MEXICO'S DRUGS WAR

When the Pentagon suggested in a strategy document last year that the
US should be alert to the possibility of a "rapid and sudden collapse"
of Mexico as a state, it caused diplomatic heartburn.

While admitting state failure in Mexico was less likely than, say, the
collapse of Pakistan, the US Joint Forces Command said Mexico's
government, politicians and judicial infrastructure were under
sustained assault from drugs cartels that could trigger a descent into
chaos, demanding "an American response based on the serious
implications for homeland security alone".

The government of President Felipe Calderon, which has launched a
fierce assault on the narcotics industry, was understandably
indignant. But there is no question that US demand for drugs, and the
tactics adopted to deal with it, are destabilising Mexico - and have
been for 25 years.

Indeed, the present problem originates in a US "victory" in the war on
drugs. In 1984, then Vice-President George H.W. Bush's South Florida
Task Force succeeded in bottling up the favoured point of entry for
cocaine into the US. The Colombian cartels switched to the longer
Pacific seaboard, inevitably godfathering a new cocaine power in
north-west Mexico. Mexican cartels were soon buying politicians and
policemen, generals and judges.

Mr Calderon's offensive, designed to end this mafia impunity and seize
back control, is a bloody and uphill battle; around 10,000 people have
been killed over the past two years. As Hillary Clinton, US secretary
of state, acknowledged on a visit to Mexico last month, it is not just
America's "insatiable demand for illegal drugs" that is doing the
damage, but licensed US gun dealers. They help keep Mexico's
narco-gangs better armed than its army and security services, while
the US Congress is cutting back funding that would help redress the
balance.

Mexico needs and has the right to expect fuller US co-operation. Both
countries need to take down the ultra-violent drugs mafias. The
problem is that the economics of illicit drugs ensure new criminal
gangs emerge to take their place.

US drugs policy is asymmetrical in its effects on supply and demand.
It has led ineluctably to the growth and spread of narcotics
production. It subverts the laws of the market by putting a floor
price under the product. Interdiction and eradication - especially
when successful - provide narcotics with great price resilience.
Disruption of supply lifts profits and recapitalises the chains of
production and distribution - increasing and diversifying supply in
the next phase of the cycle.

Surely it is time for a debate on whether a tightly regulated and
internationally agreed decriminalisation of narcotics, along with
greater effort to curb demand, is the way to destroy the financial
basis of the industry - and take it out of the hands of organised crime.