Mexico: A Nation-State Dissolves?

Mexico: A Nation-State Dissolves?
Posted by jeffvail on July 12, 2007 - 10:00am

In my annual new years predictions, I said that the most significant, and surprising, development of 2007 would be the collapse of both Mexico’s economy and its very existence as a viable Nation-State. While there hasn’t been a spectacular, single event confirming my prediction, there has been a steady erosion on all fronts—with five months left in the year, I’m not yet willing to push back my prediction of Mexico’s “collapse” to 2008. The decline of the Mexican Nation-State is a bellwether for the massively complex network of geopolitical influences sometimes termed above ground factors. It provides some insight into how symptoms of oil scarcity already being felt in poorer parts of the world will increasingly spill over into our own back yard…

UPDATE: After I wrote this story (July 7th), things took a serious turn for the worse with a series of rebel attacks on Mexican oil infrastructure: Bloomberg, Forbes (research credit: Dantes Peak).

Before I highlight the specific events that are undermining the Mexican Nation-State, let me talk first for a moment about what it means for a Nation-State to collapse, an important topic as it’s an experience that will become increasingly common over the next decade. When a Nation-State collapses, the cities don’t all catch on fire simultaneously whilst roving hoards pillage the countryside and the population starves. Nation-State collapse is not the apocalypse—it is exactly what it suggests to be: the collapse of the notional union of Nation and State under one central, viable government. Nation-State collapse also doesn’t suggest that there will no longer be Nation-States. It is my prediction that there will be a Mexico, an Iraq, etc. for quite a long time. What collapse does mean is that the importance of Nation-States will decline sharply, as they become increasingly ineffectual both domestically and internationally. Nor does the decline of the Nation-State mean the decline of Nationalism and similar identifying sentiments. Quite the opposite: as States increasingly fail to care for their constituent Nations, those Nations will become increasingly susceptible to the black shirts and brown shirts of history, but these movements will be increasingly dissociated from States, more similar in organizational model to al-Qa’ida than to Nazi Germany. (See The New Map, a paper that I presented at the 2006 Yale International Law Conference, for an overview of this notion of the end of the Nation-State)

Mexico’s Oil Production is Collapsing

Production from Mexico’s Cantarell field is collapsing, and production from new fields are not making up the difference. It appears very likely that Mexico has permanently passed its peak oil production. On top of that, domestic consumption is rising, creating the classic Export Land effect: declining production and rising domestic consumption equal accelerated declines in exports. Taxes from these export revenues generate the largest share of revenue for the federal government. Recent reductions in the tax rate that the government applies to PEMEX, the state oil company, shows that this key source of revenue is failing. The collapse of Mexican oil production has been extensively discussed elsewhere—here it is only my aim to highlight this as a component in the collapse of the Mexican Nation-State, and the positive feedback loops between the two events.

more...

http://www.theoildrum.com/node/2752

Mexico: Peak Oil in Action

There is a present-day example of the World Problematique unfolding on the North American continent. It involves Peak Oil, climate change, food scarcity and socioeconomic instability. It brings the nature of the problems the world will face over the next few decades into stark relief.
The Scenario

* Mexico's biggest oil field is Cantarell. Its 2 million barrel per day output was responsible for 60% of Mexico's production, and all its oil exports to the United States.
* Those oil exports account for 40% of Mexico's public funding.
* Cantarell's output is known to be crashing (see graphic above). Production has declined by 25% in the last year and is predicted to be down about 60% from its peak by the end of 2007. The field will probably lose over 75% of its production capacity by the end of 2008.
* When this happens Mexico's economy will probably implode.
* The United States currently exports about 20% of its corn crop.
* Next year, 20% of the United States' corn crop is going to be used for ethanol.
* Mexico imports a substantial amount of corn from the United States.
* As Cantarell's output declines, oil exports to the US will drop in lockstep.
* As oil imports drop in the US, the pressure will mount to produce more ethanol as a substitute.
* As more corn is bought by the American ethanol industry, US corn exports, especially to Mexico, will slide.
* At the same time the probability is high that Global Warming will result in higher temperatures in Mexico, a country already at temperature risk.
* Rising temperatures will bring more drought conditions and a drop in Mexico's own corn production.
* Now you have a country with a decimated economy and declining food. This is a recipe for massive migration.
* The migration moves North as it has in the past, but this time in enormous numbers.
* As the economic refugees cross the border what do they find?
* In January, 2006, KBR (a subsidiary of Halliburton) was given a $385M contract to build a string of very large detention camps in the United States...

Peak oil, global warming, food, biofuels and authoritarianism — all rolled up into one neat but ugly little package. Coming to a border near you within 3 years.

snip

The Spectre of Revolution

When contemplating Mexico's future you should always remember her past. Mexican history is full of revolutionary episodes: the War of Independence of 1810; the Mexican Civil War or War of Reform of 1857; the Mexican Revolution of 1910; the Zapatista actions in Chiapas in 1994; and the recent violent confrontations in Oaxaca.

The effect of NAFTA on the lives of the Mexican poor has been devastating. In an echo of the enclosure movement in Britain many have been forced off land they traditionally occupied, either by economic circumstances or legislation. A good overview of Mexican agrarian history, including the impact of NAFTA, is available in this FAO document.

The 100+ year-old push-pull effect of the US economy on Mexican migration is a very well documented historical phenomenon. This time, circumstances are somewhat different. Many Mexican campesinos — subsistence farmers that either owned their own land or held it jointly in a collective called an ejido — were forced off their land due to NAFTA rules that allowed the dumping of highly subsidized, below market-priced US corn on the Mexican market. The land is still there, but now sits idle. In the event of a severe economic downturn there would likely be a large movement to return to the land as well as increased northward migration.

Cantarell's crash and PEMEX's impending bankruptcy present a political crisis of the first magnitude for Mexico's elite and threaten the stability of the small middle class. This crisis presents a great opportunity for the long downtrodden majority to gain power as has happened in Bolivia, Ecuador and Venezuela. Conditions will be ripe for a resurgence of revolutionary sentiment in Mexico, which will probably take the form of an import of the Bolivarian Revolution championed by Hugo Chavez.

Of course, having such an incendiary political movement on their very doorstep will not sit well with the American industrial/political establishment. The probability of direct American political, economic and even military involvement in Mexican affairs as a result should not be lightly dismissed.

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http://www.paulchefurka.com/Mexico%20and%20the%20Problematique.html

After the USA is done as a viable experiment the bankers rule unopposed.

Mexican troops to guard energy sites
Guerrilla attacks on pipelines have caused fuel shortages for factories.
By Héctor Tobar, Times Staff Writer
July 13, 2007


MEXICO CITY — Mexican President Felipe Calderon has dispatched a new 5,000-strong elite military unit to guard strategic sites, including oil refineries and hydroelectric dams, in the wake of guerrilla attacks on pipelines operated by the national oil and gas company, Pemex, according to news reports Thursday.

Business leaders said as many as 1,000 factories and other businesses in the Guanajuato-Queretaro region of central Mexico have been forced to shut down or reduce operations this week because of fuel shortages caused by attacks this month.

The leftist Popular Revolutionary Army, or EPR, claimed responsibility for the attacks Tuesday, saying they were in retaliation for the disappearance of two of their militants last year in the southern state of Oaxaca.

The EPR communique said the rebels had bombed three pipelines and a switching station in Queretaro and Guanajuato states. The explosions severed natural gas pipelines and a crude oil pipeline that links storage facilities in the Gulf of Mexico port of Poza Rica to a refinery in Salamanca, in Guanajuato, reducing fuel supplies in the region.

more...

http://www.latimes.com/news/nationworld/world/la-fg-pemex13jul13,0,5950315.story?coll=la-home-center