Wednesday, May 6, 2015

The Socio-Economic Impact of Organized Crime in Tamaulipas


  • The arrest of top tier drug kingpins and the ongoing fragmentation of the Zetas into localized cells will weaken many gangs’ drug dealing capabilities and lead to an acute increase in parasitic forms of income generation—especially kidnapping and extortion—as well as territorial conflicts.
  • The rise of violence and predatory crime will cripple local economies and engender brain drain. Foreign investors may be deterred by the insecurity.
  • Censorship of the press, political corruption and co-optation of local law enforcement will further erode the rule of law and allow impunity to reign supreme. 
  • The state should respond to these problems by sending a large military force to dismantle Zeta cells and improve security while investing in more sustainable solutions: strengthening the rule of law and building strong communities.

Problem 

The Zetas, once Mexico’s most powerful organized crime group (OCG), pioneered a new vicious business model to Mexico’s organized crime landscape. Unlike traditional Mexican OCGs that focused specifically (or at least more intently) on transnational drug trafficking, the Zetas economic model relies on terror, violence and brute force to control territory and to then engage in a variety of parasitic rent seeking activities (such as kidnapping, extortion, theft, human trafficking and taxation) to generate income. Because of its decentralized structure, the organization quickly fractured into a multitude of competing localized cells after the government decapitated the top leadership in a number of high profile arrests and shootouts. 

As the Zetas continue to fragment under the pressure of law enforcement, succession struggles and turf wars, the level of violence and parasitic crimes in the Zetas strongholds (Veracruz, Nuevo Leon and particularly Tamaulipas) will skyrocket—especially since they will face off against a similarly fragmented Gulf Cartel that will mirror their brutality and business tactics. Increasingly, because these groups are losing their capacity to engage in international drug trafficking, they are focusing more on exploiting economic opportunities in their local turf and growing more dependent on kidnappings, extortion and theft to produce steady profits. Current statistics and incidents corroborate this looming trend. Kidnappings rates in Tamaulipas surged to 6 per 100,000 citizens—the highest rate in all of Mexico. Meanwhile, Mexico’s state oil company, Pemex, reported a 58 percent increase in illegal oil pipeline taps since last year. Moreover, indiscriminate armed robberies and cases of extortion continue to plague businesses, buses, and citizens of all social classes. Lastly, the cartel carries out these crimes with virtual impunity because it actively corrupts policemen and politicians while stifling the freedom of the press. Those public servants or citizens who are brave enough to speak out or oppose the cartel are met with swift, and often deadly, retribution.



Societal Impacts 

While the ongoing insecurity has already undermined the local economy of Tamaulipas, the increase in violence, kidnapping and extortion will exacerbate the region’s economic descent. Coastal towns along the Gulf such as Tampico and border towns such as Nuevo Laredo, Reynosa and Matamoros used to thrive from tourism and commercial ties with local residents from Texas. For example, the used car industry in Matamoros flourished from its proximity to the United States. Mexicans would often haul broken vehicles, fix them, and entice Mexican consumers from the interior with good deals on used cars. Now these buyers are too afraid to travel to the border and the entire industry is suffering. Worse yet, after a recent three day surge in violence in a section of Tampico, many residents gave up on the city altogether. In one major business district, a wave of shop owners immediately signaled their despair by posting “for sale” and “for rent” signs. Meanwhile, overall matriculation rates at the Tamaulipas Institute of Superior Studies fell by 20 percent while foreign student enrollment plummeted by 90 percent. Indeed, many affluent victims of organized crime, who can afford to do so, choose to move their families and their businesses to the United States. The exodus of upper and middle class business owners, entrepreneurs and professionals is not only creating a destabilizing brain drain but also stimulating capital flight and a reallocation of financial investments across the border in the United States. Finally, as the Mexican government hopes to attract foreign investors to revive Mexico’s oil industry, the insecurity of the oil rich Tamaulipas state could compromise Mexico’s capacity to lure investors.

By means of bribery and terror, the Zetas corrupted or intimidated the local and state politicians, police, and judicial officials into a state of tacit submission. A recent confidence test sanctioned by the state government and administered to the state’s police force reveals that close to half the police force may have links with organized crime. When gangsters with links to organized crime are actually arrested, 98 percent of them are eventually released. The Zeta’s infiltration of the police and judiciary seriously undermines the rule of law. Consequently, many victims of serious crimes fail to report crimes to the authorities because they fear the possibility of reprisals from their attackers. Even public spirited citizens telephoning anonymous crime tips to the authorities have been traced and targeted by criminals. Although the media seeks to increase government accountability by highlighting Mexico’s political-criminal nexus, at the moment, it faces insurmountable dangers from organized crime. Even a citizen journalist, who protected citizens by providing real time information about the location of shootouts, was brutally murdered for breaking the cartel’s code of censorship. As long as political, judicial and law enforcement institutions remain under the control of organized crime and fail to protect citizens’ right to free speech, the Zetas will continue to reign with impunity. In all, this represents a political failure of the Mexican government in its duty to serve and protect its citizens. 

Recommendations 

The following recommendations seek to address the short and long term problems underpinning criminality in Tamaulipas. In order to reduce the power of organized crime, safeguard the economy and develop sustainable security at the local level, the Mexican government should:

1. Dismantle Zeta cells and create an anti-kidnapping and extortion commission.

First and foremost, the state must send a large contingent of several thousand Mexican armed forces and intelligence agents to disrupt and dismantle Zeta cells in Tamaulipas. The state should create an anti-kidnapping commission that encourages citizens to safely report kidnappings and extortions to security officials. Security officials should aggressively pursue and detain kidnappers. Federal justice officials should then create kidnapping tribunals with harsh prison terms. 

2. Increase patrols of federal troops over business districts, highways and vital economic interests. 

A portion of the military should also provide surveillance in the business districts of large urban areas as well as interstate highways. If security can be guaranteed in cities and highways, business owners will keep their stores open and consumers will return to these industrious border towns. Eventually, so too will tourists. Finally, the military must maintain patrols over the state’s oil pipelines in order to maintain the confidence of foreign investors. 

3. Reform and strengthen local law enforcement and judicial institutions.

While the military maintains security, the Mexican government will cooperate with the United States with the aim of transforming local law enforcement and judiciary into effective and trustworthy institutions that serve and protect citizens and uphold the rule of law

4. Build strong communities and foster an alliance between civil society and government.

Community and business leaders, civil society institutions, the media and local governance must collaborate in order to foster mutual trust and to sustain the rule of law. The federal government should invest money in social programs aiming to empower citizen groups to take an active role in community policing and development. Since law enforcement’s best source of intelligence against organized crime are its citizens, developing and sustaining trust between citizens and the police must be a top priority. Finally, the free media must be ardently protected in order to help civil groups improve government accountability and transparency. 

Conclusion

Although these latter two reforms will take time to bear fruit, they will not only provide sustainable solutions to security problems in Tamaulipas, but also serve as a security template for other troubled regions in Mexico. Therefore, the federal government should contribute a steady wave of financial aid and security support to Tamaulipas state until these community institutions are ready to stand on their own feet.  

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