Thread: Mexico's Reynosa Sees Surge In Violence

Mexico's Reynosa Sees Surge In Violence
by Jason Beaubien

October 16, 2010


As Mexican President Felipe Calderon pushes forward with his war against the drug cartels, various parts of the country have been affected in different ways. Recently, the state of Tamaulipas, which borders the southern tip of Texas, has seen a significant surge in violence.

Just a year ago, Reynosa — a dusty, sprawling city of half a million people across the border from McAllen, Texas — was a relatively peaceful part of the country. Now it’s one of the most dangerous places in Mexico.

This is a maquila town. There are roughly 140 factories — maquiladoras — that float in a free-trade limbo between the U.S. and Mexico. During the day in downtown Reynosa, shops bustle with activity. Young men sell pirated DVDs on the sidewalk. Music blares from a CD store. Shoeshine men polish shoes.

But this is a city that, this year, has become seized with fear.

As night falls, so do the metal shutters on the businesses — and the streets become eerily empty.

"It's not officially declared a war, but we are in a war zone," says Eliacib Leija, 40, who grew up in Reynosa. Now he's the coordinator for President Calderon's PAN party in the state of Tamaulipas. "Most of the people stay home after 6, 8 at night. Just don't go out; you take your precautions. Because once in a while you hear a bunch of shootings and things like that."

Battle Between The Gulf Cartel And The Zetas

The problem in Reynosa is the same problem that’s plaguing the rest of Tamaulipas — a fight between the Gulf cartel and its former hit squad, the Zetas.

At times this fighting has involved shootouts between more than a dozen heavily armed combatants.

While residents may hear the confrontations in the streets, the local news media, under pressure from the cartels, have stopped reporting on the drug violence almost entirely.

The security situation has gotten so bad, Leija says, that many mayors and other high-ranking public officials in this part of Mexico now live in the United States. "And not only city and official people," he says. "Inversionistas. People who have businesses from Tampico, Matamoros, Reynosa, Laredo, are going to the U.S. because of this insecurity."

"It's not officially declared a war, but we are in a war zone."- Eliacib Leija, 40, a lifelong resident of Reynosa

Many people in Reynosa behave as if they're living under a dictatorship. But here the feared, omniscient authority is not the state; it's the cartels.

Shopkeepers, politicians, journalists decline to be interviewed, and some say explicitly that they can’t be caught by "los malos," the bad ones, speaking to a foreign reporter.

Along the south bank of the Rio Grande, young lookouts for the Zetas watch the river to make sure that only cartel-approved smugglers move migrants or other contraband into the United States. Migrants who have come to the border to try to cross illegally are terrified — not of the American authorities but of the Mexican criminals.

This is the state where 72 migrants were slaughtered in August, allegedly by the Zetas.

At a shelter for people who have just been deported from the U.S., a 23-year-old Honduran named Edwin Ramos Ponce says migrants here are regularly beaten, robbed and kidnapped. "They know where we come from. They know and they treat us wrong here," he says.

Ramos says he sneaked into the U.S. illegally 10 years ago with his uncle at the age of 13. Two months ago he got deported for, in his words, making some bad choices. Now he's broke and stuck in Reynosa.

"I mean, it's like dangerous here," he says. "Nobody's safe here in Mexico. Not even the [Mexican] people's safe here."

Reynosa human-rights advocate Rebeca Rodriguez says the problem right now is that "we've become accustomed to the violence. Just as we've become accustomed to poverty."

Rodriguez says the violence is now making the poverty even worse, as Texans no longer want to come across to shop or have dinner.

Economy Links Border Towns

The differences between McAllen, Texas, and Reynosa, Mexico, are sharp.

On the Mexican side, there are heavily armed soldiers on the border, torn-up roadways and a collective fear. On the Texas side, people leave their keys in the ignition of their pickup trucks at the gas pump.

But economically, these two worlds are closely intertwined. They even have the same economic development agency. Keith Patridge, the head of that agency — the McAllen Economic Development Corp. — says the violence in Reynosa is definitely affecting the area.

New potential investors are being scared away from the Mexican side, but it also has caused a burst of Mexican investment into McAllen. "From a short term, that's good for the local economy because we are selling houses, new business, creating jobs," Patridge says.

But he says McAllen derives its economic strength from its relationship with the low-cost manufacturing plants in Reynosa. Patridge says the two cities are dependent on each others' success.

"We have to really look at what is in the best interest of both parties, and the best interest for us is to have a strong, stable, progressive Mexico," he says.

And right now, with drug violence flaring across the country, that's not what they've got.

http://www.npr.org/templates/story/stor ... =130592600

I hope the investments in Mexico made by US treasonous companies like Hershey and GM fizzle. They will spend more on security to try to protect their management workers than they will save in hourly wages.

Unintended consequences - too bad, so sad.

Originally Posted by GaPatriot

I hope the investments in Mexico made by US treasonous companies like Hershey and GM fizzle. They will spend more on security to try to protect their management workers than they will save in hourly wages.

Unintended consequences - too bad, so sad.

Remember "The Mexican Bailout"?

July 1995
Volume 13, Number 7

How Nafta Caused the Mexican Bailout
James Sheehan

In the Clinton administration's spin control on the Mexican meltdown, Nafta had nothing to do with it. Without the treaty, matters would have been worse, the White House says, and now Nafta will help Mexico recover.

The Republican leadership, which shepherded Nafta to ratification, has no interest in countering this argument. They fear being indicted as co-conspirators in the back-door bailout--which they allowed to proceed without even a Congressional vote.

But an anonymous administration official finally spilled the beans to the Washington Post. It was Speaker Newt Gingrich's own Congressional office that first proposed emptying the Treasury's Exchange Stabilization Fund into Mexican banks. Others involved included Republican Senators Trent Lott and Robert Bennett, and Banking Committee Chairman Jim Leach.

The same crew is trying to obscure the direct link between Nafta and the bailout. But the record shows that Nafta included a provision for the North American Financial Group, a mechanism to "stabilize" exchange rates between signatory countries.

Formed as a side agreement to Nafta in early 1994, the NAFG supported the peso's exchange rate with a $6 billion line of credit. That kept the peso massively overvalued and enabled the Mexican central bank to rapidly inflate the money supply. The purpose? To insure that Mexico's ruling party would be victorious in the August 1994 presidential election, thereby maintaining its corrupt system of corporate statism.

The White House sent Congress several supporting documents with the Nafta implementing bill in 1993, which indicate it knew the history of Mexico's devaluations. In the "Statement Concerning Exchange Rates," the Clinton administration recounted Mexico's disastrous debt crisis of the 1980s. It promised to keep matters under control the next time. "The reform process," the document swore, "includes stabilization of monetary and fiscal policies and undertaking of major structural reforms."

This was a phony characterization, an attempt by the White House to downplay risk to encourage U.S. investors to place billions of dollars into Mexican stock and bond markets. The Federal Reserve had also stimulated this trend by pumping up the U.S. money supply while keeping interest rates low--driving U.S. investors into the riskier Mexican market in search of better returns.

After Nafta was safely ratified, the Fed gradually raised interest rates, drawing capital back to the U.S. in a flight to quality. Without abundant foreign investment capital, the Mexican central bank was unable to service its foreign debt or finance its ballooning trade deficit.

Having depleted its dollar reserves, Mexico was forced to do what it should have done earlier: "un-peg" the peso from the dollar. When the market was allowed to function, the peso's value tumbled 50% from the level long dictated by Mexico City.

Wall Street's large institutions had reaped enormous profits from the false stimulation to their investments. And it was these houses that helped bankroll the pro-Nafta lobby in Washington. Eager to preserve its "profits," Wall Street and the New York banking industry shamefully socialized their deep losses through a taxpayer bailout.

Nafta made the bailout inevitable. There was too much at stake--economically, politically, and financially--after the treaty's passage. Clinton implied as much when he said, "In the end there is no choice..., the two economies are intertwined in trade, in commerce, in the movement of people."

But of course there was a choice whether these relations would be politicized and socialized, or remain purely economic, as they would have had Nafta failed. Nafta's politico-commercial nexus is best symbolized by Treasury Secretary Robert Rubin, once the co-chairman of the largest underwriter of Mexican financial deals, Goldman Sachs. He is also the government official controlling the taxpayer funds being used to pay off his former and future clients and colleagues.

Economic relations with Mexico were once determined by informal relations among real capitalists. Tariffs were low and going lower. Nafta interrupted this process, with its faulty premise that voluntary exchange is not possible without government control of trade, environment, labor, and monetary policies.

Thanks to Nafta, economic relations between the U.S. and Mexico are now governed by a central plan, which inevitably means political mismanagement. And, like every central plan, it is backed by the socialization of losses and accompanied by a refusal to admit failure.
(Notice anything familiar?)

http://mises.org/freemarket_detail.aspx?control=237