The Great Debate
At this moment, the fiercest, most powerful criminal organizations in the world are located in Mexico. Recent events should leave no one with any doubts.
By Rob Cox
The author is a Breakingviews columnist. The opinions expressed are his own.
Nine years ago, Breakingviews proposed an “extreme idea” to Citigroup’s then-leader Charles Prince. The $240 billion New York bank’s market capitalization was lower than the worth of its parts valued separately. By splitting into three separate units, the idea was, Prince could hand shareholders an extra $50 billion or so, the equivalent of one entire U.S. Bancorp at the time.
Despite their differences on almost everything else, President Barack Obama and Texas Governor Rick Perry agree that the unlawful migration of more than 50,000 Central American children to the United States is a humanitarian crisis. Some members of Congress and U.S. military leaders label it a security crisis. Whatever it’s called, it is an emergency that requires immediate attention.
Twenty years ago NAFTA, the most ambitious free trade agreement negotiation of its time, gave birth to a profound transformation of the economies and the regional value chains of Mexico, the United States and Canada. Trade dramatically changed the relationship between the three countries, though asymmetries of power and economic vitality persist.
In Latin America, this looks to be the year of Brazil — thanks to the impending World Cup and presidential elections. But with another lackluster year looming in emerging markets, fans of transformation, growth and investment potential should instead look to Mexico.
As Argentina’s Cristina Fernandez de Kirchner convalesces in the presidential residence after surgery, a poor prognosis for her political and economic agenda awaits her outside. Yet the populist leader is unlikely to respond with major policy initiatives as she enters a prolonged lame duck period.