Lost Highways

Can Mexico continue its impressive economic growth even as the drug war looks increasingly hopeless?

For more on Mexico's bloody future, click here. 

You can learn a lot about the state of Mexico today by looking at three roads. Paseo de la Reforma is a major urban thoroughfare in Mexico City, lined with banks, hotels, and shopping malls. Highway 101 in Tamaulipas is a modern four-lane highway, once a major artery for Mexicans returning home and tourists heading to Mexico City; now, it is littered with bodies. A series of seemingly arbitrary massacres has turned it into a no-go zone. The third road is a highway under construction in the mountains of the northwestern state of Sinaloa, which will spur trade and provide opportunities for the people of the sierra. But it will also offer the region's powerful drug traffickers -- among them Joaquín "El Chapo" Guzmán Loera, Mexico's most wanted man -- direct access to the U.S.-Mexico border. Which road Mexico takes is the big question.

More than 50,000 people have died in Mexico's drug war since December 2006 -- roughly 12,000 in the last year alone, according to media tallies. Last year, more people were killed in the cartel-ridden border town of Ciudad Juárez than civilians in Afghanistan. And there's no reason to believe the July 1 presidential election will turn the tide, as all three leading candidates have pledged to continue the fight against organized crime in spite of the bloodshed. Yet talk of Mexico as a failed state, which reached a peak in 2009, has been replaced by buzz about the country's impressive economic growth. Mexico is on track to grow more than 4.5 percent in 2012, its fastest growth rate in a decade. How can both of these things be true?

Although the headlines have been dominated by the drug-war dead, the beheadings and massacres, the innocent children caught in the crossfire, President Felipe Calderón -- whose approval rating remains above 50 percent -- has quietly been pushing much-needed reforms: State workers' pension systems have been overhauled; efforts have even been made to open the oil industry to private investment; and the country's growing middle class continues to make strides upward, with GDP per capita up 40 percent since 1988. Calderón can't run for reelection due to term limits, but the good economic news should give his struggling National Action Party, or PAN, a boost. According to a survey released by the Pew Hispanic Center in April, the net immigration flow from Mexico to the United States has stopped, and may have reversed, due in part to Mexico's improved economic performance relative to its northern neighbor. In some ways, the country appears to be on the right track.

Twelve years ago, the country celebrated its birth as a fully democratic country when the first free and fair elections resulted in the ouster of the Institutional Revolutionary Party, or PRI, which had ruled for 71 years. Multinationals flocked to the country: The Bank of New York Mellon, Credit Suisse, and Banque Toronto-Dominion all now have branches on Paseo de la Reforma in Mexico City. Today, Carlos Slim, a Mexican of Lebanese origin, is the owner of the communications giant Telmex and is the world's richest man. And the country's growing prosperity has continued even as the drug violence has worsened. Foreign direct investment, for instance, grew to $19.4 billion last year. More than 700,000 new jobs were created in 2010, the fastest growth in Mexico in 14 years; the number fell just short of that in 2011. The middle class continues to grow and the Mexican financial system weathered the economic crisis well, according to a March IMF report. (The IMF also praised Mexico's banks for being "profitable and well capitalized.")

Yet, in many respects, much in Mexico appears to have remained unchanged. Corruption is still rampant: A government drug czar was arrested in late 2008 on charges of taking money from traffickers. A dark cloud hangs over Wal-Mart de México, which allegedly paid millions of dollars in bribes to advance its expansion. Distrust in officialdom is as high as ever -- a recent survey by the respected pollster Consulta Mitofsky revealed that just 12.8 percent of the public has confidence in the presidency, and even fewer (6.1 percent) trust the police. Members of the media are under increasing threat and pressure of censorship from the cartels and even local officials, with dozens of journalists killed in recent years and even crime bloggers coming under fire. Officials quietly lament that they have failed to communicate their message to the people. When many officials speak -- "We're winning against the cartels"; "The drug war is not a war" -- many Mexicans are left shaking their heads in bemusement over what that message could possibly be.

If Mexicans often seem unsure as to whether they live in a flourishing democracy or on the brink of state failure, it may be because there aren't institutions or public figures with enough credibility left to define a narrative for the country. With the Catholic Church losing its grip on the masses and increasingly out of touch (one church official declared that Mexico City's liberal mayor was doing more damage to the country with his progressive policies than the drug traffickers), in recent years many Mexicans have looked elsewhere for a charismatic messiah figure or inspirational crusader. But though they have found an initial spark in Isabel Miranda de Wallace (a mother who tracked down her son's kidnappers) and poet Javier Sicilia (who led a march through the country after his son was murdered), these characters have largely failed to live up to expectations, in part because they are intent on remaining ordinary citizens.

It's unlikely that any of the three presidential candidates will capture the country's imagination, either. Andrés Manuel López Obrador, commonly known as AMLO, lost the 2006 election amid allegations of fraud. Since then, he has campaigned nationwide incessantly, traveling to every single one of Mexico's 2,456 counties and decrying the "mafias" that run the country -- a category that includes the presidency and the mainstream media, in his eyes. His most recent rhetoric, however, has been toned down -- he has pledged to withdraw the Mexican Army from the streets, for instance -- earning him the derisive nickname AMLOVE. He has been gaining ground in polls, but still trails Enrique Peña Nieto, the PRI's candidate.

Peña Nieto has failed to provoke any real heartfelt response from the public besides ridicule. A handsome face with a dubious track record as governor of the famously corrupt Estado de México, a state that surrounds Mexico City, Peña Nieto has made blunder after blunder on the campaign trail. His best gaffe: failing to name three books that had influenced his life at the Guadalajara International Book Fair last year. No need for serious concern, however: Peña Nieto appears to be backed by the Televisa conglomerate; his wife is a soap opera star; and the average Mexican only reads one book a year. Barring an AMLO surprise finish (which after 2006, cannot be completely discounted), and in spite of allegations that Televisa sold news and entertainment content to promote Peña Nieto (he denies this and has claimed the documents are fraudulent), he looks likely to take the presidency, even if some critics fear he'll simply be a puppet for the infamous PRI dinosaurs who have run the party for decades.

Josefina Vázquez Mota, meanwhile, is a woman, which could put her in good stead in a country eager for change. A former education secretary, she has good ideas and good credentials. But she's not seen as a political heavyweight, and her statements about the war on organized crime have failed to dazzle. "My conviction is that to confront organized crime, there can be no room for negotiation," she told me in an interview. And so far, Vázquez Mota has delivered her own gaffes to match those of Peña Nieto. On March 30, for instance, she claimed that if elected, she would "strengthen money laundering," a mistake for which she was widely mocked.

While Peña Nieto and Vázquez Mota would likely continue down the same road vis-à-vis U.S. cooperation on the drug war (though they have pledged to scale back the use of the military), there is always the possibility that the leftist AMLO would follow the lead of Bolivia's Evo Morales and expel the U.S. Drug Enforcement Administration (DEA) from the country. But that's unlikely, given that the United States is doing its utmost right now to help Mexico instill peace and governability. The DEA and other U.S. agencies have expanded their presence in Mexico to support both law enforcement and institution-building, moves that have not been met by the traditional jingoistic cries from the Mexican intellectual elite or the left.

This cooperation is starting to show signs of success. The use of U.S. drones in Mexico to gather intelligence on alleged drug kingpins has not caused great outcry. Intelligence sharing continues to result in the capture or killing of major drug lords. There are now two compounds in Mexico City where U.S. military advisors work with their Mexican counterparts; according to diplomats from both sides of the border, relations at 35,000 feet are smooth sailing, in contrast to fiery border rhetoric in Texas and Arizona. The bungled Fast and Furious operation (in which U.S. agents lost track of guns they had bought and allowed into Mexico in a bid to entrap high-level weapons buyers) and the recent case of mistaken identity in the arrest of a used-car salesman thought to be El Chapo's son have been highly embarrassing for authorities on both sides of the border, but are unlikely to unhinge future cooperation.

Perhaps more crucially, from a political point of view, is the reality that the violence has not deterred investors, foreign or domestic, who realize (unfortunately) that a high body count does not necessarily translate to financial losses. Although the violence appears to be everywhere due to massive media attention, it has largely been confined to hot spots that have historically been insecure. (The notable exceptions are Acapulco, where the tourism industry has suffered immensely from drug-related killings, and Monterrey, where business has been adversely affected.) And for all the criticism of his handling of the drug war, few can dispute that Calderón and his economic team averted disaster during the economic crisis. With the violence still feeling remote for many, none of the candidates is likely to deviate significantly from Calderón's tactics.

But Highway 101 is still very much on voters' minds. The site of beheadings and indiscriminate killing in the state of Tamaulipas is now known as the Highway of Death and understandably draws more headlines than the Paseo de la Reforma. But neither of these roads defines the country today. Instead, it's the third road -- the one leading through the hills of Sinaloa to the major smuggling plaza of Ciudad Juárez, a road that will facilitate both international trade and drug trafficking -- that may well be the road to Mexico's future.



Containing the Islamist Revolution

The next American president would be naïve to think that the uprisings sweeping the Middle East will be good for America. It's time to retrench and protect U.S. interests from the Islamist tidal wave.

When politicians are in election mode, they can see nothing but victory. All decisions, all considerations, are subservient to one question: how they can convince voters to check their name at the ballot box. As someone who ran for office nine times, I know what I am talking about. But for the candidate who wins the election, and for the voters, there is always the day after.

The rise of anti-Western Islamist movements -- exemplified this week by the victory of the Muslim Brotherhood's Mohammed Morsi in Egypt's presidential election -- represents a grave threat to U.S. interests and values in the Middle East. The next president of the United States, on the day after the election in November, will have to cope with this new reality. If he is to be successful, he must develop a strategy that takes into account the new state of affairs in this region and develop a long-term strategy to unite America's friends and confront its enemies.

Unfortunately, the new reality in the greater Middle East is bad for the United States and its allies, including my country. Most importantly, the president should recognize that Islamist forces are on the move: They have seized control from Waziristan to the Atlantic Ocean in almost uninterrupted territorial contiguity. Afghanistan, Iraq, Syria, Lebanon, and Libya are at the midst of a brutal and destructive battle for their identity. Their future territorial integrity is in doubt. In these five countries, and now in Egypt, the Islamist and extremist forces have the upper hand. The media has already replaced the term "Arab Spring" with "Arab Awakening." Sooner rather than later, it will be replaced again by "Islamist takeover."

In no country are these Islamist forces friends of the United States. The extremists among them despise its culture and way of life. They deplore its status as a global superpower. The pragmatists are ready to receive U.S. financial and military aid, but will not heed U.S. advice on foreign and domestic policy.

As Islamist movements gain strength, America's traditional allies are wavering about how to confront this new threat. They doubt the loyalty of the United States, and wonder if they will enjoy American backing and support when they need it most. They are exploring other options to protect their interests.

Nor are there any glimmers of progress when it comes to the Israeli-Palestinian dispute. The Israeli government continues to expand and foster settlements in the West Bank. The Palestinians -- to whom everybody, including their Arab brothers, have given a cold shoulder -- are swept into a dangerous despair and growing radicalization. The lack of a serious Israeli-Palestinian dialogue is leading to a binational state, which would signal the end of the Jewish national dream and the Palestinian one.

The complete international illegitimacy of the settlement project and of the occupation aimed to protect it -- combined with the combustibility of the Israeli-Palestinian conflict -- is a liability for U.S. foreign policy. It will remain so even if other parts of the world become a higher priority to the United States than the Middle East.

Both U.S. presidential candidates and their advisors need to begin thinking about the day after the election, and how the next American president will deal with this complex reality. As one who lives in the midst of it, here is my advice.

First, the president has to ignore the naïve illusions about an "Arab Spring." Neither romantic expectations surrounding the emerging new forces nor a guilt complex about supporting authoritarian regimes should affect practical statecraft. Egypt's Hosni Mubarak and Libya's Muammar al-Qaddafi have not been replaced by enlightened democrats. Neither will Bashar-al-Assad.

The few friends the United States has left in the Middle East should be bolstered and linked together in a new alliance. The United States can build a new regional axis to confront Iran and the radical Islamists. This axis should stretch from the Mediterranean to the Gulf, from Tel Aviv to Abu Dhabi. It should be based on the Gulf Cooperation Council states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), and Jordan, Israel, and Palestine. Call it the GCC plus JIP. It's an alliance that would boast huge economic growth potential and substantial military strength.

The common denominators of the members of this new alliance are the need to defend themselves against Iran and radical Islam, friendship with Western democracies, and the commitment to building a region based on peace and economic cooperation.

The new axis will change the regional balance of power. It will emerge as an alternative model to the bloody chaos and economic incompetence of radical Islam, and it will draw a clear line on the region's map that Iran's expansion cannot cross. This model is not yet fully realized and fundamental reforms will be required to bring it to fruition. But with U.S assistance, if requested, these can be implemented wisely and without bloodshed.

Israeli-Palestinian peace is indispensable for the formation of this new regional alliance. It is not only vital if Israel wishes to strengthen its ties with the Arab Gulf states, it is a necessary step to prevent the disappearance of the democratic Jewish state that we Israelis fought for.

There are two practical obstacles blocking the way to an Israeli-Palestinian agreement, however. First, there is the need to relocate the roughly 120,000 Israeli settlers who now live in the West Bank in areas that will become a future Palestinian state. Second, there is the need to provide new jobs, proper housing, and a better future to the hundreds of thousands of Palestinians refugees inside and outside the territories who live in poverty and despair.

These two problems are not only political, they are economic. And they can be removed through an international financial initiative led by the United States.

The G-8 states should raise $5 billion per year over five years to enable Israel to relocate the West Bank settlers, mainly through the development of the Negev and Galilee areas in southern and northern Israel. Although the small core of ideological, hardline settlers will reject this incentive, the mainstream of Israeli society, as well as the law-abiding majority of settlers, will not turn it down. 

During the same five years, the wealthy Arab states, including those in the Gulf, should allocate the same amount of money for the economic benefit of the Palestinian refugees. These economic gains would not be in the form of handouts and welfare vouchers -- they would be meant to spur economic development, which will create jobs, vocational education opportunities, and offer Palestinians a hope for a better future.

The flow of these funds -- to the Palestinian Authority (PA), to Jordan, to Israel, possibly to Lebanon -- will inevitably bring political change. They will strengthen Jordan and the PA and offer the people of Gaza a horizon of hope that Hamas can never give them.

At the same time, the people of Israel will have to choose between two outcomes: a troubled, isolated, binational state or a Jewish state on 78 percent of the land between the Jordan River and the Mediterranean -- a state where the north and the south are as economically strong as Tel Aviv. There is no contest between these possible futures: Given these terms, an overwhelming majority of Israelis will prefer a two-state solution over a binational state, with all its negative repercussions.

For the G-8 and Arab states footing the bill, the financial burden of the combined $50 billion might seem overwhelming -- particularly at this point of world economic distress. These funds, however, are an investment in a more stable Middle East -- the sums are much less than the direct and indirect damage that the unresolved conflict will inflict. Just think of how much money the United States spent trying to stabilize Iraq.

Building a strong axis of moderates in the Middle East is doable, if there is the will in Washington. And if a revolutionary, secular, and democratic change occurs in Iran, then the new Iran will be a natural member of this alliance. Shia-Sunni tensions in the Middle East will subside. On the other hand, as long as the ayatollahs prevail, their regime will face an economically and militarily powerful regional front.

Today, those who deal with the Israeli-Palestinian conflict inspire cynicism and despair. But cynics are not the ones who change history -- people with faith, vision, and courage do. This is what is expected of the man who will lead the United States after November 2012.