Interview with former Mexican ambassador Andrés Rozental

TalkingDrugs asks Andrés Rozental about some of the economic issues surrounding the illegal drug trade in Mexico.

Andrés Rozental is the former Mexican Ambassador to the United Kingdom from 1995 to 1997. A career diplomat for more than 35 years, he served his country as Deputy Foreign Minister (1988-1994), Ambassador to Sweden (1983-88), Permanent Representative of México to the United Nations in Geneva (1982-83), as well as in various responsibilities within the Mexican Foreign Ministry and abroad. Since 1994, he holds the lifetime rank of Eminent Ambassador of México. Currently, Ambassador Rozental holds non-executive Board positions in several important multinational corporations in. He is also the President of his own consulting firm, Rozental & Asociados that specializes in advising multinational companies on their corporate strategies in Latin America.

Q1. From a business perspective what affect is the violence and insecurity having on the Mexican and US economy?

There is no question that the current situation in Mexico is having a negative influence on the Mexican economy, but it´s harder to determine whether the US economy is affected as well, given the current recession and other factors which have nothing to do with Mexico. Foreign direct investment in Mexico has not recovered to pre-2008 levels, mostly as a result of the global economic downturn, but also because there are serious downsides to having to deal with the insecurity, corruption and violence prevailing in areas of the country that have been magnets for investment. The added cost of security-related measures foreign investors have to consider when looking at Mexico puts us at a disadvantage vis a vis other destinations. There are already several high-profile examples of investment projects being put on hold because of the violence and public safety concerns.

Q2. Do you think that the North American Free Trade Agreement and the economic and social conditions that it created have led to an increase in illegal drug trafficking in Mexico?

Not at all. Illegal drug trafficking in Mexico is above all a reflection of the huge financial benefits that organized crime reaps from the insatiable demand for drugs in the US, and increasingly in Mexico. The principal driver of higher consumption in Mexico has been the decision by the cartels to change a traditional transit-only strategy when moving their shipments from South America to the US, to marketing in Mexico as an easier way to make money. The other main factor which has led to an increase in drug trafficking through Mexico was the success of enforcement efforts to close down the Caribbean routes that traffickers used in the past to ship from Colombia, Perú, Bolivia and other drug producing economies to the US and replace them with the Mexican connection. Now that the joint enforcement efforts of Mexico and the US have made it harder and more expensive to use Mexico as a trans-shipment country, the cartels have shifted once again to Central America and parts of the Caribbean as 'easier' routes.

Q3. Would a better response to the threat posed by the drugs cartels and illegal immigration be targeted investment at poor rural communities in Mexico?

Definitely, but not as a single panacea. Better opportunities for employment and participation in the formal economy by Mexicans who have traditionally migrated to the US because of the huge wage differential between the two economies would contribute to growth and prosperity in the traditional sending areas of Mexico. However, the drug cartel threat is mainly an outgrowth of the interrelationship between the drug lords and the communities in which they live or operate, most of which are poor and rural and where the Mexican State has not been able to provide for the essential educational, housing and health needs of the population. In many ways, organized crime has invested in those communities as a way of ensuring that loyalties go to the cartels rather than to the authorities. Additionally, the widespread corruption of police and other law enforcement forces further complicates the issue.

Q4. In your opinion can market forces be used as effectively as law enforcement in combating the power of illegal drugs cartels?

The only effective market force that will help fight the cartels is to recognize the demand side of the equation and allow demand to be met through a legal way for consumers to buy that which today is proscribed. As was seen during Prohibition in the US and with the anti-tobacco initiatives that have led to a significant drop in smoking among the same socio-economic classes that consume marijuana, cocaine and methamphetamines, de-criminalizing the sale and use of ´soft´drugs would probably eventually result in lesser demand. In the meantime, taxing and regulating the market would bring a huge resource base to help pay for educational and demand reduction programs, as well as free up law enforcement bodies to deal with serious crimes rather than petty misdemeanors. Producing countries would also benefit their formal economies by channeling fiscal and regulatory resources to themselves rather than to the cartels.

Q5. Do you think that the military should be used in a law enforcement role in the trying to stop organized crime and illegal drug trafficking?

In principle, no. However, in the case of Mexico where the civilian police have been unable or unwilling to perform their law enforcement function, there doesn't seem to be much of a choice in the short term. President Calderón has brought the military in to replace corrupt and inefficient civilian agencies, but has done little or nothing to create new law enforcement bodies that could recoup their function once the old ones have been disbanded. The fact that the military are not trained for this kind of work, nor are they able to follow a civil and human rights agenda given the very concept under which they operate, has seriously damaged the institution in the eyes of Mexican public opinion and has equally put the armed forces under severe strain. Unless the military are replaced soon, this situation can only deteriorate further and make it more difficult to send them back to barracks.

Q6. The US government has spent billions of dollars trying to combat drug use but it has only increased. In these difficult economic times would US citizens be in favour of a more economically effective drug policy?

The entire drug issue is unfortunately a social taboo that Americans refuse to face in a logical and coherent fashion. Most people want to sweep the problem under the rug and blame the producing or transit countries for what is essentially a huge social problem in the US and some other developed countries. Drug consumption, like alcohol, tobacco or other substances that have been either prohibited or tightly regulated over the years, will be a fact of life for the foreseeable future. Rather than avoid facing this reality and working to make sure that drugs are classified according to the potential harm they cause, regulated as to purity and safety, taxed according to their demand, and channeled into orderly and legal demand/supply mechanisms, the US and severa other countries --including Mexico-- should take the initiative to convene a global diplomatic conference to re-visit the entire narcotics regime and replace the outdated treaties and regulations in force today, with a much more realistic framework that recognizes the demand side of the equation and gives states the ability to regulate, tax and control those drugs which are less toxic and harmful to humans, at the same time as stricter rules are established for substances that are proven to be extremely harmful or destructive.