U.S. Legalization Takes a Toll on Mexico Drug Profits

Recent weeks have brought near constant reminders of Mexico’s troublingly weak rule of law, and President Enrique Peña Nieto’s police reform plan seems unlikely to make major gains on this front. But the news out of Mexico is not all bad. According to recent indicators, Mexico’s violent cartels are taking a big hit to their pocketbooks from cannabis legalization and decriminalization initiatives in the United States.

As mentioned in yesterday’s briefing, Peña Nieto has officially presented his new security proposal to the Senate, and its full text includes some provisions that would increase the federal government’s role in law enforcement, as well as place municipal police under state authority. The proposal has been criticized as insufficient not only by human rights groups, but by security experts as well. In an El Universal column published yesterday, analyst Alejandro Hope points out that Peña Nieto’s revamped “mando unico” plan is neither a new idea, nor a good one. After all, studies (see Causa en Comun’s analysis of state police forces, or the Insyde/Fundar/Tlachinollan Human Rights Center case study on police abuses in Guerrero) have repeatedly shown that state police can be just as corrupt and abusive as their local counterparts.

While Mexico seems unable to make major headway against corruption and organized crime, there is still room for optimism in its fight against drug trafficking networks. As NPR’s John Burnett notes in a recent piece filed from Sinaloa’s marijuana-growing region, legalization and decriminalization of the drug in the U.S. appears to be having an impact on growers and traffickers. From NPR:

“Two or three years ago, a kilogram [2.2 pounds] of marijuana was worth $60 to $90,” says Nabor, a 24-year-old pot grower in the northwestern Mexican state of Sinaloa. “But now they're paying us $30 to $40 a kilo. It's a big difference. If the U.S. continues to legalize pot, they'll run us into the ground. […]The day we get $20 a kilo, it will get to the point that we just won't plant marijuana anymore.”

Of course this evidence is anecdotal, but it is not the only such indicator. In April the Washington Post also reported that the wholesale price of marijuana is falling, with farmers in Sinaloa’s Golden Triangle region complaining that they are unable to turn a profit on the crop. These accounts seem to confirm a 2012 report by Hope and Eduardo Clark, published by the Mexican Institute of Competitiveness (IMCO), which asserted that Mexican cartels would see 22 to 30 percent revenue losses if Colorado, Oregon and Washington state legalized marijuana.

This development has upsides and downsides. If the potential trend holds, it will be positive news for countries like Uruguay, which is implementing its historic cannabis regulation law with the express purpose of dealing a blow to organized crime. It may also help legalization advocates push their cause in states with greater shares of Mexico’s cannabis market like California, which will likely face a vote on the issue in 2016.

But marijuana legalization may not be the magic bullet that many drug policy reform advocates hope for. For one thing, evidence suggests Sinaloa farmers are increasingly switching one drug for another, choosing to plant opium instead. This trend has been linked to a recent surge in heroin use across the U.S. 

Additionally, Mexico’s most recent crime statistics do not provide any evidence that a drop in marijuana profits translates to reduced violence or criminal activity. The government has touted a drop in homicides since 2012, but high rates of kidnapping and extortion persist. And as recent reporting on agricultural extortion in Mexico  illustrates, Mexican cartels have an impressive ability to diversify their criminal portfolios.

Ultimately, while drug decriminalization and legalization initiatives can deal significant blows to criminal networks, it seems they are no substitute for judicial and law enforcement reforms that help build a trustworthy police force and functioning independent court system.

News Briefs

• Yesterday Transparency International released its annual Corruption Perceptions Index, which compiles nationwide surveys to show how corrupt the public sectors of different countries are, according to their citizens. On Latin America, little has changed since last year’s survey was published. As TI’s own regional analysis of the survey points out, this is likely a negative sign, as it suggests that the governments of the Americas have made little progress in the fight against corruption. In its analysis of the TI report, news site Animal Politico highlights the fact that Mexico remains the lowest-ranking OECD member. BBC Mundo notes that while Brazil has risen by three places in the ranking, from 72 last year to 69, this is no great achievement as this is the same ranking the country received in 2012.

• Today marks the fifth year of USAID contractor Alan Gross’ imprisonment in Cuba. Reuters notes that his wife Judy Gross has released a statement recognizing the anniversary and warning that her husband’s mental and physical health is in terrible condition. “After five years of literally wasting away, Alan is done,” the statement reads. ABC news reports that White House sources have said that the “National Security Council and president are aware of Gross’s condition and are working on a solution,” but there is little hope that the Obama administration will accept a Cuban proposal to trade Gross for three remaining Cuban intelligence officials sentenced to prison in the U.S.

• Fusion has a more optimistic report on U.S.-Cuba relations, noting that many Cuba watchers are becoming increasingly hopeful that President Obama has been emboldened by his recent executive action on immigration, and may take a similar approach to Cuba policy.

• Venezuela’s figure Maria Corina Machado is due in court today to face charges that she and others in the opposition plotted to assassinate President Nicolas Maduro. El Nacional reports that the opposition leader says she intends to present herself to authorities today not to surrender, but to “confront injustice.”

• A landmark case for gay rights in Colombia, involving a man who was denied his deceased partner’s life insurance funds due to his sexual orientation, is making its way through the Inter-American human rights system. El Espectador and Caracol report that yesterday the Inter-American  Commission on Human Rights passed the case on to the Inter-American Court, making it the first time that the country has faced a case of discrimination on the basis of sexual orientation in the regional human rights court.

• As both sides of Colombia’s peace talks start to ease back into negotiations in the wake of the recent crisis, President Juan Manuel Santos has issued a warning to potential spoilers of the talks in the country’s armed forces, an issue highlighted by recent reports that elements in the military are spying on the negotiations. “Any officer, however important they may be, who gives the slightest expression of disloyalty or lack of discipline will be removed from the military,” said Santos in an interview with Canal Capital.

• For Chilean President Michelle Bachelet, it seems the honeymoon period is over. Emol reports that a new Adimark poll has found that her approval rating (42 percent) is ten points lower than her disapproval rating (52 percent), which is at its highest point since she took office.

• Uruguayan President-elect Tabare Vazquez revealed his top cabinet picks in a press conference last night. El Pais reports that while some of the selections  -- like keeping Eduardo Bonomi as interior minister and  placing Danilo Astori at the helm of the economics ministry -- are likely due to internal agreements within the ruling Frente Amplio coalition, most of them seem to have been picked according to their ties to Vazquez himself.

• Today, the Latin American Public Opinion Project (LAPOP) of Vanderbilt University has released the data of its latest AmericasBarometer  poll,  a survey covering attitudes towards democracy across the hemisphere. The raw data, gathered in 28 countries across the Americas, has been made available on the LAPOP web site, and an analytical report on the latest poll is due to be released later today.

• As the Ayotzinapa case continue to focus international attention on Mexico’s disappeared, the AP reports that relatives of the missing are feeling increasingly empowered to begin their own searches for lost loved ones, often without the help of authorities.