Mexico’s Neoliberal Fix: U.S. Foreign Policy and the War on Drugs

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WINNER – October 2016

The U.S. drug policy that would later be coined the “war on drugs” originated a little over 40 years ago, in 1971 under President Nixon. Drugs, America’s “public enemy number one” (Nixon 1971), were to become a recurrent theme for subsequent U.S. administrations. From Reagan’s “war on drugs” in the 1980s (Bagley 1988, p. 161) to Bush’s Merida Initiative in 2008, the repeated efforts aiming at stopping the flow of drugs originating from Central America and Mexico have taken many shapes. A shared feature however has been the gradual militarisation of the anti-drug effort, despite a recent change in the official discourse. During a visit to Costa Rica in May 2013, Barack Obama criticised that there should be such an overwhelming focus on security matters when drug-trafficking is discussed. “I am not interested in militarising the struggle against drug-trafficking”, he said in an effort to distance himself from the war on drugs terminology (quoted in Main 2014; Paley 2014, pp. 29-30). The progressive militarisation of the war on drugs nonetheless remains unaltered in practice (Delgado-Ramos & Romano 2011, p. 95). If the term itself seems to be slowly falling into disuse in U.S. official discourse, however, it might be because it hints too explicitly at the nature of this drug war, in essence “una guerra contra los pueblos”, a war against the people (Correa-Cabrera 2014, p. 4; Paley 2014, p. 29).

This essay will argue that the U.S. war on drugs in Mexico and Latin America needs to be placed within a revisionist framework of international political economy. It will be demonstrated that successive neo-liberal reforms in the 1980s and 1990s in Mexico, initiated by President Miguel de la Madrid and later reinforced by NAFTA, have triggered the disproportionate outburst of violence in Mexico and the expansion of the drug trade towards the United-States. It will further be shown that the drug war policy has been used as a way to facilitate the enforcement of neo-liberal reforms so as to open further the Mexican economy to U.S. capital, provide cheap labour, and enable the extraction of resources.

The broader theoretical framework for assessing the purposes of U.S. foreign policy in the developing world is informed by liberal and neo-realist orthodox views on the one hand, and neo-Gramscian revisionist interpretations on the other (Stokes 2005 p. 18). There are two main characteristics to each of these overall approaches: the underlying motivations for U.S. foreign policy, as well as the consistency of these motives. The orthodox narrative holds that U.S. official accounts of what foreign policy goals are truly reflect U.S. intentions in the developing world (Stokes 2005, Ch. 2). It is taken for granted that the purpose of the successive U.S. administrations during the Cold War was to contain Soviet expansionism, therefore further supporting the idea that the rationale for American engagement with the developing world has fundamentally changed in the post-Cold War era (ibid; Crandall 2008, p. xii; Stokes 2005, p. 39). Following the dissolution of the USSR, the United-States would now strive to promote democracy and human rights abroad (Stokes 2005). Likewise, the attacks of September 2011 are endowed with a power similar to the collapse of the USSR in altering the nature of the global order. By bringing about a new bi-polar world divided between “Order” and “Disorder” (Friedman 2014), 9/11 would have marked a shift of similar magnitude in the goals of U.S. foreign policy by embodying the proof that the U.S. should pursue more forcefully its democratisation agenda in the developing world (Stokes 2005, p. 45).

Revisionist historiography emerged in the 1970s as a fundamental challenge to the dominant orthodox narratives on the origins of the Cold War, and has continued to challenge orthodox readings of U.S. foreign policy into the 21st century (Stokes 2005, p. 21). Revisionist claims regard the U.S. as an imperialist state attempting to impose its economic hegemony on the developing world when they are not formulated within the theoretical framework of neo-Gramscian critical international political economy (Cockcroft 2006; Stokes 2005; Robinson 2006). In both cases, revisionists take the international liberal capitalist system as a unit of analysis, instead of states (Robinson 2006, p. 101). U.S. foreign policy in the developing world is seen to serve either the economic imperialist designs of the U.S. or the class-based interests of a transnational capitalist elite aiming to establish polyarchic regimes governed by internationally-oriented elites throughout the developing world (Robinson 2006, p. 101). However, revisionists do not aim to dismiss the nationalist strategic rationale altogether, rather they set out to cast light on concomitant economic considerations, as it is believed that socioeconomic influence translates into political power, and that the spheres of politics and economics can therefore hardly be considered separately (Stokes 2005, p. 21; Robinson 2006, p. 116). The revisionist literature disputes that the observable discontinuity in the official discourse on U.S. foreign policy in the post-Cold War era reflects a deeper change of motives (Stokes 2005, p. 47). Rather, this is interpreted as an instrumental manipulation of rationales in order to veil the overall coherent and continuous objectives of the U.S. towards the developing world and Latin America specifically. Namely, the expansion and preservation of a neo-liberal international order, through the promotion of polyarchy, neo-liberal and market oriented economic policies (e.g. deregulation, privatisation, trade liberalisation, land reform, reduction of public expenditure and social benefits), and the eradication of dissenting social forces (Kolko 1990, p. 251; Robinson 2006; Stokes 2005, pp. 21, 47).

The orthodox-revisionist debate is important in the context of the war on drugs, although revisionist accounts remain under-represented overall and often unacknowledged by orthodox narratives (Andreas 1995, p. 85; Correa-Cabrera 2014, pp. 5-6; Mercille 2011, pp. 1638-1639; Paley 2014, p. 26; Stokes 2005, p. 46). Most studies conducted on the drug war fail to acknowledge the determining factor that is political economy and share, overall, the following characteristics (ibid). Drug Trafficking Organisations (DTOs) are considered the only source of violence and the U.S. is regarded as a well-intentioned player, doing its best to prevent drug use and violence. The main obstacle to this anti-drug effort is thought to be corruption in Latin American states, for which cartels are responsible. Finally, the remedy to this situation is seen to be increased military aid coupled with a deepening of free-trade agreements to favour economic development (see O’Neil 2009; Felbab-Brown 2009). These ‘establishment’, ‘mainstream’ or ‘popular’ views are criticised for their complacency with the official discourse on American foreign policy aims. In reaction, revisionists seek to oppose an alternative vision of the war on drugs by making explicit the role of transnational capital interest in U.S. intervention in Latin America (Correa-Cabrera 2014, pp. 5-6; Crandall 2008; Mercille 2011, pp. 1638-1639; Paley 2014, p. 26). The claim put forth is that the war on drugs is used as a pretext for intervening in support of the consolidation, spread and deepening of neo-liberal reforms by facilitating indirect interference with the intervened state and paving the way for social control, as in Mexico for instance (Mercille 2011, p. 1641; Delgado-Ramos & Romano 2011, pp. 94, 96).

Mexico is particularly relevant as a case study for it is both a key producer and transit country for drugs, in addition to sharing a border with the U.S. (Mercille 2011, p. 1637). Between 2006 and 2014, the war on drugs in Mexico claimed an estimated 100,000 to 150,000 lives and 27,000 to 42,300 people were reported missing, in addition to the thousands of internal refugees that conflicts have displaced within the country (Correa-Cabrera 2014, p. 3; Paley 2014, pp. 25-26). It has consequently become one the primary targets of the U.S. war on drugs, following the end of Plan Colombia in 2007. The 2008 Merida Initiative, promoted by U.S. President Bush and Mexican President Calderon, is in fact in many ways the direct successor to Plan Colombia (Correa-Cabrera 2014, p. 4). It shares many of its features, among which its inability to curb drug trafficking and consumption of drugs in the U.S. in addition to being presented as an anti-drug operation when it is at least partially designed as a counter-insurgency campaign (Main 2014; Morton 2012, p. 1632; Paley 2014, p. 19). The initiative consisted of a $1.4 billion U.S. aid package almost entirely dedicated to military aid (Main 2014; Mercille 2011, p. 1645; Morton 2012, p. 1632; Shirk 2011, p. 6). And, indeed, by 2011 more than half of it had been spent on military equipment (Shirk 2011, p. 17). It is not the first effort at militarising drug control in Mexico, but the election of Calderon in 2006 certainly marked a turning point (Delgado-Ramos & Romano 2011, p. 95; Mercille 2011, p. 1643). By 2012, 40,000 to 50,000 new Mexican troops and Federal police had been deployed in the field (Mercille 2011, p. 1647; Morton 2012, p. 1632). Furthermore, state budget for military expenditures soared by $3.24 billion between 2006 and the end of Calderon’s mandate in 2012, a budget increase of nearly 84% while nominal GDP only grew 23% in the same timeframe (World DataBank 2014). Comparatively, military expenditures between 2000 and 2006 had only increased by $443 million (13% increase in budget), while nominal GDP had grown by 41% (ibid). The GDP and military expenditure trends of 2000-2006 are inversely proportional to those of 2006-2012, making even more salient the sharp rise in military expenditures—despite a slowing nominal GDP growth rate—under Calderon’s mandate. What is interesting is that the Merida Initiative was adopted after President Calderon declared a national war on drugs and launched military operations throughout the country, all in the aftermath of a deeply contested electoral process in 2006 (Delgado-Ramos & Romano 2011, p. 98; Correa-Cabrera 2014, p. 3; Paley 2014, p. 25). The initiative thus appears more as a tool used to assert Calderon’s authority and protect the interests of the U.S. and of transnational capital in Mexico, rather than as serving its officially stated purpose of combatting drug trafficking (Delgado-Ramos & Romano 2011, p. 95).

Although the surge in violence and the activity of Drug Trafficking Organisations (DTOs) in Mexico has been quite prominent recently, it first increased in the 1980s, concomitantly with the implementation of the first neo-liberal, market-oriented policies (Mercille 2011, p. 1644). These economic reforms were first introduced by President Miguel de la Madrid in the early 1980s, after the Latin American debt crisis of 1982 hit the country. The Mexican state had accrued significant debts with American banks in the previous years, but it was then unable to repay them and had to agree to a new set of terms. The U.S. Treasury agreed to bail out the Mexican government in exchange for a thorough restructuring of the economic system. This was done through a series of structural adjustment programmes designed by the International Monetary Fund and it ushered in a shift towards the integration of Mexico into the world economy through trade reforms, privatisation, deregulation and reform of collective landholdings in indigenous and rural communities, later reinforced by a second set of conditions imposed with the second bail-out of the Mexican economy under President Clinton in the 1990s (Andreas 1995, p. 75; Armella 1993; Dornbush & Werner 1994, pp. 253-262; Mercille 2011, p. 1646; Watt & Zepada 2013).

It is nonetheless these very same neo-liberal reforms in Mexico which had the unforeseen effect of triggering the spiralling out of control of the drugs war. This was made possible in three distinct ways. First, the Institutional Revolutionary Party (PRI), in power until 2000 and the election of National Action Party (PAN) candidate Vicente Fox, had helped corporatise the state through decades of rule. Its grip on the political and economic arenas was well established and drug-trafficking followed an elite-exploitative model in which the state oversaw the activities of DTOs (Andreas 1998; Felbab-Brown 2009, p. 7; Grillo 2013, p. 10; Morton 2012, p. 1631; Patenostro 1995, pp. 42-43; Pimentel 1999, p. 14; Thornton & Goodman 2014; Watt & Zepada 2013, p. 24). The cut in public spending demanded by the U.S. Treasury in its conditions for bailing out the Mexican state and as part of the neo-liberal turn of the 1980s had the effect of crumbling the corporatist structure of the state. Shrinking in size, the Mexican state could not sustain the same control over non-state actors and organised crime. The resulting power vacuum was filled by DTOs, growing increasingly independent and more violent as some of them began to operate outside of the control of the state (Mercille 2011, p. 1643; Pimentel 1999, pp. 22-23).

Second, while NAFTA has yet to generate jobs and pull wages up, it has had a significant impact on the expansion of the drug trade in two respects (Mercille 2011, p. 1642). First, free trade agreements have facilitated the import of guns into Mexico from the U.S., an “iron river” running across the border (Mercille 2011, p. 1643). An estimated 87 per cent of firearms used by DTOs come directly from the United-States (ibid). The second impact of free trade agreements has been to facilitate the smuggling of drugs from Mexico to the United-States and stimulate the very illegal market the U.S. is aiming to root out (ibid, p. 1642; Andreas 1995, p. 76; Andreas 1998, p. 160; Dermota 1999, p. 15; Thornton & Goodman 2014; Von Raab & Messing 1993). Opium production in Mexico multiplied nearly six times, increasing from 71 tons in 2005 to 425 tons in 2009, while cannabis crops have expanded from 5,600 hectares to 17,500 hectares over the same timeframe (Mercille 2011, p. 1638). The increased volume of cargo crossing the border makes it significantly harder for border customs to spot drug shipments while the free flow of international capital introduced by NAFTA renders any attempt at identifying and freezing drug money impossible (Dermota 1999, p. 15).

Third, the implementation of neo-liberal reforms included the shift from a self-sufficient food production in Mexico to one relying on imports from U.S. agro-businesses, with a dramatic effect on the Mexican economy. An estimated 2.3 million people lost their jobs in the agricultural sector as a result, and many others saw their wages diminish (Andreas 1995, p. 86; Mercille 2011, p. 1642; Snachez 2006, p. 180). The change in policy made it only easier for DTOs to recruit unemployed farmers into their lower echelons. Some other farmers migrated closer to the border with the U.S. to serve as cheap labour in American maquiladoras, leaving vast swaths of land unoccupied, available to foreign capital investment and resource exploitation (Mercille 2011, p. 1642; Watt & Zepada 2013).

The economic structural violence that accompanied the neo-liberal policies in the 1980s and NAFTA in the 1990s and exacerbated inequalities throughout Mexico has given rise to “radical violence”, political dissent taking the form of demonstrations, strikes and sometimes insurrections (Sanchez 2006, p. 179). NAFTA in particular was opposed significantly by large portions of Mexican labour unions and environmental groups before they were repressed by the military. In particular, the 1994 Zapatista uprising was carried out to forcefully protest neo-liberal reforms on the same day as NAFTA came into effect (Mercille 2011, pp. 1645-1646). The vigour of the social movements opposing neo-liberal reforms was as striking as the intensity of the reforms themselves (Veltmeyer 2013, p. 54). Throughout the 2000s, a renewed wave of social movements, wrestling with state forces, has emerged. Supported by indigenous and women groups, as well as peasants and trade-unionists, it builds on mass popular discontentment with the impact of neo-liberal reforms and embodies the region’s resurgent challenge to imperialism (Cockcroft 2006, p. 73).

In the face of growing popular protest, the state is increasingly required to use physical coercion and increase its military and para-military operations against activists, repeatedly violating basic human rights, so that it can enforce the consolidation of further neo-liberal reforms (Mercille 2011, p. 1645; Delgado-Ramos & Romano 2011, p. 94). It is in this context that the deepening of the bilateral military relations between the U.S. and Mexico through the Merida Initiative (Andreas 1998, p. 163; Main 2014) has proven a useful means of repressing popular opposition to the continuation of the neo-liberal project in Mexico by “armouring” NAFTA (Mercille 2011, p. 1644).

In the post-9/11 world, the U.S. and Mexico built onto the blurring of the lines between DTOs and terrorist organisations, DTOs and popular movements, and counter-narcotics and counter-insurgency campaigns. 9/11 has triggered the formulation of a new U.S. foreign policy that incorporates the overt use of unilateral military force (Cockcroft 2006, p. 68; Veltmeyer 2013, p. 54). The reach of Bush’s “war on terror” has proven pervasive including in the context of the war on drugs. One of the observable changes in the official U.S. discourse on Mexico has been the shift from depictions of communists and DTOs to terrorists, in describing leftist movements and guerrillas. The political rebranding of drug-trafficking organisations, which took place against the background of a “failed-state” rhetoric aiming to scare the public in the U.S., was legally acknowledged in 2010 and 2011 by Mexican lawmakers and the U.S. Congress respectively (Delgado-Ramos & Romano 2011, p. 94; Morton 2012, p. 1631; Stratfor 2010; Flanigan 2012, p. 279). Officials and academics draw parallels with terrorist organisation in general (Delgado-Ramos & Romano 2011, pp. 94-95; Longmire & Longmire 2008, p. 35; Shirk 2011, p. 3; Steinitz 2002) but also more precisely with groups such as Hezbollah and Hamas, with which Flanigan (2012, p. 291), for instance, finds a “great deal of commonality”. Overall, and although the comparison is sometimes contested, there is a climate of urgency established around the rise of what are described as DTOs either financing terrorism or committing terror acts themselves (Steinitz 2002, p. 2; Williams 2012). What this shift implies is two-fold. Mexican authorities can assign longer prison sentences and penalties with a greater degree of discretion. The shift further allows for greater U.S. involvement in Mexico through increased military aid spending, and more oversight from the U.S. army and the Department of Defence (Flanigan 2012, p. 279; Longmire & Longmire 2008, p. 50).

In focusing on “the enemy within”, the Mexican state and the army—supported by the U.S.—have too often stretched the “terrorist” label to include “political opponents of the regime in power” along with “journalists” and “labour organisers”, failing to distinguish them from DTOs (Isacson, Olson & Haugaard 2004, p. 1; Isacson, Olson & Haugaard 2005, p. 14). The use of this label has enabled the expansion of paramilitary activity and the carrying out of extrajudicial executions against alleged terrorists, facilitating the assassination of human rights activists, journalists, opposition leaders and environmental activists fighting the extraction of resources in Mexico (Delgado-Ramos & Romano 2011, p. 96). Members of the Mexican military trained by the U.S. for counter-narcotics purposes are thus often involved in counter-insurgency campaigns, with the tacit support of the U.S. This was the case during the 1994 Zapatista uprising, but also much more recently. Drug searches are often used as a means of repression and anti-drug operations are used as a pretext to arrest activists calling for democratic change or force populations out of areas rich in extractive resources (Mercille 2012, p. 1647; Carlsen 2008). As Mercille (2012, pp. 1647-1648) further explains, a document originating from the Mexican Defence Ministry in 2000 explicitly laid out the fact that anti-drug operations were used as cover for counter-insurgency activities in the field, with the over-riding goal of criminalising social and political dissent that opposes neo-liberal reforms (Delgado-Ramos & Romano 2011, p. 94).

To conclude, it has been argued that the neoliberal policies of the 1980-90s in Mexico have triggered the explosion of violence caused by DTOs and that is, to this day, still present. It has further been argued that the war on drugs policy has been used in Mexico to repress political dissent and grassroots movements that seek the halt neoliberal reforms in the country, which have increased inequalities, as in many other countries through Central America (Paley 2014, pp. 26-27).



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Written by: Constantin Gouvy
Written at: Queen Mary, University of London
Written for: Dr Jeffery Webber
Date written: March 2015

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