THE MEXICAN PARADOX

Why Is A Supposed "Failed State' Prospering?

Last week, gun battles between warring drug cartels in the central
Mexican state of Michoacan lasted three days, brought down a police
helicopter, caused a small flood of refugees, and took an as-yet
undetermined toll in lives.

It's almost a surprise the story made the news at all. "The conflict
was slow to get out because local media in states like Michoacan have
largely stopped covering the carnage on orders from drug gangs,"
reported The Journal's David Luhnow and Jose de Cordoba on Friday.
More than 20 reporters have been killed in Mexico since the drug wars
began in earnest in 2006. Last year, Mexico tied Iraq, and was second
only to Pakistan, in journalist fatalities.

Then there is the numbing regularity with which news of drug-related
atrocities dominates the international media's coverage of Mexico. The
decapitation of 27 Guatemalan farm hands by the Zetas gang two weeks
ago. The 146 corpses discovered in April in mass graves in the state
of Durango. The hanging in March of five victims from bridges in the
resort town of Mazatlan. The apparently deliberate killing in February
of U.S. immigration officer Jaime Zapata (and the shooting of his
partner) on a highway north of Mexico City.

And on, and on, and on.

Yet a funny thing happened on the way to Mexico becoming another
failed state. To wit, the "failed state" boomed.

In 2010, a year when there were more than 15,000 drug-related killings
(up by nearly 60% from the year before), the economy grew by 5.5%-the
fastest rate in a decade. The Mexican peso appreciated against the
dollar. Inflation was essentially flat. Foreign reserves rose to $113
billion. Twenty-two million tourists visited the country. Trade with
the U.S. reached an all-time high of nearly $400 billion. In Ciudad
Juarez, where 3,000 people were killed last year, the maquiladora
industries added some 20,000 jobs. The percentage of the population
living below the poverty line declined to 47.4% in 2008 (the last year
for which the World Bank has data) from 63.7% a decade earlier.
Literacy rates surpassed 90%. Life expectancy continues to rise to
near-First World levels.

In the U.S., sociologists are puzzling over the paradox of falling
crime rates in an era of high unemployment and economic uncertainty.
The Mexican paradox appears to be the reverse.

Then again, what most people consider a paradox is simply the crash of
reality against our own unexamined cliches and preconceptions.

Consider the idea that crime in Mexico is out of control. The homicide
rate in Mexico (about 12 per 100,000 in 2009) was more than twice that
of the U.S. (five per 100,000) but well below Brazil's rate of 20.5 in
2008, to say nothing of the U.S. Virgin Islands, where it's about 50.
In Mexico City, home to some 20 million people, the murder rate
actually fell over the last decade. In 2009, it was about one quarter
of the rate in Washington, D.C.

So how shall we define "out of control"? And what shall we make of the
fact that the vast majority of the victims of Mexico's drug wars are
themselves members of drug gangs? "They constitute a portion of
population, that is worse than useless in any community," said Abraham
Lincoln about the gamblers of Vicksburg in 1838. "And their death, if
no pernicious example is set by it, is never a matter of reasonable
regret with anyone." Something similar might be said of the drug
cartels in their current orgy of mutual annihilation.

Then there's the idea that Mexico would have been better off had it
never picked a fight with the cartels. I grew up in that Mexico, in
which a corrupt and authoritarian government made its peace with-and
took its cut from-the cartels.

That Mexico, built on conspiracies of silence and fear, could not
survive the country's transition to democracy. It's no surprise that,
even now, in the fifth year of his presidency and after 34,612 deaths,
Felipe Calderon has an approval rating of 54%. Mexicans have no
shortage of misgivings about his methods, but not many are proposing a
viable alternative to taking the cartels head on. And by "viable,"
that means something other than the fantasy of expecting Ron Paul to
win the presidency and end the war on drugs. Not that libertarians
will ever stop proposing that utopia as their sole idea in what
otherwise amounts to a feckless counsel of despair.

Last week I asked former Colombian President Alvaro Uribe whether
Mexico can defeat the narcos. "Colombia is a typical case
demonstrating that we can win," he answered-with the statistics to
prove his case. He stressed that the key to winning was what he called
a "permanent pedagogy" to convince people that the war on the cartels
is "a necessary fight, not a partisan cause."

Mr. Uribe rescued Colombia from a plight far worse than what Mexico
confronts today. But the central challenge is the same: how to
establish a rule of law that has the legitimacy of consent and the
courage of its convictions. Doing just that was Mr. Uribe's
achievement, and it remains Mr. Calderon's challenge. Not much of a
paradox here. Mexico's current prosperity is the bet that its
market-friendly policies won't soon be betrayed by a government that
can be cowed or seduced by criminals.