‘We Must Win the Battle’

Mexican President Felipe Calderón was already embroiled in a brutal war against drug lords before the slump in the United States hit his export-driven economy hard. He sat down recently with NEWSWEEK's Lally Weymouth to talk about how hard it's been to fight this two-front battle. Excerpts:

How do you feel the drug war is going? Many Mexican soldiers have been killed.
Calderón: From the very beginning I told the people that this was going to be a long-term battle, that there will be casualties. We must win the battle. We are moving ahead according to the plan to attack organized crime, and we are kicking them really hard. People have died, but let me tell you, probably about 90 percent of those people are linked with organized crime in one way or another. The problem is not only a criminal problem but also a social problem in the sense that we have young people without opportunities who are [hired] by criminals as distributors of drugs. Eventually, they die in the streets. I have serious concerns about that.

There is a lot of discussion about weapons from the U.S. flowing into Mexico.
It is a big problem for us. Most of the weapons we seize—in the last three years we have seized about 45,000 weapons—come from the United States. There are about 12,000 stores that sell weapons on the border with Mexico. I recognize the American government is improving its actions [in] stopping the flow [of weapons] to Mexico.

What is the most damaging weapon?
Armor-piercing bullets, which do a lot of damage against our police corps. We are working with the American government in order to stem the flow, but we have a very large border, and it is very difficult to be successful.

Do you feel the U.S. is helping you enough?
The U.S. has been very helpful to us, and we are improving and getting better results. For instance, some of the most important drug lords [have been] either captured or died in action. [Sharing] intelligence was very useful in these [successes].

No other country in Latin America has been hit worse by the economic crisis than your country.
Yes, you are right. There's an expression: "When the United States catches a cold, Mexico gets pneumonia." And that was exactly the case last year. And there are several reasons for that: 84 percent of our total exports go to the U.S., so if American consumers reduce their consumption, we suffer a lot. By the third quarter, the export of automotives in Mexico went down by almost 50 percent due to the economic crisis in the United States. The second factor that sent a shock into our economy was the reduction of our oil production by 7 percent. Why? Because Mexico didn't invest enough in the oil sector, and we are suffering the consequences. The main oilfield, Cantarell, which used to provide 60 percent of the total oil in the country, started to deplete.

Loss of oil production meant you faced a decline in tax revenue?
Yes. That is why I needed to propose to the Congress to raise some taxes, which wasn't very popular. [But] today we are running a deficit probably lower than 2 percent in total.

During your campaign, you spoke out against monopolies in Mexico. Is this still one of your main concerns?
Very important. Actually we are preparing a reform bill to submit to Congress to increase the power of regulatory institutions, antitrust commissions. I do believe that what Mexico needs is more competition and more fair play in several sectors—from telecommunication to transportation.

What's your view of Venezuelan President Hugo Chávez and his effect on Latin America?
We live in a very complicated neighborhood. There are some tough guys around us. What we need to do is try to find an equilibrium in the area. It is probably time to reestablish some basic principles related to democracy, human rights, and freedom of speech that are universal values. I have some concerns about what is happening in the region.

Why is the PRI [the once dominant Institutional Revolutionary Party] gaining momentum in Mexico?
Probably the main factor is the midterm elections last year. As you can imagine, the Mexican economy was going down by 10 percent in the second quarter of the year, and that was exactly in the moment of the midterm election. So the PRI won. Let me tell you, when I started to run for president of Mexico, according to the opinion polls, I was in 17th place. I [was given] no chance to win, even inside my own party. Eventually, I won. So nothing is written in elections. Not in Mexico, not in any other country.