The State of Politics, Law, and Security in Mexico

Peter Nunez: Good morning, ladies and gentlemen. Welcome to this panel discussion sponsored by the Center for Immigration Studies on the state of politics, law, and security in Mexico.

My name is Pete Nunez, and I’m the chairman of the board of directors of the Center for Immigration Studies. Some of you are familiar with the center; some of you may not be. It is the country’s, I think, pre-eminent private think tank — you probably don’t like to use that word — research institution dealing with the impact of immigration in the United States, located in Washington, D.C. Many members of the board of directors are here for our annual meeting, and several members of the staff.

Today you’re going to hear from four people who have studied, to one degree or another, from different perspectives, the circumstances in Mexico which contribute to the push factors that affect both legal and illegal immigration into the United States. For those of us that are from San Diego or Southern California, this is not a big surprise. We deal with this, read about it, see it on TV every day in one way or another, and so we’re going to get an update from various people who have studied and written about circumstances in Mexico and how that will affect the implications for U.S. immigration policy in the future — the near future, perhaps, maybe the distant future.

Let me introduce the panelists. To my immediate right is the director for the Center of Immigration Studies, Mark Krikorian, and Mark has been the director for longer than he probably wants to admit now — (laughter) — has written widely, testified on numerous occasions before congressional committees, appears regularly in print, electronic media of all sorts, discussing the impacts of immigration.

Next is George Grayson. George is a professor of government at the College of William & Mary in Williamsburg, Virginia. He also has been writing on and studying Mexican politics for most of his career. You may occasionally read his syndicated columns that appear in the press here in San Diego and elsewhere around the country.

Next is David Shirk. David is a professor at the University of San Diego. He is the director of the Trans-Border Institute. In fact, and also, his area of study has been the legal system and security issues in Mexico, which he, again, writes and talks about quite frequently. Was it only yesterday, David, that the institution sponsored a round table discussion on the media, media coverage of the border issues, not just immigration, but border issues in general, at the university?

And to my far right is S. Lynne Walker. Lynne is a writer with the Copley News Service, for which she covers Mexico and Latin America. Again, her articles appear quite regularly here in San Diego and, I think, elsewhere around the country.

We have about two hours to discuss this. We’re going to have each of our panelists provide a 10- or 15-minute discussion. There may be some back-and-forth and certainly questions from the audience as we go forward. So by a very undemocratic vote, we elected David Shirk to lead off. So David, thank you for being here, and we look forward to your remarks.

DAVID SHIRK: Thank you, Pete, and thank you to the center for this invitation. It’s a pleasure to be here with you this morning. Can I get a time frame? Fifteen minutes?

MR. NUNEZ: Fifteen, whatever you need.

MR. SHIRK: Okay. Originally they told me an hour-and-a-half so — (laughter) — I’m going to try to shorten it a little bit, so excuse me if I speak quickly.

The broader panorama is obvious to most people, most observers of Mexico. In 2000, Mexico experienced a major political watershed when Vicente Fox from the National Action Party was elected as the first opposition president after 71 years of rule by the Institutional Revolutionary Party, and it brought a great promise and great hope that there would be major changes in Mexico. And I would argue that, in fact, the Fox presidency, the legacy of the Fox presidency, is quite significant and has made major accomplishments.

But when Fox took office, despite this very significant step towards strengthening democratic governance in Mexico, huge, significant challenges remained. And I would say that the two most important challenges that Mexico faces today are quite obvious. First, the problem of economic development, which includes not only the problem of promoting growth over the longer term, but also addressing serious problems of poverty and inequality in Mexico. And those issues are, I think, the foremost issues that Mexico needs to confront.

A second issue, and a related issue, though, that Mexico needs to confront, is the rule of law. Over the Fox administration we saw growing public frustration and alarm about the proliferation of crime, corruption, and violence, particularly drug-related violence, in Mexico. And in effect, it seems to me that addressing Mexico’s economic challenges is intimately tied to its rule-of-law challenges, and Mexico’s overall democratic consolidation hinges essentially on these two very important policy areas.

I want to focus my remarks this morning on the rule of law. That’s an area where we’ve been doing a lot of research at the Trans-Border Institute in the last couple of years, and it’s an issue that I think is important for us to consider in the U.S. context. So I want to take some time to talk about that.

What do I mean by the rule of law? In effect, when I use the term “rule of law,” I’m referring to three things: one, the preservation of public order and compliance under the law. This is everything from stopping at stop signs to filing your income taxes, et cetera. It’s making sure that people obey the law, and without that component, you cannot have an orderly society.

The second component, I would say, is accountability of public authorities to the law, which is an equally important component to our modern democratic notions of what the rule of law is. This means not pilfering from the public purse and basically ensuring that there is accountability under the law.

The third component is access to justice under the law. This is a more nebulous concept, but it’s such things as the right to a fair and speedy trial, which is a right that many Mexican citizens do not enjoy at present. We see people languishing in prisons in Mexico for three, four years before they are sentenced, without the possibility of parole, or I’m sorry, without the possibility of bail — thank you — without the possibility of being free until they are sentenced.

So I just want to give you a sense of what are some of the trends that we’ve seen in terms of the rule of law in Mexico, and what are some of the areas where we will need to see improvement in the next few years.

To understand the trends, I have a nice chart that I would normally like to show, but what we can see in terms of crime trends, reported crime trends in Mexico over the course of the last 50, 60 years, which is the period for which we have somewhat reliable data, crime actually in Mexico declined significantly from the 1940s to the 1970s, a pretty precipitous and consistent decline on virtually all indicators: homicide, assault, robbery. All of these things went generally downward.

And in large part that was due to a number of factors, one of them very significantly being the economic miracle that Mexico experienced during that time. We saw living conditions in Mexico improve dramatically from the 1940s to the 1970s, and then start to drop. And as those conditions dropped over the course of the 1970s and ’80s — economic conditions worsened — we saw an increase, a corresponding increase in robbery, assault . . . although homicide actually continued to decline, notwithstanding public impressions.

The other thing that is important to note is that over the course of the last 20 years, there has been a perceptible, maybe not increase, but a perceptible concern about entrenched problems of corruption, organized crime, criminal impunity, and abuse of public authority.

What are the contributing factors? I would say there are four important factors we want to consider in the Mexican context. First, the economic scenario. As I said, Mexico’s criminal-justice problem or rule-of-law problems have coincided with the major economic restructuring in Mexico that has deteriorated the buying power of Mexican wages and has contributed to a host of other socioeconomic problems, including mass outward migration.

If we want to address the rule of law, we need to address economic development issues. I don’t think that poverty is necessarily the culprit. Poverty rates have remained relatively constant in Mexico. And so what’s important is not just that economic factors matter, but what kinds of economic factors are important. Unemployment, and particularly wage disparities and income inequality, seem to be quite significant as a causal problem in Mexico, and reducing those inequalities, I think, will have significant benefits.

A second issue, though, is a question of institutional design and institutional function in Mexico. We see resource limitations, inadequate professional training, structural/functional redundancies and inefficiencies, and corruption in the Mexican criminal justice system and other areas of Mexican governance, and these need to be addressed and can only be addressed through widespread, or I should say, wholesale reforms to the criminal justice system.

Just to give you a sense of the dysfunction that we see, only about 25 out of 100 crimes in Mexico are reported, and that’s indicative of the lack of confidence that people have in the Mexican criminal justice system. Of those 25 crimes, only about 4.6 out of those 25 are actually investigated. Of those 4.6 crimes that are actually investigated, only about 1.6 result in the actual filing of criminal charges against an alleged perpetrator, or presunto delinquente.

Once charges are levied, a defendant’s odds of being sentenced — this is the good news — are extremely high. Out of the estimated 1.6 charges that are brought, or cases that are brought to trial, 1.2 actually – I’m sorry, out of 1.8 prosecutions, 1.2 are brought to trial; out of those 1.2, 1.1 result in a sentence. So very high success rate in terms of prosecutions, as long as you forget the fact that the vast majority of crimes go unpunished. This is, I think, a serious concern, and it led to a number of reforms that I’ll mention in my closing remarks in just a few minutes.

A second concern, a very serious concern in the Mexican context, the second factor that has contributed to elevated levels of crime and violence, of course, is the presence of organized crime, and in particular, our methods for combating organized crime, which are threefold. One is the eradication of product, which has fallen by the wayside, I would say, since the 1980s in Mexico. The second is the interdiction of product, which is the seizing of product en route. And third is the interruption or disruption of Mexican organized crime syndicates, primarily by targeting high-level members of different organizations.

And what we’ve seen is that the effect of that third effort to combat organized crime has some unfortunate consequences in the sense that when we make one step forward in knocking out the leaders of a given organization, we see two steps back in terms of the elevated levels of crime and violence that ensue as the organizations reposition themselves. And so the best that we can hope for, perhaps, is that after we knock out an organization and we see a bloodbath, some organization will take control and establish an equilibrium until the next time we take out some of their organizations.

Finally, a third factor that I think is really important to mention, but I do so with caution, is a set of cultural factors, core values, attitudes, and belief systems and behavioral norms in Mexican society that can be a positive for promoting the rule of law or can be a negative.

I don’t like to talk about culture because I think too often cultural arguments have a terrible chicken-and-egg problem. It’s foolish to think that because Mexicans have certain cultural practices like paying bribes to police that it’s because it’s intrinsic to their being or to their nature, but as long as they are in a context, an institutional, an economic, or a strategic context in which those kinds of behaviors are more expedient, more efficient, more effective means of advancing your interests as a citizen, it is a cultural practice that . . . those are cultural practices that are at least a barometer, if not an obstacle, to improvements in the justice sector.

The good news is that Mexicans have expressed vocal demands for strengthening the rule of law, and I think may be sensitive to, amenable to, campaigns to encourage shifts in everyday behavioral practices like bribery. We’ve seen some great media efforts to reduce use of piracy, and to say no to bribes, et cetera. Those may be useful.

Okay, in the last minute or two here, what are some of the — what’s the prognosis, and what are some of the prescriptions for improving the rule of law in Mexico? Despite all of the bad news that I have talked about so far, there are some bright spots on the horizon.

One of the things that Vicente Fox was able to accomplish in his administration, although not pass, was a major reform initiative that I think sets a blueprint for justice- sector reform in Mexico. What he talked about were structural reforms to address some of the procedural problems and institutional problems that I mentioned earlier, in particular, efforts to reform the judicial system so that you reduce case backlogs, make it more efficient, both in terms of investigation of crimes and prosecutions, and also, try to improve the actual situation in Mexican prisons so that people are actually being rehabilitated instead of re-educated as better criminals.

The other thing that I think is really important is that blueprint, that Fox blueprint, for reform in the justice sector is actually being implemented in some key states. The state of Chihuahua, for example, is beginning to use, as of this year, oral trials, which will lead to more speedy prosecutions. The state of Coahuila is using alternative sentencing mechanisms. Actually, since 2000 they’ve been using those. That also helps to make the justice system more efficient.

I think, though, that — as a last word, I think that Mexico’s domestic efforts, though, cannot be successful without significant collaboration from the United States. And it’s important to note that we’ve been collaborating; we’ve been working with Mexico in important ways. We gave a very large amount of money towards USAID-funded initiatives in Mexico that actually helped to get some of these Mexican states moving forward on justice reforms and judicial reforms. We’ve also, obviously, been working very closely with Mexico on extradition. And we’ve seen an increase in extraditions over the last five, six years, actually, since the Zedillo administration, despite some road bumps along the way.

But I think it’s really important to underscore that Mexico’s rule-of-law challenges are not Mexican, are not limited to Mexico. They impact us, and they are, indeed, an important strategic national priority for the United States. We can help Mexico move towards the improvement of its justice system, I think, by working together. And I think that this is an important message, not just for the justice sector, but for economic development and a wide range of policy issues. We’d do much better working with Mexico than simply criticizing Mexico and demanding that Mexico get results on its own. If we want to see a change south of the border, it’s important for us to be a part of that change, I think. So thank you very much for your patience, and I’ll wait for your comments.

MR. NUNEZ: Thank you. Next we’ll hear from Lynne Walker.

S. LYNN WALKER: Thank you. Good morning. I’m the Mexico City bureau chief for Copley News Service. I’ve been based in Mexico for the past 14 years. So my comments come to you from the ground, from living in Mexico, talking to people both in the government and average Mexican citizens, and from what I have observed since I’ve been there.

I want to start by telling you this: On December 5th of 2006, the leader of a five-month conflict in Oaxaca was arrested. Felipe Calderón had been in office just five days, but his message was clear. His government wasn’t going to tolerate the lawlessness that has destroyed this particular beautiful colonial city, and even more importantly, these people who had maintained control of Oaxaca for five months had showed Mexico that a small group of malcontents could hold an entire population hostage.

December 11th, six days later, Felipe Calderón sent 6,500 police and troops to the state of Michoacán in response to rising drug violence that culminated several months earlier with the decapitations of five men whose heads were thrown on a dance floor of a bar that they had frequented. Within the next two days, a cousin of Felipe Calderón’s wife was murdered, then Felipe Calderón upped the number of troops and police to 10,000 in the state of Michoacán.

January 3rd, Felipe Calderón sent 3,300 troops and soldiers to Tijuana, where business leaders for months had demanded federal resources to fight kidnappings, extortions, and murders. The following day, Tijuana’s entire police force was disarmed by military commanders. As of right now, they have not been re-armed, and some are operating with slingshots.

January 19th, Felipe Calderón sent 7,600 soldiers to the state of Guerrero, where drug violence has wracked the resort of Acapulco. That same day, four drug kingpins, Osiel Cárdenas, who is the deadly leader of the Gulf cartel, “El Guero” Palma, and two drug traffickers from Tijuana’s Arellano Felix cartel were extradited to the United States, a move that U.S. Attorney General Alberto Gonzales called unprecedented in scope and importance.

Is Felipe Calderón going to bring law and order to a violence-wracked Mexico? That is the question that everyone is asking, both in Mexico and in other countries. Calderón says the answer is yes, that with less than two months in office, Mexico is experiencing, as he puts it, more peace and certainty. One of his chief campaign promises was to restore law and order to violence-plagued regions. Felipe said that he’s delivering.

The Mexican people have applauded his actions. His popularity has soared as he sent these troops around the country to combat drug crime and violence. Local cops are notoriously corrupt, but the Mexican military enjoys a respect on the part of the Mexican citizens. Most people were relieved to see that they have showed up.

Whether any of these troop movements and federal police movements, as splashy and dramatic as they might be, will have any far-reaching implications remains to be seen. The question is, when the soldiers leave, and when the federal police leave, will the criminals come back? That is what people fear.

Perhaps the Calderón administration thought that by extraditing some of the drug kingpins, it would at least temporarily debilitate drug organizations. The Mexican government itself acknowledged that Mexico has concerns about the legal system successfully prosecuting drug kingpins and also has concerns about maintaining them in prison. Osiel Cárdenas, along with Benjamín Arellano Félix, successfully disrupted the operation of the federal penitentiary once known as La Palma, now known as Altiplano, as they began to work together, paid prison officials and began to have the prison operating in their favor as opposed to keeping them incarcerated.

But even with these measures in Tijuana, in Michoacán, in Guerrero, some Mexican officials have worried about, as they put it, the efecto cucaracha, or the cockroach effect, and that is that criminals will simply flee the area where the police and soldiers are, go to another place, wait it out and then come back. The governor of Sonora was one of those who expressed that concern. He, of course, is the governor of the neighboring state, the Baja California. And that is a valid concern. Many people simply believe they’re just fleeing and they’ll be back.

Now, what does all of this have to do with immigration? Well, let me give you a vivid example that lingers in my mind from the days I spent in Oaxaca in late October and November, when former president Vicente Fox sent federal police in to deal with this five-month conflict in which, literally, a group calling itself the APPO had taken control of the city and the state police have withdrawn.

I was in a taxi one night, and a taxi driver told me, he said, you know, he said, “I’ve lived in Oaxaca all my life.” And I said, “How old are you now?” And he said, “I’m 44.” And he said, “I’ve always found something to do, you know, to maintain myself, to work, to take care of my family.” But he said, “I’m thinking about going to the United States.” He said, “I’ve never been before, but I have family there; they’re in Napa Valley.” And he said, “I’m thinking about going because, he said, we just can’t make it here anymore . . . my wife is working, but with all of this conflict and all of this problem, no one will get in a taxi. I’m afraid they’re going to steal my taxi and burn it, which they had done on, you know, scores of occasions with other taxi drivers.”

And he said, “My kids aren’t in school anymore because the schools are closed, I think I’m just gonna go to the United States.”

Okay, there is an example of how a conflict like that impacts immigration. And so this is what I think we have to take a look at in addition to all of these crime factors. One of the important effects, for example, in Oaxaca, which did not have to do with drug violence but had to do with another kind of social unrest — it was a city that was out of control.

When I talked to the hotel and motel administration there, for example, they estimated that 1,200 to 1,500 workers had lost their jobs. These people who work in these hotels, and then that isn’t even mentioning the restaurants, tend to be lower-skilled or unskilled people — the maids who clean the rooms, the waiters who wait on the tables and wash the dishes in the restaurant. These are the most likely candidates to immigrate to the United States.

They had jobs in Oaxaca — 50 percent of Oaxaca’s population is now outside the state now, most of them in the United States, but others have migrated to other parts of Mexico as well for work. These are the kind of people who go if there aren’t any options, and that was the concern. Hoteliers said they had held on as long as they could, but they said, “I can’t, I’m not even paying — I don’t even make enough now to pay the electricity and the water and the telephone. I can’t keep my people employed anymore and I had to let them go.” That’s a direct impact on immigration.

So I think that when we talk in the context of crime, we do need to look at those kinds of things. Oaxaca, for example, has not recovered. But Oaxaca is not the only case. And the other impact of a situation like that is, when you have that kind of incredibly bad publicity, clearly things are out of control, hotels being destroyed, the State Supreme Court burned to the ground and all the files burned with it, visitors tend not to go. (Laughter.) You know, it’s just one of those things. Vacation is supposed to be vacation, and, you know, you don’t want to be worrying all the time about a riot in the streets, so tourism goes down.

In November, the hotel occupancy rate in Oaxaca — and I keep using this as an example because it’s a recent one — is 3 percent, 3 percent. At Christmas time, when normally you can’t get in, after the conflict had — after the arrest of this leader who I mentioned in the beginning, the occupancy had gone up to 30 percent at Christmastime, when normally you’d have to battle your way into a hotel and get a room.

And so then what happens to investment, both domestic and international? Well, first you have a tourism impact, and it doesn’t only stain a place like Oaxaca; it stains the entire country because a lot of people think in terms of Mexico; they don’t think in terms of this one place and this one Pacific Coast state. So then people start to say, well, you know, maybe we just want to go somewhere else. Tourism is a big factor.

And then you also have to look at the issue of investment. Well, who is going to want to invest, whether they are Mexican investors or foreign investors, in a place where at any given moment, everything you own could be burned to the ground because the government is not going its job, which is first and foremost to protect its citizens and their property? And so it just doesn’t make sense. You’re running too high a risk and no one is in control.

So these are the kind of things that I think we have to look at as well. And I do think it’s relevant to the kind of research and things that you think about at the center. And I think that that’s the kind of panorama we’re looking at. Now, as to the larger issue, I also think it’s relevant to look at the exchange and interchange between the countries. Obviously the issue of crime is relevant to Mexico and the United States as neighbors. It’s a shared issue. The issue of drugs, drug trafficking, and drug consumption are shared issues for the two countries.

And so one vivid example I have of that is the issue of international gangs, which go directly to the immigration issue because I investigated those kind of — that kind of issue a couple of years ago and found that gang members in Central America had actually been formed in the United States on the streets of Los Angeles, by and large, were deported after — I almost said exported because that’s what we said, we said we were exporting crime to other countries. They were deported and formed very dangerous cells in their own countries, El Salvador and Honduras and Nicaragua, and then began to try to get back to the United States again, bringing all of their crime knowledge with them.

But that was a reverse situation, trained on the streets of Los Angeles in the gang culture, [then] deported. I talked to people who got off the planes, had flown in from Tucson and landed in Tegucigalpa, deported and then back again in the United States.

So I think that we do need to look at this as sort of an integral problem. I agree with you; I think we need to work with Mexico. I don’t think it’s very helpful to just criticize — no one works well under the constant pressure of criticism — and kind of recognize the back and forth. We all have heard Mexico’s argument, well, if you didn’t consume drugs, we wouldn’t sell it. That’s true. I mean, it’s, like you said, it’s a chicken-and-an-egg thing, but it’s true.

And so it’s not a simple matter of saying, well one country, you’ve got to clean up your act. We’ve got dynamics going back and forth. The hit squad for Arellano Félix came from Barrio Logan — by and large, in San Diego. And because they were American citizens, they could jump the border and go back and forth, and that made them very convenient. Now that phenomenon is showing up in Nuevo Laredo, which is the companion city to Laredo, Texas. So there is this interchange. I do think immigration is important in that context, and I do think it merits a look from that perspective.

MR. NUNEZ: Thank you very much, Lynne. Next we’ll hear from George Grayson. Professor?

GEORGE GRAYSON: Thank you so much for the opportunity to be here and for the incredible hospitality that my wife Bryan and I have received since our arrival on Wednesday.I have to, though, take this opportunity to tell you a story about Pete Nunez because he’s one of the cleverest men I’ve ever met. Pete went to law school on an accelerated program at the University of California in San Diego. And once he got out, he wasn’t gonna go out to make lots of money. Instead, he wanted to help people, and he was involved in assisting the indigent. And his first case was a capital case, and the accused appeared to be guilty. Even Peter Spear would not have taken this case because – (laughter) – the accused – just the circumstantial evidence was overwhelming. They never found the body, but the circumstantial evidence was so strong that it was certain that this defendant was going to be convicted.

Well, Peter, fresh out of law school, is just looking for a Hail-Mary pass, and in his summation to the jury, he says, ladies and gentlemen of the jury, he said, you have heard the prosecution put on a formidable case, but I’m going to tell you that if you watch that door over there, within the next minute, the alleged victim of the crime is going to walk through, and therefore you will have to exonerate my client. The whole jury swivels its head as one.

And after about 15 seconds, Peter says, you know, ladies and gentlemen of the jury, I’m sorry I fibbed to you, but the fact that you looked means — (laughter) — that there is reasonable doubt — (laughter) — and you have to exonerate my client. The jurors go into deliberations, come back in 15 minutes — guilty! Peter goes up to the foreman of the jury and says, you know, you all looked; how could you find my client guilty? And the head of the jury said, “Your client didn’t look.” (Laughter.)

I have to also say a word about Lynne Walker, and that is, we talk by telephone from time to time, and she is one of the most tenacious journalists that you can imagine. She will call from Oaxaca in the heat of a battle so that you actually hear gunfire in the background, and if there’s anyone from an insurance agency here today, I would like to take out a policy on her life if I can be the beneficiary.

She is correct about the ability of the drug gangs to run the prisons. The situation in La Palma was so bad that the head cook in the prison would send around a list on Wednesday asking who was going to be there on the weekend — (laughter) — because the prisoners sort of came and went as they decided, and the more intrepid bad actors were able to leave prison in a laundry truck.

I think that, probably, my comparative advantage here would be to look briefly at five issues and try to use those five issues in a minute or two each to give you an insight into Felipe Calderón. I had the chance to meet with President-elect Calderón in Washington, I guess now about two months ago. As I was telling Queen Elizabeth yesterday, I hate name-droppers. (Laughter.) And Calderón — and one of the questions that I asked him was, are you going to be mesmerized by the so-called plato loco complex because on October 2, 1968, there was a bloodbath in downtown Mexico City in which the military shot hundreds of innocent people.

And since then, presidents have been reluctant to aplicar la ley, to enforce the law, lest they be charged with excessive violence, lest they be charged with a crackdown on human rights, and of course, many of those who commit crimes such as occupying downtown Mexico City for six weeks after the election will hoist the banner of social justice, as did APPO and the teacher’s union in Oaxaca. President-elect Calderón was quite emphatic in saying that he wasn’t going to be mesmerized by the plato loco complex. He realized that it had beset his predecessors but that he was going to aplicar la ley, and he spent some minutes iterating and reiterating that point.

And so the first point I would like to make is that with regard to the fight against criminals, especially the narco-traffickers, Calderón has combined substance with symbolism. The symbolism is important because immediately after swearing the presidential oath, he went out to the largest base in the country, in Mexico City, and met with the brass of the military.

During his speech, his first speech to the nation, he emphasized austerity, but he said, except for the army and the navy and the marines, which form part of the navy. He then sent troops to Michoacán, later sent troops, as we know, to Tijuana, and just on Monday, he installed a new executive director of the National Security Council and carried out the ceremony in the palacio nacional, which isn’t where you usually install important bureaucrats, but he was making a statement to the nation that security was his number-one priority.

Now, sometimes Don Felipe can get carried away, such as the visit he made to the troops . . . such as his visit to the troops going to Michoacán, in which he did put on a khaki jacket — (chuckles) — and a hat that had the five stars that represent the commander in chief, and that perhaps was a Dukakis moment — (laughter) — but in general he is using symbolism extremely well, and I am impressed. I think, as David and Lynne have indicated, it’s a row of stumps that he has to plow, and so we, the jury, are still out with regard to how successful he will be.

The second area in which he has combined symbolism with substance deals with the poverty in the country, because the gap between the rich and the poor is fearsome. Something like 45 percent of the wealth is vested in the hands of 10 percent of the population, and this is a population that lives like maharajas, pays little in taxes, sends their students, their children to private schools and never has to worry about the security where they live because they’ve got armed guards and fences and police dogs and so forth.

Well, in his first budget, Calderón sharply increased the expenditures on social programs, and before doing that, he made his first trip outside of Mexico City, to the poorest town in the country, that is, in the state of Guerrero, and he made good on that symbolic overture to the downtrodden by fattening the budget with regard to social programs. And I think he knows quite well that he’s got to narrow this gap, otherwise the man who lost the presidential election last year, Andres Manuel López Obrador, who has now called himself the legitimate president and is barnstorming the country criticizing every appointment, every speech, every bill that Calderón offers, that Lopez Obrador or his successor, possibly someone like Marcelo Ebrard, the mayor of Mexico City, will be running as a messianic candidate in 2012, much like Lopez Obrador did last year.

Thirdly, Calderón has proved adroit at working with congress. Vicente Fox was a marvelous, extraordinary vote-winner, but because he had been in the private sector for 30 years before entering politics, he really disdained politics and politicians. He didn’t have the olfato político, the political nose, to bargain, negotiate, log roll, with members of congress, and as a result, he got very little through the lower and the upper houses. In fact, by late 2002, about two-and-a-half years into his term, the senate vetoed his request to fly to the U.S. and Canada for three days, something that was unprecedented in a country where the president was the top of the political pyramid and typically, when they asked members of congress to jump, the members of congress said, how high?

Calderón has an olfato político, and he’s worked closely with the members of the congress, many of whom he knows. And what has been a terrific surprise for many of us is that his secretary of finance, who is number-three in the IMF, and so was the target of criticism when he was appointed, especially by the leftist newspapers, saying the running dogs of capitalism are taking over this government just as they took over the governments of Salinas and Zedillo and Fox.

Agustín Carstens has proved to be an extraordinarily adept bargainer. And far from the typical image of a bureaucrat or a technocrat, he is able to log roll with the best of them. And he sought out the chairmen of the various committees in congress, and in effect said, what do you need in your state? What do you need in your city? New bridge? Well, you don’t have a river there but — (laughter) — if you want a bridge, we’ll find you a bridge.

And by that kind of . . . he was able to get the budget through with only about 20 nay votes. Now, it’s true they couldn’t raise the tax on soft drinks, which was a minor revenue matter, but the soft drink industry put a full-court press on congress and tried to point out that the soft drink was the staple of the Mexican diet and that Mexicans would lose zillions of calories if they had to pay an extra 5 percent for their Coca-Cola.

But in Carstens, we have a quite canny Secretary of Finance, whereas in the past, Paco Gil-Diaz, who was a superb secretary of finance, really didn’t want to compromise, and Vicente Fox didn’t know how to compromise, nor did his cabinet, which preferred self-expression to teamwork to the point that it became known as the Montessori cabinet — (laughter) — which may have been, in fact, a libel on Maria Montessori. (Laughter.)

The fourth optic through which you view Calderón is his emphasis on breaking monopolies and oligopolies. Mexico is an extraordinarily wealthy country. If Taiwan or Singapore or South Korea could lease Mexico for 20 years, we gringos would be talking about the colossus of the south.

Oil, natural gas, silver, gold, marvelous mountains, resorts, historical artifacts, museums, incredibly hospitable people, but, of course, the economy is just infused by monopolies and oligopolies, whether you’re talking about the oil workers union or the teachers union or telecommunications. Cement costs much more in Mexico than it does in San Isidro. Television, the pharmaceutical industry, transport, the national oil company, the two national electricity companies, all of these are huge bottlenecks to Mexico’s development.

Fox talked about it. My sense is that Calderón will attempt to do something about it, perhaps starting with the pharmaceutical industry, where you’ve got three major firms that dominate the market, and despite the so-called inexpensive pharmacies in Tijuana — and you can’t swing a dead cat in Tijuana without hitting a pharmacist — their prices look good only because the prices of pharmaceuticals are so high in the United States.

Finally, there is the question of immigration. And Calderón really hasn’t tipped his hand. Now, he has articulated the boilerplate that every Mexican politician indulges in: that is, that there’s almost an irredentist view that Mexicans have rights to cross into the United States, that that border 45 minutes away by trolley, is really just a surveyor’s line, and for hundreds of years, thousands of years, people have crossed back and forth, and so what’s the big deal? Or as President Bush would say, willing workers should be able to be hired by willing employers.

Well, Calderón realizes there’s no quick fix. He’s not, as Fox, propelled by his foreign secretary, Jorge Castañeda — by the way I was just reading that the astronauts on the moon, Peter, could see two things from Earth. One was the Great Wall of China. The other was Jorge Castañeda’s ego. (Laughter.) And his ego was larger.

But anyway, rather than copy Fox, who thought he would get a democratic bonus, a democratic bond, because he had ousted the PRI, Calderón has maintained a low profile on this position. He knows that there’s no polvo mágico, or magic powder. His ambassador to Washington, who will be Arturo Sarukhan, has a lot of experience in the United States, speaks English much better than I do, and understands that you have to wait for the American political process to play its hand, that you can’t really accelerate that process.

Calderón has, though, unlike Fox, indicated that Mexico has serious problems at its southern border, which in many ways is a third border of the U.S. because it’s an open sesame, especially between Guatemala and Chiapas, or Guatemala and Tabasco. And not much has been done about it yet, but at least he recognizes the problem.

But I think that he hasn’t been marching down insurgentes with a brass band trying to pressure the U.S. Congress and the White House to change immigration policy is a good sign. It’s much like in the Sherlock Holmes tale of the hounds of the Baskerville, the dog that did not bark is really the important factor in solving the mystery. And I for one certainly wish President Calderón all the best during the next six years because he has a Herculean challenge before him. Thank you.

(Applause.)

MR. NUNEZ: Our last panelist, Mark Krikorian.

MARK KRIKORIAN: Thank you, Pete. What Pete didn’t tell you about Professor Grayson is that in addition to being a professor, he’s a longtime elected official, a state legislator, which you could have deduced from the body of jokes that he was able — (laughter) — to call forth. I have no jokes.

MR. GRAYSON: They’re bad jokes.

MR. KRIKORIAN: They’re still jokes. (Laughter.) I have no jokes, good or bad, which is probably one reason I’m not an elected official — (laughter) — but instead a think tank hack and flack.

I’m going to give some immigration-related conclusions that I draw from a lot of what we heard today. They’re only my take. I have no illusions that our previous speakers would agree with them, but it seems to me pretty clear from the kind of problems that we are seeing in Mexico underline the importance of serious immigration control in the United States.

It is essential to insulate ourselves to the degree possible from the fallout of Mexico’s transition to development. This isn’t anything unique to Mexico. All kinds of countries undergo these kinds of convulsions when dealing with the move from backwardness to modernity, to put it frankly. South Korea, Chile, Spain, Greece, this is not a unique or unusual phenomenon at all.

Nonetheless, what is unusual is that our border is the only place where the First World and the Third World meet. And our response needs to be both offense and defense. Professor Shirk talked about ways we can help Mexico maybe reform its justice system, work together with them on drug and law enforcement issues, frankly, complain and whine less about Mexico’s conduct, and I agree with that completely.

On the other hand, you don’t win a game just with offense. You have to have defense, and the defense in this case must be more muscular, more serious immigration and border controls. Now there are a lot of aspects of that that end up getting talked about a lot in the media and in Congress — employer sanctions, for instance, which is the shorthand term for holding employers responsible to check whether they hire legal workers. We’re seeing actually a new up-tick in employer enforcement around the country as part of the Bush administration’s strategy of a spoonful-of-enforcement-helps-the-amnesty-go-down, to try to persuade congressmen and voters that they really are serious about enforcements so please give us an amnesty.

Nonetheless, it’s an important, vital element of any serious immigration policy to turn the magnet of jobs off. There’s a lot of talk that’s relevant here about fencing. You know, do we need some fencing, more fencing, fence off the whole border? This is an important tool; it’s an important discussion. I’m not going to talk about that particularly.

Likewise, this whole guest worker issue — part of, I would submit, a sort of defensive approach to this is to foreswear this whole idea of a guest worker program. It can do nothing but supercharge the migration of people from Mexico and Central America, and ultimately, Pakistan and Indonesia and everywhere else into the United States, both legally and illegally.

But what I wanted to talk a little bit more about in the few minutes I have is another aspect of sort of this: our defense strategy with regard to Mexico’s transition to modernity, and that is, to limit to the extent possible, and it is possible, this development of an integrated border economy, a border society, a border region. We see this in the twin cities all along the border: San Diego and Tijuana; Nogales, Arizona, Nogales Sonora; El Paso and Juarez; Laredo and Nuevo Laredo; Brownsville and Matamoros.

Despite the Chamber of Commerce boosterism about this phenomenon, it frankly is a parasitic phenomenon. The Mexican cities are much larger than the American sister cities, twin cities, and this reflects the fact that the benefit is enormous on the Mexican side of the border. You don’t see this phenomenon along the Canadian border. There are, in fact, border towns in Canada: Windsor, Canada; Niagara Falls, and some other places but they’re there by happenstance. There is no real — or not very much, anyway — arbitrage to do across the U.S.-Canadian border because Canada and the United States are both highly developed nations.

There’s, you know . . . Indians smuggle some cigarettes across the border in upstate New York, and there’s some of the same, you know, cheap medication thing — drug purchases that go on as well. But the difference again, the arbitrage that you can do across the U.S.-Canadian border is minimal, whereas that’s not the case where the First and the Third Worlds meet — the only place on the planet where the First and Third worlds meets, which is just to the south of us.

Now, this isn’t to say that promoting the import of foodstuff and manufactured goods from Mexico isn’t a goal; this is good for us and good for them. Facilitating and even speeding the import of truck containers or train containers across at Otay Mesa at Laredo, and elsewhere along the border is an important goal for us. But this regional integration, this creation of a kind of common border region that’s distinct from the hinterlands or the centers, the metropolises of each country, is however much it might be in Mexico’s interest, and it’s maybe – that’s for them to decide – it’s fundamentally contrary to the interest of the United States. And there is, in fact, a good deal that we can do about it.

And the reason this is problematic, I have to say, is really twofold. Number one, it makes ordinary border enforcement much more difficult. I mean, the more congested and built up the border regions are, it’s simply much more difficult for the Border Patrol to do its job and much easier for illegal crossings to successfully take place. But beyond that, what it does also, is promote the overflow of the various dysfunctions that we’re seeing as part of Mexico’s transition to modernity.

You know, we are going to see journalists being executed, assassinated on the American side of the border — locals, especially small local governments, being purchased by drug gangs and used as sort of cover for illegal activities. And that’s the kind of thing that doesn’t happen in regular immigrant communities, say, in Mexican immigrant communities in Chicago or Houston, or even Los Angeles. It’s a border phenomenon, and it’s something that, I would submit, needs to be an important priority for us to limit to the degree possible. And there are three things that I have in mind to that end.

One, we need to take border security even more seriously than we do, I think, and this involves, I would submit, creating a border security zone. This is a formal zone, something like what Congressman Duncan Hunter suggested in legislation last year, where the Homeland Security Department has much broader authority, even than it does now. And what I would suggest we need in such a border security zone is active and aggressive efforts using eminent domain to purchase property that might be developed sort of on the edge of developed areas to prevent sprawl along the border.

I would even submit taking property that’s already been developed and demolishing it as well as requiring within this zone, however deep it ends up being — half-a-mile or a mile from the border — the Homeland Security Department to okay all development, all site work; all buildings, roads, everything because a border security zone is what, not only the Border Patrol needs to enforce the law, but what’s needed to limit this kind of sprawl and development along the border.

The second strategy I would suggest is limiting or perhaps even ending the entire institution of border crossing cards. Laser visas, these are called. Half of all temporary admissions to the United States, all of them, everywhere — airports, seaports, east, south, north, west — are on border crossing cards. And these have become increasingly not temporary tools to go shopping at Wal-Mart, but de facto Green Cards. They’re good for 25 miles, to be used within 25 miles of the border, in Arizona within 75 miles of the border. They used to only be good for 72 hours. You’re not allowed to work on them, but you could be here for 72 hours. The administration in 2004, made them good for 30 days at a time and this promotes a kind of development of a common border region that, I submit, is a real problem for the United States.

And the third strategy, or I guess in this case a tactic, I would suggest is this — something that’s never really been addressed very significantly — is the use of the residents in Mexico of people who have U.S. Green Cards with only a few exceptions. If a person who has been admitted is a lawful, permanent resident, has a Green Card, lives permanently outside the United States, he has abandoned his domicile in the United States. His Green Card is forfeit.

And those lines in the morning that build up at the San Ysidro port of entry include lots of people who are violating the terms of their Green Cards, people who are supposedly permanent residents, immigrants of the United States but are living in Mexico. And every one of those people needs to have their Green Cards cancelled, or at least told that that’s what’s going to happen because this living on one country and working in another is something that we are not going to permit to the degree that we have been permitting it.

Just to wrap up, the convulsions that we are seeing in Mexico are part of normal transition to modernity. Every country does that in its own way. We had, you know, miners a hundred years ago using dynamite, blowing up mines. We had violence — quite extensive violence in our own country as part of our transition to modernity — and we’ve seen the same things in all other developing countries. There’s no reason Mexico should be expected to be different. It’s not. This isn’t a unique problem. Mexico isn’t bad because of this. But it has serious consequences for the United States.

And I hope that at some point, maybe in my children, more likely in my grandchildren’s lifetime, Mexico will become a First World country and our border with the south will be very similar to our border with the north. We won’t see this kind of parasitic border economy and border society having any more rationale. And then Mexico will have to deal with its illegal immigrants itself and that’s their problem, but it’s not going to happen now; it’s not going to happen in the medium term. It may happen in the long term; I hope it does, but we live today and we need to respond and to try to adjust and cope with the challenges that are facing us today. And I don’t think we’re taking that, frankly, seriously enough and we really do need to. Thank you.

MR. NUNEZ: Let me offer — let’s go back and start over again because David and then Lynn and give them at least a chance to react, if they wished, to anything that happened after they spoke. So, David, you want to — you have the floor again if you need it.

MR. SHIRK: I would only reiterate, I think, some of the points that both Lynn and George made. It’s important to note that the current Calderón administration has made some important steps in the right direction in a variety of areas. And the two major areas that I indicated, economic development and the rule of law, I think Calderón has tried to send a clear signal for obvious reasons that he came into office with a weak political mandate and wants to reinforce his claim, his legitimacy as Mexico’s president. In order to do so, he has to address the two problems Mexicans care about most: the economy and basic, personal security.

The problems is or a concern that I think exists is that that’s, in some ways, what Fox did when he came into office, all right. At the start of every presidential administration, you can expect to see the spotlight go onto organized crime. It was Fox that made very important arrests and gains against the Arellano Félix Organization at the start of his term. But we saw, after a year or two, significant backsliding, the escape of el Chapo Guzmán. We saw continued problems of crime and violence as the drug feuding continued. So one thing to be concerned about is that the initially strong response of any given presidential administration in Mexico could wane over the next couple of years.

I think, though, that there is cause for cautious optimism. I think that Calderón is, perhaps, the genuine article when it comes to a sincere commitment to push forward a policy-agenda. Fox did not see himself, necessarily, as a president who should come in with a major set of reforms. He saw himself as a transitional president and he reiterated that many times. Calderón, I think, does see himself and has a very different formation than Fox — sees himself as political reformer.

An interesting and important point about Calderón is that he comes from a sector of the PAN that is the oldest and most socially progressive wing of the PAN, the wing of the PAN that dominated the party in the 1960s and ’70s, a sort of Christian-Democratic orientation of the party that emphasizes social justice and the ideals that came out of the Catholic church during Vatican II or since Vatican II. And so I think that he may really have his heart in the right place.

I also wanted to just address the issue of North American integration. It’s not clear to me that we can necessarily avoid a more integrated North American future. It is something that did start with NAFTA; it’s something that, in fact, preceded NAFTA very significantly. The level of trades with or without NAFTA, most probably would have continued to rise to make Mexico our second-largest trading partner, basically started in the 1990s. The question is whether we will choose to insulate ourselves, as Mark said, from that process of integration or embrace it and try to make it better.

And for my money, it’s kind of like the Texas governor, who talked about the rain in a very unfortunate way; sometimes you just have to embrace the weather. If you can’t stop it, you got to enjoy it. Unfortunately, he used those comments in a very inappropriate setting. But my sense is that we need to be thinking about how — not what we can do to stop integration, but how we are going to cope with the integration in North America. And there are a variety of things that we can do.

To me, the long-term answer is to make Mexico — or to help Mexico become a better partner, a partner for the North American community. And that means, to some degree, making Mexico a place where the kinds of inequalities that we have talked about, the kind of unfortunate rule-of-law problems, et cetera, are minimized.

We have some good examples of how that can be done. We have some pretty impressive progress made by formerly third-rate countries like Ireland and Spain that have been brought up to a level as shelf countries to be successfully integrated into the European Union. If you walk around Dublin today, you’d have no idea that Ireland lagged behind, as far as it did, 20 years ago. So I think that we can look at the Schengen agreement and some of the other work that’s been done in the European communities to promote effective and relatively rapid integration in North America.

But this is a point of serious, I think, ideological concern and debate, and something needs to be, I think, actively discussed, and all the potential pitfalls of a more integrated model really fleshed out. I don’t think that the vast majority of Americans, at this point, really understand that that’s the process that we’re currently engaged in. A process of significant social and economic integration and, at the very least, it needs to be just debated and discussed if we’re going to deal with that.

MS. WALKER: I just have a couple of thoughts as we begin the Calderón administration. We all thought we knew Vicente Fox and we didn’t. He had convinced everybody on the campaign trail that, you know, he was a certain way and he disappointed people. He raised the expectations and then he disappointed them. We don’t know Felipe Calderón at all, it seems. The campaign didn’t seem clear, as it seemed clear when Vincente Fox was running. It became this fight, you know, between himself and Andres Manuel López Obrador, and in the end, it ended up tied. And so now we’re waiting see who he is and how he’s going to run Mexico.

I remember, very clearly — I actually thought it was a very poignant moment in his speech the first time he thought he had won — we went through this several times on and after July 2nd — but he told the Mexican people if he did win, he won 35 to 35 with less than 1-percentage-point difference between his leftist opponent. And he asked the Mexican people, he said, I know, I understand what you’re saying to me here. And he said, give me a chance to win your confidence and to show you that I can do something.

So, I think that’s what the Mexican people are doing. I think they’re giving him that chance that people aren’t rioting in the streets; they’re not tearing the country to the ground. And so now, he — you know, they’ve given him his chance and he’s going to have to deliver. He might be a great president, he might be a very bad one, or he might just drift off into history without much note at all. But I think he has been given the chance and people are waiting to see how well he does for Mexico. So I think those are the thoughts I have right now.

MR. NUNEZ: George, anything to add?

MR. GRAYSON: Perhaps just two quick points. One is that Calderón has gotten off to a good start and, of course, the jury is still out. But the increased number of extraditions could be a mixed blessing because in Colombia, when the violence really escalated was after the, I guess, the extradition of Pablo Escobar. And that could happen in Mexico. The border towns are characterized by dual sovereignty, so much so that a chain of papers on the Texas-Mexican border, El Mañana, simply doesn’t report news or opinion pieces about the drug cartels because they don’t want their reporters slaughtered or their print shops bombed again.

So, I think Calderón is doing the right thing but he’s grabbed that tiger by the tail and the tiger still has a lot of fight in him because of the enormous amount of money that is available in the drug business. He’s concerned, not just that drugs flow to the U.S. because we’re the major consumer, but there’s a sharp increase in drug consumption in Mexico. There was a three-fold increase during the Fox sexenio in Mexico City and a two-fold increase throughout the country.

And so, Calderón realizes that there has to be a partnership in fighting the drugs at a time, by the way, when the U.S. is devoting far fewer resources to the war on drugs because we’re so thinly stretched in Iraq. But Calderón, also, is aware of the great increase in consumption at home. And so, the problems are just enormous in Mexico.

And, I think, to his credit, though, he seems to have chosen an agenda of two or three items that he’s going to focus on, whereas for Vicente Fox, when he finished his first address to the nation — and Lynne was there at the Auditorio Nacional — he said, “I’m going to bring peace to Chiapas,” and Chiapas was probably, and the Zapatistas, on a list of a hundred problems facing the Mexicans 99th or 100th. It was not a major problem; security, poverty, jobs, education, healthcare [were]. Fox wasted his first six months in office in a quixotic fight that pleased no one. In contrast, Calderón has a brief agenda and seems to be pursuing it with all of the implements available to a Mexican chief executive, which are still considerable.

MR. KRIKORIAN: I wanted to have one quick response to something that Professor Shirk said, that the — first of all, there’s a difference between economic and social integration. I mean, expanded trade with Mexico is something that we should encourage both for our benefit and their benefit.

But the analogy between the United States and Mexico is not to Northern versus Southern Europe and Ireland because the gap between the less-developed and more-developed countries that are now in the EU is nowhere near the gap between the United States and Mexico. The comparable situation is Europe versus Turkey and Morocco, and that’s a very different situation, that really — so my point is that our situation with Mexico was really not comparable to what the European Union saw over the past 20 years. That’s it.

MR. NUNEZ: If you have questions, we’d like you to use the microphones so we can make sure that we get it on the record. While we’re having our first combatant to step forward, let me make . . . well, you’re here, go. Your call.

Q: Hi, Joseph Seckleman (sp). My question is — and none of you have addressed this — the United States has a huge demographic problem. One-quarter of its population that was born in the 17 years after the second World War, the baby boom generation will be retiring and taking Social Security and Medicare and –

MR. NUNEZ: Are you?

(Laughter.)

Q: Of course, those are unfunded programs that depend on younger people to support them. And there are two politically unacceptable choices: cut benefits, raise taxes, or quietly let in millions of illegal people. And so if you . . . someone could address those?

MR. KRIKORIAN: You can let them in legally, conceivably, sure. But yes, I’ll take that. We’ve actually looked at that some. We published a piece on immigration and aging society. It’s at our website at cis.org, along with all of our other material. And the answer is, immigration cannot be a solution to our Social Security problems because, I mean, for several reasons. First of all, large-scale immigration inevitably ends up being people who are relatively poorly educated and don’t earn a lot of money, which means they don’t pay a lot in taxes and that they use a lot in government services while they’re working.

The Social Security Administration is actually done kind of projections of the benefit derived from increasing immigration, and it is miniscule even based on what are really very clearly unrealistic assumptions. For instance, that they used in their assumption of calculating a relatively small benefit to Social Security from immigration. They assumed that every immigrant, from the moment he stepped into the United States, earned the same amount and paid the same in taxes as the average native-born American, an obviously absurd assumption. And even that assumption didn’t yield much of a benefit to Social Security.

And remember, Social Security is a redistribution program. In other words, if you’re poor, you take out more than you paid into it very quickly. And so, if you’re importing more people who are going to not pay that much into Social Security and are going to use a lot it when they retire, that’s like losing money on each unit but trying to make it up in volume. I mean, our only solution to dealing . . . there are other solutions that have to be used in dealing with the change and the age structure. For instance, raising the age that you get benefits, cutting the benefits, et cetera. Immigration not only is not a solution, it actually complicates the problem a lot.

MR. NUNEZ: Another question?

Q: I’m a non-expert in all of this stuff, so anybody can respond to this. It was mentioned that by working with Mexico to make improvement to the rule of law, increase a sense of personal security, and I think by default, improve the economy, that would decrease the driver for immigration to the U.S. I’m just wondering what might the U.S. do in that sense in a cooperative way that we haven’t already done to affect that? And also, is there a relationship between organized crime and the oligarchies and monopolies that might make reforms in that area more difficult?

MR SHIRK: I’ll take a stab at both of those questions just a second, please. Oligarchy. What specifically can the U.S. do that we haven’t been doing currently? Well, we can do what we’ve been doing well.

One of the things that we’ve done well is to advocate for, particularly through USAID, which received . . . or which gave, I think, $50-million grant to an NGO in Mexico, which was formed in cooperation with the USAID, an organization called Pro Derecho, to promote justice-sector reform at the state level in many different places. The Chihuahua Reform, which I mentioned, is a direct outgrowth of that.

Training of lawyers is going to be extremely important to have a check against the Mexican justice system, and it’s something that we can invest in pretty heavily, you know, $50 million is nice over a 10-year period but making a real financial commitment to helping strengthen the justice system will pay off, I think, huge dividends for us.

In terms of the connections between the oligarchy and narco-traffickers, there are — Mexico is a fascinating place to work because there are lots of very interesting conspiracy theories because so many things are difficult to explain. And certainly, in those oligarchical conspiracy theories, you hear very interesting things, the idea that Carlos Salinas, the former president of Mexico, is the head of a massive, underworld, criminal organization and network in Mexico, and that his chief opponent, his chief rival is President Luis Echeverría, former President Luis Echeverría, who also heads a powerful branch of the Mexican criminal underworld.

Frankly, the problem with conspiracy theories is you can never prove them one way or the other. My sense, though, is that the oligarchies that we ought to be more concerned about are the ones that Professor Grayson mentioned, the oligarchies of Carlos Slim,l of mega-millionaires . . . billionaires. Carlos Slim, the third richest man in the world, resides in Mexico and operates a sizable portion of Mexico’s business. Those are the oligarchies that I think Calderón’s going to have to take on. And I am not completely confident that will be accomplished over the course of this term.

Calderón has to deal with the very same people, people like Carlos Slim, that he needs to help him implement important elements of his economic package. So biting the hand that feeds his administration, I think, would not necessarily be politically wise. Anyone else want to speak to those points?

MR. GRAYSON: Yes, and let me go back to the analogy with Spain because I agree with Mark, there’s some major differences. Spain was much more developed when Francisco Franco died in 1975, but thanks to an intrepid prime minister, Adolfo Suárez, the left and the right were brought together in Spain. It was one of the magnificent accomplishments of the 20th century. And there were tradeoffs. The Communist Party was legalized; the workers’ rights were legalized, in return for which the Army was given a privileged position. The capitalist model was adopted. And so, Spain has recorded incredible records of growth.

In Mexico, the problem is that there is no consensus on what economic model to follow. And so you’ve got the PAN and the progressive wing of the PRI who believe in free-market approaches. In contrast, you have the PRD, the leftist nationalist party, and a good chunk of the PRI that wants to turn back the clock and have the large welfare state, have the government own even more citadels of the economy, and work with corporatist institutions like the various trade unions, the official, quasi-official trade unions. And so, we really have to wait for Mexico to sort out its affairs and to decide whether it’s going to develop an essentially market-oriented approach or whether it’s going to try to turn the clock back.

There’s virtually nothing that the United States can do to affect that. That is an internal battle that must be played out. A big difference, though, is that Franco died, and although you had the bunker that was left — Franco’s loyalists — that bunker was not nearly as powerful as the PRI is. The PRI controls 17 states. The PRI has well over a hundred deputies and 32 senators. The PRI has removed itself from presidential competition because of the ineptness of Roberto Madrazo’s campaign, but it can still work to stall reforms, and so this was a major challenge.

Fox was absolutely tone deaf. Fox could not organize a one-car funeral. (Laughter.) Calderón, in contrast, thanks to Carstens, is working so far adroitly with Congress. But you’ve still got the big issues, such as confronting the monopolies. And, you know, el petroleo es nuestro, one hears every March 18; the oil is ours, even though Pemex is losing reserves much more sharply than it’s finding new discoveries.

But that is a salient difference that is going to have to be ironed out by the power brokers in Mexico. I think that Calderón is quite willing to take on the monopolies, but he’s going to have to have the backing of a broader spectrum of the political scene than simply his own PAN and a faction of the PRI.

Q: Hey, I beat everybody to the mike. Frank Morris, on the border. I’m glad to see all of my colleagues and others.

My question involves U.S. security and the impact that Mexican law and politics on U.S. security, especially with the high increase of OTMs, other Mexicans coming across the border. My question, especially to you Lynne and to you, Professor Shirk and to you, Professor Grayson, is it would seem that it’s in Mexico’s political, national interest to be sure that there is not penetration from the Mexican border of direct al Qaeda and other kinds of threats to the United States.

My question is, do you know or do we know that, A, this is a high-priority, and, B, whether there have been any steps taken by the Mexican government or politics? I assume there is a consensus, political consensus that they will want to do this to in fact counter this threat. Do we know?

MS. WALKER: I believe that the Mexican government takes this very seriously, and the reason is they do not, under any circumstances, want to be responsible for or pinpointed for, blamed for, allowing any terrorists, not even one, into the United States, because it is in their best interest to help protect their neighbor. I do believe Mexico when they said that they’re trying and they’re going to do their best. It’s just not something they ever want to have happen.

And I just want to say as an aside, that when 9/11 happened, the day, you know, 9/11 — Mexicans were devastated. I mean they really went out of their way to express over — individuals — I’m not talking about Fox, who was a little slow, but I’m talking about individuals that could not say enough how sorry they were and how upset, yes.

Q: (Off mike.)

MS. WALKER: Well, look, here’s the problem, though. I mean, the Mexican government is an entity that I really believe does not want terrorists to get through. It’s in their own best interest; it’s in the interest of being — it just would be the worst thing.

However, as you know, there’s massive people smuggling all along the border and all kinds of people show up. They aren’t just Mexicans as sometimes the images — they’re not just Mexicans. It’s Central Americans. They have Russians coming through. They have Czechoslovakians and they often have Iranians coming through. And they have been — I saw just a very, very tiny story the other day that several, maybe a group of 10 or 12, were detained by Mexican immigration officials . . . Iranians. I believe they were Iranians, I don’t think they were —

MR KRIKORIAN: Iraqis.

MS. WALKER: They were Iraqis, right?

MS. WALKER: And they’re pleading a religious, you know, questions, you know, persecution . . . asylum. They’re trying to get to the United States and Mexico has stopped those people. That’s not the first time and they have, you know, detained them and, I think, sent them back to their country. So . . . smuggling or the illegal entry of mostly Iraqis (sp) historically, but now who knows, has been regular here.

MR. NUNEZ: Next — oh, Dave, another one?

MR. SHIRK: I also wanted to mentioned, after 9/11 we also saw an increase in Mexican antipathy toward the United States in public opinion polls. In the two, three months after 9/11 happened, a disturbing increase from an average of 12 percent of Mexicans saying they hate the United States; we saw those numbers go up into the — I think it was 18 or 20 percent. We saw a surprising and I think troubling reaction from some Mexicans.

The other thing I think to keep in mind is that not only does the government take this issue seriously, but some of the organized crime syndicates take it seriously as well. A major terrorist incident perpetrated at or through the border would be bad for business in a very serious way. And it’s not clear to me that the Ariano Felix or the Zumbadas of Mexico are naturally allies to al Qaeda or other criminal organizations. They do not need that kind of heat at the border. And in many ways, 9/11 was a serious cut in profits for these organizations. In fact, some of the things we saw here locally — drug traffickers driving the opposite way up the freeway with specially loaded tires to beat the spikes they have there at the border — those were acts of desperation by the drug trafficking organizations because there was so much attention . . . was so much law enforcement and security at that point that their warehouses and their stores were getting backed up and they needed to move product.

So I’m not sure they want that kind of heat. Certainly the possibility that some Middle Eastern group of terrorists that has no other way to get into the country . . . and we certainly know they’ve got plenty of other ways to get into the country. None of the 19 hijackers were unauthorized to enter the country. There’s no doubt that someone can get into the United States, terrorists or not, using these kinds of smuggling organizations. The question is whether those smuggling organizations would be willingly involved in some kind of a terrorist plot, and I kind of think that that is unlikely because it is not — because these are good capitalists.

MR. KRIKORIAN: Well, I suppose the analogy is to the Roosevelt administration cutting a deal with “Lucky” Luciano and the mob during the Second World War to protect the harbor in New York, the Port of New York.

MR. NUNEZ: Carol ?

Q: Yes, years ago I was the special assistant to the vice chairman of the Civil Rights Commission and we went down to Nuevo Laredo at the border, and there was a great many Mexican leaders there and they spoke one after the other about all that the United States had to do for Mexico to help Mexico. And Morris Abram, who was the vice chairman to whom I was the assistant, said, Mexico has to do something about corruption. And another leader got up and said, well, the United States has to help Mexico do something about corruption.

So it seems that — are there elements of Mexican society other than government — are there . . . the church, any kind of civic institutions . . . what are the attitudes of the 10 percent that are very wealthy? We all know that government is just not enough, and the people themselves have to have some movement toward correcting these kinds of abuses and stop living with, you know, having to pay a bus driver to stop at your stop, and things like that. So that would be my first question.

And the other is Vincente Fox came to Chicago and made speeches all over the United States saying things that I think are terribly offensive to a great many Americans, that Mexicans were here to live their Mexican heritage here in the United States, that he was actually seeing a kind of piggybacking on the prosperity of the United States which Mexicans could enjoy while still perpetuating their culture and their heritage and their language. And in that he seemed to have some endorsement from Bush also, who seems to think something like that is possible

So as long as that attitude prevails, I think a lot of Americans feel — I don’t know, do not feel as if they can do much for Mexico without the impulse there on the part of all the people and with this idea that they’re entitled to come into America and have their own culture preserved here, I think that creates a certain amount of resentment.

MR. SHIRK: I think that’s absolutely right. Mexico cannot expect help from the United States unless Mexico makes steps on its own to address its own problems, right? And I think one of the major problems you pointed out is corruption. Another one, I think maybe even a more significant one, is the lack of resources that government has to address problems in Mexico. Mexico collects, among major countries in this hemisphere, the lowest amount in taxes, partly because people don’t trust the government. I think they collect something around 12.5 percent of GDP in taxes. We in the United States collect about 40 percent, and I think that’s — 35 or 40 percent, and that’s pretty consistent with OECD countries.

So Mexico needs to do something that is, as someone mentioned earlier, is not very popular. They need to start collecting more money in taxes, and that will give them the resources to do more investment in infrastructure and education, which is part of this path forw

What I think is promising — and I think, being cautiously optimistic, is that we have seen efforts on the part of Mexican public officials to make those kinds of investments and to increase . . . I mean, Fox tried to get fiscal reform passed. There are some pretty — he faced some pretty difficult political circumstances and, as Dr. Grayson said, probably lacked the political skills to get that fiscal reform through the legislature.

Another . . . and I think this is one of . . . if I could change two things about Mexico overnight with a magic wand, the first would be to eliminate the prohibition on re-election, because that’s probably the most significant barrier to forward-thinking public policy, because no public official in Mexico can be consecutively re-elected. So they have no thought about the day after their term in office. They are only looking at the next political appointment or political opportunity that they can get outside of that office. And so I think it leads to very short-term policymaking. The other is to actually require lawyers to pass a bar exam and be beholden to a bar, because then they might behave more ethically and responsibly in supporting the justice system.

But I think you’re absolutely right. Your point is well taken. I think that we can somewhat cautiously say that, number one, policymakers are trying to make some forward steps. And actually, number two, Mexican people are demanding policy reform, and I think — democracy is a good thing, and democracy is helping to push forward important changes at the national level and at the local level in Mexico, and the only thing that I think U.S. support can offer is to help speed that process along, but it has to come from Mexico.

MS. WALKER: I have one tiny thing to say about the issue of corruption. My thought is this: You have to break the chain of corruption. And you’re absolutely right; everybody has to participate in this. It can’t just be, “Oh, Mr. President, can you fix this for us?”, which has sort of been a mindset in Mexico. Fox talked often about, “We’re going to break the paternal system,” and that was — he talked the talk and it was the right thing to say. It’s not just going to be the president sort of is bad if Mexico is going to fix everything. Everybody has got to participate in this.

So you’ve got to stop paying the cop when you get pulled over for speeding and you know you were speeding or running the red light. You’ve got to stop paying to get a drivers license down at the drivers license office instead of, you know, doing whatever the requirements say. I could give you a million examples of paying in little bitty ways. Maybe we’re only talking about 20 or 30 pesos here, or 50. And when you double park your car where clearly there was a no parking sign and the tow truck comes and starts pulling your car — you know, you just have to go down and pay it.

But it’s very hard because it is a system now. It is an ingrained system. You’re right; let’s don’t talk about culture. It’s a system. And it is more expedient. I talked to an analyst once, an economist, and he said his wife insists that she will not pay bribes. So she goes down — see how George is laughing? She goes down to the office where you’re supposed to pay your fine and he said, “I don’t see her for the rest of the day. You know, she’s down there standing in line waiting to pay her fine and go home.” So in other words, you know, that’s time cost . . . if you have a job you can’t do that. You know, you’re working every day.

So it’s all part of a system now. It’s easier for me to sit up here and say that it’s got to stop for it to really stop, but that’s part of the problem. It is from the bottom all the way to the top.

MR. NUNEZ: Let me add on a little bit. I’ve done, over the last 10 years, a lot of work in other foreign countries — legal reform I guess would be a general term — and I spent a number of years working in Armenia where corruption was as bad as any other country you want to think of. And it’s exactly as Lynne described. I mean, it’s not a cultural thing; it’s just that’s the way the system has been forever. And it was that way under the Soviets and it was that way since independence. Everybody carried, in Armenia, your drivers license, your registration in a little leather folio. And everybody carried a thousand dram note in their folio so when you were stopped by the cop — which was arbitrary — you handed him your drivers license, registration; he took the thousand dram note and let you go. If you didn’t, you would be there for the rest of the day.

We asked the American ambassador one time — we were talking about corruption, and he said, well, he’d just met with the prime minister, who proudly announced that Armenia had cut corruption in half — a startling revelation and declaration. Well, how did you do it? Well, up until that point in time there were 42 different agencies that had authority to go around to the businesses and the public and inspect things and issue licenses or do whatever it is the government did to regulate things, and every one of them required you to pay a bribe to get whatever the permit was, or the license, or to pass the inspection. So they cut corruption by eliminating a half of the inspections. (Laughter.)

MR. NUNEZ: Other –

MR. NUNEZ: Yes.

MR.GRAYSON: It takes 55 days to open a business in Mexico. It takes three days in the U.S., one in New Zealand, one or two in Canada. I think the corruption —

MR. NUNEZ: Did you include California in your statistics?

(Laughter.)

MR. GRAYSON: I think the corruption is so endemic it does have a cultural dimension as well as a systemic one. I see the best possibility as Mexico increasingly adopts market mechanisms. This leads to decentralization of decision making so there isn’t just one palm that has to be greased. There will be more palms that have to be greased.

It’s cut back on feather-bedding so that the union movement — which Vernon [Briggs] and I very much support, my dad being a Teamster — but the union movement is much weaker now and the union movement was one of the most thoroughly corrupt enclaves in Mexican society.

And also, to the degree you can break these bottlenecks such as in telecommunications or in . . . (unintelligible) you will have more competition. You know, I’m not sanguine that if you build a chemical plant — if you’re DuPont and you build a chemical plant, that you’re not going to try to pay off a health inspector because some kind of number three gunk is coming out your smokestack, but if you’re got a Bayer plant five miles down the road, they are going to raise unshirted hell about the competitive advantage that DuPont, hypothetically speaking, is getting from being able to take shortcuts in environmental regulations.

So I see the advances of the market economy as probably being much more effective than all the jeremiads that might come out of Los Pinos or out of the churches.

MR. KRIKORIAN: Let me make just one micro point too. I mean, Lynne is right that this has to happen from the bottom up. I’ve lived in Soviet Armenia for two years. There is no question that it’s culturally rooted, believe me. But that doesn’t mean that it’s unchangeable. I mean, things can change, cultures can adapt, and — I mean, I have hoped for a change there, but my micro point is that because it has to happen from the bottom up, our immigration policy is actually, I think, postponing those kind of changes because the very people at the local level, ordinary folks, but the ones with sort of gumption and enterprise who would be the first ones to stand up and say, “No, I’m not paying this bribe,” and then other people might follow, those are the people who leave and go wash dishes in Chicago.

They’re a mismatch for us. They’re 19th century workers in a 21st century economy. They’re not helping the United States. But in Mexico’s context, these are the sort of grassroots level people who could become change agents, and they leave instead.

MR. NUNEZ: The border is a safety valve for them.

MR. KRIKORIAN: Right.

MR. GRAYSON: — for the Mexican elite.

MR. KRIKORIAN: Right.

Q: I wanted to ask — Ronald Thomas (sp) is my name. I wanted to ask whether there is any part of Calderón’s proposals — his budget or whatever — that’s basically government job creation. I mean, it’s work in progress administration, our kind of Depression era when, you know, there wasn’t any investment coming from the outside. Is there anything there to sop up some of the underemployment, even though perhaps the birth rate has gone down now, but there’s still terrific underemployment there.

MR. GRAYSON: Just a word or two, and that is that to be unemployed in . . . Mexico’s unemployment rate is officially about 3 percent, but you’re employed if you’ve worked an hour during a two-week period, and so the figures are just funny money.

Look, Calderón is a market-oriented person and so he’s going to give some tax benefits to firms that increase their employment rolls, but he’s not embarked upon job creating WPA-type programs. He is, though, focusing much more money on health care and now has guaranteed every baby that’s born in Mexico to have health care throughout that individual’s life. And let’s face it; if you have a good health care system and a good educational system, you are more than likely to have development. They’re the two factors — quite apart from breaking the bottlenecks — that the government can focus on.

Regrettably, in education — something that Lynne has written about astutely — you have a major union that makes the National Education Association look like choir boys and girls, and this union has a hammerlock on the public education system. Anyone in this room who knows a middle class Mexican knows that they hock themselves to the hilt in order to get their kids into private schools and pay those tuitions. They can’t afford it in many cases, but they make the sacrifices because the public schools are incredibly politicized and the standards are poor. And you just can’t mention something like accountability or merit pay in Mexico without having a tremendous reaction from the most powerful — one of the most powerful politicians in the country, Elba Esther Gordillo, who was responsible for Calderón’s election. Her union provided the critical mass of votes for him to enter Los Pinos.

To his credit he has named, as secretary of education, another strong woman, who is not going to be beholden to Elba Esther, but that may lead more to a stalemate than to the diminution of the SNTE, the teachers union’s power.

MR. NUNEZ: One last question and we have to quit.

Q: Actually, I have two questions. The first one is, after 9/11, the border enforcement of the Mexican border has increased tremendously. Do you see any direct connection between 9/11 and the border enforcement of the Mexican border? And I’m not talking about the other borders, not the seaports, not the airports, but the Mexican border. And I’m not talking about drug smuggling, but about terrorist threats.

The other question is if any of you were able to shape the current immigration reform in a way that you wanted, what would it look like in a post-9/11 world?

MR. SHIRK: Could someone repeat the question? I, at least, couldn’t hear.

MR. NUNEZ: Comment on the degree to which 9/11 has affected security on the U.S.-Mexican border is essentially the first topic. And the second one was, what’s your ideal immigration reform?

MR. KRIKORIAN: I’ll be happy to go first. Obviously none of the 19 hijackers snuck across any border, but they’re not the only terrorists we’ve dealt with either. I mean, we’ve had –

MR. GRAYSON: They got drivers licenses in Virginia.

MR. KRIKORIAN: Right, yeah, some of them. It’s your legislature that passed the rules. (Laughter.) But the fact is that immigrants will — I mean, terrorists will use any means to get into the United States, and since 1993 we’ve had al Qaeda related terrorists. We did an examination of 48 of them and there have been more subsequently, and they’ve used every means to get in. Some have come in — some actually snuck in illegally, or crossed the border without inspection or tried to sneak through ports of entry. Others have come in as tourists, as students, as legal permanent residents, even, I mean, we’ve had at least one high-up Hezbollah official who was smuggled through a Mexican border crossing on the Mexican border who is now in jail at Dearborn.

So my point is that immigration enforcement is indivisible. Any weakness will be the weak point that bad guys use, and as it’s harder to just fly into New York from Pakistan, people will find other means of doing it. So, I mean, border enforcement has to be part of any anti-terrorism . . . sort of a defense part of an anti-terrorism strategy.

Q: May I add one more thing? There have been terrorists who have never crossed any American border – (inaudible).

MR. KRIKORIAN: Sure. Yeah, I mean, there obviously is domestic terrorism, but it’s . . . quite frankly, it’s a minor phenomenon. I mean, as bad as the Oklahoma City attack was, that was sort of the one big domestic terrorist attack. There are animal rights people and some anti-development people that have burned houses and done attacks. There are things like that, but that’s kind of a low-level maintenance phenomenon, and, you know, really, we haven’t seen anything like Oklahoma City domestically since then. The real threat is foreign terrorism.

I mean, I’ll quickly take a whack at the ideal immigration policy issue. My take is that we need – for legal immigration, my approach is – and this is my upcoming book; I outline this, but it will be a while before you can buy that – is we need to do zero-based budgeting in immigration – not zero immigration, but we assume zero immigration and then build up from that what specific categories of people we think are essential to let in, even despite the problems that immigration creates for a modern society, and that would be spouses and minor children, a handful of Einsteins, and real refugees who have no other options and never will, ever, and that ends up being a lot less people than we take in now.

Q: But where is the connection between the Mexican border — (inaudible) — the Canadian border?

MR. KRIKORIAN: My point is they’ll enter any way they can get in, and the Canadians have a functioning state that’s much more effective at screening — at working with us in preventing terrorism. I agree that the Mexican government, the last thing they want is somebody sneaking across the Rio Grande with a radiological weapon and detonating it in Houston. It would be a disaster for them. But . . .

MR. GRAYSON: But Mexico has no southern border. I mean, you can cross in from Guatemala into Chiapas or Tabasco.

MS. WALKER: On a raft.

MR. GRAYSON: On a raft, and you see people going across the Suchiate River and they’ve paid a few pesos, about a dollar. But the rafts are makeshift — ply boards on truck tires —

MS. WALKER: Yeah, or inner tube, yeah, kind of thing.

MR. NUNEZ: Well, and look, let’s not . . . there’s a quantum leap, or there’s a significant difference between migrants coming here for work and, in the old days, what we used to worry about was KGB spies. Now, al Qaeda – I mean, these people can be very sophisticated. We’re not talking about, you know, 100,000 al Qaeda people coming in; you just need one or two or three, and they’re clever enough to get into Mexico and get across the border. You don’t need to have — you know, the immigration problem is a different problem, but it all happens at the border.

Okay, well, we are, fortunately or unfortunately, as the case may be, out of time. I want to thank all of you for coming. If you want to know more about the center — I assume most of you already know much about it, but please visit the website, CIS.org. We produce, generally on a monthly basis, backgrounders, research projects, sometimes more than on a monthly basis. Many of you I’m sure use our news service. We hope that’s – I know it’s helpful to me; I think it is to many others.

So, again, thank you for coming, and we are adjourned.

(Applause.)

(END OF EVENT.)