•Mexico hold general elections on 1 July with candidates promising a tougher stance on crime
•Homicides during Nieto tenure grew and show no signs of diminishing after 2018 elections
•Foreign commercial operations have been relatively immune to cartel violence, but in less-developed rural states they are particularly vulnerable
•Andres Manuel Lopez Obrador became the 58th Mexico's President in July 2018 and vowed to be tougher on crime, although lacked details on proposed solutions.
Mexico hold general elections on 1 July, when the electorate voted Mexico's new President for a five-year term and selected 128 members of the Senate for a six-year term and 500 members of the Chamber of Deputies for a three-year term. The new president run for MORENA party (Movimiento Regeneración Nacional), a left-wing party that run for election in Juntos Haremos Historia coalition where it was joint by Labor Party (PT) and Social Encounter Party (PES), both with social-democratic views.
Four candidates were in competition for the office, including the elected Presidents Andres Manuel Lopez Obrador together with Jose Antonio Meade, Margarita Zavala and Ricardo Anaya. All of them have vowed to be tougher on crime, but they have lacked details on their respective solutions. Andres Manuel Lopez Obrador won the elections with a win gathering 53,19% of total votes becoming 58th President of Mexico, while Ricardo Anaya, second ranked, gathered 22,28% of votes.
The elections took place against the backdrop of widespread corruption, crime and cartel violence, which has increased during the the five-year term of the Nieto administration. Enrique Peña Nieto, 57th President of Mexico, came into office promising to end an extremely violent war with the drug cartels that was responsible for killing more than 100,000 people since 2007.
During his first two years in office, Nieto channelled funds into security-focused ministries, leading to a sharp drop in homicides. Then when the price of oil dropped in June 2014 and continued to drop, his government was forced to reduce security spending as tax revenues declined. Additionally, the Nieto administration has focussed on decapitating the leadership of cartels, leading to fragmentation and the spawning of more virulent groups. The result: crime and homicides have risen and continues to rise.
Homicides rose by 22 percent between 2015 and 2016, representing around 20,000 murders in a country of 123 million people. In 2017, Mexico endured one of its most violent years since 1997, when it registered over 25,000 homicides. The homicide rate rose to 20.51 per 100,000 people in 2017 from 16.8 per 100,000 in 2016—this was higher than the rate in 2011 when it was 19.37 per 100,000. That year was known as the most violent in Mexico’s war against the cartels during the administration of President Felipe Calderon.
Fast forward to 2018 and the evidence strongly suggests that Mexico’s war with the cartels has worsened during the Nieto stewardship. Homicides underscore the insecurity in Mexico, and politicians are under particular risk during this election cycle. Between September 2017 and March 2018, between 42 and 62 political figures, including mayors, activists, deputies and party members, among others, have been murdered. The primary reason driving homicides is the targeting of political figures that do not protect the interests of cartels or threaten them.
Guerrero, Oaxaca, Jalisco and Veracruz have had the most out of 16 states impacted. What is more important to note is that the fragmentation of cartels has forced smaller groups, which are hyper-violent, out of major urban centres, such as Mexico City, Guadalajara and Monterrey, among others, and pushed them into areas with limited government reach. This proliferation has also had an impact on foreign commercial interests.
In March 2018, Coca-Cola FEMSA announced that it would close its operations in Guerrero, citing “the absence of law and order”. According to the company, employees at Mexico’s largest bottling plant in Ciudad Altamiro suffered continual threats and hostility from local cartels that were trying to extort the company. An armed group even fired on the facility and attempted to throw Molotov cocktails, leading to the injury of an employee. Coca-Cola FEMSA also closed another facility in Guerrero in 2014 and temporarily suspended operations in 2015 due to harassment against its delivery workers from cells of La Familia Michoacana cartel.
PepsiCo trucks and warehouses were attacked in mid-2014. In general, major multinationals have not been that affected by cartel violence with the exception of the oil and gas sector, where billions of dollars are lost annually from theft, but this trend could change in the long-term outlook.
There is evidence to suggest that states with more advanced economies driven by certain sectors, such as the automotive and aerospace manufacturing, are not heavily impacted by cartel-related violence. Whereas less developed states have been susceptible to poor governance and weak rule of law that is cemented by high levels of cartel activity. Guerrero state serves as a sobering reminder of this reality.
How will Andres Manuel Lopez Obrador and his administration be grappling with a situation that is unlikely to abate in the foreseeable future? There is very little optimism that they will be able to deliver a comprehensive solution to Mexico’s rampant crime challenges in the very soon period.
Meanwhile the aggressive campaign for the wall that US President Trump is pushing forward on his agenda is not helping the Mexican state to find a efficient solution for the internal problems that lead to regional tensions.
Further details on the regional situation will be provided as NSG team keeps an eye on the globe's most security affected regions.