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Mint
26-05-2025
- Politics
- Mint
To Beat the Narcos, Mexico Must Put Security Before Politics
(Bloomberg Opinion) -- Even in a country as accustomed to violence as Mexico, some vicious acts can still shake up society. The assassination of two of Mexico City Mayor Clara Brugada's close aides last week was one of them. The shocking murders during the morning commute on one of the city's busiest avenues were designed for maximum political impact. The authorities have been careful not to air any conjectures about who was responsible. But the attack makes very clear that Claudia Sheinbaum doesn't have much room to continue soft-pedalling Mexico's security challenge. Mexico's first female president has made inroads in the fight against narco violence since her October inauguration. Her decision to empower her Secretary of Security Omar García Harfuch — the city's former police chief who was himself the target of an unsuccessful assassination attempt in 2020 — to take on organized crime has had some good results: The average of daily intentional homicides declined about 25% according to official figures; several high-profile operatives have been arrested or killed; some big-ticket fentanyl seizures have occurred. In February, the government transferred 29 drug capos to the US for prosecution. Polls show growing public approval of Sheinbaum's security policies. Yet that's not enough. The government has focused on trying to administer the problem and reverse the negative trend of recent years — instead of tackling the insecurity threat head-on with a comprehensive plan to truly change Mexico's state of lawlessness. It's understandable: Sheinbaum's predecessor Andrés Manuel López Obrador's labelled his containment strategy 'hugs, not bullets' in an explicit call to avoid repression, an ethos of his administration. You could say it was naïve or even cynical, but by disregarding a problem he didn't think he could solve, López Obrador navigated his six years in power relatively unscathed. The memories of President Felipe Calderon's disastrous war on drugs, when the Mexican state deployed the army to wage a full-on fight against narcos, were still fresh. Unfortunately for Sheinbaum, the extent of criminal penetration in the country is such that she doesn't have the luxury of pursuing an incremental approach. Forced by continuous political violence, US government pressure and growing popular demand, Sheinbaum must own the insecurity problem that López Obrador left unresolved. In fact, the cowardly assassinations of Ximena Guzmán and José Muñoz, even if the result of just local underworld disputes, show that you can't take on organized crime without paying some political costs for the unavoidable backlash. 'These killings are symbolic and show the big problem that Mexico faces. It's likely that we are seeing the start of more violence,' Daniel Linsker, head of security consultancy firm Control Risks in Mexico, told me. 'The government's strategy is changing and that will always generate push back, both from criminal groups but also from insiders that benefited under the previous rules.' Since his return to power, the US president has adopted a more aggressive stance toward Mexican cartels, flirting with the idea of military operations or drone strikes inside the Latin American country. The White House has designated six Mexican cartels as terrorist organizations, increased surveillance efforts and lifted the US visas of some Mexican politicians, including the governor of the Baja California state neighboring California. Prosecutors are also negotiating deals with some of the fiercest drug lords now in US custody. The Mexican government's reaction has been measured. The Wall Street Journal reported earlier this month that a telephone call between the leaders ended amid tensions when the US president insisted on a leading role for the US military in battling the drug gangs. But despite their strikingly opposed political styles and ideologies, there is a window of opportunity for Sheinbaum and Trump to cooperate on the narcotrafficking problem. Mexico needs the US to solve its internal violence and, likewise, the US crucially requires Mexico to reduce the flow of illegal drugs and the underground economy that it fuels. For that to happen, both countries must set and respect their own red lines: The Mexican government needs to be honest about the indispensable logistical, intelligence and military support that the US provides to take on groups that that control significant parts of the country and have sophisticated weapons and defense systems. Sheinbaum should let Washington play bad cop against some of the undesirable political and business figures that populate Mexico including within her own political movement. In the meantime, the US needs to understand that it's part of the problem: Americans' insatiable demand for narcotics and the supply of advanced weapons by US manufacturers are key drivers of this tragedy. Secretary of State Marco Rubio acknowledged last week that the cartels are armed by US gunmakers, a point Mexico has been making for years. 'We want to help stop that flow,' Rubio said. 'We have a mutual interest in Mexico.' That's encouraging. And then there is the thorny issue of territorial sovereignty: As integrated as both countries are in economic terms, the full authority over its territory is paramount for Mexico. Given the history of bilateral relations, no Mexican president would accept US army troops on the ground unilaterally. The US may think it's only trying to help by sending a former Green Beret as ambassador — but in the leftist circles close to the nationalist ruling party that's seen as 'imperial arrogance.' Mexican nationalism is alive and well: A recent poll showed that over 53% of Mexicans have a negative image of the US and that number reaches 84% when asked specifically about Trump. All this leaves Sheinbaum with a narrow course of action. The US-Mexico relationship is already one of the most complex and multilayered diplomatic bonds in the world. That's even more so now with Trump's pledge to eliminate the cartels. While the White House would ideally recognize Sheinbaum's domestic political constraints, the Mexican government needs to take Trump's threats seriously because it's only a question of time before he embarks on more forceful measures. Monumental decisions loom for Mexico's unflinching president, squeezed between an aggressive White House and a nationalistic party that resents any whiff of imperialism. But she can play a tough hand well by relentlessly focusing on improving Mexico's security conditions. More From Bloomberg Opinion: This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. JP Spinetto is a Bloomberg Opinion columnist covering Latin American business, economic affairs and politics. He was previously Bloomberg News' managing editor for economics and government in the region. More stories like this are available on
Al Jazeera
08-04-2025
- Business
- Al Jazeera
Why Indonesia's sinking rupiah is a flashing alarm for its $1.4tn economy
Indonesia's rupiah is trading at record lows against the US dollar, stirring memories of the 1997-98 Asian financial crisis. While the rupiah has been battered by the market uncertainty stemming from US President Donald Trump's sweeping tariffs, the currency's slide began weeks before Wednesday's 'Liberation Day' announcement. Since the inauguration of Indonesian President Prabowo Subianto in October, the rupiah has slid about 8 percent against the dollar amid concerns about the former general's stewardship of Southeast Asia's biggest economy and most populous nation. The rupiah's plunge mirrors the collapse of the currency in 1998, which led to a financial crisis that helped bring about the end of three decades of authoritarian rule by President Soeharto. 'What's happening in Indonesia now reflects how confident global investors and markets are in the economic decisions of the current leadership,' Achmad Sukarsono, an analyst who covers Indonesia at the Control Risks consultancy firm in Singapore, told Al Jazeera. The rupiah has been falling steadily since shortly before Prabowo took office, hitting an all-time low of 16,850 on Tuesday. While the rupiah has seen its share of highs and lows over the past 28 years – including throughout the COVID-19 pandemic – its fall below the 1998 threshold is psychologically important for Indonesians because of the currency's role in Soeharto's ouster, according to Hal Hill, a professor emeritus of Southeast Asian economies at the Australian National University (ANU). 'There's still that memory that if the Indonesia rupiah declines quite a bit, people start to get edgy, and they think it's a repeat of the earlier crisis,' Hill told Al Jazeera. Currencies depreciate for several reasons, including political uncertainty, inflation, trade imbalances with other countries, and speculation by investors. In the case of Indonesia, Prabowo's policies – including a $30bn free school lunch programme, plans to weaken the independence of the central bank, and restrictions on foreign companies such as Apple – have shaken investors' faith in the economy. 'It's all about heightened uncertainties' and a 'significant drop in market confidence', Arianto Patunru, an economist and fellow at the ANU Indonesia Project, told Al Jazeera. Prabowo's establishment of the Danantara sovereign wealth fund using $20bn in government funds, and his push to allow members of the military to hold more civilian posts – a move that critics have said hearkens back to Soeharto's dictatorial rule – have also stoked concern. Last month, Finance Minister Sri Mulyani Indrawati, who was widely credited for her role in steering Indonesia through the 2007-09 global financial crisis, was forced to dispel rumours that she planned to resign amid the turmoil in the financial and currency markets. On top of its domestic challenges, Indonesia, like many developing economies, is at the same time grappling with the double whammy of China's economic slowdown and the fallout of Trump's escalating trade war. In his 'Liberation Day' announcement on Wednesday, Trump unveiled a 32 percent tariff on Indonesian imports. Indonesia, a middle-income country with a per capita gross domestic product (GDP) of $4,960 in 2024, has seen its economy grow at a solid pace in recent years. GDP rose by more than 5 percent last year, after similar expansions in 2023 and 2023. But those headline figures do not capture a marked deterioration in living standards for large numbers of Indonesians. The number of Indonesians classified as middle class by Jakarta's Central Bureau of Statistics – defined as those with monthly outgoings of between 2 million rupiahs ($118) and 9.9 million rupiahs ($585) – fell from 57.3 million in 2019 to 47.8 million last year, a decline attributed to factors including higher inflation and the lingering effect of COVID-19. In March, former finance Minister Muhammad Chatib Basri described the country's middle class as an 'economically distressed population' with a weakening purchasing power and limited savings. 'Indonesia is in its most challenging and difficult period since the 1997-98 Asian financial crisis and there are both domestic and international reasons for that,' ANU's Hill said. 'The domestic reason is a new president. The business community is still trying to work out where he wants to go and manage the fiscal situation, and that's combined with the external environment.' Control Risks' Sukarsono said the country's economic challenges raised questions about Prabowo's priorities. 'When the government should focus more on factors that have caused the current shrinking of the middle class, it is bafflingly more preoccupied with programmes that do not address the decline in purchasing power and the waves of layoffs amid the deteriorating condition of the labour-intensive segment of the manufacturing sector,' Sukarsono said.
BBC News
27-03-2025
- Business
- BBC News
Trump tariffs: Can Vietnam golf its way out of new US import taxes?
Countries around the world are braced for Donald Trump's so-called "Liberation Day in America!!!" next US president's deadline to impose reciprocal tariffs on trading partners will come just days after he hit foreign carmakers with 25% import could be particularly vulnerable to Trump's latest salvo of levies. It has a large trade deficit with the US and has been a beneficiary of firms moving factories out of China to avoid measures announced during his first term in some countries have hit back at Washington, Vietnam's Prime Minister, Pham Minh Chinh, has suggested that he may take a more diplomatic in January, he said he was willing to visit Trump's Mar-a-Lago home in Florida and "golf all day long" if it "benefits" his country, drawing laughter in the that work? 'Bamboo' economics Trump has previously said Vietnam was "worse than China" and "almost the single worst abuser of anybody". But he has not yet specifically targeted Vietnam with tariffs, even though it has the third largest trade deficit with the US, after China and Mexico. Analysts say Vietnam is doing well at engaging with Washington - but its efforts may still not be enough to avoid most of Trump's tariff plans."The Vietnam PM seems to be taking a page from the book of [former Japanese PM] Shinzo Abe, who built a close personal relationship with Trump over their shared love of golf," said Stephen Olson, a former US trade negotiator."I would not however expect any special treatment of Vietnam from a policy point of view. Personal relationships are important to Trump, but in this case, I believe his desire to appear tough on trade will win out."Vietnam has said it doesn't plan to "restrict trade" with the US, although it currently taxes some imports from government said this week that it will allow SpaceX, which is owned by close Trump ally Elon Musk, to operate its Starlink satellite internet service in the country on a trial analysts see this as one of the measures Vietnam has taken to avoid being hit with US also said it will lower tariffs on several US imports, including energy and cars, a move aimed at "improving trade balances".It came less than two weeks after Vietnamese and US companies signed more than $4bn (£5.4bn) in deals, in areas including oil and gas Norris from the consultancy Control Risks said "Vietnam is being careful to avoid any moves which would signal any non-cooperation on trade issues".This strategy is in line with its foreign policy approach - known as "bamboo diplomacy". Like shoots of plants that sway with the wind, Vietnam hopes to be adaptable to foreign pressures."If the US were to increase pressure on Vietnam, the government might respond with offers to facilitate investments in the hospitality and casino industries, undertake advanced machinery purchases, and – capturing the moment – consider access to Vietnam's rare earth minerals," Mr Norris said. What about China? One big factor working against Vietnam is concerns about China's was one of the biggest beneficiaries of US-China tensions during Trump's first 2018, he hit China with tariffs, causing some businesses to rethink where they made their products. Some chose to shift manufacturing to Vietnam. This has led to an increase of exports from Vietnam to the US, with Chinese companies that have moved production there contributing to that figure. Former US trade negotiator Wendy Cutler said Vietnam has emerged as a "destination for major Chinese investment".While the US remains Vietnam's biggest export market, China is its largest supplier of goods, accounting for more than a third of imports, according to the latest official data. Chinese firms were also behind nearly one in every three new investments in Vietnam last year."These are huge red flags for Trump. My expectation is that Vietnam will at some point be hit hard by tariffs," Mr Olson tariffs on Vietnam could impact US businesses such as tech firms Apple and Intel, and sportswear giant Nike, which have moved production lines from China to Vietnam. A recent survey by the American Chamber of Commerce in Vietnam found that most US manufacturers there expect to lay off staff if tariffs are US president believes the levies will boost his country's economy by encouraging more businesses to make goods in the US and bring in billions of dollars of taxes. But many economists have warned that it could force up prices for American consumers and negatively impact global trade. What comes next? Washington is also concerned about so-called "trans-shipments" - Chinese goods passing through Vietnam on their way to other countries. US officials have been "quietly stressing to Vietnam that it must reduce its trade surplus over time and combat the trans-shipment of Chinese goods through the country," Mr Norris prime minister has said he is confident that his administration can "handle the relationship with the US".Now that the South East Asian nation has cut some tariffs on US goods they may be more attractive to Vietnamese consumers, increasing America's share of trade with the then there is golf - playing a game with Trump had worked for the late Japanese leader Shinzo and Trump established a friendship, which included many golf games over several years. The friendship arguably helped Abe secure tariff exemptions for Japan's critical car industry at the now, it is unclear if Vietnam would really give golf diplomacy a real test will come next week, when a new slate of Trump's taxes are set to take effect.
Bloomberg
21-03-2025
- Politics
- Bloomberg
Ochieng: M23 Rebels Will Continue Advancing in Congo
Rwanda-backed M23 rebels have captured yet another strategic town in the eastern part of the Democratic Republic of Congo, even as the leaders of the two countries called for a ceasefire in the conflict. Beverly Ochieng, Senior Analyst for Francophone Africa at Control Risks spoke to Bloomberg's Chief Africa Correspondent, Jennifer Zabasajja on the siege and what it would take to stop the rebels. (Source: Bloomberg)
Bloomberg
06-03-2025
- Business
- Bloomberg
Parvulescu: No Guarantee Putin Wants a Ceasefire
Sorana Parvulescu, Partner EMEA at Control Risks speaks with Bloomberg TV's Jennifer Zabasajja on the Horizons Middle East and Africa show about Ukraine's President Volodymyr Zelenskiy's readiness to negotiate a peace deal with Russia and Egypt's Gaza reconstruction plan. (Source: Bloomberg)
