Testimony on Drug Trade Highlights System’s Complexity

5/27/16 InSight Crime

opium_poppy_field_-_mexicoIn testimony before Senate Foreign Relations Western Hemisphere subcommittee, InSight Crime Co-Director Steven Dudley discussed some common myths and the decidedly more complex reality of Mexico‘s drug trafficking groups and their role in fueling the US heroin epidemic.

Mexico’s Increased Market Share

US consumption of heroin has increased significantly in the last few years. The reasons for this are complex but have to do with the increase of prescription drugs in the United States, a rise in prices of these prescription drugs and their black market counterparts, and the subsequent safeguards on this prescription medicine market, specifically OxyContin.

The US portion of the world heroin market is small by comparison in terms of users, but outsized in terms of potential earnings. The Rand Corporation estimated in 2014, that US consumers spend as much as $27 billion on heroin each year, an increase from $20 billion per year in 2000.1 Only the marijuana market is worth more in the US.2

Mexican, Guatemalan and Colombian criminal organizations have reacted to these changes by producing more heroin. Only a small percentage of the world’s opium poppy is cultivated in this hemisphere, but after it is processed into heroin, almost all of it is sold in the United States where the number of consumers for the drug has more than doubled since the early 2000s.

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Donald Trump’s ‘beautiful’ wall both a dream and nightmare

5/27/16 BBC News

Mexican-American_border_at_NogalesAt the south-western tip of California, straddling the dirty trickle that is the Tijuana river, stands a wall – or rather a series of walls, fences and ditches.

This is the stuff of Donald Trump’s dreams, only his wall would be bigger and better of course, not to mention longer, stronger and vastly more expensive.

Between the fortifications, in what is effectively no-man’s land, a yellow line painted on the concrete marks the end of the mainland United States and the beginning of Mexico.

The border here owes its defences to Operation Gatekeeper, a controversial programme enacted in 1994 under President Bill Clinton which built barriers, added patrols and spruced up technology such as movement sensors.

All these years on, it appears to have worked, up to a point.

“It’s like water,” says border agent Shawn Moran as he drives the route near San Diego which he has patrolled for two decades. “They’re going to take the path of least resistance and right now there’s a lot of resistance out here.”

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New US Ambassador to Mexico Arrives to Take up Post

5/26/16 ABC News

Roberta_S_JacobsonRoberta Jacobson arrived to assume her new role as the United States ambassador to Mexico on Thursday, coming at a time when immigration and Mexican trade have been heated themes in the U.S. presidential campaign.

Considered among the U.S. diplomats most knowledgeable about the region, Jacobson said in briefs remarks in Spanish upon her arrival that she was excited and confident there would be “excellent communication” between the U.S. and Mexico.

“I have the intention to travel far and wide in Mexico to get to know the unique attributes of each region and to be able to listen to Mexicans in person,” she said.

Antonio Garza, U.S. ambassador to Mexico in 2002-2009, called Jacobson “an extraordinarily able diplomat” and “the best of a generation when it comes to Latin America.”

In terms of the binational themes getting traction in the U.S. election campaign, Garza said, “I think her position is largely going to be somewhat neutral but to comment as factually as possible on the assertions that the candidates might make.”

Donald Trump, who on Thursday reached the number of delegates necessary to clinch the Republican presidential nomination, has infuriated many in Mexico by accusing Mexican migrants of being “rapists” and by promising to make Mexico pay for a larger border wall.

In an effort to emphasize the contributions that Mexican immigrants make in the U.S., Mexico’s government recently named a new ambassador to Washington.

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What’s at Stake in Mexico’s Gubernatorial Elections?

5/27/16 AS/COA

votersAs the June 5 date nears for Mexico’s gubernatorial elections, campaigns are getting so ugly, they’re making U.S. elections seem civil by comparison. President Enrique Peña Nieto lamented that all political parties are stooping to “very dirty” campaigning.

Here’s a preview of what’s at stake and why these elections are important ahead of the 2018 presidential race.

 

What’s up for grabs on June 5?

Twelve of Mexico’s 32 states will pick new governors and elect officials to local seats. Baja California will also hold local elections and Mexico City will have a special vote to select 60 members of its constitutional assembly. All in all, 1,425 seats are up for election.

Seventy-eight registered candidates are competing for the 12 gubernatorial spots. The cost of their campaigns, taken together, is estimated to be as much as $187 million. Governors serve six-year terms and cannot seek reelection.

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Headlines from Mexico

newspapers logo2-011.This week, the parents and teachers of the disappeared 43 students from Iguala, Guerrero in 2014 protested in front of embassies in Mexico City to demand follow up on the Interdisciplinary Investigator Group’s (GIEI) final report and investigation, and a long term follow up to the incident. This Thursday marked 20 months since the disappearances.

Read more: Excelsior, El Universal, La Jornada, Milenio

2.  Last Thursday, Mexico’s Secretary of Education announced that around 3,000 teachers from the states of Guerrero, Oaxaca, and Michoacan would be fired because of three days of absence with no justification. Teachers continue to stage protests and sit-ins over educational reforms that they claim to attack their labor rights and their job security.

Read more: La Jornada, Excelsior, El Universal, La Jornada, Excelsior

3. Insecurity and corruption are the most prominent problems for Mexicans in 2015 , and the State of Mexico was the entity with the most attention on corruption , according to the National Survey of Quality and Governmental Impact ( ENCIG ) issue released Wednesday by the INEGI. According to a survey by INEGI, at least 9 out of 10 Mexicans think that corruption is a common practice and, nevertheless, lawmakers do not approve the anti-corruption initiative. Anti-corruption bills are still in limbo for passage by the Senate.

Read more: CNN Expansion, Reforma, Dinero, Reforma

4.Mexico’s Foreign Relations Department ruled Friday that the extradition of convicted drug lord Joaquin “El Chapo” Guzman to the United States can go forward.Guzman’s lawyers now have 30 days to appeal the decision, and they have said they will.Joaquin Guzman  will be most likely tried in Eastern New York for his US extradition, as many of his charges take place there. Other news relating to Univision and Netflix series are appearing as “El Chapo” wants the rights to his name for the shows.

Read more: El Universal, La Jornada, Excelsior,  Reforma 

Bank of Mexico Sticks to 2016 Growth Outlook, Trims 2017 Forecast

5/26/16 Wall Street Journal 

Agustin_Carstens

MEXICO CITY—The Bank of Mexico said Wednesday that it still expects the country’s economy to grow between 2% and 3% this year, but lowered its growth forecast slightly for 2017.

In its quarterly inflation report, the central bank forecast gross domestic product would expand between 2.3% and 3.3% in 2017, less than its previous estimate of 2.5% to 3.5%. The economy grew 2.5% in 2015 and expanded 2.6% in the first quarter of this year.

The main reason for the 2017 change is the lower outlook for U.S. industrial production, which is a driver of Mexican output, Bank of Mexico Gov. Agustín Carstens said at a news conference.

Growth could be better if private consumption in Mexico continues to gain strength, or the economy sees favorable effects from overhauls in areas such as energy, telecommunications and the financial sector. On the other hand, a slowdown in the global economy, and particularly the U.S., and more complex international financial conditions restricting investment could lead to lower growth than expected, the bank said.

The central bank still expects the inflation rate, currently at 2.5%, to remain below its 3% target in coming months, possibly rising temporarily above that level toward the end of the year.

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Mexico’s Arca Continental to Bottle, Distribute Coca-Cola in Southwest U.S.

5/26/16 Wall Street Journal 

14716049305_62495b73a5_bCoca-Cola Co. said Wednesday it plans to transfer its soda manufacturing and distribution in Texas and parts of Oklahoma to a joint venture headed by Mexico’s Arca Continental SAB.

The letter of intent with Arca, Coke’s second-largest bottler in Latin America, comes as Atlanta-based Coke accelerates efforts to divest plants and trucks in order to focus on marketing and its more profitable concentrate business.

Arca is the first Mexican bottler to acquire Coke territory in the U.S. but not the first foreign partner. Hong Kong-based Swire Pacific Ltd. is a major Coke bottler and distributor in the Western U.S. and Japan’s Kirin Holdings Co. owns a Coke bottler in the Northeast.

Coke said in February it would sell all of its U.S. manufacturing and distribution by the end of 2017, part of a broader global divestment drive. It paid $12.3 billion in 2010 to acquire the U.S. territories of Coca-Cola Enterprises Inc., its biggest domestic bottler at the time.

With the latest deal, Coke said it has struck deals to refranchise territories representing about 60% of bottler-delivered volume and 41 of 51 cold-fill production plants in the U.S.  Coke still owns bottling and distribution in California and parts of the Northeast, in addition to other territories.

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