Mexico and Central America: Taking Aim at Corruption in Pharmaceutical Procurement

By Thomas Andrew O’Keefe*

Secretary of Health Headquarters, Mexico City, Mexico / Diego Delso / Wikipedia, Not Modified / Creative Commons License

Under pressure to reduce the cost of medications and medical supplies, the governments of Mexico, Guatemala, and Honduras have resorted to an international facilitator to combat inefficiencies and a lack of transparency in medical procurement while attempting to build their own capacity to manage purchases and reduce related corruption in the future.

  • The Mexican government has been trying to obtain lower prices from manufacturers and distributors of patented or single-sourced medications and medical devices since at least 2008, when it created a Coordinating Commission to Negotiate the Prices of Medications and Other Health Inputs. A pooled procurement mechanism overseen by the country’s Social Security Institute (IMSS) was established in 2013 to purchase pharmaceutical products and medical supplies on behalf of various federal and state agencies. When President Andrés Manuel López Obrador (AMLO) took office at the end of 2018, he labelled the Coordinating Commission as ineffectual and IMSS’ pooled procurement process as hopelessly corrupt – and terminated both. He consolidated purchasing authority for Mexico’s public health sector in the Secretariat of Finance and Public Credit, which also proved incapable of handling the task. To address widespread shortages throughout the country that were putting lives at risk, the Secretariat was signing contracts at exorbitant prices.
  • Last July, the AMLO administration executed an agreement with the United Nations Office for Project Services (UNOPS), a not-for-profit agency based in Copenhagen better known for implementing humanitarian and development projects. For 2021, the Mexican government is expected to spend some $4 billion to procure medications through UNOPS on behalf of federal entities and 26 of Mexico’s 32 states. UNOPS will reportedly net a 1.25 percent commission for what will be its largest single procurement project to date. In 2022, UNOPS will set up an electronic reverse auction system to conduct the bidding process with international suppliers.

Guatemala and Honduras reached out to UNOPS, with good results, years ago.

  • In 2014, UNOPS began assisting the Honduran Social Security Institute (IHSS) and Ministry of Health to establish a more effective and transparent procurement system for purchasing medications and medical supplies. After a year, UNOPS was able to procure medications at costs at 40 percent or more lower than what had previously been paid. Government funding remains a problem, but allegations of corruption in medical purchases have dropped sharply.
  • Following major corruption scandals at Guatemala’s Social Security Institute (IGSS), the Guatemalan government signed a contract with UNOPS in 2016 that involved both procurement and technical assistance to the IGSS to enhance transparency and strengthen its procurement processes. As a result, the Guatemalan government estimates the IGSS achieved an estimated 57 percent reduction in the prices of procured medicines and a 34 percent savings in surgical medical supplies and cochlear implants. The IGSS claims it was able to utilize these savings to, among other things, build new hospitals and extend health insurance coverage to more Guatemalans.
  • These experiences build on Guatemala and Honduras’ participation since 2010 in a mechanism overseen by the Council of Ministers of Health of Central America and the Dominican Republic (COMISCA) to jointly negotiate the prices of medications and medical devices for subsequent purchase by the public health sector in their countries.

Ensuring efficiency and reducing corruption in medical purchases will ultimately depend on the governments’ ability to reform their own systems, not on developing a permanent dependency on UNOPS or other international entities. UNOPS is scheduled to hand the entire procurement system over to the Mexican government in 2024. The recently created Mexican Institute of Health for Well-Being (NSABI) will initially oversee distribution within Mexico, but the AMLO administration has indicated that this function will eventually be taken over by a more specialized agency that will also have warehousing capabilities (including cold storage facilities).

  • AMLO signed an executive decree at the end of October that recognizes the health safety certificates issued by regulatory authorities in other countries as being equivalent to those issued by the Federal Commission for Protection against Health Risks (COFEPRIS) in Mexico. The decree also simplifies the process for COFEPRIS to issue certifications for the sale and consumption of all imported medications in Mexico. These moves are intended to undermine the ability of unscrupulous pharmaceutical firms to “capture” the regulatory approval process and thereby hinder competition.
  • The positive experiences in Guatemala and Honduras with UNOPS may encourage reformers in other Latin American countries, as just happened in Mexico, to look to the self- financing UN agency for assistance in clamping down on corruption, ensuring better management of the public health care sector, and implementing modern procurement systems to address the longstanding challenge of getting essential medical supplies to citizens who need them. The COVID 19 pandemic has made health a global priority and exposed serious deficiencies that no longer can be ignored. Without robust and equitable public health care systems, there is no sustainable economy.

December 21, 2020

* Thomas Andrew O’Keefe is president of Mercosur Consulting Group, Ltd. and lecturer with the International Relations Program at Stanford University.

U.S.-Latin America: Who Can Learn from Whom about Elections?

By Todd A. Eisenstadt*

Polling station in the outskirts of San Cristóbal de las Casas in Chiapas, Mexico, during the 2003 gubernatorial election in Chiapas.
Polling station in the outskirts of San Cristóbal de las Casas in Chiapas, Mexico, during the 2003 gubernatorial election in Chiapas./ Dr. Todd Eisenstadt

The irony of an increasingly probable electoral crisis in the United States this year is not lost on observers in Latin America, who have endured multiple challenges to the legitimacy of elections for decades – nor is the irony that the United States could learn from the region’s hard, if still incomplete, lessons in democracy. U.S. President Donald Trump’s efforts to raise doubts about the fairness of the November 3 elections have been reported widely in Latin America. Citing unknown sources and unconfirmed events, he has alleged massive voter fraud and predicted court challenges so serious that, he said, it’s especially urgent that his nominee to the Supreme Court be seated immediately.

Such ominous-sounding challenges to elections are not new to most of Latin America. Mexico is not unique in this regard, but I saw its whimsical and exotic election frauds closeup in the 1980s and ‘90s as an international elections observer.

  • In the razor-close 1988 election, the lights went out during the vote count, and by the time they came back on the renegade outsider leftist had lost his lead against the PRI’s candidate. Political operatives called mapaches (“racoons” because they worked only in the dark), breakfast bribes (called Tamale Operations), and voters who made the rounds all day long to cast ballots in different precincts (carruseles or “carrousels”) were common. Crazy Mouse, named after the board game, was a scheme in which opponents of the PRI were sent from precinct to precinct only to be told they were to vote across town. Similar tricks, as well as intimidation, have been common in many other countries. Latin Americans are accustomed to wondering whether the military will have to escort a president who loses an election out the door, but it’s a totally new point of speculation for the U.S. population.

Although still far from perfect, Mexico and other Latin American countries have improved their elections. The unwritten code among political bosses in Mexico has long been to not ruin national institutions (like the postal system) or invite foreign interference (like Russian manipulation of public opinion). But other steps signal a shift away from zero-sum political games.

  • Since the 1990s, post-electoral negotiations to mollify the victors’ opponents – “keep them in the game” rather than make them a destabilizing force – gave them perches from which to eventually mount legal challenges, including rightist Vicente Fox (an interim governor who later became President) and current President Andrés Manuel López Obrador. The U.S. Supreme Court in 2010 in Citizens United reduced regulation of campaign donations, but Mexico has limited campaign finance and TV advertising. It has encouraged the independence of electoral institutions and set federal standards in all 32 states, which have one voter list matched against one voter ID per citizen – rather than 50 states and 3,000 counties with different criteria. Electoral observers are trained about citizens’ rights and responsibilities, not mobilized out of distrust for the system or to intimidate voters.
  • Since the turn of the century, most Latin American countries have put greater emphasis on the rule of law and tried, albeit inconsistently, to address economic inequality and other threats to democracy and stability. They have also learned the hard lesson that sometimes “dirty elections” must be cleaned through broad citizen mobilization with the support of national and international leaders. Some observers wonder whether the Black Lives Matter movement will expand and evolve into a mobilization akin to the cacerolazos in Chile and elsewhere in the 1980s that helped galvanize opposition to the dictatorships of the era.

The chaos, isolation, and economic pain caused by COVID‑19 make Latin America’s democracy lessons even more pressing for the United States. Voters fear going to the polls and are anxious about trusting balloting systems, such as mail-in voting, that President Trump is trying to delegitimize. The U.S. military, wittingly or not, mobilized troops to support the President’s suppression of civil protests. U.S. voters are in unfamiliar territory.

  • The hemisphere is watching closely if – and how – El Norte figures out how to exorcise the fears and the doubt that are undermining its democracy. Bringing in a slew of smart and seasoned international election observers from Mexico and elsewhere would be a start. So would learning from the Mexican opposition parties how to subvert expediency, especially in the time of COVID, in favor of longer-term discipline for democratization.

October 6, 2020

* Todd A. Eisenstadt teaches political science at American University and is author of several books on democratization, including Courting Democracy in Mexico: Party Strategies and Electoral Institutions, for which he observed over a dozen local and national elections there.

Mexico: Competing State Strategies and Results on COVID

By Piper Neulander*

Disinfecting city street in north-central Mexico./ Carl Campbell/ Flickr/ Creative Commons License

In the face of Mexican President Andrés Manuel López Obrador (AMLO)’s relatively cavalier attitude toward the COVID‑19 virus, the governors of states as varied as Nuevo León and Oaxaca have implemented contrasting approaches – with different levels of success and political gains. AMLO’s response has been colored by relatively late shutdowns, limited ramping up of national-level coordination mechanisms, and the maintenance of strict austerity despite an extraordinary decline in economic activity. Yet state governments have a large degree of autonomy in Mexico’s federal system, and some have taken advantage of it. Nuevo León – a northern, industrial, relatively urbanized and wealthier state – and Oaxaca – a southern, more rural and poorer state – both initially followed AMLO’s hesitant lead towards the virus, but eventually diverged in their strategies.

Nuevo León

The governor of Nuevo León, independent Jaime Rodríguez, has adopted policies that have departed sharply from federal guidelines. The state began to count private and state labs’ coronavirus tests together and quickly, while the federal government still only had one lab to officially confirm tests. It also used its own measurement system in many industries to allow for slower, safer re-openings – developing 12 measures, rather than the federal government’s four – and cooperated with neighboring states to prevent spread of the disease.

  • These policies gave Nuevo León a fighting chance to slow the spread through its dense population and industrial workplaces. Early testing meant the state had a far more accurate initial count of cases, and local processing of the tests enabled faster action. While these steps made Nuevo León citizens more aware of the spread within their communities early on, they caught medical workers unprepared for the surge, prompting protests over the lack of preparation.

Oaxaca

Oaxaca Governor Alejandro Murat, who aligns himself closely with AMLO, took advantage of that relationship during the pandemic. The state received federal help from the military to build much-needed hospitals in the region – one of which AMLO personally inaugurated during a tour of the Istmo region. (It was unclear, however, if the hospital actually began operating upon inauguration.)

  • This strong partnership with the federal government, however, made the state vulnerable to the same pitfalls as national-level policies, including inadequate testing and slow identification of virus trends, contributing to striking lethality rates from COVID‑19 in certain Oaxacan counties. The county of Juchitán, for example, experienced an 18 percent fatality rate.

In Nuevo León, Rodríguez saw a huge boost in popularity during the early months of the pandemic – an average of 25 percentage point increase in various polls conducted between March and May. His approval rate for his handling of the COVID crisis specifically was 72.3 percent in June – one of the five highest approval rates among Mexico’s 31 states. In Oaxaca, where polling figures vary, most pointed to a 6.6 percentage point increase in Murat’s approval rate between May and July. Also in June, opinion on compliance with isolation and decreased mobility was at 68.3 percent approval in Nuevo León and 60.6 percent approval in Oaxaca.

The governors’ political fortunes seem to parallel the states’ health results. Rodríguez was successful on two fronts: relative success against the coronavirus, and clear success in grasping the moment for his own political purposes. He was smart to forge his own path against the virus, focusing on essential tools like testing and regional cooperation, and, despite the health workers’ protests, delivering quality care to victims of the disease. Rodríguez was consistent and clear with the public about the risks of the virus, allowed his Secretary of Health to guide a response to the virus, and harnessed his urban, industrially supported state’s strengths in his response, while avoiding many of the mistakes of the federal government. In Oaxaca, Murat’s close adherence to AMLO’s lead placed the state at a disadvantage in combatting COVID‑19. While he did also gain in popularity for his response, the gain was smaller. Much of Oaxaca’s actions were boosted by support from the federal government, making the state-level response less distinguishable from Mexico’s central government strategy.

September 18, 2020

* Piper Neulander is a student in the School of International Service focusing on Latin America.

The Perils of Quédate en Casa: COVID-19 and Gender Violence in Latin America

By Brenda Werth*

Women performing "A Rapist in Your Path" holding up signs

A Rapist in Your Path – Brasília/ Mídia NINJA/ Flickr/ Creative Commons License (not modified)

Stay-at-home orders during the COVID‑19 pandemic have had a devastating impact on women in Latin America and brought mass protests against gender violence to a screeching, and troubling, halt. Since the foundational march of NiUnaMenos in June 2015 in Buenos Aires, Latin American activists have revolutionized protest against gender violence in a spectacularly public way, bringing together hundreds of thousands of women and allies on the streets of major cities to denounce gender violence and demand protection of gender, sexuality, and reproductive rights. Since its debut last November, the flashmob Un violador en tu camino (A Rapist in Your Path), created by the Chilean feminist collective Las Tesis, has been performed in more than 200 cities around the world, decrying the role of the state and police in perpetuating gender violence.

  • Even as the coronavirus began to spread, movements against gender violence continued to expand. In March, millions of women marched to commemorate International Women’s Day to demand an end to femicide and gender inequality. In Madrid, among the posters condemning gender violence were some declaring “The patriarchy kills more than the coronavirus.” By March 15, however, Spain was on lockdown, and by the end of the month most Latin American countries had instituted either partial or total lockdowns. Suddenly, slogans condemning gender violence and demanding gender equality were replaced by the urgent message for people to stay home: “Quédate en casa.”

The stay-at-home orders have had severe consequences for women across the globe. In Latin America, where seven out of 10 femicides take place in the home, the weeks following the institution of quarantines saw surges in the reporting of domestic violence, primarily against women, children, and LGBTQ individuals. Calls to domestic violence hotlines increased 40 percent in Argentina, 60 percent in Mexico, and over 90 percent in Colombia. Financial precarity, unemployment, and lack of access to child and eldercare all exacerbated preexisting gender inequalities, creating a “perfect storm” for domestic violence.

  • Quarantines have proven crucial and effective in countering the health threat posed by coronavirus, but they have left victims of gender violence trapped under the same roof with their abusers. One unintended effect of quarantine is the reinforcement of the perception of domestic abuse as a private, family affair, separate from the public sphere, and excluded from the jurisdiction of the state.

Government responses to the increased domestic violence in Latin America have varied tremendously, ranging from acknowledgment to denial of the crisis.

  • Elizabeth Gómez Alcorta, Argentina’s Minister of Women, Genders and Diversity, has issued a resolution explicitly allowing individuals to leave quarantine in order to seek assistance and protection against domestic violence. The Argentine government has also collaborated in building innovative campaigns blending awareness of both pandemics – gender violence and COVID‑19. The Barbijo Rojo (red mask) campaign refers to a code word women may employ when talking to pharmacists to let them know they are at risk of harm and unable to seek out help.
  • In comparison, denial has guided Mexican President Andrés Manuel López Obrador’s response. His government has failed to implement any major policy changes to address the increase in gender violence during COVID‑19, and he has maintained that 90 percent of calls to domestic violence hotlines are false. According to AMLO, Mexico does not have the same problem as other cultures with domestic violence because “the Mexican family is exceptional.” The government’s campaign to address domestic violence during quarantine, Cuenta hasta 10, asks family members to “count until ten” before expressing anger in the home. According to Lulú Barrera, the campaign lacks “gender perspective” by disregarding the structural causes of gender violence and ultimately puts women at risk by asking them to sacrifice their wellbeing to maintain peace in the home.

While the health pandemic has highlighted the dire need for movements like NiUnaMenos and messages like that of  Un violador en tu camino to continue and expand, stay-at-home orders have halted collective public mobilizations and forced women to return to the private sphere of their homes. The movements have radically transformed awareness and perceptions of gender violence over the last five years, but the current crisis, including the alarming increase in domestic violence, shows the gender-violence pandemic remains strong and could get worse. Protecting public health through stay-at-home orders should not neglect the need to protect women. Solutions must be jointly envisioned and enacted by public health experts, activists, and political leaders.

June 29, 2020

* Brenda Werth is Associate Professor and Department Chair, World Languages and Cultures, at American University.

Mexican Migration Crackdown Creates a “Wall” Before the Wall

By Maureen Meyer and Adam Isacson*

A truckload of military police, wearing National Guard armbands, passes through central Ciudad Hidalgo

A truckload of military police, wearing National Guard armbands, passes through central Ciudad Hidalgo/ Adam Isacson, WOLA

Facing U.S. threats to impose potentially steep tariffs on Mexican goods last June, Mexico has adopted a series of measures along its southern border with Guatemala that, while somewhat effective at stopping the flow, seems a partial solution with high financial and political costs.

  • Mexican authorities’ apprehensions of migrants in June, after U.S. President Donald Trump tweeted his threats, reached 31,416. Captures that month and in July were three times greater than the same period in 2018. (The total of migrants and asylum-seekers apprehended by the United States and Mexico last year is estimated to be more than a million.)
  • Mexico deployed nearly 12,000 of its newly minted National Guard troops to the southern border states with Guatemala. Many identify themselves to visitors as “soldiers”; appear to have little (or no) specialized training for migrant interdiction; and wear military uniforms with black armbands that read “GN.” The Guard, however, has not reduced criminal activities against migrants. Local and international experts report that criminal elements assault, rob, rape and kidnap people transiting the area and prosecutors’ offices take little action to investigate these criminal attacks. Observers report that coyotes, working with corrupt officials, arrange safe passage for many migrants on designated “safe buses” for up to US$2,600 per person.
  • Local observers say the enhanced operations have largely shut down what was the most transited of the four main routes through which migrants have traveled in recent times, but some people are learning to take alternate routes through puntos ciegos (blind spots) where government patrols don’t often go and where risks for migrants can be greater. One such corridor, in central Chiapas, seems to continue to be exploited robustly.

The Mexican government has been reluctant to deal with the consequences of its acquiescence to Washington’s demands, according to numerous border-area observers. At its peak, the aggressive patrolling filled detention centers to far over capacity (some at 300 percent capacity) with poor health conditions and alleged mistreatment. Apart from the members of the National Migration Institute’s Citizen Council, officials have restricted independent monitoring of detention facilities by human rights groups and migration specialists. The country’s refugee agency is on the verge of collapse, yet the Mexican government has yet to allocate sufficient resources to it. Over the course of 2019, the Mexican Commission for Refugee Assistance (COMAR) received over 70,000 asylum requests – more than double in 2018 – but its 2020 budget is a mere US$2.35 million (4 percent of UNHCR’s budget for Mexico operations).

  • The U.S. push has put the administration of President Andrés Manuel López Obrador (AMLO) in a bind. On his first day in office, he signed a decree with Guatemala, Honduras, and El Salvador – from which the vast majority of migrants come – to address the underlying causes of the migration. Another agreement was reached with El Salvador, to fund programs to preserve and create jobs in agriculture. While the Mexican government has not left behind the focus on reducing the “push” factors of migration, it has been largely put on the back burner.

The Mexican government has put managing U.S. relations ahead of addressing the strategic migration problems it faces. It did not push back when the Trump administration announced it would be returning U.S.-bound asylum seekers to Mexico to wait for their hearings through the “Remain in Mexico” program, and under the threat of steadily rising tariffs up to 25 percent on Mexican goods, it has largely complied with nearly all U.S. demands. The results have been mixed, and the costs have been high.

  • Sources in the southern border region report that the National Guard deployment and other Mexican actions over the past seven months have reduced – although estimates range from “not very significantly” to “probably just around 30 percent” – the number of Central American migrants arriving in Mexico. Shelters are not as full as they were in mid-2019, but several remain very full. Data on other nationalities is sketchy, but anecdotal information indicates that Cubans, Haitians, and even Africans continue to find their way to shelters in the area.
  • In complying with U.S. demands, AMLO and his government have risked violating some of their fundamental stated values. AMLO had campaigned on independence, transparency and improved human rights, but the border deployments of the National Guard represent a further militarization of Mexico’s border security strategy – with a significant risk of human rights violations – and the detention of fearful Central Americans and extra-continental migrants in substandard conditions.

January 17, 2020

* Maureen Meyer is Director for Mexico and Migrant Rights at the Washington Office on Latin America (WOLA), and Adam Isacson is WOLA’s Director for Defense Oversight. The full text of their report is at The “Wall” Before the Wall: Mexico’s Crackdown on Migration at its Southern Border.”

AMLO’s Foreign Policy: A Blast from the Past, or Abandoned Dream?

By Laura Macdonald*

AMLO Cabinet

López Obrador stands with members of his cabinet for an official photo in December 2018/ Prensa AMLO/ Wikimedia Commons/ https://commons.wikimedia.org/wiki/File:Andres_Manuel_Lopez_Obrador_2.jpg

 

Mexican President Andrés Manuel López Obrador (AMLO) took office last January with a pledge to focus almost exclusively on his country’s many internal challenges, but international affairs have intruded upon his wish to downplay foreign policy, forcing him to make difficult compromises.

  • AMLO rode into office with the slogan “la mejor política exterior es la política interior” (the best foreign policy is domestic policy). Mexico’s high levels of corruption, impunity, entrenched poverty, widespread violence, and human rights violations were his top priorities. He was elected with a mandate to clean up the political system and crack down on the “mafia of power,” which he and millions of Mexicans perceived as the source of most of their country’s problems. The unpopular foreign policy of his predecessor, PRI president Peña Nieto – who tried to curry favor with President Trump and his family despite the U.S. President’s repeated insults to Mexico and Mexicans – encouraged a more nationalist response as well.
  • In his inaugural speech in the Mexico City zócalo, he laid out an approach to foreign policy based on themes of self-determination, non-intervention, peaceful solution to disputes, development cooperation, defense of human rights, and the rights of migrants. This position is reminiscent of the deeply rooted policy of non-intervention known as the Estrada Doctrine adopted by the Partido Revolucionario Institucional (PRI), the long-time Mexican dominant party, in the 1930s. AMLO’s political roots are in that party and reflect that heritage – he has said he won’t travel outside of the country except to sign international agreements and he skipped the June G20 summit in Osaka, Japan.

Nevertheless, the world has intruded upon AMLO. Trump’s statements and actions have forced him to act and react, and Central America’s crises have thrust him into an overwhelmingly hostile regional context. He has had mixed results:

  • Despite his previous opposition to free trade, AMLO made a strategic decision to renegotiate NAFTA and to refrain from direct confrontation with the Trump administration. Mexico was forced to accept various measures that may harm its interests in the long term, including the rules for domestic origin and intellectual property rights.
  • He has continued Mexico’s traditional principles of non-intervention and self-determination – the Estrada Doctrine – and advocated for the recognition of existing regimes instead of meddling in their internal affairs. This position has led to a break with the position of the Lima Group, of which it is still a member, regarding Mexico’s position so far has been vindicated by the failure to date of the Lima Group’s advocacy of regime change and the bellicose position of the Trump administration, but Mexico has not been seen to be playing a leading role in orchestrating negotiations in response to the Venezuelan crisis, and is isolated from the position of the U.S., Canada, and most Latin American states.
  • Despite early statements in which the AMLO administration cast migration as not inherently problematic and called for policies to address the causes of Central American migration, it subsequently shifted its position under intense U.S. pressure and agreed to policies that would limit the numbers of migrants crossing into the United States from Mexico and create a growing humanitarian challenge within Mexico itself.
  • As part of AMLO’s law of “republican austerity,” he has closed trade and agricultural offices in embassiesand consulates around the world, and has eliminated the offices of ProMéxico, which promoted international trade and investment into Mexico. Diplomatic staff, untrained in commercial issues, are supposed to take over their responsibilities. This decision, framed as scaling back the swollen ranks of highly paid public officials, will affect the government’s ability to diversify trade and investment away from the U.S. market and reduce its ability to defend the country’s interests in ongoing trade negotiations.

The AMLO government faces the daunting prospect of trying to respond to Trump without risking economic disaster or losing all shreds of national dignity. In the context of an already globalized economy, Mexico cannot achieve its domestic priorities without a recognition of the importance of foreign policy and active international engagement, in tandem with progressive allies – other governments as well as domestic and international civil society. So far, he has been able to navigate these shoals and retains high levels of popularity at home, but his economic policies focused on re-activation of the domestic market and have not yet born fruit. A more active and progressive foreign policy could help shore up his domestic and international legitimacy as the economy lags.

September 5, 2019

* Laura Macdonald is a Professor in the Department of Political Science and the Institute of Political Economy at Carleton University in Ottawa.

Does Mexico’s “3×1 Program for Migrants” Encourage Autodefensas?

By Clarisa Pérez-Armendáriz and Lauren Duquette-Rury*

Autodefensas

Autodefensa in Michoacan / Esther Vargas / Creative Commons

Mexico’s armed vigilante groups, or autodefensas, are more likely to exist in those municipalities where migrant organizations – called hometown associations (HTAs) – help fund projects back home in collaboration with local authorities. HTAs are voluntary civic associations or clubs located in migrants’ destination countries – the United States for Mexicans – comprised of individuals with a shared attachment to a common place of origin. HTAs raise funds that they send home to fund public goods such as roads, health clinics, potable water, electricity, drainage and sanitation, and schools, often in partnership with government authorities. Since 2002, the Mexican government has run a “3×1 Program for Migrants” that matches the remittances that HTAs send back to their origin community at the local, state, and federal levels of government

  • In a recent article, we analyze data from 2,352 Mexican municipalities in 2002-13 that show that vigilante groups were more likely to emerge in 2013 in municipalities where HTAs participated frequently (six or more times during a 10-year period). The vigilante groups are parochial organizations comprised of private citizens who, acting outside of the formal mechanisms or institutions sanctioned by the state, take up arms to provide security for their communities.

The repeated cooperation between migrants and state and local actors appears to enable community members to act collectively in security and justice matters as well as public good projects. Notably, the depth and frequency of contact are more important factors than the amount of investment and the presence of drug-related violence or activities. Mexico’s vigilante groups apparently are not merely a response to contemporary security crisis, state incapacity, or unequal access to security. Rather, they are a function of citizen capacity enhanced by transnational linkages, strengthened by 3×1, to mobilize collectively to provide security for their communities.

  • In contrast to research indicating that migrant-state transnational co-production partnerships contribute to strengthening democracy by enhancing collective organizational capacity through preexisting levels of social capital, resources, and knowledge, we find that HTAs and their communities can marshal their new capacity to form organizations that carry out informal, non-state, extra-legal armed actions. Autodefensas can threaten state capacity and the rule of law. While they tend to be community-based organizations and have contributed to reducing violent crime, the mechanisms for citizens to hold these groups accountable are limited and human rights violations and extrajudicial killings are common.

The 3×1 Program rules prohibit the funding of private security in municipalities. Program funds could conceivably be misallocated strategically, but doing so to fund nonstate armed groups would entail significant risks and costs. It would be easier for HTAs to simply reallocate their collective remittances toward projects – including public security –  outside of the 3×1 program.

  • The HTA’s motives merit further inquiry. While evidence is lacking to demonstrate that HTAs’ desire to protect their investments is a key factor in encouraging vigilante group formation, they and their local co-sponsors are indeed targets of extortion by criminal gangs. They may be seeking to protect their current and future public goods investments by adapting the successful transnational coproduction model for public good provision to specifically enable vigilante group formation in Mexico. The emergence of return migrants from the United States as key leaders of vigilante groups in 2013 –  including José Manuel Mireles and Luis Antonio Torres (“El Americano”) – makes the question of social and political remittances all the more compelling.

July 23, 2019

* Clarisa Pérez-Armendáriz  teaches Politics and Latin American Studies at Bates College and is guest editor with Ana Isabel López García (GIGA-Hamburg) of a Special Issue in the Journal of Ethnic and Migration Studies on how Mexican emigrants respond to and influence political violence in Mexico.  Lauren Duquette-Rury teaches sociology at Wayne State University and is the author of Exit and Voice: The Paradox of Cross-Border Politics in Mexico (University of California Press, 2019).

Mexico: Has AMLO Compromised on Human Dignity?

By Alexandra Délano*

Mexican Foreign Secretary Marcelo Ebrard speaks during a meeting in 2018, during which U.S. Secretary Mike Pompeo was present

Mexican Foreign Secretary- designate Marcelo Ebrard participates in a bilateral meeting with U.S. Secretary of State Michael R. Pompeo in Mexico City on October 19, 2018. State Department photo/ Wikimedia Commons

Mexico has always negotiated with the United States from a position of weakness – it depends on its northern neighbor economically and politically more than the other way around – but the recent negotiations, compromising its commitment to human dignity in exchange for avoiding tariffs, may be among the worst outcomes. Tariffs on Mexican products would surely be costly for Washington, as business leaders and Republican legislators have stated recently, but the much greater economic threat is to Mexico. As a result, Mexico has consistently sought to keep the issue of migration separate from trade and other priorities – a delinking that both countries have accepted for the sake of advancing economic integration.

  • Trump has destabilized that tacit agreement by asserting that maintaining the status quo in commercial relations will depend on new steps by Mexico to support expansion of barriers on its northern border, to better control its southern border, and to stop the flow of migrants from Central America. In addition to imposing the tariffs, Trump threatened to abandon the newly negotiated North American Trade Agreement (“USMCA”) and even to close the U.S.-Mexico border.
  • President Andrés Manuel López Obrador (AMLO) has opted for a strategy of minimizing confrontation with Trump. This has implied concessions such as accepting the return of persons awaiting asylum hearings in U.S. courts. Even though this policy, called the Migrant Protection Protocols (or Quédate en México), is not in an official agreement, and even though it does not go to the extreme of establishing Mexico as a “safe third country” – which would obligate migrants to claim asylum in Mexico instead of having the option of continuing their journey to the United States – it is an attempt to appease Trump and maintain the fragile balance in the relationship.
  • AMLO has taken other steps to placate Trump. For example, Mexico and the UN’s Economic Commission for Latin America and the Caribbean (ECLAC or CEPAL) recently announced a development plan for Central America that, although limited in scope and without apparent funding, is an important step towards addressing root causes of migration in the region.

AMLO’s government negotiated to increase its control of the southern border and to continue to host asylum-seekers awaiting a court hearing in the United States. It did so in the absence of an integrated migration strategy, and without a commitment to invest resources, at a time when the budget of the Mexican Commission for Refugee Assistance (COMAR) was just cut 20 percent. The Instituto Nacional de Migración (INM) is also ill-positioned to assume a greater role without addressing its need for the resources and measures necessary to root out corruption and reduce its over-reliance on detention and deportation. Officials from these organizations were not even included in the negotiations – further reflecting the lack of vision and interagency coordination on the migration challenges. Not surprisingly, the INM Commissioner resigned days after the agreement was announced.

  • Mexico’s policies also appear to neglect the need to strengthen multilateral mechanisms to compensate for its weakness in the face of U.S. pressure. Mexico has traditionally been one of the most active promoters of multilateral agreements on cooperation on migration issues, including the Global Compact on Migration approved last year, but it appears unable to build on these accomplishments to either counterbalance Trump’s pressures or guide an internal policy on what to do. It has also failed to build support among G20 allies, including Canada – its second most important trading partner and a player in the extractive activities implicated in driving emigration and internal displacement in Central America and Mexico.

Mexico’s migration policy at this point is very far from the ideals laid out by López Obrador. His primary concern has been to pursue the impossible goal of containing Trump without harming other interests. Above nationalist posturing – claims that Mexico will never negotiate away its dignity – is the need to protect the dignity of persons. A migration policy that prioritizes migration control and that is based on the mood swings of the United States’ government does not meet this basic criterion. It leaves Mexico in the same weak, isolated position from which it cannot negotiate agreements on labor mobility, humanitarian protection, and economic development. Mexico seems to have made a strategic error in response to Trump’s most recent tantrum – one likely to reoccur under even more challenging conditions as the 2020 election nears.

June 25, 2019

* Alexandra Délano is chair of the Global Studies Department at the New School in New York City. This article is adapted from her essay in El País on June 5, Lo que está en juego en las negociaciones con Estados Unidos: la dignidad humana.

U.S.-Mexico: Tariffs, Threats, and Trade Agreements

By Ken Shadlen*

Cargo ships

Cargo ships off shore of Galveston Island, TX / Jocelyn Augustino / Creative Commons / https://commons.wikimedia.org/wiki/File:FEMA_-_38860_-_Cargo_ships_off_shore_of_Galveston_Island,_TX.jpg

The United States’ threat last week to apply tariffs on imports from Mexico, unless Mexico revamped its approach to Central American migrants passing through the country, underscores the power asymmetries in the global economy – and undermines the credibility of U.S. trade agreements elsewhere. President Trump threatened to abrogate U.S. commitments under NAFTA (and the WTO) unless Mexico introduced measures in an area that is not addressed by NAFTA. While the tariffs won’t be applied, at least not now, and there is debate about just how much Mexico changed its migration policies as a result of Washington’s maneuver, the linkage between trade and “non-trade” issues such as immigration, especially within preferential trade agreements such as NAFTA, have deep implications for the political economy of international trade.

  • Many critics of Trump’s threats claim that immigration policy and trade policy are distinct, and that it makes no sense for the administration to link the two. But this misses the point: what is and is not “trade” is determined politically. Since the 1980s, the United States has conditioned market access on the introduction and enforcement of a wide range of “trade-related” policies, including investment, intellectual property, government procurement practices, and so on. Market size confers to the importing country the power to define what constitutes “trade,” and the definition of “trade” thus has changed according to Washington’s preferences. In that sense, Trump’s linkage maneuver is not at all new.
  • On the one hand, NAFTA is the outcome of massive linkage of this sort, as Mexico was required to introduce extensive changes to policies and practices in a range of trade-related policy areas in order to qualify for the agreement. On the other hand, NAFTA was meant to protect against further “ad hoc linkage,” with new conditions attached at the whim of the United States.
  • Prior to NAFTA, Mexico’s exports largely entered the U.S. market under the Generalized System of Preferences (GSP), which offers preferential market access to exports from developing countries under a wide range of conditions. But GSP preferences can be withdrawn unilaterally, and, as the importing country, the United States changed GSP preferences in response to its changing sentiments. Beneficiary countries always ran the risk of having the U.S. Congress and Executive attach additional conditions to the program, like ornaments on a Christmas tree.
  • NAFTA and other NAFTA-like trade agreements that have followed promised to deliver substantially more predictability and stability than the GSP.

Recent events question these premises. In 2017-18, Trump warned that Washington would withdraw entirely from NAFTA unless it was renegotiated on terms more to his liking. Last week’s threat to remove preferential market access unless Mexico changed its immigration policies and practices is precisely the sort of behavior that NAFTA was meant to protect against. The agreement supposedly replaced the unstable preferences of GSP, which were always vulnerable to the whims of U.S. politicians, with a new set of preferences that were clearly defined, had fixed conditions, and were less prone to being unilaterally withdrawn. But evidently it didn’t.

Washington’s actions are similar to if the Mexican government announced it would stop enforcing copyrights and patents of U.S. firms, unless the United States were to substantially increase science and technology assistance to help upgrade the stock of biologists, chemists, and engineers in Mexico. The reaction to such an announcement would be ridicule, and Washington would claim NAFTA (and the WTO) binds Mexico to protect intellectual property. The United States would assert, moreover, that its science and technology assistance is not covered by NAFTA; Mexico’s threat would elicit no change of behavior on the part of the US. 

  • Beyond NAFTA per se, these events make one wonder why any country would sign a trade agreement with the United States. After all, if countries already have preferential market access under the GSP, then one of the main benefits of reciprocal trade agreements is to lock-in and stabilize those preferences – even with the need to make substantial concessions on “trade-related” policy areas. If, in reality, only half of the bargain is locked in, if the benefits can be made to disappear at the whim of the U.S. President, then for many trading partners the benefits of such agreements will be unlikely to compensate for the costs.

June 11, 2019

*Ken Shadlen is Professor of Development Studies and Head of Department in the Department of International Development at the London School of Economics and Political Science.

Mexico: Gambling That Austerity Will Be Enough

By Juan Carlos Moreno-Brid*

Mexico City's Paseo de La Reforma

Mexico City’s Paseo de La Reforma / Flickr / Creative Commons

While continuing to emphasize his goal of reversing neoliberalism in Mexico, President Andrés Manuel López Obrador (AMLO) is pursuing a budgetary policy with austerity – not much-needed fiscal reform – as his top priority, at least for 2019-20. In his inauguration speech last December, AMLO repeated campaign themes deriding the neoliberal policies implemented in Mexico since the mid-1980s, blaming them, as well as rampant corruption, for the country’s slow growth, rising inequality, and widespread poverty. Since then, however, the President’s speeches on economic policy and his Secretary of Finance’s main policy documents have stated that all public-sector operations will be subject to strict austerity.

  • They have indicated that 1) there will be no fiscal reform in the first three years of the administration; 2) fiscal revenue will not increase this or next year as a proportion of GDP; and 3) in this period, the public sector will not incur additional debt. In other words, the implementation of AMLO’s proposed social and economic programs will depend on the availability of public revenues subject to the strict constraint of no additional resources through public borrowing or any tax reform. The government has made sharp cuts to government personnel and wages and eliminated various public entities, including ones created to attract foreign investment and tourism.

At the same time, AMLO plans to change the composition of public expenditures significantly to accommodate his top-priority projects, among them Jóvenes Construyendo el Futuro (a massive transfer of $180 per capita for an ambitious, and, in many ways, welcome apprentice program for up to 2.3 million youngsters); Sembrando Vida (planting a million trees); Adultos Mayores; and investment to put in place a Maya Train, building from scratch a new crude oil refinery in Dos Bocas, and revamping an airport in Santa Lucía.

More in line with AMLO’s stated intention of overturning neoliberalism, what Mexico really needs is a profound fiscal reform – strengthening public revenues, modernizing public investment strategies, and strengthening its development banks – to foster growth and equality with long-term debt sustainability and greater countercyclical capacity. It is a paradox that the new government chose to commit itself to a severely austere budget, reflected in cuts in public expenditures and an increased primary fiscal surplus.

  • The decision to refrain from tax reform, coupled with drastic austerity, imposes acute limits on the new administration’s ability to strengthen and modernize infrastructure, reduce income inequality through fiscal tools, or strengthen its capacity to act in a countercyclical way – not to mention alleviate major lags in the socioeconomic conditions of the poor population. The IMF, OECD, World Bank, ECLAC, the Centro de Investigación Económica y Presupuestaria (CIEP), Grupo Nuevo Curso de Desarrollo (UNAM), and many local think tanks have systematically underlined that Mexico’s tax revenues as a proportion of GDP are extremely low. According to the estimates of UNAM, CIEP, and others, those revenues are at least six percentage points short of what is needed to meet long-standing needs in infrastructure, health, pensions, education, and overall social security and protection concerns. By reducing the bureaucratic apparatus and public-sector wages virtually across the board, the administration runs the risk of further weakening the state’s technical capabilities in some key areas of public policy and thus undermining its ability to correct course.
  • The underlying reasons for the new government’s commitment to austerity seem to be more political than economic. It has stated that a significant amount of resources can be freed up by abating the rampant corruption, and it apparently believes that before implementing fiscal reform, the government must prove to the citizens that it can deliver efficiently, effectively, and with honesty. Whether there will be sufficient achievements in terms of economic growth and inclusion and in eliminating impunity to convince the middle and upper classes to accept a progressive fiscal reform three years from now is an open question, but the answer will determine Mexico’s economic growth path and progress in the reduction of inequality, poverty, and corruption, and perhaps too its social stability and the viability of its democracy in the future.

April 16, 2019

*Juan Carlos Moreno-Brid is a professor of economics at the Universidad Nacional Autónoma de México (UNAM).