mexican government.

“Their business is no longer just the traffic of drugs. Their business is to dominate everyone else,” Calderon said. “This criminal behavior is what has changed and become a defiance to the state, an attempt to replace the state” by exacting war taxes and taking up arms more powerful than those used by outgunned government forces.

Mexico City has a lot of kidnapping and extortion going on. The crime is about more than just drugs.

Another LA Times story reports on the scale of the cartels.

Reporting from Mexico City — Nearly four years after President Felipe Calderon launched a military-led crackdown against drug traffickers, the cartels are smuggling more narcotics into the United States, amassing bigger fortunes and extending their dominion at home with such savagery that swaths of Mexico are now in effect without authority.

The groups also are expanding their ambitions far beyond the drug trade, transforming themselves into broad criminal empires deeply involved in migrant smuggling, extortion, kidnapping and trafficking in contraband such as pirated DVDs.

Read the second article in full. A US government has issued travel warnings for a growing list of Mexican states. The fight with the drug cartels is not seen as a threat to the stability of the state.

What the US could best do for the benefit of both the United States and Mexico: Build a huge border barrier and heavily man the border with agents to stop the drug and people smuggling. The US government should do far more extensive searching at the legal crossing points while simultaneously putting a stop to all illegal crossings. Then track down and deport all Mexican criminals in the United States as a prelude to deporting all illegal aliens in the United States.

The drug cartels would have far less power if they couldn't use Mexico's physical proximity to the United States to smuggle large amounts of drugs into the United States.

On the bright side, Brazil and Honduras are much worse. That's why the worst places exist: To make bad places look good by comparison.

From 2007 to 2009, the murder rate jumped from 10 to 14 per 100,000 people. That's still low compared with countries such as Brazil, with a murder rate of 22, or Honduras, with 60.9.

By Randall Parker    2010 August 07 04:28 PM Entry Permalink | Comments (9)
2009 December 13 Sunday
NAFTA Not Helping Mexico Catch Up

The theory is that lowered barriers for trade will raise economic performance of all the countries in the world and they will all converge on the standards of living seen in the Western industrialized countries. The reality is that Mexico is not closing the gap with the United States over 15 years after the North America Free Trade Agreement was signed.

But a study released Wednesday by the  Carnegie Endowment for International Peace finds that Mexico has fared poorly under the accord.

“After 15 years, it seems clear that Nafta’s promise of broad-based dynamic growth did not come true in Mexico,” write the study’s authors,  Eduardo Zepeda of the Carnegie Endowment and Timothy A. Wise and Kevin P. Gallagher of the  Global Development and Environment Institute at Tufts.

Mexico's economy grew only 1.6% per capita per year since NAFTA passed. Some economists are probably surprised by this result. Oh, and get this: the wage gap between the United States and Mexico actually widened slightly - the opposite of what economists expected.

So what's the problem with economic models? The elephant in the room. If we consider the taboo then Mexico's doing about as well as we should expect. But I expect economic performance of the United States to deteriorate and so NAFTA might eventually be incorrectly praised for a future narrowing of the gap.

By Randall Parker    2009 December 13 04:53 PM Entry Permalink | Comments (0)
2009 December 09 Wednesday
The Fall Of Mexico: A Low Grade Civil War?

Writing in The Atlantic Philip Caputo reports on how the fighting in Mexico is taking on some of thee characteristics of a civil war.

To clarify the crime. Of the many things Mexico lacks these days, clarity is near the top of the list. It is dangerous to know the truth. Finding it is frustrating. Statements by U.S. and Mexican government officials, repeated by a news media that prefers simple story lines, have fostered the impression in the United States that the conflict in Mexico is between Calderón’s white hats and the crime syndicates’ black hats. The reality is far more complicated, as suggested by this statistic: out of those 14,000 dead, fewer than 100 have been soldiers. Presumably, army casualties would be far higher if the war were as straightforward as it’s often made out to be.

The small amount of attention given to these events by the US press shows how situational ethics can be. Imagine a US ally in Central America disappearing communist guerrillas out of their houses in the 1980s. Of course Congress would be crying about the evil Republican anti-communists and trying to cut off funds to that country. But drug lords are seen as worse than communists. Or maybe ethical standards have changed since the 1980s? Or perhaps the fact that Mexico is directly on the US border makes our elite more supportive of war tactics by a government.

The army appears to be carrying out lots of executions.

What, then, accounts for the carnage, the worst Mexico has suffered since the revolution, a century ago? To be sure, many of the dead have been cartel criminals. Some were killed in firefights with the army, others in battles between the cartels for control of smuggling routes, and still others in power struggles within the cartels. The toll includes more than 1,000 police officers, some of whom, according to Mexican press reports, were executed by soldiers for suspected links to drug traffickers. Conversely, a number of the fallen soldiers may have been killed by policemen moonlighting as cartel hit men, though that cannot be proved. Meanwhile, human-rights groups have accused the military of unleashing a reign of terror—carrying out forced disappearances, illegal detentions, acts of torture, and assassinations—not only to fight organized crime but also to suppress dissidents and other political troublemakers. What began as a war on drug trafficking has evolved into a low-intensity civil war with more than two sides and no white hats, only shades of black. The ordinary Mexican citizen—never sure who is on what side, or who is fighting whom and for what reason—retreats into a private world where he becomes willfully blind, deaf, and above all, dumb.

How many of the killings done by the Mexican Army or police are really done on behalf of drug smugglers? How many are done by local factions of the government for reasons unrelated to the drug war? How many of the killings done against the drug gangs are basically mistakes? Oops, we thought you were something you aren't. In the fog of war you have to expect some friendly fire casualties.

The United States government ought to build a very formidable barrier along the entire border with Mexico and then hugely increase the staffing of border crossings in order to cut the drug flow. Border control would insulate us from Mexico's violence while also reducing the flow of corrupting drug money and guns into Mexico. The US government should also increase DEA and FBI staffing to run down and tear apart Mexican organized crime in the US.

I urge you to click thru and read the whole article. Mexico is what we should not want to become like.

By Randall Parker    2009 December 09 07:34 PM Entry Permalink | Comments (0)
2009 November 20 Friday
Life Expectancy In Mexico

Recently on an old post an irate commenter named Maria told me in ALL CAPS (with lots of exclamation points) that I didn't understand why illegal immigrants are coming to America: Because they can't survive in their own countries. I deleted her ALL CAPS comment and sent her an e-mail to submit it again without using ALL CAPS. I do, parenthetically, delete comments that are written in ALL CAPS. I probably have missed a few but ALL CAPS is one of the few things (aside from spam) that cause me to delete comments. But I digress.

Maria's comment about survival got me curious about something: How long do starving, desperate, incredibly poor Mexicans live? Average life expectancy in every Mexican state is above 70 years.

Another immigration myth shot to hell.

By Randall Parker    2009 November 20 02:37 PM Entry Permalink | Comments (4)
2009 September 26 Saturday
Some Mexicans Leaving Mexico To Escape Violence

Mexico's rising violence by drug gangs and kidnap gangs has started a trend where wealthier Mexicans have begun immigrating to escape the danger.

On top of the traditional economic reasons, a growing number of Mexicans feel unsafe in their own country, particularly wealthier citizens who are targets of kidnap gangs and other forms of crime.

Surveys have shown over the past decade that the main motivation for immigration by Latino populations is overwhelmingly economic, followed by family reunification. But the violence raging across the country, where more than 13,000 have been killed in drug-related violence since Mexican President Felipe Calderón took office in late 2006 and dispatched the military to fight drug gangs, is also pushing people across the border.

The Mexicans ought to stay in their country and fight for it against the criminals.

A big barrier built over the entire length of the US-Mexico border combined with a bigger push to capture ocean-going smugglers is needed. Even the efforts made in recent years to make illegal border crossings riskier have been enough to shift some smugglers toward using ocean routes. Smugglers are shifting toward using sailboats and other boats to smuggle both drugs and people from Mexico to the California coast.

"We've seen a huge spike in smuggling by water," said Lauren Mack, a spokeswoman for the Immigration and Customs Enforcement office in San Diego, California. "It's become very, very risky and difficult to cross by land. Smugglers try to jump where they think we're not looking."

It is a waste to use less than sufficient power and force to stop smuggling. If the US made a much bigger effort to stop smuggling from Mexico then the lawlessness caused by drug gangs would go way down as the money for the gangs dried up. We can help both the United States and Mexico by taking control of our borders to stop smuggling.

By Randall Parker    2009 September 26 11:46 PM Entry Permalink | Comments (4)
2009 August 23 Sunday
Mexico Oil Production Hits 7.8% Yearly Decline Rate

Another reason why the US needs bigger barriers on its southern border with Mexico:

Aug. 21 (Bloomberg) -- Petroleos Mexicanos, the state-owned oil company, said oil output in July fell 7.8 percent to 2.561 million barrels a day as production from its Cantarell field kept sinking.

Mexico is a few years away from becoming a net oil importer. Currently Mexico is one of the United States' biggest oil suppliers. Not for long.

The Mexican federal government is going to lose its biggest funding source as oil production declines.

Falling oil production poses a big threat to the Mexican government's finances, which rely on oil taxes to fund nearly 40 percent of the federal budget.

Petroleum geologist Jeffrey "westexas" Brown says since 2004 Mexico's production has declined on average 4.7% per year but net exports have declined 13.5% per year. This fits with Brown's Export Land Model where internal consumption growth of oil exporters causes their exports to decline much more rapidly than their production.

Canada has a lot of oil in its tar sands in Alberta and will continue to export oil for many years to come. US oil production will decline. International oil prices will go up as high as needed to continue demand destruction. The cost of substitutes will determine how much our living standards decline.

By Randall Parker    2009 August 23 04:58 PM Entry Permalink | Comments (2)
2009 June 14 Sunday
Gulf Cartel Beats Sinaloa Cartel In Nuevo Laredo Mexico

The relative calm that has replaced gun battles and lawlessness in Nuevo Laredo came as a result of one cartel winning over the other. The presence of government troops helped the Gulf Cartel hang on to their territory.

The government, which is in the midst of a vicious, countrywide battle with the cartels, played a role in the newfound tranquillity by pouring soldiers into Nuevo Laredo, under President Felipe Calderón and his predecessor, Vicente Fox. They took up positions around the city and took over the police force, which was regarded as a corrupt adjunct of the cartels.

But the army did not actually defeat the traffickers here by rounding them up and putting them out of business. Rather, law enforcement officials on both sides of the border say, a brutal, long-running turf war between rival cartels came to an end when one side, the Gulf Cartel, came out on top. The added presence of government troops made it harder for the rival Sinaloa Cartel to continue its quest to take over Gulf territory. But many of the most-wanted criminals responsible for the violence got away and continued their business trafficking drugs, in the shadows.

This is all nature's way of telling us we should build a thick deep border barrier on the entire US border with Mexico.

Government troops sent to Ciudad Juarez so far haven't brought peace to the place.

CIUDAD JUAREZ, Mexico — Three months into a military surge aimed at restoring peace to this gangster-choked border city, soldiers are being blamed for the deaths of as many as four men, the disappearances of eight others and the torture of still scores more.

“The guarantee of public security has been totally broken,” said Gustavo de la Rosa, an outspoken official with the Chihuahua state human rights commission. “Juarez was better off without the soldiers.”

In Juarez drug addicts are among those targeted and it is not clear why.

No one knows why the drug addicts have strayed into the crosshairs here. One reason for the mystery is that few homicides are ever solved in Ciudad Juarez. The addicts, counselors and police say they suspect that patients may owe money to dealers or work for competing gangs or have stolen drugs they were hired to carry across the river to El Paso.

Making the United States more like Mexico is a bad idea. We live in an era when the obvious requires frequent restatement. The truth just doesn't sink in among our high and mighty.

A lot of police officers are among those killed in Juarez. I wonder how many of those police were innocents and how many were working for cartels battling each other.

The border city, home to the Juarez drug cartel, ended 2008 with a total of 1,605 people murdered, according to press tallies, including 77 federal, state and municipal police officers.

Chihuahua, where Juarez is located, was considered Mexico’s most violent state in 2008, with 2,206 murders reported.

Want to live in the Third World but don't want to move? The Third World is coming to you so that you do not have to come to it.

By Randall Parker    2009 June 14 11:38 PM Entry Permalink | Comments (1)
2009 March 01 Sunday
Mexico Oil Production In Steep Decline

Declining production from oil depleted oil fields operated by Pemex mean that Mexico is only a few years away from ceasing to be an oil exporter.

Mexican state oil monopoly Petroleos Mexicanos produced an average of 2.68 million barrels of crude oil per day in January, down 9.2 percent from the same month last year.

Mexico's oil export decline is sharper than its production decline due to internal consumption growth. The internal consumption combined with the production decline will bring a halt to Mexico's oil exports in a few years.

Mexico's oil production decline is part of a larger pattern of oil production decline by non-OPEC oil producers.

There are simply too many non OPEC countries with declining production which cannot be offset by increasing production of about 0.50 mbd in 2009 from non OPEC countries including Australia (0.04), Azerbaijan (0.02), Brazil (0.19), Canada (0.10), Kazakhstan (0.07), Sudan (0.04) and Vietnam (0.04). Production declines in 2009 from Mexico (0.24), Norway (0.21), UK (0.19) and Russia (0.26) are expected to be about 0.90 mbd which is greater than the 0.50 mbd increase. Consequently, I am forecasting non OPEC-12 crude, condensate and oil sands production to be 41.0 mbd in 2009, 0.3 mbd down from 2008 and 1.1 mbd down from the 2004 peak of 42.1 mbd. The annual decline rate is expected to increase in 2010 because Australia, Brazil, Sudan and Vietnam are not expected to provide a production increase.

Since a large (though obviously declining) fraction of the Mexican government budget comes from oil exports this decline in production will further weaken a government already challenged by narco-paramilitaries and corruption. The United States should build a formidable barrier along the entire US border with Mexico in order to better insulate ourselves from worsening conditions and increasingly lawlessness in Mexico. Mexico's government has managed to maintain control even under severe economic conditions in the 1970s and 1980s. But we need to insulate ourselves from the possibility that Mexico could implode.

Drug violence is way up in Mexico.

- In 2008, 6,000 people died in drug violence in Mexico, according to President Felipe Calderon. This was almost double the 3,042 who died in drug-related violence in 2007.


- In 2006 in the United States, 794 of the reported 14,990 homicides in the United States were narcotics related, according to the Federal Bureau of Investigation (FBI).

The article reports that more than a quarter of Mexico's drug-related homicides took place in Ciudad Juarez, on the border with Texas. If we got control of the border and made drug trafficking much more difficult then the drug business would shrink and northern Mexico would become more peaceful.

In Cuidad Juarez 250 have been killed in February alone. That translates into an annual rate of 3000 for just that city.

The drug war and the decline in Mexico's oil production make that country a growing problem for the United States. We should stop the flow of illegal aliens across the border and cut legal immigration from Mexico.

A big recent arrest of Mexican drug traffickers in the United States highlights the importance of keeping Mexican criminals out of the United States. If they were not here they would not commit crimes here.

WASHINGTON – Today Attorney General Eric H. Holder Jr., announced the arrest of more than 750 individuals on narcotics-related charges and the seizure of more than 23 tons of narcotics as part of a 21-month multi-agency law enforcement investigation known as "Operation Xcellerator." The Attorney General was joined in announcing the current results of Operation Xcellerator by DEA Acting Administrator Michele M. Leonhart.

Today, 52 individuals in California, Minnesota and Maryland were arrested as part of Operation Xcellerator, which targeted the Sinaloa Cartel, a major Mexican drug trafficking organization, through coordination between federal, state and local law enforcement, as well as cooperation with authorities in Mexico and Canada.

Mexico drug cartels wouldn't have big criminal networks in the United States if we had a lot fewer Mexicans in the United States. Keep Mexico's problems south of the border. We have enough problems of our own.

By Randall Parker    2009 March 01 06:30 PM Entry Permalink | Comments (1)
2009 January 20 Tuesday
Mexico Oil Production In Steep Decline

Mexico's oil fields are past peak and continue to decline sharply.

Jan. 20 (Bloomberg) -- Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.

Pemex last year likely extracted 2.8 million barrels a day, down about 9 percent from the 3.08 million a day pumped in 2007, representing a total of $20 billion in lost sales, according to data compiled by the government and Bloomberg. The Mexico City- based company, which had revenue of $104 billion in 2007, plans to report annual production figures tomorrow.

Given Pemex's role in funding the government this oil production decline is going to create a Mexican government financing crisis. Mexico will cease to export oil in a few years and will become an oil importer. This will create financial strains on the government and economy.

The US government ought to take steps to insulate the US from Mexico's coming economic crisis. We should build a deep and long border barrier to keep out Mexicans when their living standards go into decline.

By Randall Parker    2009 January 20 11:24 PM Entry Permalink | Comments (2)
2009 January 16 Friday
Military Report Considers Possible Chaos In Mexico

A US military report, The Joint Operating Environment 2008, considers the possibility that Mexico will descend into chaos.

The Mexican possibility may seem less likely, but the government, its politicians, police, and judicial infrastructure are all under sustained assault and pressure by criminal gangs and drug cartels. How that internal conflict turns out over the next several years will have a major impact on the stability of the Mexican state. Any descent by Mexico into chaos would demand an American response based on the serious implications for homeland security alone.

The drug and criminal cartels are not the only destabilizing influence on Mexico. Declining oil field production is another substantial problem. In a few years Mexico will become a net oil importer and won't be able to afford to maintain current levels of oil consumption.

Drug violence from Mexico could escalate in the US as a spillover.

Homeland Security Secretary Michael Chertoff said last week that the U.S. needed to be prepared for a spillover of the drug violence into the U.S. and would have to be prepared to fight it.

That means a military surge — not to defend faraway Iraq, but defending our own homeland. A collapsed state will bring millions of Mexicans spilling over our border, not as illegal immigrants, but war refugees, fleeing for their lives from violence.

What to do in that case? Investors Daily recommends letting in millions of refugees. I say build huge border walls instead. If Mexico needs our help then send in US troops to occupy part of it and make that part suitable for refugees. Also, form military and intelligence teams to hunt down and kill the people who control the big drug cartels.

The U.S. will have no choice but to accept such refugees on humanitarian grounds, just as Pakistan, Thailand and Venezuela have had to do from over their own borders in the past. Criminals often embed themselves among them, to prey on the helpless and to expand their operations, creating a new internal threat to the U.S.

A much tighter US border with Mexico would cut the flow of drugs from Mexico and cut the money flowing to drug cartels.

By Randall Parker    2009 January 16 12:57 AM Entry Permalink | Comments (6)
2008 September 08 Monday
Will Drugs And Declining Oil Cause Mexico To Implode?

Sean Maher thinks drug corruption and declining oil production could cause a collapse of Mexico.

There are two pressing issues that are putting intolerable stresses on the Mexican economy and society; the first is the huge escalation in drug related violence and corruption, as US support for the Colombian war on drugs has displaced Cartel activity into Mexico, now the primary base for cocaine shipments in the region. The revenues involved are estimated by the DEA to have reached over $40bn a year (or about 25% of all official exports), financing very effective private armies, and rampant high level corruption.

Attempts to crack down on the drugs will cut exports at a time when oil exports are already in steep decline.

The second crisis relates to collapsing oil production and hence state revenue; the biggest Mexican oil field, Canterell, has seen production tumble 37% in a year and down 50% from its 2004 peak, equivalent to 1.2m barrels a day. For US energy security this is a full blown emergency; this field was a 'Supergiant', as big as the four largest discovered in US Gulf waters combined and Mexico is currently the third largest oil exporter to the US, after Saudi and Canada.

Amazingly, Mexican production fell 10% and oil exports dropped over 16% in the first 7 months of 2008. The faster decline in exports reflects soaring domestic demand.

The oil industry in Mexico provides lots of jobs and a third of Mexico's tax revenue comes from oil. Not only will Mexico stop exporting and suffer a huge decline in tax revenue, but it will need to import oil that it can not afford to import. Currently the Mexican government collects only 11% of GDP in the form of non-oil tax revenue.

Petroleum geologist Jeffrey "westexas" Brown argues that the net oil exporting countries will export far less oil in the years ahead as declining production and soaring domestic demand cuts the amount of oil available for export. In a sort of "Always look on the bright side of life" take on this trend Brown says this development will free us from needing to placate or protect or cater to oil exporting countries.

I have good news for the GOP.

We will probably be free of Mexican oil imports by 2012. We will probably be free of Norwegian and Russian oil imports by 2025. We will probably be free of Venezuelan oil imports by 2028. We will probably be free of Saudi oil imports by 2031.


Those are the dates that I expect to see the respective countries approaching zero net oil exports, although Venezuela is a bit of a wild card. In any case the GOP is telling us that we can maintain Business As Usual, as we replace oil imports with increased US oil production and other forms of energy. The Democrats really aren't any better on energy, but I think that they are at least trying to sell us less of an energy fantasy than the GOP is regarding domestic oil production.

Think of the coming collapse of world oil exports as an energy independence program that really will work. We will not import all that oil which will no longer get exported by other countries. Calls by politicians for energy independence will finally be heeded as we find it impossible to buy much oil abroad.

My guess is that total world net oil exports in 2031 will be at 25% or less of the 2005 rate.

Jeffrey Brown expects all the major oil exporters to export far less in the coming years.

I wrote my first essay on Net Oil Exports with a guest post on TOD, in January, 2006, where I introduced the Export Land Model (ELM). I focused on the current top three net oil exporters, Saudi Arabia, Russia and Norway. They accounted for about 40% of total world net oil exports in 2005.

Here are the EIA net export numbers for the top three for 2005 and 2007:

2005: 18.7 mbpd
2007: 17.2

Of course, Saudi Arabia is currently showing a year over year increase in production, but I estimate that their 2008 net exports will be at 8.4 mbpd, or less, versus their 2005 rate of 9.1 mbpd. Norway is in terminal decline, and then there is Russia.

In our (Khebab/Brown) top five net oil exporters paper, our middle case shows Russia and Norway approaching zero around 2025, when Saudi Arabia would be exporting about 3 mbpd—which would of course be the combined net exports for the top three.

Note that net exports declines tend to approximate linear declines, i.e., an approximately fixed volumetric decline per year. If we average the initial top three two year decline, it’s 750,000 bpd per year. If we extrapolate this out to 2025, the top three would be exporting about 3.7 mbpd. Note that this is about what Khebab’s middle case shows.

Russian oil exports are declining, IMO, because they have to, if they are going to meet internal demand. While Russia has a lot of potential reserves in frontier areas, my guess is that they are to Russia as Alaska is to the US, i.e., Alaska helped, but it was no panacea.

We need a really tall barrier wall along the entire US border with Mexico to protect us from the chaos and economic hard times coming for Mexico. The world oil production decline will give us enough problems without having to take in millions of poor and low-skilled Mexicans.

By Randall Parker    2008 September 08 10:48 AM Entry Permalink | Comments (1)
2008 May 16 Friday
Endangered Mexican Police Chiefs Seek Asylum In United States

On the southern border of the United States lies country we are expected to respect. But Mexico is a monumentally messed up place.

NUEVO LAREDO, Mexico -- The job offer was tempting.

It was printed on a 16-foot-wide banner and strung above one of the busiest roads here, calling out to any "soldier or ex-soldier."

"We're offering you a good salary, food and medical care for your families," it said in block letters.

But there was a catch: The employer was Los Zetas, a notorious Gulf cartel hit squad formed by elite Mexican army deserters. The group even included a phone number for job seekers that linked to a voice mailbox.

Our elites resist creating a formidable border barrier to stop illegal entries from this country.

The article reports that Mexico's military has suffered over 100,000 desertions in the last 8 years. Some of those deserters who signed up with the cartels were trained at Fort Benning Georgia.

WASHINGTON — As many as 200 U.S.-trained Mexican security personnel have defected to drug cartels to carry out killings on both sides of the border and as far north as Dallas, Rep. Ted Poe, R-Humble, told Congress on Wednesday.

The renegade members of Mexico's elite counter-narcotics teams trained at Fort Benning, Ga., have switched sides, contributing to a wave of violence that has claimed some 6,000 victims over the past 30 months, including prominent law enforcement leaders, the Houston-area Republican told the House Foreign Affairs Committee.

Your tax dollars help to raise the level of professionalism in the private drug armies. When those forces cross over into the United States on protection details or other operations they operate more efficiently and competently because the US Army trained them.

Police chiefs in Mexican cities have begun seeking asylum in the United States as their police forces abandon them.

MEXICO CITY — With the U.S. Congress debating whether to send hundreds of millions of dollars in aid for Mexico's crackdown on drug cartels, American officials said Wednesday that three Mexican police chiefs have sought asylum north of the border in fear for their lives.

Jayson Ahern, the deputy commissioner for Customs and Border Enforcement, told the Associated Press that the officials had sought asylum "in the past few months."

Citing privacy issues, Ahern did not identify the police. A senior Homeland Security official, speaking on condition of anonymity, confirmed the asylum requests to the Houston Chronicle but provided no details. "They're basically abandoned by their police officers or police departments in many cases," Ahern said in Washington.

The police chief in Puerto Palomas, a town bordering Columbus, N.M., west of El Paso, requested asylum in March when his entire force quit after receiving death threats from drug traffickers, reports show. Seven men were killed gangland-style in Palomas early Sunday in attacks attributed to local smugglers.

Mexico is so dangerous for police that Mexican police chiefs (at least those not owned by organized crime organizations) can make a very credible claim when they seek asylum to escape death. The BBC notes how unusual it is that government officials seek asylum to get away from non-government actors.

Seeking political asylum is, of course, usually associated with individuals fleeing persecution from governments and their forces of law and order, but in Mexico it seems it is the forces of law and order that are being persecuted.

In recent weeks, at least six senior police chiefs have been murdered.

The most prominent murder was that of Mr Millan, the acting head of Mexico's Federal Police Force (PFP).

You can drive from the United States over a border into a country with massive government corruption, private armies, and where top law enforcement officials are getting assassinated and police chiefs are crossing over to ask for asylum after their staffs abandon their posts. Congress resists protecting us from all of this.

By Randall Parker    2008 May 16 06:22 PM Entry Permalink | Comments (4)
2007 November 17 Saturday
Will Oil Production Decline Bankrupt Mexican Government?

Michael Orme sees Mexico as falling apart.

Mexico as a nation-state is under threat, and with it the US's third largest source of oil. The Federal government does not have the forces to smoke out, let alone counter the drug barons who virtually control such provinces as Sinaloa, Nuevo Leon and Sonora. Nor can they tackle the rebels and privateers who have been disrupting the country's oil infrastructure. There has been a mass exodus from the police and the army in the wake of the assassinations of hundreds of public officials. Indeed, by some definitions, Mexico is no longer a functioning nation state.

I do not know the extent to which drug barons control areas of Mexico. I tend to be skeptical of more severe versions of such claims in large part because drug barons do not need extensive control. They just need enough power to get law enforcement agencies to leave them alone. Does that require a degree of control that causes everything else to malfunction? Or does Mexico malfunction for other reasons such as a low skilled workforce, a lack of a civic culture, and other factors?

However, Orme points to another reason to expect worsening conditions in Mexico that strikes me as more plausible. Mexico's government relies very heavily on the national oil company Pemex for tax revenue.

Moreover, Mexico as a state lacks diverse and predictable sources of tax revenues. It is reckoned that over 70% of Mexican businesses and individuals cheat the system, leaving the government to rely heavily on the State-owned oil company, PEMEX to act as a de facto tax collector. These PEMEX activities account for 40% of government revenues. And therein lies an increasingly serious problem.

Mexico's oil production is going to continue to decline. Though some of the revenue loss is probably being offset by higher oil prices. The tax revenue of Mexico rises with oil prices. That article mentions the Mexican legislature has just granted a tax cut to Pemex, the Mexican national oil company. But Vicente Fox vetoed that bill. Why? Probably because he thinks the national government can't get by without that Pemex tax revenue Yet Pemex needs to retain more money to develop oil fields in order to slow and delay production declines.

So why is the company starved for cash? Its proven reserves are dwindling, and last year fell 7.7 percent. Its main oil field, Cantarell, is about to reach its peak production and will begin to decline next year. Without big investment and new oil discoveries soon, Pemex's total production, now hovering above 3.3 million barrels a day, could begin to decline by the end of the decade, analysts say.

Despite lofty prices for oil, Pemex has seen little of the roughly $9 billion windfall above its expected revenue. It is heavily taxed - the government relies on it to finance about one-third of the national budget.

And events this month have shown an uneven will to give Pemex the means to find and pump new oil. President Vicente Fox, a long-time supporter of legislation to lower the heavy taxes Pemex pays, surprised the country by vetoing a bill that would have allowed Pemex to pay $2.4 billion less next year.

Think about what that portends for the future. Mexico's government is going to continue its dependence on Pemex revenue even while it starves Pemex. Eventually the money going from Pemex is going to start declining. Mexico will enter a severe financial crisis. In theory it can raise the tax revenue elsewhere. But it will need to enact types of taxes that the affluent can't escape via bribery. Can Mexico's political system manage to do this?

Cantarell's long term outlook is a massive decline. Just in 2007 Canterell production will decline 15%.

Production at the field is down 130,000 barrels a day from January, within Pemex's forecast that yields will decline around 15 percent this year.

The Organization for Economic Cooperation and Development (OECD) Latin American Economic Outlook 2008 report draws attention to low Mexican tax revenue and low quality of spending of that revenue.

The OECD urges Brazil and Mexico to improve the efficiency of public spending. Both Brazil, which collects tax revenues equivalent to around 35% of its GDP, and Mexico, where tax revenues amount to only 15% of GDP, score badly in such areas as access to basic services like clean water and electricity.

The corruption that keeps down Mexican tax collections starves funding for Mexican schools. The average of 9th grade education in Mexico probably keeps Mexico's economy below where it could be. Though Mexico can't hope to rise to US living standards given a national average IQ of 87. As of 1999 Mexico spent only about 3% of GDP on education and compulsory education was raised to 9th grade from 6th grade only in 1993! Mexico's human capital development is severely lagging.

Given the problems in Mexico (corruption, massive organized crime groups, private militias, poverty, population growth) we need to build a non-pathetic border barrier fence along the US border with Mexico. Yes, we really can isolate ourselves from some of the world's problems and should make the effort to do so.

By Randall Parker    2007 November 17 11:43 AM Entry Permalink | Comments (3)
2007 March 25 Sunday
Mexican Drug War Losses Over 150 Dead Per Month

Cops are getting killed in drug-fueled violence in Mexico as the drug lords fight for power over the government.

The number of police deaths in Mexico in incidents involving organised crime has jumped 50% this year, according to official statistics.

At least 61 police officers have been killed in Mexico since the year began.

The increase in police deaths follows a crackdown on drug-related violence by the Mexican government.

If the United States built a wall along the entire US-Mexico border one of the effects would be to cut revenue to Mexican drug lords. Mexico would become a more civilized and lower crime society. Governments in Mexican border cities and towns could get a handle on the lawlessness and drive out the drug gangs.

The figures above for police deaths are just the tip of the iceberg. As of Friday March 23 one accounting puts total deaths from the drug wars at 491 so far in 2007 and over 2000 in 2006.

MEXICO CITY - Nearly 500 people have been killed in Mexico's drug wars so far this year, according to media reports here, despite a crackdown on the illicit trade by President Felipe Calderon.

The dead include dozens of police officers, the daughter of a retired Army general and a suspected cartel hit man in the northern city of Monterrey left with a knife sticking out of his chest and a message to local officials affixed to his body.


Calderon's government, which took power in December, promised a get-tough approach against the drug trade, which claimed more than 2,000 lives last year.

That's worse than US yearly losses from fighting in Iraq. We are talking about the country on the southern border of the United States. We need to insulate ourselves from this with a border barrier and tougher immigration controls. We should also deport all the illegal alien criminals and other illegal aliens. That'll remove drug gangs and provide other benefits as well.

A big increase in law enforcement in a section of the Texas border with Mexico freed up enough agents to quadruple drug seizures. A barrier layer along the entire border with fence and wall elements would free up Border Patrol agents to go after drug smugglers. So few would attempt to cross that agents could respond to electronic crossing detection sensors and catch just about every illegal crosser. We could eliminate Mexico as a conduit for illegal drugs smuggled into the United States while also eliminating it as a source of illegal aliens.

Thanks to Omer K for the heads up.

By Randall Parker    2007 March 25 10:37 AM Entry Permalink | Comments (7)
2006 November 24 Friday
Mexican Government Releases Report On Dirty War Period

A succession of Mexican presidents supported a dirty war against opponents.

MEXICO CITY, Nov. 22 — Just before leaving office, the administration of President Vicente Fox has quietly put out a voluminous report that for the first time states unequivocally that past governments carried out a covert campaign of murder and torture against dissidents and guerrillas from the late 1960s through the early 1980s.

The 800-page report is the first acceptance of responsibility by the government for what is known here as the “dirty war,” in which the police and the army are believed to have executed more than 700 people without trial, in many cases after torture. It also represents the fulfillment of Mr. Fox’s vow when elected in 2000 to expose the truth about an ugly chapter in Mexico’s history.

I'm going to guess that the people getting killed were mostly Amerinds and the people directing the killing were mostly Spanish. This was yet another Spanish-Amerind civil war. Such wars are a recurrng theme in Latin America. I wonder if any readers know just how much of a threat was posed to the Mexican government by the groups they fought. Had the government not waged its dirty war would the guerillas have developed into a far larger and more disruptive force?

The top leaders of Mexico knew what their soldiers were doing.

The events occurred during the administrations of Gustavo Díaz Ordaz, José López Portillo and Mr. Echeverría. The federal security department kept the presidents informed about many aspects of the covert operations. Genocide charges against Mr. Echeverría, the only one still living, were thrown out in July by a judge who ruled that a statute of limitations had run out.

If we continue to let in people from Mexico the United States too will continue to split more deeply along racial lines.

Today in northern Mexico the narco battles pose a threat to stability as corruption and organised crime interact to produce lethal conflicts over power.

Police chief Baltazar Gomez and councilman Osvaldo Rodriguez of the suburban city of Santa Catarina, were killed just after midnight by a lone gunman who followed them inside a convenience store where they had gone after attending a funeral. A Santa Catarina city councilwoman accompanying the men was wounded, authorities said.

Gomez, who had been police chief for three weeks, is the sixth law enforcement official killed this year in Nuevo Leon state, across the border from Texas.

Mexico also still has a big problem with inter-ethnic and class conflict.

OAXACA, Mexico -- Masked protesters armed with sticks, rocks and homemade gasoline bombs clashed with police and raided a downtown hotel Monday during a march by leftists seeking the governor's resignation.

The protesters began attacking police as they marched to the city's main central plaza, prompting the officers to fire back with tear gas and pepper spray.

The protesters are battling to remove Governor Ulises Ruiz Ortiz who is a member of the Institutional Revolutionary Party (PRI) which had a monopoly on power in Mexico for most of the 20th century. Ruiz Ortiz is accused of corruption, rigging the election that brought him to power, and organizing a strike of the opposition newspaper Noticias de Oaxaca by a union affiliated with the PRI. This is the Mexico that el Presidente Jorge W. Bush wants to dissolve our borders with.

When you see a news article about the Oaxaca conflict that mentions "indigenous groups" thats a term that refers to Amerinds who are in conflict with the mostly Spaniard ruling class.

Fox's conservative government has been helpless to stop the conflict between a heavy-handed state governor and leftists, striking teachers and indigenous groups who are seeking to force him from office.

Bush is intent on recreating the highly racially stratified society of Mexico in the United States. I think the US has enough problems with race already without importing still more problems.

By Randall Parker    2006 November 24 10:23 AM Entry Permalink | Comments (0)
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