She drinks tequila, smokes pot, and is worshipped by perhaps two million throughout Mexico. Santa Muerte, or Saint Death, is showing some wear from her years of hard living: instead of the angelic likening usually afforded to saints, her depiction is a hooded skeleton, often accompanied by a globe and scythe. The message of her accessories—death has a long reach, and it is universal.

She represents a syncretism of Mesoamerican and Catholic beliefs, somewhat akin to Bondyè, the higher God of Haitian Voodou, which combines Western African beliefs with Catholicism. Throughout Mexico’s poorest communities Santa Muerte has been prayed to for decades to deliver succor. And mete out retribution. In Tepito, one of Mexico City’s poorest neighborhoods, experts believe Sante Muerte is more revered than Jesus Christ.

Her popularity spread over the past decade, thanks in large part to the narcocultura that pervades Mexico. Now candles, tiny statues, and palm-sized prayer cards with Santa Muerte can be found in hundreds of shops in New York, Los Angeles, Chicago, Houston, and elsewhere. Among Mexican-American teens, typically more middle class than devotees in Mexico, Santa Muerte has become a symbol that allows them to reconnect with a part of their heritage.

Santa Muerte may have deeper roots. According to a recent article in The Economist, some anthropologists link her provenance to Aztec underworld gods. Others, notably David Romo, a priest at one of two temples devoted to Santa Muerte in Mexico City, trace her image to the outbreak of the bubonic plague in Italy.

It is said that Santa Muerte doesn’t judge—How could she sit in judgment, she doesn’t have eyes?—but she does offer protection from danger. Undoubtedly gangsters fancy the idea that Santa Muerte doesn’t discriminate between the good and the bad, but her appeal extends to others on the margins of Mexican society, such as cart vendors, taxi drivers, prostitutes, and petty criminals. The unrepentant don’t make model Catholics, and most probably aren’t interested in confessing their sins, or hearing that they should, “Go forth, and not sin again.” But they aren’t exactly atheists either; they tend to live by codes, perhaps believe in kharma, and think that formal institutions are nothing more than a tool of repression. Santa Muerte fits the niche.

Unsurprisingly, Santa Muerte’s prominence has incurred the ire of the Catholic Church. Catholic priests insist Santa Muerte is a satanic cult that encourages violence. The government is uncomfortable too. Last year, the army destroyed dozens of Santa Muerte altars in the northern state of Nuevo León, ostensibly for links to the drug trade. In response, parishioners staged a rally in Mexico City calling on religious freedom.

Despite the pressure from the authorities, the popularity of Santa Muerte is unlikely to wane anytime soon. The group’s draw on the poor is likely only to increase as Mexicans struggle to recover from recession. North of the border Father Marco Mercado, of the Good Shephard Catholic Church in Chicago, worries that “Santeria” is on the rise among his parishioners. Perhaps it’s only fitting for a society with such a large informal job market to have an informal saint as well.

Overview Mexicans could be forgiven for thinking they were in hell on earth last year. The economy skidded into recession while drug violence ravaged Juárez and other major cities, leaving more than 5,000 dead. North of the border there was scuttlebutt of Mexico becoming a failed state.

Turns out 2008 may have only been purgatory, this year things have actually gotten worse. As the federal government redoubled efforts to break the back of Mexico’s drug syndicates a crescendo of violence ensued. January was bloodiest month of drug-related violence since President Felipe Calderón came to office in 2006—over 1,000 were killed.

Concentrated crackdowns offered hope of leashing the gangs. The deployment of 45,000 federal troops to 18 locales teetering on chaos, coupled with the arrival of US security aid in the form of the Merida Initiative, produced a sizable drop in violence over the first quarter a year on.

Unfortunately the respite proved seasonal. Several high-profile arrests of drug kingpins this summer spurred a backlash of grisly beheadings and coups de grace. Off-duty policemen, prosecutors, and rival gang members were the usual victim profile. While the scale of the killing had been seen before increasingly innocent bystanders were victimized.

As of this writing, news is emerging that one of the biggest fish of them all, Arturo Leyva, the “boss of bosses” of Mexican drugs, has been killed in a raid by Mexican commandos. The likelihood of indiscriminate gang reprisals certainly has officials waiting to exhale, but the elimination of such a kingpin, as opposed to his arrest, may prove a shrewd tactical, as well as legal, move. Without the chance of bailing out a crime boss there will be less incentive to amp up the violence. And the command structure of the gangs may well be disrupted as result. On a legal front, while Calderón has done a commendable job of organizing raids, the rate of successful prosecution of suspected traffickers in Mexico is lackluster.

The Great Recession The severity of economic contraction stands in marked contrast to the rest of the region. A recent study by the Brookings Institution begins: “With the exception of Mexico, many large Latin American economies have shown a respectable resilience to the global financial crisis.”

The vast majority of government revenues come from the state-owned petroleum industry, remittance payments from Mexicans working in the US, and tourism. All depend heavily on consumption north of the border. As the American consumer went on hiatus, Mexico’s economy went into tailspin, contracting by over 10% from July ‘08-’09. Economic performance for 2009 will likely be the worst of any sizable economy.

Heaped atop these ongoing crises, Mexico’s grand surprise this year came in the form of a new infectious disease, the H1N1 strand of influenza. Swine ’09 trained the world’s worries on Mexico. Other nations proved quick to overreact, further ostracizing Mexico in the midst of its woes.

Mexico received latent praise by the CDC and WHO for its handling of the H1N1 outbreak, scarce consolation for the tourism industry no doubt, which saw revenues drop by over 30%. An estimated 100,000 tourism-related jobs were lost as a result. As spring turned to summer and the flu season headed south of the equator, the hysteria around H1N1 gave way to insouciance. By the time the WHO declared H1N1 a pandemic in August, global worries had turned to anticipating the illness’ return in the fall.

Mexico held mid-term elections in July. Apparently what’s old is new again; the centrist PRI that governed Mexico for seven decades, until 2000, staged a death-defying comeback. Beyond the headline of a privival, the election underlined the non-ideological nature of Mexico’s political parties. The ranks of the two major parties, the PAN and PRI, are filled by a precarious group of technocrats and political opportunists. The PRD, the major leftish party in Mexico as recently as 2006, is quickly unwinding. The ‘Green’ party, which gained some 10% of the seats in the July election, has a platform that shies away from environmental advocacy in lieu of supporting a death penalty. This may offer the hope of pragmatic governance in the future, but just as easily may point to a trend of bald party opportunism as opposed to platform coherence.

As a result, it seems professionalization, rather than persona-based politics, is taking hold of the highest echelons of government. For all the hardships Mexico has endured over recent years, a whopping 69% of Mexicans approved of the president’s performance going into the election. This should have helped President Calderón’s PAN. Still the PAN was roundly defeated. If caudillo politics are alive and well in Mexico, as many insist, the phenomenon no longer reaches as deeply into national politics.

The most likely explanation is that while the president is viewed as a politician acting in good faith, the PAN is just as riddled with corruption as Mexico’s other main parties. A well-publicized round-up in the president’s home state of Michoacán led to the arrest of 28 officials suspected of having ties to La familia, a notorious crime syndicate. Two of the ten mayors arrested were PAN members.

In other realms, social policy has oscillated between greater liberalization and conservative retrenchment. Personal drug use of everything from marijuana to heroine was decriminalized in August, a stark response designed to more directly target traffickers. Yet state abortion bans have become so widespread that a federal ban may be in the offing. The fits-and-starts character of social liberalization in Mexico is broadly representative of much of the region.

2010 promises more challenges for Mexico. The economy will almost surely return to positive growth by mid-year and there are already signs that exports to the US are ticking up. The major economic concern is the strength of recovery. Recent statements from high-level policymakers indicate Mexico’s commitment to growth through NAFTA is being redoubled. In my opinion NAFTA promises diminishing returns for Mexico for several reasons, chiefly because the US will plausibly remain an unreliable partner, as Congress’ refusal to allow Mexican trucks on US highways indicates. Instead Mexico should look southward, seeking closer trade ties with Brazil. This would provide Mexican exports a second large market and possibly spur Brazilian FDI to Mexico.

The major security challenge will be localizing drug violence. Extirpating the drug gangs is hopelessly naïve given America’s huge appetite for drugs. A realistic goal should be to decrease the number of gangs operating in Mexico, and try to insulate civilians from the gang’s ire. Seemingly frustrated by haphazard US cooperation, President Calderón signaled a strategic shift in his efforts to reform last month. In a mid-term address he spoke of the need to alleviate Mexico’s poverty. A fight against poverty seems likely to be the hallmark initiative of the president’s last three years in office.

Reforms will need to be strategic and structural in order to put Mexico back on track. Not just to produce signs of recovery next year, but for the economic and security challenges of a new decade.

With the global economic crisis still dominating headlines following inconclusive results from Davos, I’d like to focus on two effects on Mexico’s economy.

One indicator is remittances.  Worldwide, remittances bring in several times more money than foriegn aid.  In Mexico, these bring in the second-largest amount of foreign money after oil.  In 2008, remittances slowed 3.6% to $25 billion (BBC World News).

Second is trade.  With reduced US consumption, Mexican exports are declining.  Interestingly, NAFTA’s duty-free access to the US market caused the Big Three Auto makers to move production to Mexico.  Consequently, exports over the last decade have moved up the value-added chain, with automobiles and textiles being the two largest gainers.  Since the American auto industry has been granted a temporary lifeline by the US government, this will keep the auto industry in the border regions above the water.

To be honest, few know the scale of the crisis.  But Mexico’s coupling to the US market will ensure that most movements in the American market will affect the Mexican market.  Fortunately, the country is in a much better position than during the 90’s, but will nevertheless feel the effects of the current downturn.

FPA blogger Rich Basas on the crisis of remittances in Mexico.  Read more here.

Fourteen years after its passage, the North American Free Trade Agreement (NAFTA) is still widely debated, with concerns over issues such as job movement, workers’ rights, and environmental protection. Laura Carlsen, Director of the Americas Policy Program in Mexico City, testified before the U.S. Congress on December 6th that NAFTA has been disastrous for small farmers in Mexico. A detailed report with the findings and analysis she presented to Congress can be found here.

The full text of NAFTA is available here on the website of the Organization of American States (OAS).

An article I authored examining Mexico's “Oportunidades” anti-poverty initiative and its influence on New York City's new “Opportunity NYC” program, is featured on the Foreign Policy Association's website.  Oportunidades is Mexico's conditional cash transfer program that has had considerable success in addressing poverty over the past ten years.  Now, New York City Mayor Michael Bloomberg has introduced “Opportunity NYC,” based on the same model, which he examined first-hand during a visit to Mexico earlier this year.  Click here for the article.

In the first 6 months of the year, Mexican immigrants sent $11.4 billion to their native country, according to estimates by the Central Bank of Mexico.  That is about the same as last year, which is seen as a significant slowdown, since earlier figures grew by 10% each year, reflecting population growth.  Overall, 64% of Mexican immigrants sent money home during the evaluated period, compared to 71% last year.

The Inter-American Development Bank surveyed Mexican immigrants living in the U.S. in order to shed light on the slowing remittances. The poll found the 56% of the 2 million Mexican immigrants in states with newer immigrant populations sent money back to family in Mexico this year, compared to 80% last year. The “new migration” states, including Louisiana, North Carolina, Pennsylvania, and Georgia, have seen a recent surge in laws targeting immigrant groups including English-only laws, increased penalties for those who employ illegal immigrants, and legislation making it more difficult for migrants to obtain driving licenses and other documentation. The report showed a distinction between the “new migration” states, due in theory to these new laws, and the traditional migration states such as California and Texas, where the remittance rates have not fallen.

Remittances, transfers of money from foreign workers to their home countries, constitute the second largest financial inflow to many developing countries, exceeding international aid. Contributing to economic growth and livelihoods worldwide, remittances promote access to financial services for both the sender and recipient. The concept is not new, but rather a normal centuries-old practice as historic as migration itself. In the 19th and 20th centuries, several European countries including Spain, Italy, and Ireland were highly dependent on remittances received from their emigrants, with the practice accounting for 21% of Spain's current account income in 1946. Italy in 1901 became the first country to enact a law protecting remittances.

With a slowing of remittances from Mexican immigrants in the U.S., who account for 95% of all remittances sent to Mexico, the economic impact will become more evident over time. What the findings of the Inter-American Development Bank suggest is that U.S. state laws targeting immigrant populations have important consequences that are felt far beyond their jurisdictional reach. In a globalized and interdependent economy, the impact is in turn felt at home as well.
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See here for an announcement and explanation of the survey results from the Inter-American Development Bank.

Often referred to as “banking for the poor,” microcredit programs provide collateral-free small loans to those too poor to qualify for traditional bank loans.  Originating in developing countries, microcredit has provided a successful model for enabling impoverished individuals to engage in self-employment projects to generate income.  It is part of the larger microfinance movement, and often focuses on lending to women, who have shown to be more reliable in repaying the loans and also more likely to devote their earnings to benefit the entire family.

Two organizations, BanComun de la Frontera and Grameen de la Frontera, focus on microlending in Mexico's northern regions.  The latter is named after the famed Grameen Bank in Bangladesh, which is credited with developing the microcredit model that is now widely replicated worldwide.  BanComun loans, which range from just $50 to $800 per person, have reached over 1,500 residents in the poorest neighborhoods of Nogales.  Approximately 85% of the clients are women, and the program has a 95% repayment rate.  BanComun is expanding to other cities including Juarez and setting up a social investment fund that will allow people to help finance the socioeconomic welfare of its clients. 

Meanwhile, the Dallas-based Chiapas Project has helped more than 4,000 impoverished women in the state of Chiapas, through a partnership with Alternative Solidaria. The loan repayment rate has been 98%, encouraging organization leaders to further expand their reach through the Grameen Foundation. According to the Chiapas Project, with loans as small as $50, women can buy chickens and sheep to raise, plant trees to produce and sell fruit, purchase a corn grinder to make tortillas for the market, or buy cloth to create and sell handicrafts. The hope is that through microfinance, women such as those in Chiapas who typically live on less than $2 a day, are able to earn the income necessary to rise above poverty.

As highlighted recently in the newspapers El Financiero and Milenio.com, new studies show that community forest management in Mexico has reduced poverty and social inequity while conserving natural resources.  Over 2,300 forest communities in Mexico have been given “forest use permission,” resulting not only in effective conservation, but also in economic growth within the communities. 

The following articles (in Spanish) provide details:
Informa BM, manejo comunitario de bosques contribuye a reducir pobreza en Mexico  Milenio.com); Reduce la pobreza el manejo comunitario de los bosques (El Financiero)

New York City Mayor Michael Bloomberg traveled to Toluca, Mexico this week to learn about the Oportunidades anti-poverty program.  Serving approximately 25 million people, Opportunidades is Mexico's conditional cash transfer program and principal anti-poverty initiative. The program awards cash grants to economically disadvantaged families for keeping their children in school and providing them with healthcare.  The focus on breaking the cycle of poverty by taking a long-term approach has gained praise from the World Bank and several countries that have looked to it as a model. Now, New York City is doing the same.

Mayor Bloomberg's Center for Economic Opportunity has introduced Opportunity NYC, a conditional cash transfer program that will be the first of its kind in the U.S. It is based on similar programs throughout the world, including Mexico's. As a pilot program, Opportunity NYC will begin with 2,500 families and could be scaled up from there, depending on the results.

In Mexico, the Oportunidades program is credited with decreasing the percentage of Mexicans living in extreme poverty by 17% since 1996. Strides have also been made in education and healthcare, with measureable improvements in nutrition, preventive healthcare access, prenatal health visits, school-readiness skills, and decreases in drop-out and failure rates among participating children, among other indicators.

According to Mayor Bloomberg, “The bottom line about Mexico's conditional cash transfer program is that it works, and during this trip we want to study the details of what they’re doing right, so our program in New York can also succeed.” (See press release.)

The Mayor's delegation included city representatives along with Dr. Judith Rodin, President of the Rockefeller Foundation, a participant in the Opportunity NYC program. Delegates saw the Oportunidades program in action in Toluca and also visited Mexico City to meet Mayor Marcelo Ebrard and President Felipe Calderon.