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Mexico: A Collapse Update from Jeff Vail

Jeff Vail, The Oil Drum
I’ve been predicting the collapse of the Mexican Nation-State since 2006. It turns out that was a bit premature. But with violence flaring, the potential for collapse in Mexico is once again in the headlines. Oil production continues to fall, border violence is up, and the government is preparing for a showdown with the drug cartels. I’ll argue below that the government will keep the wheels on through 2009, but that the Mexican state will collapse shortly thereafter, ushering in the beginning of the end of the Nation-State.

It’s been difficult to read a paper or watch the news recently without hearing about the growing troubles in Mexico. The US military’s Joint Forces Command issued their Joint Operating Environment 2008 report recently that listed Mexico and Pakistan as the most likely states to collapse in the immediate future (PDF, see p.35 for analysis of Mexico). Even 60 minutes ran a segment about the rising drug violence.

Of course, readers are probably already aware that a root cause of the problems in Mexico is the precipitous decline of Mexican oil production and an even faster decline in the level of oil exports. Add to that declining remittance incomes being sent home by migrant workers in America, declining tourist revenues, and lower revenue per barrel of oil exported, and the Mexican state is experiencing a severe financial crunch.
(8 March 2009)

Chris Nelder on Mexico

Chris Nelder, Energy and Capital
A new contender now tops my long list of worries: Mexico

I have been keenly aware of Mexico’s troubles for most of my life. I lived in Mexico City for a short while as a kid, and saw its crushing poverty firsthand. I vividly remember certain formative experiences, like seeing kids my age dressed in rags and panhandling for centavos, or eight full-grown men riding a single motorcycle, or a rural cave dwelling with a TV antenna sticking out of the top, powered by an illegal tap on a nearby power line. I also grew up in Tucson, where shopping excursions to the border town of Nogales 60 miles away was standard fare when we had visitors.

But I have written about Mexico’s oil production repeatedly in this column primarily because it is so essential to US supply. Mexico is our #3 source of imports, providing 1.3 million barrels per day (mbpd), or about 6% of our total petroleum supply (EIA, Dec 2008 data).

Yet Mexico’s days as a top oil producer, and possibly its days as a democratic nation, are numbered.

Mexico’s largest oil field, Cantarell, is one of the four largest “supergiant” oil fields in the world, and was once the world’s second-largest producer (after Saudi Arabia’s Ghawar field). It peaked in 2003 at 2.1 mbpd, but thanks to a program of nitrogen injection that was pursued to maximize the rate of production (probably at the expense of long-term production), its production is crashing at an accelerating rate, currently about 38% per year. It is now producing about 0.77 mbpd, and will probably fall to 0.5 mbpd before tailing off at a gentler rate (or so Pemex hopes).

Mexico’s largest producing region is now the Ku-Maloob-Zaap (KMZ) complex, adjacent to the Cantarell complex. It’s a much smaller complex than Cantarell, and at 0.78 mbpd it is near its planned maximum production rate. Nitrogen injection was initiated from the beginning, which we could take as an indication that Mexico would rather maximize its revenue now than worry about tomorrow.

One doesn’t have to look too far to see why that might be.

Oil is Mexico’s number-one export. With its oil revenues in decline, the state is finding it increasingly difficult to fund operations-including operations against one of its other top exports: illegal drugs.
(11 March 2009)

Our Friends in The South

James O’Nions, Red Pepper
As we face increasingly international and interconnected crises around food, finance and climate, we need to know more about our global allies in the South. James O’Nions looks beyond the familiar but limited NGOs that stand for North-South relations in the mainstream media

‘Sustainable peasants’ agriculture cools down the earth’ reads the banner outside the conference centre at the UN climate talks in Poznan. It’s an unusual slogan to a British activist. But then La Vía Campesina, an international organisation of peasants and landless movements, despite having member organisations in 69 countries, is not an organisation we hear much about in the UK, including on the left. And while there are development NGOs that work with social movements, few such organisations give us the kind of critical analysis of the world system advocated by Southern-based movements such as La Vía Campesina.

This analysis coming from the South is shaped by directly organising some of the world’s poorest people against the most extreme consequences of 30 years of neoliberalism. It’s also an analysis that is becoming more relevant now that the North is starting to suffer the consequences of trying to turn the world into a corporate paradise. A major financial crisis is overlaid by the worsening of global warming. The North has even begun to feel the effects of the food crisis despite the insulation of relative wealth.

Seen from the South, these overlapping crises appear even more serious. Last year saw food riots in many countries, and while food subsidies produced some temporary improvements, the UN’s Food and Agriculture Organisation reports that 40 million extra people have been pushed into hunger and predicts the food crisis will get worse in 2009.

The effects of climate change on the South are less immediate. Yet increases in extreme weather events and flooding, and the melting of mountain glaciers on which a fifth of the world’s population depends for drinking water are already evident.

… Peasants and the food crisis

For La Vía Campesina, the food crisis vindicates their belief that food for export is a problem rather than a solution to global poverty. La Vía Campesina is a global federation of small farmers’, agricultural workers’ and fisherfolk organisations. Mainly, though, they identify as peasants, a term with negative connotations in English, behind which, as the campesinos are all too aware, lies a modern contempt for small producers.

No one, neither Marxists nor neoliberals, anticipated the re-emergence of the peasantry as a social force in the world, let alone as a progressive rather than conservative force. Yet this is the flip-side of agricultural globalisation, which compounded centuries-old inequalities in land distribution with the dominance of agribusiness and open markets.
(7 March 2009)
Also at Common Dreams.
You can find out more about La Via Campesina and food sovereignty here.