Rule of Law and Security Update

Since our last rule of law and security update, Mexico’s security situation has further deteriorated with bouts of unprecedented violence and the increased use of terrorist tactics by drug cartels. The following presents an account of recent developments followed by an analysis of ongoing trends.

June: Record Violence

The month of June 2010 registered a new record high of drug-violence. According to data from the newspaper Milenio, the month registered a total of 1,200 drug-related executions (DREs), making it the most violent so far. The total number of DREs during the period of January-June has reached 6,230, yielding an average of 1,038 executions per month during 2010. DREs during this period increased 80.8% over those registered during the same period in 2009 (3,446).

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June was not only the most violent month in terms of the numbers of DRE’s, but also in the level of aggression between cartels and the state. The number of law enforcement executions reached 103 in June, a 101% increase on the previous month.

Terrorism

Clearly, the key development during June was the assassination of Rodolfo Torre Cantu, the PRI’s gubernatorial candidate in the state of Tamaulipas on June 29th. This incident effectively marked a new threshold of violence, in which the cartels have opted for more emblematic assassinations as a means to intimidate the state, and which falls under the category of terrorism—despite assurances by the federal government otherwise.

Cartels Meddling in Elections

At the same time, the assassination of Torre Cantu, along with other important incidents during the electoral process before the July 4th elections (notably the assassination of a mayoral candidate in the municipality of Valle Hermoso in the same state on May 13th), provide strong evidence of the drug cartels’ intentions to influence the electoral process—a practice that is likely to be repeated in the future.

Although the assassination of Torre Cantu did not in any way alter the outcome of the gubernatorial election in Tamaulipas (the late candidate was poised to win a landslide victory and his assassination only created a sympathy vote toward the new PRI candidate), it sent an important message to the political class: not to get involved in this conflict. At the same time, the killing of Torre Cantu contributed to the high levels of voter absenteeism in Tamaulipas and elsewhere.

Violence by Region

Again the state of Chihuahua witnessed over a third of DREs nationwide with 436 executions—a slight decline from last month’s figure, but still an extremely high number compared to previous months. Other states that registered very high levels of violence were Sinaloa (168), Baja California (75) Durango (65) and Nayarit (54). Although with fewer levels of DREs, drug violence in other hotspots such as Guerrero, Nuevo Leon, and Michoacan has continued its rampant course with numerous clashes between the cartels’ hired guns and the local and federal police and the military. While DREs declined in some of these hotspots, they have increased in other previously peaceful states such as Colima, Durango, Sonora and even Queretaro.

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Fuel Theft

In Tamaulipas, on May 23rd, members of Los Zetas hijacked the natural gas field Gigante Uno in the Burgos basin, holding five PEMEX workers as hostages to prevent authorities from coming in. The group was siphoning fuel for an entire month before the Mexican army decided to enter and engage with the gunmen on June 24th. PEMEX did not disclose any information about the hijacking until media pressure drew national and international attention to the incident.

In a separate development on June 26th, the army killed five members of Los Zetas who had kidnapped seven workers from PEMEX in the Arcos field in the municipality of Mier (Burgos basin). The armed group had been forcing the workers to siphon off fuel for them, until they were faced with the army patrol.

Fuel theft provides a quick source of income for criminal organizations and also represents a less risky activity than drug trafficking. Such incidents are occurring with increasing frequency in this region (according to PEMEX, the losses from fuel theft and the kidnapping of workers in the Burgos basin region are estimated to be MX$80million (US$629 thousand) per month). The hijacking of energy infrastructure, however, is something new and should raise concerns regarding the safety of strategic energy infrastructure.

Rehab Center Killings

The recent killings in rehabilitation centers in Chihuahua deserve special attention. Since 2008, it has been a common occurrence for rehab clinics in the state to be violently attacked. This only caught the media’s attention after massive executions took place in June and September 2009. Smaller-scale executions of addicts undergoing treatment occur rather more frequently; only a few days after the abovementioned murders, on June 17th, six recovering addicts where shot dead outside a clinic.

One of the hypotheses regarding why the rehab centers are being targeted by the cartels in Chihuahua is that these cartels have identified some of their enemies (e.g. members of rival drug dealers or former consumers with high levels of debt) hiding within such clinics. Another credible hypothesis is that the attacks on rehab centers are carried out for purely economic motives.

According to research presented by the Milenio, every treated addict stops spending a daily average of US$50 in cocaine or heroine a day. When this is multiplied by the number of patients undergoing therapy in the state of Chihuahua (approximately five thousand), this gives a total of US$250,000 a day in forgone revenue; US$1.75 million per week; or US$7.5 million per month. Clearly rehab centers represent bad business for the cartels. The latter hypothesis would better explain why cartels kill indiscriminately among patients, and why this phenomenon has begun to be replicated in other states (nine patients where executed in a drug rehabilitation clinic in Durango on June 26th).

Regardless, these tragic events could certainly have been prevented. Despite previous attacks, state and local authorities are not offering these facilities the protection needed; consequently, more attacks of this kind should be expected.

Recent Developments (July)

The month of July has seen a continuation of the trends observed during June with increasing clashes between drug cartels and authorities and, more significantly, the continued use of terrorist tactics by the cartels against the state as a strategy of intimidation.

On July 15th, members of La Linea, the Juarez cartel’s hired guns, detonated a car bomb in Ciudad Juarez. The explosion, aimed at federal agents, killed four people (three policemen and a doctor) and left several wounded. The methods used by members of La Linea very much resemble those used by terrorists in the Middle East, suggesting cartel members may have received training from terrorist organizations or former guerrilla members. This implication should send alarm waves to the federal government about more sophisticated terrorist attacks.

On July 18th an armed group stormed into a private party in the city of Torreon, Coahuila, killing 17 people and leaving 18 others severely injured. Even though Coahuila does not rank among the most violent states, violence in the state has been on the rise. As in Tamaulipas, this violence is attributed to the growing conflict between the Gulf Cartel and their former mercenaries, Los Zetas, now ranked as an independent cartel.

Outlook

Looking forward, our basic forecast remains unaltered. The facts and figures outlined above provide a very clear indication of what to expect in terms of violence; the number of DREs per month is likely to consistently remain above the 1,000 mark and experience sustained increase over time. Drug-violence as of July 19th (at 730 DREs) suggests this month will replicate the levels of violence witnessed in June, with significant spikes in the states of Chihuahua, Coahuila and Sinaloa.

The increased use of terrorist tactics by drug cartels should not come as a surprise. As the Colombian experience shows, this is an inevitable phase in the conflict between the state and the cartels, as the latter’s survival is increasingly threatened by the former. These developments are also consistent with our projections as outlined in our Rule of Law and Security Outlook for 2010 report from January 29th (advanced conflict scenario):

…The second scenario considers the possibility of the conflict [between drug cartels and the state] taking upon greater dimensions. In this scenario, we foresee more emblematic attacks and executions of federal law enforcement, potentially crossing the boundaries of isolated acts of terrorism (such as the September 2009 grenade attack in Morelia) into more extensive attacks such as car bombings… [T]he risk of cartels relying on terrorist tactics has dramatically increased.

Final Thoughts

A careful assessment of the ongoing trends described here confirms our forecast of a sustained escalation of DREs together with more emblematic assassinations and the incipient use of terrorist tactics.

Notwithstanding the importance of DREs as a proxy to measure the dimensions of the conflict— both between rival cartels and between cartels and the state, increased attention should be given to the use of terrorist tactics, even if the attacks in question appear minor in scale–such as the car bombing in Juarez. Evidence from the Colombian experience as well as from guerilla warfare movements suggests these smaller-scale incidents are often the prelude for more extreme attacks in the future.