Mexicans in Australia

Three Mexican nationals, who arrived in Melbourne, Australia five weeks before a 16 million dollar shipment of cocaine arrived at port have been arrested in Australia.

What’s interesting is that the Australian Federal Police have said that the cocaine was smuggled from South America, through the United States, and on to Australia.

Does this suggest there is a glut of cocaine inside the United States? That would be an interesting development. I have noted here and there that some sources – mostly from the US government – say demand for cocaine is down. The fact that Mexicans are moving cocaine into new markets, beyond the US, seems to support these findings.

Yet more ephedrine activity in Argentina, this time in Rosario, suggests there might be a shift occurring from a focus of selling cocaine inside the US to a focus on methamphetamines. Similarly, the focus may have shifted from the US as a primary coke market to other places in the world…

Diosito - "My little God"

Diosito – “My little God” - was the last word of the co-pilot of the plane that crashed in Mexico, just before the black box recording ended. While some people in Mexico tell me that sabotage has not been ruled out, most of the Mexican public seems to be content with the results of the investigation.

While coming into land, the plane carrying two top Mexican officials got caught in the jet wake of a commercial airliner less than two miles ahead. The plane’s jet engines could not handle the intake of another jet’s wake and thus began to malfunction.

This sort of accident smacks of pilot error, which is unfortunate given the deadly results of what was perhaps a moment’s lack of concentration or a slight mistake in calculation.

Nevertheless, the official story is that the crash was an accident, and for now it seems to have satisfied most observers. If the crash was indeed sabotage, those that know the truth are keeping it from the rest of us, likely to maintain some sort of handle on the situation.

The possibility that a criminal outfit in Mexico targeted and downed an official flight, killing two very important officials in the fight against organized crime, is one none of us are willing to stomach. It would mean an escalation of Mexico’s security problems beyond what many will agree is already a very difficult situation.

Mexican organized crime inside the United States

Keep in mind, these points represent reports of a presence, which doesn’t necessarily mean a strong presence. Thanks to the LA Times for pulling this map together together with this story.

A new map for the US?

The FBI recently released information (see Washington Times article) that their agents in Texas believe Los Zetas have extended their operational control to north of the Mexico-Texas border. Zetas operating in Texas each operate in distinct areas, organized and divided to reflect the various border crossings or "plazas" at Juarez, Nuevo Laredo, Reynosa, Matamoros, and others.

In light of this not-very-surprising-information, I thought I would post here a new map of the US, sent over by a friend in Texas.

Pictures are worth a thousand words...

A few words on Bolivia

In the best interests of maintaining a balance between work and play, I decided many months ago to stop trying to cover the whole region. Bolivia is one of the countries I have allowed slip off my radar. I do receive quite a bit of information from sources in the country, but I can no longer take the time to sift through that information and try to present a sensible analysis for my readers.

But I cannot ignore how much Bolivia has distanced itself from Washington in the past few months.

Bolivia has lost trade preferences for a long list of its export products, meaning the US is no longer an export market for Bolivia. This decision hinged mostly on Bolivia’s ongoing cooperation in the War on Drugs. Seizures and the arrest of drug traffickers makes up part of what seems to be a largely subjective decision, mostly based on how much Washington “likes” the current administration in Bolivia.

Morales has been very clear about using the United States as a scapegoat in his domestic battle to keep the whole country under his control. I believe that when he expels the US ambassador and USAID, he does so mostly to keep his core constituency happy. Unfortunately the fallout on the international level is one where Washington will not stand by and let a Bolivian leader sling mud.

Now the Peace Core is packing up and leaving, as is the Drug Enforcement Administration.

I would argue that Bolivia is now firmly inside the Venezuelan orbit. Morales has effectively cut himself off from any would be channels of dialogue or mutual support with Washington and has apparently placed his bets with the success of the Chavez regime – a considerable risk simply considering that all his geopolitical eggs should not be in one basket.

I wouldn’t venture to guess what will happen next in Bolivia, but wanted to point out Bolivia’s current status to call attention to a situation I think will seriously deteriorate over the coming months and could likely explode before the end of 2009, if not before.

Best case scenario: Morales manages to keep the low lands under his control and moves the country forward on shaky legs.

Worst case scenario: Bolivia slides into civil war, with Chavez backing Morales in a fight to keep control of the low lands. If this were to unfold, it will be interesting to see how Brazil and Argentina react – both receive a significant portion of gas imports from Bolivia’s low land regions.

An Obama Promise and Plane Crash Implications

Mexican President Felipe Calderon called President-elect Barak Obama on 6 November to congratulate him and discuss matters of Mexican security.

Obama reassured Calderon he is committed to helping Mexico with his security challenges. And Calderon invited Obama to visit Mexico.

Let the promises begin. Early in Bush's presidency, he made similiar promises to former Mexican president Vicente Fox only to nearly completely ignore the southern neighbor.

Many of us will watch closely the development of this important relationship.

Meanwhile, the recent plane crash in Mexico City that killed Interior Secretary Juan Camilo Mourino and the former director of federal organized crime investigations, Jose Luis Santiago Vasconcelos and possibly other high-ranking government officials has got conspiracy theorists working over time.

There were some reports that the plane exploded in mid-air, but no confirmation has since surfaced.

Did Mexican organized crime sabotage the plane? It seems pretty clear now that there was no direct attack on the plane from a point on the ground, as in a surface to air missile, but the Mexican government has so far not ruled out sabotage or other such activity. Nor has it ruled out that the crash was an accident.

If this crash was not an accident, the implications are serious and very worrying. The Mexican government is stretched to the maximum with troop deployment and financial resources deployed to combat narcotrafficking across a number of Mexican states, especially the border regions with the United States and Guatemala.

I'm not sure how the government would be able to handle yet another escalation in the country's ongoing war against organized crime. I am fairly certain, however, that the cartels are in a position to take this conflict to the next level. I have doubts about the Mexican government.

More on this developing situation soon...

A new direction

This blog will take a new direction. Posts will be shorter and more frequent.

The commentaries I posted on this blog and prepared for Southern Pulse up until a couple weeks ago will continue to be published by International Security Network. They will also be available on my web site through occasional updates.

This blog will continue to focus on security in Latin America, but I will place here ideas, observations, and off the record information I can not publish simply because the information cannot be corroborated or has come from an unconfirmed source.

Finally, the information and analysis in the blog posts after this one reflect my own opinions, not those of the Southern Pulse network or any of my publishers.

Now, with the introduction and that disclaimer out of the way, let us begin...

The Monroe Doctrine: Circling the Drain

Many of the legacies left by George W. Bush will focus on the War on Terror and Iraq. In Latin America, however, his legacy will be one that always remembers how Latin America was lost on his watch. As President Bush closes out his final months in office, many in Washington lament that the Monroe Doctrine, the foundation of Washington’s soft power in Latin America, is circling the drain and nearly dead.

Iran, China and Russia are certainly helping it along, but they would be in no position to do so if the present White House had simply lived up to what President Bush promised in his first presidential campaign: closer ties with Latin America. If anything, however, President Bush has distanced himself farther from Latin America than any president in recent history, creating a vacuum that has been steadily filled by patron nations not motivated by Washington’s best interests.

On 22 September Russian Naval cruiser, Peter the Great, set sail with two other ships for Venezuela where they will take part in naval exercises in the Caribbean. Russian bombers recently left Venezuela after a number of training missions off the Venezuelan coast, and a long time Russian spy, now Deputy Prime Minister, Igor Sechin recently made his rounds through Cuba, Venezuela, and Nicaragua at the head of a large delegation of diplomats and business leaders.

The Russians are courting Bolivia, offering helicopters to help combat organized crime and drug traffickers. Meanwhile, Bolivia has announced it will move its Middle Eastern embassy from Egypt to Iran, a county now hard wired to Venezuela with at least one weekly flight.

A runway built by the US military in Manta, Ecuador, may soon be used to receive regular flights from China, and there are talks to open an international deep water port in Manta, making Ecuador a primary link between South America and growing business interests out of China.

Hutchinson-Wampoa, the company that controls ports on both sides of the Panama Canal has shown considerable interest in building in operating the Manta port, as well as a deep water port in northern Mexico.

The Chinese Development Bank, a financial institution that conducts some US$400 billion in annual loans, grants, and other programs, will invest US$100 million in Chile, where the national mining company, Codelco, will soon open another copper mine just to meet Chinese demand.

Over the past four years, we have watched the president of Iran receive a warm welcome in Nicaragua, Bolivia, Venezuela, and Ecuador, when the US president was all but forced off stage at the Summit of the Americas in Argentina and embarrassed by a negative public reception in Guatemala at the tail end of his obligatory Latin American tour in 2007.

The US State Department declared in January 2008 that this would be the year of engagement. So far, there has been little more than a cursory glance at Latin America, with most of the attention coming recently when Bolivia, then Venezuela, sent the US ambassador packing.

The International Monetary Fund has been lambasted as a bunch of Washington cronies. The State Department's Human Rights report and yearly review of cooperation in the so-called War on Drugs is significantly watered down in an environment where the region’s new patron states don’t place a high value on protecting human rights or preventing drugs from entering the United States.

Any influence the United States may still retain over the region has all but eroded. And since Thomas Shannon, the State Department’s top diplomat in Latin America, visited China in 2004, it has been all but formally acknowledged that China has a “seat at the table” when any Latin America enters serious discussions over trade, military support, or foreign direct investment.

Looking ahead, President Bush will hand his successor two ongoing conflicts in Afghanistan and Iraq as well as the so-called wars on terrorism and drugs. By many accounts, the new president will inherit four “wars”. Three of the four wars are over an ocean and half a world away. And the war that potentially has the most impact on Americans' daily lives has received the least amount of attention and funding.

What may affect Americans the most in the coming presidential term and beyond is likely not the threat of nuclear war or a terrorist attack but losing the support and respect of a region that since 1823, when the Monroe Doctrine was first signed, has been for better and for worse, the sole purview of the United States.

In the last eight years, Washington’s backyard has become littered with a number of interests that range from hostile to indifferent towards the United States. For many Latin American nations, the upshot is choice, an option to trade with other countries aside from the US and the EU. They are new patrons who don’t care about human rights standards. They do not force Latin governments to give their soldiers immunity from prosecution at the International Criminal Court

Moving forward, many countries in Latin America, specifically Brazil, Ecuador, Chile, Argentina, and Mexico, may see winning combinations and synergies emerge from budding relationships with at least China and Russia. Iran is a distant, yet significant regional player.

The big loser will be the United States. US diplomatic pressure and geopolitical voice will increasingly fall on deaf ears. A region that was once very close has perhaps forever stepped away. It is unlikely future leaders in the White House will repair broken relations or revive one of the region’s oldest unspoken laws.

One Brazilian diplomat recently told Southern Pulse, “In the past, the door for talks with the United States on any issue had to remain open. We had no choice. Now we can close it if we want. And in the future, it may rarely, if ever, open again if China and Russia have their way.”

A drop in the Bucket

Between 16 and 17 September, the Drug Enforcement Administration closed out Project Reckoning, a multi-layered operation focused on the activities of Mexican organized crime inside the United States and Europe. The 15 month investigation, focusing on the Gulf Cartel, culminated in the arrest of some 500 individuals in the US and Italy.

In addition, the DEA seized a large quantity of drugs and money. Their press release reads: “Project Reckoning has resulted in…the seizure of approximately $60.1 million in U.S. currency, 16,711 kilograms of cocaine, 1,039 pounds of methamphetamine, 19 pounds of heroin, 51,258 pounds of marijuana, 176 vehicles and 167 weapons.”

At a glance, this operation was a resounding success. The DEA’s mission has always been to focus on the big fish, the major players in drug trafficking, and by investigating the upper echelons of the Gulf Cartel’s operations in the United States, focusing on Atlanta, it had led a multi-agency effort to dismantle an important faction inside a major criminal network.

It is an impressive conclusion to a long investigation, and perhaps even a good start. But it is still only a drop in the bucket.

Not long ago, in early August, five Mexican nationals were found with their throats cut in an apartment complex in Birmingham, Alabama. Local police responded in force. But it is likely they were too late to catch the perpetrators, who were miles away, en route to Mexico before the first 911 call was even made.

This incident reminded us of the shoot out that occurred in Phoenix, Arizona on 22 June when organized criminal, dressed like Phoenix Police Department SWAT, entered the house of local drug traffickers and killed everyone inside before leaving the scene and fleeing back to Mexico.

Texan teens were recruited by members of Los Zetas to conduct assassinations in the Laredo area in 2006. The recruiters purposely targeted minors who were US citizens for the grisly work. For the duration of one year there were at least three cells of minor assassins operating across Texas.

These are just three examples of how the tentacles of Mexican organized crime have begun to stretch into and across the United States. Continuing demand for methamphetamines, cocaine, heroin and other drugs ensure a constant flow of drug supply north. And as Mexican organized crime consolidates control of all levels and layers of the drug trade in the United States, down to the wholesale level, the need to protect turf will extend north from the border into American cities as far north as Seattle and New York.

As the Merida Initiative indicates, the front line of the so-called drug war has moved north from Colombia to Mexico. But what Project Reckoning exemplifies is the fact that this front line will not stop at the US-Mexico border. It will continue north into American cities, towns, neighborhoods, and the suburbs of small cities like Birmingham, a place most people would consider safe and a fair distance from the blood bath constantly splayed across Mexican press.

For many years now, the argument against a supply-side approach to reducing the amount of drugs flowing into the United States has fallen on deaf ears, Republican and Democratic alike. And when the DEA most needs funding and support to dismantle large smuggling operations, the organization has seen significant budget constraints and a forced hiring freeze in 2007 and part of 2008, while the Department of Homeland Security, perhaps one of the best examples of bureaucratic failure in the past decade, has seen a constant budget boost.

The result is an increase in the number of Immigrations and Customs Enforcement agents organizing the deportation of immigrant criminals who are back within the week, often bringing others with them. There are many examples that suggest deportation feeds a cycle of violence between the US and Central America, with Mexico in the middle.

The encroaching presence of Mexican organized crime inside the United States is inexorably tied to immigration because both challenges have everything to do with the US-Mexican border. In as much as Mexico is unable to provide security incentives to stay home and contain its own organized crime problem, Americans will continue to watch as violence directly linked to the drug trade migrates from foreign press, to national news, to local reports.

The border cannot be plugged, and deportation is not an answer. The most direct route to improving this situation is by focusing on assisting the Mexican government with a security problem it clearly cannot handle. The Merida Initiative is a start, but when the total aid for three years, some US$1.5 billion, is compared with the annual earnings of Mexican organized crime, estimated between US$15 and 40 billion, one begins to see how much more help is required. It is best sourced from international partners, and if Mexico continues to suffer, the United States will continue to be the first in line to feel the effect.

Bolivia's Morales Fights to Avoid a Common Fate

When Bolivian President Evo Morales won the 10 August referendum with some 68% percent of the vote, many observers thought he had taken a major step in the right direction towards quieting his opposition. Events since the referendum, however, have proven that if anything the opposition is more incensed and strategically better positioned than ever to thwart Morales’ plans to mold his country after his own progressive ideals.

On the 27th of August, the Brazilian military was mobilized to help Morales out of an embarrassing situation. When a Bolivian military helicopter carrying President Morales landed in Guyaramerin in the northeastern Bolivian department of Beni, after his meeting with a Canadian oil company, members of the Youth Union of Beni attacked the helicopter with rocks and bottles.

Morales was quickly escorted to a waiting car and driven to the Mamore River, which forms the border with Brazil in that region. Crossing into Brazil, Morales was eventually met by a Bolivian military transport craft that landed by the light provided by the headlights of Brazilian military trucks lined up on either side of the runway at Brazil’s Guajara Mirim base.

Such youth groups with a strong following in Beni and in the city of Santa Cruz have been the more militant arms of an opposition in Bolivia’s “media luna” lowlands region where an ongoing dispute over the reallocation of resources, specifically the direct hydrocarbon tax (IDH), has opposition leaders at loggerheads with the Bolivian government.

Road blocks, protests, and other acts of civil unrest have continued to disrupt the flow of goods and services around the country and by many indications appear to be getting worse.

Opposition leaders have control of food and energy resources that flow from the lowlands to the highlands, where there is a mass concentration of Morales supporters. But Morales has significant popular support and the control of the military.

When opposition leaders in the southern department of Tarija threatened to cut off gas supplies to Argentina, Morales responded by sending the military to secure the gas stations.

But as some analysts have pointed out, it wouldn’t take more than a well placed explosive to disrupt gas flows from the lowlands to the highlands. In the coming weeks, as Morales pushes harder for a national referendum to consolidate the legality of the country’s new constitution, it is possible such dramatic measures are taken.

Already, it seems, the Morales camp is preparing for this eventuality. On 30 August, the Bolivian Vice President, Alvaro Garcia, outlined the possible development of a terrorist group in Santa Cruz, a city long held by the opposition. A day before Garcia’s announcement, a group of Morales supporters, seeking to peacefully march to the center of Santa Cruz, were met by a group of violent anti-Morales activists. A number of Morales supporters were seriously injured.

Before leaving for his trip to Algeria, Lybia, and Iran, Morales announced that the nationwide referendum to approve or reject the new constitution would be held on 7 December. Governors from the "media luna" departments of Beni, Santa Cruz, Tarija, Cochabamba and Pando have said they would prevent their people from taking part in the vote. And on 2 September, Bolivia’s National Electoral Court blocked the 7 December referendum decree stating that by Bolivian law, any such vote must be first approved by the Congress, which has the authority to set the date. Bolivia’s senate is controlled by Morales’ opposition, placing the president at a serious disadvantage.

One side controls the presidency and military, the other controls most of the country’s resources, the senate, and a surly, unorganized group of militant youths. Something will eventually give, and it is not clear if Morales will succeed in preventing the opposition from blocking his reforms and perhaps forcing him out of office. Morales will have a fight on his hands if he wants to avoid the very same fate he has helped hand his predecessors, all of whom were members of the opposition.

The Price of Violence in Central America

The Salvadorian Public Security Council (CNSP) recently released a report that quantified violence, drug trafficking, and organized crime by placing a number on the amount Central American countries spend on security.

In an effort to curb violence, Central American governments spent some US$6.5 billion in 2006, according to the CNSP study, or nearly 7.7 percent of the sub-region’s GDP.

The highest spending rates are for Guatemala, with a bill of US$2.29 billion, followed by El Salvador with US$2.10 billion. Costa Rica and Nicaragua registered significantly less with US$ 791 million and US$529 million respectively.

When compared to the GDP of each country, these numbers represent a surprisingly high portion of GDP, with some 11 percent for El Salvador, with ten percent in Nicaragua, and 3.6 percent for Costa Rica.

Measured against this backdrop, international aid focused on increasing security seems woefully lacking. As part of Plan Merida, the US’ most recent anti-narco trafficking legislation, Central America may receive up to US$150 million in the next two years.

Yet compared to 2.29 billion spent in Guatemala on security in 2006 alone, the money slotted for Central America in the Merida Plan, if allowed to pass, will likely fall far short of making any real impact in the region.

El Salvador had one of the world's highest death rates at 150 per 100,000 in 1991 at the end of that country's civil war. Some 15 years later, in 2006, Salvador's CNSP registered a death rate of 67.8 per 100,000, still one of the region's highest death rates, measured at three times Mexico's death rate, where the drug trade ensures the death of over 2,500 annually.

How much money needs to be spent before Central American leaders realize they need to try another approach?

According to the CNSP study El Salvador spends some 11 percent of its GDP on security, yet spends only 2.7 percent on education. Something is not right.

The Deportation Conveyor Belt

Mexico’s National Immigration Institute (INM), the governmental organ responsible for investigation illegal immigration and enforcing Mexico’s immigration laws, is underfunded, poorly manned, and full of corrupt officials, according to the head of the INM, Cecilia Romero Castillo.

In a recent interview with Mexico’s Processo news magazine, Romero claims her organization simply cannot keep up with the growing number of illegal and documented migrants that enter Mexico on a yearly basis. Human trafficking, she claims, is a “juicy business” supported by INM officials that have been in place since November, 2006.

“…We are advancing a series of investigations…to identify a networks of traffickers. And when I speak of networks, I’m referring to an arrangement between foreigners and Mexicans, and within the group of Mexicans I have no doubt that some migration agents and officials with INM are involved,” Romero told Processo.

One group, called the Miami Mafia, specializes in trafficking Cubans into the United States through Mexico. According to reports from Mexico’s Attorney General’s office, this organization may earn as much as US$80 million a year. In other cases, human traffickers have charged as much as US$4,000 a person, to move them from Guatemala, through Mexico, and into specific points inside the United States.

The INM has some 4,600 employees between migration agents, investigators, and mid- to high-level officials. And for many years, the number of employees has not risen to keep pace with the growing number of people passing through Mexico’s various ports of entry via land, sea, and air.

“In 2000, the country had 23 airports and now there are close to 100,” Romero admitted, adding, “The most worrying is that INM now has less employees that it did in 2000.”

One in five or six illegal immigrants make it through and remain in the United States, Processo reports.

“In the state of Tamaulipas, which is a very complicated situation, there are only 240 employees, and they are not enough to cover 11 international bridges, five airports, two sea ports, apart from migration stations,” Romero said.

Tamaulipas has long been the stronghold of Mexico’s Gulf Cartel, and a major trafficking point for any illegal product – human, drug, or otherwise – that flows into the US from Mexico.

Meanwhile, INM must document and receive all those Mexicans deported from the United States apart from preventing the passage of illegal immigrants through Mexico.

The organization’s Countryman Program oversees this process, and has two separate initiatives for children and minors who are deported from the United States, unaccompanied by adults.

Between January and May, 2008, some 300 thousand Mexican nationals were deported from the United States, nearly 2,000 a day, placing the 2008 tally at over a million.

When considering the complex situation of immigration inside the United States, and the current focus on deportation, the above facts should place a light on a larger reality: many of the people who are deported back to Mexico simply cannot be processed by the INM.

The trouble within Mexico’s INM is just one of the many reasons why a number of Mexican analysts consider the movement of people between Central America, Mexico and the United States to literally be like a human conveyor belt. Once deportees arrive, its likely they are shuffled through a haphazard layer of backed up paper work, resulting in a high probability of human error. And once repatriated, what’s to stop them from returning?

Until the INM receives better funding, reduces corruption, and increases the number of personnel required to cover the country’s various ports of entry, deportation as a tool for controlling illegal migration in Mexico or the United States is, at best, a mechanism that keeps the conveyor belt moving.

Mexico's Hydra

The Mexican state of Michoacan has long been a battle ground for opposing members of organized crime. Both the Gulf Cartel and Sinaloa Federation have fought over this important territory in the middle of Mexico, where cocaine supply from Colombia or precursor chemical supply from Asia can be received and quickly moved north.

One criminal group, however, has emerged as the true power in Michoacan. Since its inception, believed to be in 2004, it has grown from a small, clandestine entity to one of Mexico’s rising stars in the criminal underworld – a testimony to the nature of the hydra effect in organized crime. When one head is cut off, another quickly replaces it.

Known as La Familia Michoacana, or simply La Familia, this group was an unknown group of armed thugs in Michoacan, quietly going about its perverse form of social justice until late 2006, when Mexican daily, El Universal, interviewed one of the group’s spokesman, an individual who called himself “Most Crazy.”

Most Crazy revealed that La Familia had some 4,000 members working in various parts of Michoacan. Everyone received a salary of between $1,500 and $2,000 a month, and all were born in Michoacan. The group’s focus was to rid the state of “hielo” or ice as methamphetamine was called, take out any kidnappers, and extortionists, and protect the youth.

Its enemies were members of the Milenio Cartel, a second-tier drug smuggling organization tied to the Sinaloa Federation.

Most Crazy ended his interview stating that his group did not like to kill. But by the end of 2006, the state of Michoacan had registered some 520 executions, 17 of which were decapitations. By most accounts, this “reluctant” violence worked as La Familia is now considered the reigning criminal organization in the Michoacan area, with a strong grip on the state of Mexico and the Federal District.

Since the group’s public announcement, La Familia has inched its way up the ladder, moving from a second-tier local outfit to a more powerful group with an increased amount of financial backing and human resources across at least two states and in the capitol city.

La Familia reportedly pays millions in bribe money every month, and offers protection to various business owners in Michoacan, the state of Mexico, and the Federal District. The protection, however, mostly translates to extortion, where some business owners are taxed every week, others once a month.

Now, in August, the Mexican Attorney General’s office has made an announcement, revealing what many observers have known all along. La Familia intends to control the drug smuggling market in Michoacan and open a route all the way north, passing though the traditionally held lands of the Sinaloa Federation, where many claim El Chapo Guzman has been weakened by the Mexican government’s constant focus on dismantling his organization and his ongoing battles with Los Zetas and other rival groups.

What began as a small group of armed men on the prowl to protect their kids from hielo has turned into a first rate criminal outfit that often dresses in the uniforms of elite federal police, the AFI, and is just as well armed and organized as any top-tier drug smuggling organization in Mexico.

This group’s move to the top levels of Mexican organized crime, perhaps more than any other example, shows how dismantling one group normally leads to another taking its place.

Correa's Tightrope

Ecuadorian President Rafael Correa announced on 19 July radio show that Iran and China may invest in the planned refinery to be constructed in Ecuadorís Manabi province on the Pacific coast.

It was an announcement loaded with political innuendo yet takes a step in the direction toward Correa's pragmatic plan to make Ecuador a regional hub of international trade between Asia and South America.

The refinery, named ìEloy Alfaro Delgado is the result of a joint venture between Petroecuador and PDVSA, with 51 and 49 percent shares respectively. Presidents Correa and Chavez were present for the ground breaking ceremony on 15 July, the same day the accords forming the joint venture were signed.

Construction on the US$6 billion refinery is expected to end in 2013, with the refinery supplying 300,000 barrels of oil a day to foreign markets and quite possibly to China alone.

China's involvement is more pragmatic than political. Ever eager for South American natural resources, China's involvement in the refinery is a clear-cut business decision, one that will lock up more refined petrol products for China and increase the likelihood that the refinery will actually be built.

Money from both Iran and Venezuela, however, remains in question.

Just three days prior to his radio announcement, Correa had met with a high-level member of Iran's Trade office, Majid Salehi. The two discussed trade cooperation and bilateral relations, according to a presidential office announcement. This meeting came on the heels of a May agreement for both countries to open trade offices in Quito and Tehran. Political ties between the two countries seem to have tightened, but itís not clear if this will translate for an real economic upshot for Correa.

Iran's ability to lend strong financial support to Ecuador's blossoming trade position is limited, according to World Markets Research, but the country's name on the project allows Correa plenty of rhetorical space, allowing him an opportunity to stoke nationalistic fires.

When announcing Iran's involvement Correa stated that "Iran has a lot of experience in the oil field, it has been a producer for a long time, almost a century.

Somebody may say: Iran, Axis of Evil, but what do I care what other countries think? We have to be masters of our own destiny. We have nothing against Iran. Iran has done nothing to us," Correa said.

Venezuela's participation in this project is under an equal amount of financial uncertainty, generating a level of instability in both this project and Ecuadorís overall trade relationship with its South American ally.

According to testimony heard on 17 July before the US' Congressional Committee on House Foreign Affairs Subcommittee on the Western Hemisphere, PDVSA had to borrow some US$16 billion in 2007 to maintain operations. The company is under a number of international lawsuits for its inability to keep up with the deliverables as stipulated by supply contracts. And the company has in some cases sold off international assets to assuage its cash flow problem.

Meanwhile, Ecuador's Central Bank published in early February trade figures revealing that Venezuela has surpassed the United States as Ecuador's leading supplier of fuel. The small country does export crude oil, but has no refining capability, forcing it to import diesel, petrol, and other refined products.

In 2007, Ecuador imported some US$262 million diesel from the US, down from US$628 in 2006. Venezuela filled this gap with some US$423 in diesel exports in 2007. This growing dependence on Venezuela is yet another reason why Ecuador has pushed ahead with plans for a refinery.

Despite Venezuela's possible financial shortfall, Ecuador may find all the project financing it needs from China. The small South American country is an increasingly interesting position vis-a-vis its geographic advantages. And the Manabi refinery is but one development.

When the US military's lease on Manta terminates in 2009, Ecuador will likely use the Manta port and heavy-duty runway to construct a regional import/export center. If plans for a cargo rail line that will link Manta with Manaus in Brazil's Amazonas state come to fruition, Manta would indeed become a regional hub of trade activity, and with the refinery, make Ecuador that much more attractive in Asia's eyes.

Mexico Infiltrated

I'm back from field research for my book on immigration and organized crime in the United States. During the past two months, I have received a number of comments and questions about Mexico lately. Rest assured, many are closely watching the situation. For now, I'd like to share a piece I recently prepared for ISN.

More to follow soon...

Published by the International Relations and Security Network on 17/07/08

Mexico infiltrated

As organized crime gains increasing control over the country, the possible formation of a megacartel could precipitate the slow, steady failure of the government.

The number of murders related to organized crime in Mexico passed the 2,000 mark on 4 July. Since Mexican president Felipe Calderon entered office, at least 4,867 such murders have been registered, at an average of eight narco-related deaths a day according to Mexican daily El Universal.

At this pace, Mexico will close out the year with over 4,000 narco-related murders, fomenting public uncertainty and raising doubts about the president's hard-nosed, confrontational approach.

With some 20,000 soldiers in at least 11 Mexican states, Calderon has tried to take the bull by the horns, but he's met heavy resistance. Alarming spikes in violence have seen 10 people killed in under six hours in Tijuana, Baja California and 12 people killed in broad daylight in Culiacan, Sinaloa.
Controlling Mexico's cities

Edgardo Buscaglia, a UN adviser and economics and law professor in Mexico City, recently reported to the Mexican attorney general's office that up to 60 percent of Mexico's cities were controlled by organized crime.

Criminal elements infiltrate local governments by financing political campaigns and with bribes. Mexico ranks 6th in the world for the highest presence of organized crime, Buscaglia's research reveals, after Afghanistan, Iraq, Pakistan, Nigeria and Equatorial Guinea.

The Dallas Morning News reported recently of the formation of a Mexican megacartel, and as such, the prospect of a failed state on the US' southern border appears to be an unfortunate possibility.

Others would argue, however, that the nature of organized crime in Mexico is based on the simple tenant of convenient arrangements that are short-lived and end in violence.

It is an argument against the failure of Calderon's strategy and the Mexican government that has been well supported by this year's dramatic shifts in power from what used to be three major cartels into something significantly new.

Yet the de facto erosion of government control in many pockets of the country continues unabated, and as many in Mexico look north, they see the Merida Initiative (the recently passed US aid package) as the only way out of an unending cycle of violence.

Shifts in the sand

When Calderon entered office in December 2006 there were three well-established drug smuggling organizations in Mexico.

The Arrellano-Felix Organization (AFO) controlled the Tijuana border crossing market, or plaza.

The Sinaloa Federation, a conglomeration of the Carrillo-Fuentes organization in Juarez, the Sinaloa Cartel, run by Joaquin "El Chapo" Guzman, the Beltran-Leyva brothers and others, controlled plazas east of Tijuana stretching to Nuevo Laredo.

The territory from Nuevo Laredo to the Gulf of Mexico was under the control of the so-called Gulf Cartel, run by Osiel Cardenas Guillen and his partners and enforcers Los Zetas - a band of former Mexican Special Forces troops who defected to the drug trade.

Calderon made his presence felt when he immediately targeted the Gulf Cartel by extraditing its leader, Cardenas, who had been running his business from behind bars.

When Cardenas, along with a number of mid-level lieutenants in his organization, were extradited to the US, the structure of Mexican organized crime dramatically shifted.

Without a command and control structure in place, the Gulf Cartel, which had long battled the Sinaloa Federation for control of the Nuevo Laredo plaza and other areas in southern and central Mexico, was on its heels.

Further destabilized by what appeared to be Calderon's singular focus, the leadership within the Zetas structure took command of the Gulf Cartel's functions, and rather than push to extend its territory deeper into the Sinaloa Federation's traditional lands along the western coast, the group stood its ground in Tamaulipas, in the northeast.

To date, Calderon's efforts have netted some 81 of the cartel's 157 high-level operators, according to El Universal.

Arguably, the Sinaloa Federation was able to gain some ground in 2007 as the Gulf Cartel fought to defend its turf from Calderon's offensive, but the military's presence in the Federation's territory in Sonora, Sinaloa, Chihuahua and Michoacan (among other states) prevented a rapid expansion into the void and kept its leader, El Chapo, on the run.

As such, there was a relative impasse until the end of 2007, when a clean break between El Chapo and the Carrillo-Fuentes organization in Juarez precipitated further splintering within the Sinaloa Federation.

A spike in violence in Juarez marked the first few months of 2008 as El Chapo fought for control of the lucrative Juarez plaza.

On the heels of the Carrillo-Fuentes departure, the Beltran-Leyva brothers abandoned El Chapo in mid-May after, it is believed, the brothers learned that El Chapo provided the intelligence that lead to the January arrest of Alfredo Beltran in Culiacan, then a top operator within the Sinaloa Federation.

The retaliation saw El Chapo's son gunned down outside a shopping mall in Culiacan in May, an assassination ordered by the Beltran-Leyvas and reportedly carried out by members of Los Zetas.

"You must always consider the nature of Mexican organized crime since as far back as the 1980s," a security analyst in Mexico City, who asked not to be identified, told ISN Security Watch.

"These relationships are built on mutual benefit, but when the conditions change, the fallout is often violent, resulting in a relationship limited in scope and short-lived," he added.

Los Zetas and the Beltran-Leyva organization had been working together since mid-2007, but until the assassination of El Chapo's son in May 2008, many analysts did not consider this possibility, with most assuming that the Beltran-Leyvas were still loyal to El Chapo.

Now it is believed that Los Zetas and the Beltran-Leyva brothers have formed a new organization that controls access to the US and stretches across nearly the entire US-Mexico border area. Only Tijuana remains, and the considerably weakened Arrellano-Felix organization is not in a strong position to defend its turf.

With the supply routes from the days of the Gulf Cartels' peak of power still in place, the addition of the Beltran-Leyvas' control of the Sonoroa-Arizona smuggling route, likely strong ties with the Carrillo-Fuentes in Juarez; and the proven firepower of Los Zetas, this new organization may prove to be powerful indeed.

The paradox

"When states focus their counter-organized crime ops by only going after physical persons linked to large-scale organized crime without at the same time dismantling the criminal-asset networks supporting criminal enterprises, and without attacking high-level corruption that is linked to the economic networks, and that is - in exchange - providing protection to organized crime and benefiting from it, criminal groups will act rationally by re-assigning more financial and economic resources to protecting themselves through added corruption and by increasing the levels and scale of 'organized violence,'" UN adviser Edgardo Buscaglia told ISN Security Watch in a recent email interview.

This situation is one Buscaglia calls "The Paradox of Expected Punishment."

Supporting Buscaglia's argument is Guillermo Valdes, head of Mexico’s intelligence organization, known as CISEN. Valdes recently told the Financial Times in a frank admission that the cartels threatened democracy in Mexico.

"Drug traffickers have become the principal threat because they are trying to take over the power of the state," Valdes told the Financial Times in a 13 July report.

From the Mexican attorney general's office, reports have surfaced that organized crime controls no less than 80 municipalities throughout the country.

Both admissions point to one clear fact: Mexican organized crime works diligently to control politicians and other political leaders from the municipal level up to the national Congress. If Buscaglia's theory holds true, then as Calderon pushes forward his offensive, now focused on the Sinaloa Federation, criminal organizations will react with more violence and more bribes.

"Unless the Mexicans start dismantling the financial [and] economic networks supporting org[anized] crime operations, through money laundering, high-level corruption, arms trafficking, human traf[ficking], etc, the expressions of violence and instability will keep growing and the paradox will impede an effective performance of the State," Buscaglia said.

A way out?

Some consider the recent passage of the Merida Initiative, a multi-million dollar anti-drug trafficking aid package approved in June by US Congress, a way out of this paradox. (See Sam Logan, Mexico aid package passed, for ISN Security Watch.

Others disagree. Bruce Bagley, chairman of the Department of International Studies at the University of Miami, says the Merida Initiative is not a way out for a number of reasons, including the need for greater focus on police and judicial reform.

"Police reform and judicial reform need to make drug enforcement in Mexico more a civilian rather than a military function, and they're not very far down that line," Bagley told ISN Security Watch.

It is clear the Mexican government cannot outspend its opponents in head-on combat. As Buscaglia points out, the criminal's financial network must be targeted, but judicial reform and the professionalization of Mexico's police forces are also fundamental but have thus far received relatively little attention.

Files used to process criminal cases or in the investigation of these cases have been found to have an 87 percent error rate, according to Mexican daily La Reforma.

Would-be criminals run amuck. If they are arrested, chances are the arresting officer is on the cartel payroll. If not, the chances are he will make a mistake in the paperwork that will lead to the criminal's release. Within this atmosphere, it is extremely difficult to investigate, prosecute and imprison criminals inside Mexico.

"[The US has] a policy that is contradictory within itself on migration, guns, drugs and trade and investment, and Mexico just has to live with it because they are junior partners and they are trying to deal with [their security] problems, but militarizing them is not going to get rid of it," Bagley argued, adding, "drug trafficking will continue and Mexico has to address its institutional problems itself and those problems are not going to be solved from one day to the next."

The Merida Initiative does provide funding for judicial reform and the professionalization of police forces, but not nearly enough. If it is to be a way out, most argue, more focus should be placed on improving the police so they may perform a job currently conducted by the Mexican military.

Some 20,000 soldiers are on patrol in at least 11 Mexican states, but Calderon has plans for a drawdown in 2009, according to a Jane's Intelligence report. Local reports claim Calderon is focused on ramping up the number of police on the job, but doubts remain about the screening process. With a fast increase of police, will the government prevent the entrance of more cartel-paid moles?

Either way, violence in Mexico will likely continue at record levels through the end of the year. It is not clear if a megacartel is forming along the northern border, but if one does surface, its life may be short-lived, as history suggests.

Mexico depends on aid and assistance from the US. The situation is one of national security in Mexico. Such a security threat on the US' southern border is more than enough to shock US leaders into action. So far, however, they have focused on the status quo policy of heavy spending on military aid with less attention paid to the root causes of corruption, judicial reform and police professionalization.

As one Mexican security analyst recently put it, the relationship between Mexico and the US is one in which the US holds Mexico by the throat over the edge of a cliff. Mexico is certainly in a bad situation, but the US will never drop its southern neighbor. To do so could very well mean state failure, and this is not a reality the US or the region can accept.

Summer slow down...

Until mid-July, I will be on the road conducting field research for my first book, a nonfiction narrative about organized crime and immigration in the United States. 

By the third week of July, I will be back with the weekly commentary, Security in Latin America.

What if Mexico's Military Doesn't Win?

For over 500 days, Mexican President Felipe Calderon has used his military to combat organized crime across the country, specifically in Tijuana, Juarez and the states of Michoacan, Sinaloa, and Tamaulipas. But the body count suggests his measures have incurred more trouble than solution.

For the past 16 months, Mexico has registered 3,600 deaths - 225 a month, or an average of 7.5 a day - related to organize crime, according to Mexican daily La Cronica. In some pockets of Mexico, such as Culiacan, where violence has spiked in recent weeks, some quietly wonder what will happen if the military cannot control what is clearly the country’s top national security threat.

Mexico’s National Security Council met in Culiacan, Sinaloa on 13 May to discuss measures needed to diminish violence in the region. The high-level emergency meeting, including the Mexican Attorney General, head of the Mexican intelligence agency, the Secretary of Public Security, the Secretary of National Defense, and the Secretary of the Navy among others. It was organized after two weeks of extended violence in Culiacan that saw a number of policemen killed as well as members of organized crime, most notably the son of alleged leader of the Sinaloa Cartel, “El Chapo” Guzman.

According to some observers, the violence in Sinaloa may be in part due to a recent division within the Sinaloa Federation between “El Chapo” Guzman and the Beltran Leyva brothers. But what is beyond conjecture are the hardened positions taken each by the state’s police and military forces, and members of organized crime that operate in Sinaloa, a strategic state in the Mexican smuggling underworld.

During a two week span from 28 April to 12 May, a number of incidents escalated violence to the point where it has spilled over into Mexico City, causing at least one assassination that has put the whole country on edge.

On 30 April, a shootout in Culiacan left three gunmen and two local police dead. Another 13 were arrested and police seized some US$370,000 along with an unspeficied number of high-caliber rifles. The next day, Edgar Millan, head of the 27,000 strong Federal Preventive Police (PFP), held a press conference to assure the public that Calderon’s government would continue fighting.

He then boarded a plan to escort the 13 captured gunmen back to Mexico City where they were likely subjected to long hours of interrogation.

The following day, 2 May, four PFP agents were killed while patrolling a small town 15 miles outside of Culiacan. Two municipal policemen were killed along with along with two more gunmen and one unidentified male who was shot in the head. The bad guys had struck back.

By 4 May, notices started appearing around Culiacan. They came in the form of macabre messages written on coarse cloth cuts dangled from public places. Some messages were from the cops, telling the criminals to watch out. Others were from the criminals in response. And some were from one of the Beltran Leyva brothers, who claimed to be the boss in Sinaloa, a curious development. The various messages, none signed except those from Beltran Leyva, continued showing up every morning on 3, 4, and 5 May. By 6 May, local police lines were jammed with dozens of anonymous calls, most fictitious, about this or that cop who had been killed.

The next day gunmen again attacked the police, but only four were wounded. That was when the governor of Sinaloa, Jesus Aguilar Padilla, asked for a National Security Council meeting to be convened in Culiacan. But before they could meet, howver, a crowning moment of violence occurred in the early evening hours of 8 May.

Most believe it had nothing to do with the police.

Coming out of a local store, Edgar Guzman, the 22 year-old son of “El Chapo” Guzman, was attacked by an onslaught of gun fire and a discharge from at least one bazooka. He was instantly killed. The son of the Sinaloa Federation’s chief financial officer was also killed in an onslaught that left over 500 shell casings littered about the parking lot.

Now, Mexican authorities fear, there is confirmation that the Beltran Leyva brothers, formerly in association with “El Chapo” Guzman, have split from the Sinaloa Federation, marking the moment with the death of Edgar.

And to drive home the point of their strength and gut for violence, the brothers orchestrated the assassination of Edgar Milla, the head of the PFP, who was killed in Mexico City only hours after the death of the son of the alleged leader of the Sinaloa Federation. In under two days, the Beltran Leyva brothers exploded onto the Mexican organized crime scene as yet another group the Mexican government will have to dismantled before peace can be won.

It is reminiscent of when a DEA agent involved in the hunt for Pablo Escobar, the head of Colombia's infamous Medellin Cartel, lamented that killing Pablo only made way for the rise of the Cali Cartel. Now, as the Mexican army squeezes the life out of the Tijuana and Juarez Cartels, could it be that it has made room in the country’s black market for the rise of the Beltran Leyva brothers? If this is the case, then the question, “what if the military can’t stop them?,” is perhaps more appropriate than we thought.

Bolivia's Internal Power Struggles

The selfish interests of a small group of upper class Bolivian families could determine the future of their country's geopolitical position in South America.

These families stand at the center of Bolivia's secessionist movement in the state of Santa Cruz, where a referendum for the state's autonomy was held on 4 May. Voters favored autonomy at 84 percent. It was a political gut shot for President Evo Morales' administration. But the outcome reaches beyond Morales and could have prolonged consequences for both Brazil and Argentina.

Bolivia supplies Brazil and Argentina with the natural gas that moves industry in Brazil and warms homes in Argentina. Disruption of the flow of gas is not an option for either country.

Two years ago, when Morales nationalized his country's natural resources, he began a long battle to redistribute the wealth of his country from the hands of the few - represented by Santa Cruz - to the hands of the many, mostly his poor constituents. Yet in Santa Cruz stands the most concentrated group of interests that has the most to lose from Morales' vision.

The recent referendum represents the culmination of a long road of shouts, protests, some street clashes, and mostly political maneuvering to avoid the power of the state, and Morales' administration, from stripping them from their long-held positions of economic power. Santa Cruz will not go quietly, and leaders there know they have some leverage.

Santa Cruz is the engine of the Bolivian economy, representing 50 percent of the country's GDP and some 90 percent of the country's industrial strength. The state can easily stand alone, and without Santa Cruz, the rest of Bolivia would wither on the vine. Morales knows this but rather than fight the secessionist movement head on, he has simply regarded their referendum and clamor as illegal and the fruit of "imperialist" conniving.

Since the Bolivian Congress has made any secessionist referendum illegal, Morales has the legal upper hand, but he could not ignore Santa Cruz if state leaders decide to unilaterally act on their recent vote. The referendum vote, theoretically, gives state leaders more autonomy, allowing them to control their own state police, form a parliament, enter into binding agreements with sovereign nations, and control all land redistribution.

Three other provinces, Pando and Beni to the north of Santa Cruz, and Tarija on the southern border with Argentina, will hold secession referendums in June. While not as economically important as Santa Cruz, a successful referendum in these countries would form a strong oppositionist block using the voice of the people: the same tactic Morales has used to push forward his own political agenda.

Most importantly, Tarija and Santa Cruz both lie on significant natural gas deposits. Tarija sits on some 85 percent of the country's proven gas reserves. Depending on how this power struggle progresses, the leaders of both Brazil and Argentina could find themselves pulled into Bolivia's domestic problems to secure supplies of natural gas, a matter of national security.

Bolivia's military has remained at a distance from the political dispute, although most presume it will remain loyal to Morales. The Bolivian military is the most interesting component of this situation. If the generals' loyalty remains with Morales, he will have the necessary tools to force the unruly upstarts into line. If not, the secessionists, led by Santa Cruz, would force the hands of Argentina and Brazil.

It is unlikely that any war breaks out over control of Bolivia's natural gas resources. But as one group struggles to preserve its power against a government that has a democratically elected right to redistribute that power, Bolivia's neighbors can't help but pay attention. The decisions of a small group of families could very well change their future.

The International Element of Argentine Domestic Problems

The recent food riots in Haiti were just the tip of an iceberg that extends as far south as Argentina. Brazil and Argentina are the world’s top producers of soy, after the United States, and Argentina is the world’s top wheat producer.

Both countries are under increasing pressure to reduce exports to safe guard the economy and the county’s own food stuffs. But Argentina is in a very difficult position where the government is at the beginning of what may prove to be a long and nasty process of readjusting food supplies, prices, and the balance between international demand and local needs. It will be a process felt across the world.

The 30-day truce between farmers and the Argentine government will end on 2 May. So far, negotiations have not gone well, as farmers are reluctant to pay even higher export taxes – the third tax hike on soy, for example. As the personal grudge the Kirchners have against the Argentine mega-farm aristocracy wages on, it is likely further disruptions in export for meat, soy, and wheat will continue into the near future.

Argentina’s internal wheat demand is some five million tons a year. It produces 15 million tons of wheat annually, exporting ten.

The battle over food exports in Argentina and the spike in food prices world wide has exacerbated a far deeper problem the country has with inflation. The country’s Agricultural Minister recently resigned, in part, due to his decision not to be a member of an administration that actively works to hide the truth about inflation.

As the real value of the Argentine peso against the dollar continues to slip, food prices in Argentina will rise. It is one thing to work a month and not be able to buy a luxury item. It is entirely another to work full time and not be able to buy food.

Expect the situation in Argentina to rapidly decline into street-level protests, perhaps even riots if the prices continue to scale up. The effects Argentina’s internal problems will have on the international level will be felt in the poorest countries most dependent on Argentine wheat. West African countries are at the top of this list.

Well aware of the situation in Argentina, Brazilian President Lula announced on 25 April that his country will increase wheat production to reduce dependency on Argentina. Lula’s announcement is in part politics, but it also reveals his take on the Argentine crisis. It is one the Brazilian leader expects will not improve for months, perhaps even years, to come.

Meanwhile, Venezuela simmers. Chavez said on 24 April that one day Venezuela will be a food exporter. Today, however, it is one of the region’s few net food importers. Chavez is likely worried about supply from Argentina as well as international food prices in general as his price controls may slip as government subsidies are not able to keep up with the rising price of food.

If price controls on the retail side do slip, many Venezuelans would find themselves waiting in long lines for basic foodstuffs only to realize they can’t afford them now – not an ideal combination for stability.

Brazil will again take the lead to do what it can to fight the rising cost of corn, wheat, soy, and other foodstuffs, as demonstrated by its recent donation of money for food to Haiti. But Brazil cannot act alone. If Argentina is unable to meet the world’s demand for wheat and soy, the ripple effect will reach from the middle class outlets in the United States to the smallest market in West Africa and beyond.

South American Defense Council

Speaking from the Miraflores Presidential Palace in Caracas, Venezuela on 14 April, Brazilian Defense Minister Nelson Jobim was confident the South American Defense Council (CDS) could be organized by the end of 2008.

“I believe the council can be installed by the end of the year,” he said.

Since 14 April, Jobim has moved on to visit Suriname, with visits planned for Guyana, Colombia, Ecuador, Peru, Paraguay, and Argentina.

The formation of the CDS would be the headstone of a region-wide military alliance that, according to Jobim, would not be the classical military alliance as it would not involve operational units.

Yet the formation of this alliance has caused concern in Washington as it is the region’s first military alliance that explicitly does not want the involvement of the United States. This concern, however is unfounded, and if Washington tries to get involved, it would find itself undercutting Brazilian leadership, allowing Chavez room to proselytize his message and anti-American position within the military alliance.

Many observers from inside the beltway do not take two important truths into account.

Despite photo opportunities and many hugs, Lula and Chavez are not friends. Lula's administration is populated with old-school revolutionaries who share some of Chavez’s vision but have little respect for his implementation process. Lula, after years of trying and failing to be president of Brazil learned the hard way that being a die-hard Socialist is no path to power in Brazil. As a lame-duck president, he is more interested now in his legacy and in passing the torch of leadership to a hand picked successor.

Keeping Brazil at the top of the region’s geopolitical totum pole is a top priority as voters in the next election will likely remember Lula’s often stated promises to make Brazil a global player. The first step up that ladder is regional dominance. Checking Chavez is essential to that goal.

The idea for this military alliance was born in Brasilia and appeases the Brazilian military voices who have been calling out for a check on Chavez and his military spending. Bringing Chavez under the reigns of a regional military alliance, in theory, gives the Brazilians room to exert some control over Chavez in a multilateral forum of regional friends where he is least likely to employ his unsavory acts of public outrage to spark nationalist tension at home.

This alliance also allows Lula to quietly remind Chavez who is the real power house on the continent. The Venezuelan military has shiny new toys, but neither Chavez nor his generals have the persuasive pull enjoyed by Brazilian military leaders, backed up by Brazilian military factories and years of service for militaries around the region.

The Bolivian army, for example, could not mobilize without Brazilian vehicles, parts, and service. The Colombian Air Force recently used Brazilian built Supertucano aircraft to bomb the FARC camp in Ecuador. Supertucanos were used on nearly all the major bombing missions against FARC encampments in 2007. They have had a major impact on the Colombian Military's increased in air raids. Brazil has the region’s largest arms and ammunition industry in the region and is region’s leader in nuclear technology, followed closely behind by Argentina.

With Lula calling the shots for his representative at the South American Defense Council, he remains in a position to apply pressure on Chavez to keep him quiet and involved in Venezuelan domestic matters, a focus that would benefit the Venezuelan president.

The region’s other military leaders are more likely to fall into step behind Brazil and if Chavez were to pull out of the alliance, he would remain more isolated within his own region than he is today – a stated goal of US foreign policy for Venezuela.

Washington frets about a military alliance in South America, but if Washington leaders can be objective about Brazil’s goals, they would see therein an ally that can do far better in controlling Chavez. If Washington meddles in the South American Defense Council, it would find a loud voice in Chavez and the Brazilians would be forced to join in, cursing Washington all the while for not letting them take the lead.

The Other Border

With so much focus on the US-Mexico border, it is easy to forget about Mexico’s border with Guatemala. It is one that in the coming months and years will likely become a concern and a serious problem if Mexico is forced to fight a two-front war against organized crime.

Two problematic areas have been established.

One is in southern Guatemala where the Suchiate river largely defines the Guatemala-Mexico border. This is an illegal immigrant corridor through which hundreds of thousands of undocumented Central Americans pass into the Mexican state of Chiapas.

And it is not just Latinos. On 3 April, six adult male Iraqis were apprehended after having crossed the Suchiate river on a raft holding falsified Dutch and Greek passports purchased in Guatemala. A total of 29 Iraquis were arrested in Chiapas in 2007.

Those who help Central Americans and other cross Mexico’s two borders are called “polleros” or sometimes “coyotes”. From 2000 to 2005, some 15,000 polleros were arrested in Mexico, and according to the Mexican National Migration Institute, 3,739 were prosecuted. The gap between arrests and prosecutions indicates a high level of complicity between polleros and the authorities tasked with stopping them.

A similar high number of arrests and low number of prosecutions continues through today, indicating the reports published concerning arrests of polleros or illegal migrants should be taken lightly as it is likely arresting officers will take a bribe. This system if catch and release then has served to enrich corrupt police officers more than it has to stop illegal border crossings into Mexico.

The other problematic area is in northern Guatemala in the department of Peten, where a largely lawless border area facilitates the ongoing construction of clandestine airstrips and the resulting movement of illicit cargo across the border into Mexico. It is an ideal smuggling route as there is relatively little government presence in the Peten and even less on the border.

Five principle border crossing routes have been identified by Guatemalan authorities: Pipiles, Santa Rosita, Bonanza, crossing into Chiapas, and El Repasto and El Sacrificio crossing into Campeche state. Near these border crossings in Guatemala are any number of landing strips, where men connected with Mexican trucking companies arrive at prescheduled times to pick up the cargo and transport to distribution centers further inside Mexico.

The Guatemalan government believes the Sinaloa Federation, the Gulf Cartel, and the Juarez Cartel all have agents working in the Peten region to move drugs into Mexico. These groups and others have worked in the Peten with near impunity for nearly a decade. So far, the Guatemalan government is powerless to stop them and help from the United States and Mexico is not on the horizon.

Together, both of these corridors represent the number one reason why Guatemala is a magnet for drug trafficking and illegal immigration. The combined result is more than the state of Chiapas, historically one of the most poor Mexican states, can handle.

With all eyes fixated to the north where President Calderón has focused the might of the Mexican military to combat organized crime, there is little help coming from the federal level to assist with what is clearly another major national problem in Mexico. It is one that has a clear spillover effect in the United States, the ultimate destination of both the drugs and humans that pass from Central America across Mexico’s other border to ultimately arrive on the northern shores of the Rio Grande.

Lula-Chavez Recife Summit Summary

Venezuelan President Hugo Chavez arrived in the northern Brazilian city of Recife on 25 March to review with Brazilian President Lula the Abreu e Lima petroleum refinery, to be built under an agreement between Petrobras and PDVSA. The meeting itself resulted in little more than photo opportunities, but it did reveal a growing weakness in Chavez’s position. By the end of the summit, Chavez revealed he doesn’t have the money to pay for his end of the refinery. He agreed in principle to a regional military alliance, and signed deals that open up more trade flowing from Brazil to Venezuela.

Contrary to what many believe, Lula and Chavez are not good friends. They do have some ideological overlap, but Lula is interested in seeing his country take the regional leadership role for good. And if he has to crush Chavez to make that happen, so be it. But Lula’s tactics are not direct. He’d rather smile and hug Chavez, and only afterwards use Petrobras, a military alliance, and an unequal trade balance to pull Venezuela into a dependency that forces Chavez to acquiesce to Brazil’s political leadership in the region.

It is no secret that PDVSA has a cash flow problems. Chavez has outspent his enormous oil windfall and despite the high price of Venezuelan heavy crude, PDVSA cannot keep up with the production necessary to sustain Chavez’s expenditure appetite. It’s a matter of expertise and the ability to run an efficient refinery. Petrobras has both.

The Abreu e Lima refinery will have the capacity to produce some 200,000 barrels of oil a day with the potential of expansion to 400,000. Talk of the refinery has been ongoing since 2005 with no formal agreement in place.

During the presidential summit, no formal agreement was reached, indicating that Chavez simply doesn’t have the cash to put up his part the US$4 billion price tag for the refinery.

Most in Brazil expect Petrobras to build the refinery itself, scrapping the proposed 60-40 split between Petrobras and PDVSA. Lula’s bet is that by 2010, when construction of the refinery is expected to be complete, Chavez will have no choice but to do what it takes to get PDVSA crude oil into the Petrobras heavy crude oil refinery.

Lula has also moved to arrange agreements to continue exporting to Venezuela. Milk, beef, and other foodstuffs are at the top of the list, and trade between the two countries is expected to rise from US$5 billion in 2007 to US$8 billion in 2008. This increase in trade will undoubtedly become unbalanced in Brazil’s favor as Venezuela continues to import the food its own farmers and merchants can no longer sell Venezuelans at competitive prices.

Finally, with talk of the South American Defense Council on the regional agenda, it is likely Venezuela will sign onto the agreement. Brazil’s Defense Minister will travel to Caracas in the middle of April, and it is possible he obtains backing from the Venezuelan military. It would pave the way to bring other countries on board. Along with Venezuela, there is some indication that Brazil will pull in Bolivia, Colombia, Guyana, Ecuador, Peru, and Paraguay.

This summit did little for Chavez. He did manage to secure more foodstuffs for Venezuela and indicate that he’s at least interested in the military alliance. For Brazil, the summit was enough to solidify in Lula’s mind what many in Brazil have been thinking all along. It was wise to let Chavez act like the regional leader for a time. He had the money and some interesting ideas. But he burned hot and fast. In the coming months and years, it will become undeniably clear to Chavez and the rest of South America that Brazil is coming into its own and that Chavez was just a fad

Coca in Brazil

When satellite images revealed a small coca plantation some 150 kilometers south of Tabatinga in the Brazilian state of Amazonas on 14 March, both the Brazilian military and local members of the civil police immediately headed to intercept.

They found roughly two hectares of coca bushes and a small cocaine processing lab filled with all the necessary chemicals and other materials required to process coca leaves to coca paste and from paste to the pure powder.

According to analysts, Brazil consumes roughly 40 tons of cocaine a year, while another 40 tons annually pass through the county and on to West Africa where the shipments are downsized and carried into Europe, mostly through the work of dozens of mules.

Given the size of the two hectare plot, the bushes growing there could yield up to 12 kilos of pure cocaine, hardly enough to warrant Brazil as a source country.

The small plantation’s location was along the banks of the Javari river, south of Tabatinga, a lawless town that sits on the Brazil-Peruvian border. The location suggests cooperation between Brazilian and Peruvian elements, and confirms the use of the Javari river as a waterway used to transport cocaine from the remote jungles of the Amazon to the city of Manaus and possibly onto Belem on the coast for export, or south to Sao Paulo for distribution and local consumption.

The discovery of the plantation indicates that there are likely more, but most importantly, it confirms a long-held suspicion that coca bushes have been genetically engineered to grow at low altitudes.

According to local reports, the leaves of the coca bushes that grew along the banks of the Javari were thicker than the leaves found on bushes growing at higher altitudes in the Andes. Some point to the leaves’ thickness as a sign that this new strain can produce more coca paste per bush.

Tabatinga has long been known as a port town where drugs, guns, and the precursor chemicals used to produce cocaine meet and are swapped between interested parties coming south from Colombia, east from Peru, or west from Brazil. The Brazilian criminal Fernandinho Biera-Mar, considered to be running a multi-million dollar smuggling business from his prison cell, pioneered the links between organized crime in Rio and Colombia’s FARC. The cocaine for guns barter system he put in place is considered very much alive today.

It’s possible that his associates are involved in the creation of coca plantations in Brazil. Such an evolution is certainly not a surprise, as the Brazilian Amazon would be the perfect place to expand coca production.

Reporting the discovery of the camp, the Brazilian military called it a triumph of superior intelligence gathering. Others quietly regard it as a lucky break. With barely enough man power to operate the air-bridge denial program that Brazil maintains in the Amazon through a series of radar posts, and a Navy that refuses to patrol rivers, Brazilian authorities are hardly in a position to crack down on the proliferation of more coca bush plantations in the Amazon.

There is simple saying in Portuguese that goes, “In the Amazon, anything grows.” Apparently coca does too.

Mexicans in the FARC & the FARC in Mexico

After the Colombian Air Force (FAC) bombed the camp of FARC leader Raul Reyes with Brazilian airplanes and Israeli guidance systems, the camp lay destroyed in the early morning hours of 2 March. When the Colombian military special forces picked through the bodies just moments after the dust settled, they came across an interesting find.

Mexicans figured among the dead.

Six days later, the Colombian vice president, Francisco Santos, said that there were “several” Mexican youths being trained by the FARC while residing at Reyes’ camp. At least one Mexican, Lucia Morett Alvarez, was taking a course on explosives. This fact resonates with the as yet unconfirmed rumors that Raul Reyes had been in contact with a Mexican insurgent off-shoot called the Ricardo Flores Magon - Insurgent Militias. Other information connecting the FARC with insurgencies inside Mexico is likely on the recovered computers, but so far has not been leaked.

According to the Colombian government, however, at least four Mexicans have been confirmed as dead from the bombing of Reyes’ camp.

Beyond insurgent activity, and the reported resurgence of FARC activities among Mexico’s universities, the presence of the FARC in the Mexican drug trade has been well established. As businessmen, FARC operatives have taken no sides in Mexico’s internal struggles. They are known to have worked with all of the major Mexican drug trafficking organizations. Where there is a Mexican buyer, it seems, so there is a FARC seller.

Echoing the Colombian vice president’s public claim of Mexicans taking classes from the FARC, the Mexican Attorney General, Eduardo Medina-Mora, said on 10 March that the FARC maintains a strong presence in Mexico. He claims the FARC sells some US$780 million worth of cocaine to the world market every year, of which Mexican drug trafficking organizations purchase some US$428 million or 55 percent.

While it is difficult to determine the true dollar amount of FARC cocaine sales to Mexico, it’s possible that this number may soon grow if the recently released older brother of the Arellano-Felix drug trafficking organization (AFO), Felipe, decides to get back into the cocaine buying business.

He was the organizations top cocaine smuggler in the early 1990s and is considered the front man who made contact with the FARC, establishing the insurgency as a reliable cocaine supplier. The AFO has been credited with being the first Mexican drug trafficking organization to have engaged the FARC as a cocaine supplier. Now, it seems, there is a chance to renew old ties, bringing the FARC deeper into Mexico.

Two Fronts Against Colombia

Colombian relations with Ecuador chilled after Colombia delivered a bomb strike on the Ecuadorian side of the border. The FARC’s number two, known as Raul Reyes, was killed, making the strike justifiable for Colombia but still inexcusable for Ecuador.

Speaking more to a domestic audience than the Colombians, Ecuadorian President Rafael Correa reacted strongly to the Colombian incursion. He has sent a cursory amount of troops to the Colombian border for a show of strength, not intimidation. He has also begun a regional tour to seek support for his cause, and is scheduled to meet with Hugo Chavez on 5 March after his current meetings with Alan Garcia in Peru have been concluded.

Chavez, who has maintained a rhetorical offensive against Colombia since November last year, has taken advantage of Ecuador’s ire to propel his rhetoric and actions to a new level of war mongering. Chavez has now sent troops and tanks to the Venezuelan-Colombian border, has closed a major border crossing point, and promises that trouble will come if Colombia makes any move to invade.

Uribe will not send Colombian troops to either border, however. Interesting though is his abrupt change in tact. Until 4 March, Uribe had resisted playing into Chavez’s game of name calling and public argument. Now Uribe has announced that he will sue Chavez at the International Criminal Court for financing genocide.

Few doubt that Uribe has the information to back up his claims. Colombian intelligence agents have been planting the seeds of intelligence gathering in Venezuela for over a decade. Rumors that Chavez has in one way or another loaned or granted the FARC 300 million are likely supported by as yet undisclosed evidence. Already information has been leaked to Colombian media, which has taken the mantel for its country and is currently in full attack mode against Chavez – likely allowing Uribe to keep out of the public eye as Colombian journalists lambaste the Venezuelan leader with a number of accusations.

Not the least of which has been a recent accusation that Chavez offered a “stake” in oil companies to the FARC. The nature of this agreement is unclear, but if true, its ramifications for the state sponsorship of an internationally recognized terrorist group and insurgent army are serious enough to potentially cause Chavez some serious trouble at home.

Correa’s ruffled feathers are little more than a show of national unity and a savvy politician seeing an opportunity to gather support. Correa knows that Raul Reyes’ death benefits his country nearly as much as it benefits Colombia. And it is Chavez, not Uribe, that is in the most precarious position. Uribe appears to have lost his patience and will now push forward with a credible smear campaign that may loosen tight blocks of “chavista” support inside Venezuela, further reducing Chavez’s already dwindling support base.

With 24 percent inflation, scarce supplies of basic foodstuffs and a soaring crime rate around the country, it behooves Chavez to keep his supporters’ attention focused elsewhere. Yet if by chasing after war with Colombia, Chavez actually brews a conflict, he must be careful to control blood shed and come out a clear winner. If not, there is a significant chance he will lose the conflict and his presidency...