Narcos, No’s and Nafta
This is a strange time for U.S.-Mexico relations. The Mexican government just issued a travel advisory warning Mexicans about going to Arizona — where they could get arrested by the police for no reason — and the U.S. government just issued a travel advisory warning Americans about going to northern Mexico — where they could get shot by drug dealers for no reason. Meanwhile, Wal-Mart de Mexico is expected to open 300 new stores in Mexico this year, thanks to growing Mexican demand for consumer goods. And Mexico’s drug cartels will probably open just as many new smuggling routes into America thanks to our growing demand for marijuana, cocaine and crystal meth.
We take the Mexican-American relationship for granted. But with the drug wars in Mexico turning into Wild West shootouts on city streets and with our own immigration politics turning more heated, what’s happening in Mexico has become much more critical to American foreign policy and merits more of our attention. Mexico is not Afghanistan, but it also has not become all that it hoped to be by now. Something feels stalled here.
Three groups are now wrestling to shape Mexico’s future. I’d call them “the Narcos,” “the No’s” and “the Naftas.” Root for the Naftas.
The Narcos are the drug cartels who are now brazenly attacking each other in turf wars and challenging the state for control of towns. The success of U.S. and Colombian efforts to interdict drug trafficking through the Caribbean and north from Colombia have pushed the cartels to relocate their main smuggling up through the spine of Mexico. President Felipe Calderón is bravely trying to take them on, but the Narcos have bigger guns than the Mexican Army — most smuggled in from U.S. gun stores.
The Mexican daily Reforma reported last week that “the recent wave of insecurity in Mexico has made businesses related to public security, automobile armoring, insurance, satellite positioning systems and bulletproof vests grow at an unprecedented level.” Companies in Mexico, it added, now invest between 1 percent and 3 percent of their sales in security. In 2006, it was just 0.5 percent.
While the Narcos are the rising bad-news story here, the rising good-news story is Mexico’s burgeoning middle class — sort of. Mexico has two middle classes. One lives off the oil pumped and exported by the state oil company Pemex, which funds 40 percent of the government’s budget. That budget sustains a web of salaries and subsidies to teachers’ unions, national electricity company workers, farmers unions, state employees and Pemex workers.
I call this group the No’s because they are the primary force opposing any reform that would involve privatizing state-owned companies, like Pemex, opening the oil or electricity sectors to foreign investors or domestic competition, or bringing best-practices and accountability to Mexican schools, where union control has kept Mexico’s public education among the worst in the world.
Fortunately, though, there is another rising middle class here, which the Mexican economist Luis de la Calle describes as the “meritocratic middle class.” It’s people who came from the countryside to work in new industries spawned by Nafta. This rising middle class has a powerful aspiration to dig out of poverty. Mexico has standardized school achievement tests, so you can see how well schools in one neighborhood stack up against another. Some of the best results, said de la Calle, can now be found in small private schools in poor Mexico City neighborhoods where the Naftas reside.
What is also striking, he added, are the names of the private schools in some of these poor Mexico City districts — like Iztapalapa: “They are called John F. Kennedy, Abraham Lincoln, Isaac Newton, Winston Churchill, Carlos Marx, Van Gogh and Instituto Wisdom.” Why such names? They are appealing to the aspirations of Mexicans, about 40 percent of whom live below the poverty line but 75 percent of whom identify themselves as “middle class” in polls.
De la Calle also studied the top 50 Mexican baby names in 2008. The most popular for girls, he said, included “Elizabeth, Evelyn, Abigail, Karen, Marilyn and Jaqueline, and for boys Alexander, Jonathan, Kevin, Christian and Bryan.” Not only Juans. “We have two middle classes,” he said. “One comes from teachers’ unions and Pemex and power companies, who milk the Mexican government. These are the middle-class conservatives, and they want to preserve the status quo. But there is a rising and far larger Mexican middle class coming up from the bottom who send their kids to the Instituto Wisdom and who have a meritocratic view of the world.”
So here’s my prediction: When Mexico’s steadily falling oil production meets its rising meritocratic middle class, you will see real political/economic reform here. That is when the No’s will no longer have the resources to maintain the status quo, and that is when the Naftas from the Instituto Wisdom will demand the reforms that will enable them to realize their full potential.