Mexico's False Dawn

Don't believe all the rosy news about Mexico's rise -- this emerging economy is still stuck emerging.

MEXICO CITY — Mexico begins the new year with unusual optimism. People here have new hope that the worst of the drug war has passed, and the economy has returned to growth after a brutal recession. But in Mexico, things often aren't what they seem: Is this country really changing for the better, or is it just on a lucky roll?

The country's promise -- and its problems -- have been on full display during President Enrique Peña Nieto's first few weeks in office. Residents of the notoriously violent city of Juárez enjoyed the first weekend without a homicide in five years -- but the majority of the police force of another town in central Mexico resigned amid a spate of attacks. Families flocked to downtown Mexico City over Christmas to skate around the ice rink that is set up every year -- but just three weeks ago, the same area had been the scene of mayhem and violence as protesters demonstrated against what they saw as Peña Nieto's fraudulent election victory.

Much of Mexico remains very violent, but the killings have ebbed somewhat from the worst days of the drug war. In recent years, its homicide rate has stood at more than three and a half times that of the United States. But there has been incremental improvement: In a (probably incomplete) tally, the daily Reforma counted about 9,800 gang-related murders in 2012 -- down from 12,366 in 2011. Alejandro Hope, director of security policy at the Mexican Competitiveness Institute, says all murder -- perhaps a better indicator than just cartel-related counts -- was down about 8 percent in 2012.

So though there were still four times as many gang murders as in 2007, last year's drop has brought a sense of relief. In Juarez, businesses are reopening and night life is returning. Vacationers flocked back to Acapulco after a massive military effort there. It reminds me of the more extreme situation I saw covering the Iraq war, as people became almost giddy in 2007 when bombings dropped from several times a week to just a few times a month. There, people used to say that a dying man is happy to find out he's only sick. U.S. commanders called it a "tolerable" level of violence.

But preventing another deadly spiral of violence depends on how much the change is due to strengthened Mexican institutions. In a recent conversation, Hope listed encouraging signs: The government doubled and tripled security budgets over recent years, and the police and military improved their tactics. The security forces have been going after midlevel narcos, which cut cartel capabilities but don't create the violent power vacuums that occur when kingpins are toppled. Others note that the feds have smartly disbanded entire local police forces, which are often too corrupt or intimidated to do any good, before starting anti-crime sweeps.

But the drop in violence could also be fueled by less encouraging factors. When it comes to Juarez, for instance, nobody can agree on the reasons behind the dramatic drop in violence. Mexico may be less deadly because cartels have sorted out their turf and consequently have less reason to fight. A drop in cocaine use in the United States, Hope said, has probably reduced shipments to the north, resulting in fewer drug-related killings. And one crime expert wrote that the cartel wars may have expended the supply of street-level killers -- for now.

"It could always start up again," Hope says. "We're going to be battling organized crime for generations."

Last year raised doubts that law enforcement is up for that battle. In June, three federal police were killed by their colleagues in a food court at Mexico City's airport, apparently as one group tried to arrest the others for smuggling. Another 14 federales were charged with ambushing a car carrying CIA employees and a Mexican Navy captain in August. The federal police has been an independent force and was key to former President Felipe Calderón's anti-drug strategy -- but Peña Nieto is now folding it into another ministry and forming a "gendarmerie" to fight cartels. And though the Marines scored big when they killed the country's most feared cartel leader, Zetas chief Heriberto Lazcano, in a gunfight, they actually didn't know who he was at the time and his corpse was quickly stolen.

Similar questions surround Mexico's economy. It has approached or surpassed 4 percent growth each of the past three years, but whether it can continue its progress remains anyone's guess. Some think it can: A recent rosy-with-caveats report in the Economist stated that the country's turnaround will probably make it one of the world's top 10 economies in 2020, while the World Bank reported that, between 2000 and 2010, 17 percent of the population joined Mexico's middle class.

Read between the lines, however, and Mexico's economic success story becomes more complicated. The World Bank study about a booming middle class, for instance, defined middle-class incomes as starting at only $10 a day per person. A recent U.N. survey of 18 Latin American countries showed nearly all of them reducing poverty over the last decade -- with all but two doing so faster than Mexico. And the new middle class often still relies on remittances, which total more than $21 billion annually, from relatives in the United States. Those funds still surpass the country's foreign tourism revenue -- it's the age-old "exportation" of Mexico's unemployment for cash.

Mexico's economic progress is also still tied to forces beyond its control. The new economy has been aided by the end of the U.S. recession, which has improved exports and released pent-up demand. Chinese wages are rising, making Mexican factories more competitive. Decent oil prices have also been key, as energy revenues fund a third of the country's budget.

But leaving itself at the whim of outside forces isn't a recipe for continued success. Long-term free market prosperity requires better education, infrastructure, and equal opportunity enforced by law. The country has made progress, holding three messy but competitive elections since 2000 under a more powerful elections commission. The Supreme Court is more independent and has issued important rulings, such as reining in some military powers. There's been a bloom of civil society groups using freedom-of-information laws to extract data from the government, evaluating schools, recording human rights abuses, and exposing corruption. And Peña Nieto is pushing a plan to improve the notoriously poor schools by vetting the country's teachers, who are now nearly impossible to fire.

Peña Nieto described the problem at his inauguration, saying, "We are a nation that grows in two gears. There is a Mexico of progress and development, but there is another as well that exists in backwardness and poverty."

There are still plenty of elites who probably value their privileges more than the patriotic feeling they'd get from seeing their country advance. Mexico has had long periods of macroeconomic growth, including from 1940 to 1982, but it was often built on harsh conditions and little mobility for most Mexicans. Today, monopolies or duopolies still exist in fields ranging from food production to broadcast television, and billionaire Carlos Slim's conglomerate still controls the telephone and Internet markets. Well-connected criminals and informal syndicates extract protection money and determine who can mine coal, produce avocados, and even open street stands. Oil profits are reportedly sapped by corruption and smuggling within the state oil company, which Peña Nieto promises to reform. The self-styled "president for life" of the teachers union, political kingmaker Elba Esther Gordillo, has vowed to fight Peña Nieto's school reforms. Meanwhile, the country fell four years straight from 2008 through 2011 on Transparency International's Corruption Perceptions Index.

New regulations must simultaneously encourage growth while protecting workers from abusive corporate bosses. The business community hailed new labor laws issued in December that make it easier to hire and fire as a sign of a new Mexico. That sounds good for growth, but labor activists fear a blast from the past, saying the law preserves exploitative practices like coercing workers to sign repeated temporary contracts in order to avoid paying overtime and benefits. They say the reforms also still allow politically connected unions to enter factories without employee approval and get paid by bosses to silence workers. No wonder full-timers still live in poverty.

And when it comes to the business of government, political rules leave polls more beholden to parties than the public, with a one-term limit that makes mayors and governors rely on party machines for their next job. Additionally, the absence of a presidential runoff allowed Peña Nieto to win office with just 38 percent of the vote in a four-way race.

For now, Mexico and its new president have some momentum. But Mexicans know that good times can quickly turn bad. On New Year's Eve, revelers in Mexico City lit fireworks and street bonfires to ring in 2013 -- so many, in fact, that smog alerts had to be issued in the capital.



Al Qaeda Country

Why Mali matters.

Read Peter Chilson's gripping new ebook on the lost country of Mali.

In 1893, in West Africa's upper Niger River basin -- what is now central Mali -- the French army achieved a victory that had eluded it for almost 50 years: the destruction of the jihadist Tukulor Empire, one of the last great challenges to France's rule in the region. The Tukulor Empire's first important conquest had come decades earlier, in the early 1850s, when its fanatical founder, El Hajj Umar Tall, led Koranic students and hardened soldiers to topple the Bambara kingdoms along the banks of the Niger. Umar imposed a strict brand of Islamic law, reportedly enslaving or killing tens of thousands of non-believers over a half century. He is said to have personally smashed to pieces captured idols, and once told a French officer he encountered at a well guarded fort to "Go back to your own country, accursed man." Umar traveled widely, prophesying the end of French rule and preaching about the paradise that awaits those who die by jihad. Killed in the explosion of a gunpowder cache in 1864, it still took almost three decades for the French to wrest control over the middle and upper reaches of the Niger River, including Timbuktu and much of the desert to the north.

Now, the jihadists are back and so are the French -- the two sides slugging it out over the same real estate they fought over 120 years ago. An alliance of jihadist groups, including Ansar Dine, the Movement for Oneness and Jihad in West Africa, and al Qaeda in the Islamic Maghreb, have retaken Timbuktu and again threaten the area of the upper Niger and Senegal Rivers, where the French once built stone fortresses to fend off Umar's attacks. The forts are still there, long abandoned and crumbling along the riverbanks. Over the past 10 months, jihadist forces have re-established the rule of Islamic law across northern Mali, which encompasses around 200,000 square miles or 60 percent of the country. This is a place where teenage couples risk death by stoning if they hold hands in public.

If Mali feels somewhat far away or less than important, consider this: Northern Mali is currently the largest al Qaeda-controlled space in the world, an area a little larger than France itself. U.N. Secretary General Ban Ki-moon has warned that Mali could become a "permanent haven for terrorists and organized criminal networks." In December, Gen. Carter F. Ham, commander of the U.S. Africa Command, warned that al Qaeda was using northern Mali as a training center and base for recruiting across Africa, the Middle East, and Europe. Jihadists operating in northern Mali have been linked to Boko Haram, the violent Islamist group based in northern Nigeria, and to Ansar al-Sharia, a group in Libya which has been linked to the attack on the U.S. consulate at Benghazi that killed Ambassador Chris Stevens and three other Americans.

Until last week, Mali appeared to be in a state of semi-permanent standoff, split between the jihadists in the north, and what remained of the Malian army and government in the south. But a sudden jihadist advance into the south shattered the fragile equilibrium, drawing France into the fray. On Jan. 10, jihadist rebels overran the strategic central Malian village of Konna, then the northernmost outpost under government control. The rebel forces had been spotted leaving Timbuktu days earlier in a long column of some 100 vehicles and 900 rebel soldiers.

For the French, the fall of Konna proved not only that the Malian army has not recovered from its March defeat by Tuareg rebels and jihadists in the north, but also that it cannot protect the rest of the country. Faced with this reality, the French launched an air campaign to drive the jihadists back, and dispatched ground troops -- soon to number 2,500 -- to secure Mali's capital, Bamako, and to reinforce Malian army positions bordering the north. By Jan. 12, French airstrikes had driven the jihadist rebels out of Konna.

The French government has repeatedly said that the Malian government asked for its help after the fall of Konna. But there is also a less selfless reason for Paris's urgency: fear that a growing al Qaeda presence in West Africa will make France itself more vulnerable to terrorist attack. French President Francois Hollande said as much on Monday, warning that the jihadist groups in Mali pose a threat that "goes well beyond Mali, in Africa and perhaps beyond."

France's decision to lead the intervention in Mali ended months of handwringing over how to implement the Dec. 20 U.N. Security Council Resolution, which established an ill-defined "Mali Support Mission." The resolution approved a force of 3,300 African troops to be raised from Mali's neighbors -- mainly Nigeria, Burkina Faso, and Niger, as well as Togo, Benin, and Ivory Coast -- which were expected to take on the rebels toward the end of 2013. But the resolution provided no timetable for an invasion of the north and no way to pay for it or to equip and train the African troops. France and the leaders of the Economic Community of West African States (ECOWAS) have been slowly securing help from Britain, Germany, and the United States for training and logistics help. But the fall of Konna and fresh worries about the vulnerability of the rest of Mali to jihadist takeover forced the hands of both France and ECOWAS.

Now French troops are in Mali and troops from Mali's neighbors began arriving in Bamako this week, though it's still not clear how or when the African troops will go into action. France's ambassador in London, Bernard Emié, told the BBC on Monday that the African troops still require training and equipment. The jihadists, meanwhile, have counterattacked, taking another village in Segou province -- one of the first regions the Tukulor Empire conquered 165 years ago -- and pushing to within 300 miles of the capital. France's military action will test just how strong the jihadists are. According to French and U.S. officials, they are both well-trained and heavily armed, having captured equipment from the Malian army last spring and acquired additional weapons from Libya, itself awash in weapons after the fall of Muammar al-Qaddafi. The officials say al Qaeda in the Islamic Maghreb is also well funded, having raised around $100 million from kidnappings in Mali in recent years, including the kidnapping of a Frenchman near Mali's border with Mauritania in November 2012.

Mali today is a country of surprising reversals and disappointments. The splintering of the country began with a Tuareg rebellion in January 2011, the fifth such uprising since 1960. But the Tuaregs' push to establish their own state was derailed last summer by jihadist groups who were better organized and funded -- and the Tuaregs have since offered their support for the Malian government's struggle to drive the jihadists from the north. The uprising also led to the demise of Mali's 20 year-old democracy, when in March junior army officers unhappy with the government's inept handling of the Tuareg situation launched  a coup d'état. The resulting chaos led to the collapse of Mali's army in the north, aided by the defection of entire Malian army units of Tuareg commanders and soldiers. In May, the junta in Bamako barely survived a second coup attempt by a paratrooper regiment loyal to the deposed civilian government. Days later, a mob of boys and young men stormed the presidential palace and beat up the junta's own puppet civilian president. Since then, the Malian junta and its civilian front men have waffled on accepting foreign military aid to oust the jihadists, insisting with wounded pride that the army can do the job itself.

Last May, I visited Col. Didier Dacko, commander of what remained of Mali's army, at the largest Malian army base along the border with the north. I asked him to respond to a quote I'd gotten from a Western diplomat in Bamako, who told me the Malian army has never been strong. "It is an army of farmers," the diplomat had said. Dacko shrugged when I read him the quote and replied, "Malians are not used to instability."

And he's right. Mali has been at peace since 1893 and now the jihadists have returned to stir the national memory. For the moment, Malians in the south seem to welcome the French intervention, though the legacy of colonialism has left many West Africans skeptical of just about anything Paris does. To this day, for example, many in West Africa and in Mali remember El Hajj Umar Tall not as a jihadist, but as an anti colonial crusader. It's hard to imagine French troops would be welcome for very long in Mali or anywhere. And the jihadists want to reinforce that point.

"France has opened the gates of hell," one Islamist leader in Mali, Oumar Ould Hamahar, a member of the Movement for Oneness and Jihad in West Africa, told Europe 1 radio in a phone interview in response to the French bombing campaign. "It has fallen into a trap much more dangerous than Iraq, Afghanistan or Somalia."

France has promised to stay in Mali until the country is stable again, but Paris has said that it wants to position African troops to do the heavy work of dislodging the jihadists from the north. Still, France may be unable to avoid a long engagement with its own military forces right out front. A French armored column has already rolled out of Bamako, headed for the north. Even with air strikes -- there have been more than 50 so far -- and French troops on the ground it will still be some time before an African force is ready for a major push. Taking back Mali's northern cities, such as Timbuktu, Gao, and Kidal, may be the easiest task. Mali's vast northern desert is a hard place to live, not to mention wage war. For eight months a year, the daytime temperature exceeds 120 degrees Fahrenheit in a vast and unpopulated land that is easy to hide in, especially for the jihadist forces who know the territory well. Any army, no matter how large and well equipped, will have a tough time driving them out.

For now, it appears as if a piece of El Hajj Umar Tall's empire has survived after all.