Troubled U.S. neighbor Mexico: Bernd Debusmann

(Bernd Debusmann is a Reuters columnist. The opinions expressed are his own)

By Bernd Debusmann

WASHINGTON (Reuters) - Is Mexico on the road to becoming a failed state? Or is the government slowly gaining the upper hand against the drug cartels fighting each other and the state with growing ferocity?

The first question was the headline over an analysis the U.S.-based private intelligence service Stratfor sent to its corporate clients after the assassination of Mexico's police chief, Edgar Millan, in Mexico City.

The second question is extrapolated from the U.S. State Department's latest International Narcotics Control Strategy Report.

It covers 2007, says that roughly 90 percent of all cocaine consumed in the United States comes across the U.S.-Mexican border and notes that "Mexico made unprecedented efforts and achieved unprecedented results in attacking the corrosive effects of drug trafficking and consumption" during the first complete year of President Felipe Calderon's administration.

What it has not done is to curb violence on a scale so huge that the term drug war takes on real meaning. The State Department's report estimates drug-related killings at 2,000 in 2006 and 2,600 in 2007. Media estimates put the death toll so far this year at around 1,100, bringing the total to 5,700.

(To put this into perspective: since the war in Iraq began more than five years ago, 4,079 U.S. soldiers have been killed.)

The U.S. sees progress ahead. "President Calderon has addressed some of the most basic institutional issues that have traditionally confounded Mexico's success against the cartel, using the military to re-establish authority and counter the cartels' firepower (and) moving to establish integrity within the ranks of the police..."

Easier said than done. Police reform has been on the agenda of every administration in modern Mexican history. There have been successive purges of officers working for the drug cartels. Then as now, many honest policemen have been too terrified to take on the traffickers.

That climate of fear was highlighted this month when the U.S. Border Patrol reported that three Mexican police chiefs serving along the frontier had crossed into the U.S. and asked for political asylum after receiving death threats. (Other sources put the number at five.)

That was a novel development. Law enforcement officials who felt their own government could not protect them? Asylum seekers usually flee persecution by governments, not criminals. But by murdering Millan, the cartels sent a clear message - no one is safe from us, no matter how senior, no matter where you are, no matter how much protection you have. Cooperate with us or die.

ECHOES OF COLOMBIA

There are echoes of Colombia, where the Medellin and Cali cartels attempted to take over the state and nearly succeeded in the 1980s. The late Medellin boss Pablo Escobar rose to immense power (and billionaire status) on the strength of a simple alternative presented to judges, police officials, military officers and politicians - "plomo o plata."

Take the plomo (lead) of a bullet or the plata (money). Convincing Mexican police officers to opt for the money is particularly easy because their wages are so miserable -- $375 per month on average. As Stratfor's analysis put it, "there comes a moment when the imbalance of resources reverses the relationship between government and cartels. Government officials, seeing the futility of resistance, effectively become tools of the cartels...That is the prescription for what is called a 'failed state'..."

How serious is that possibility? "We are not yet at the worst-case scenario, and we may never get there...but the possibility should not be taken lightly."