THE MILITARISATION OF MEXICO´S ECONOMY / THE FINANCIAL TIMES BIG READ

The militarisation of Mexico’s economy

The influence of the armed forces has grown dramatically under Andrés Manuel López Obrador. But critics say there is no accountability or transparency

Michael Stott and Christine Murray in Mexico City

© FT montage/Shutterstock/Getty Images/EPA

Passengers arriving at Latin America’s busiest airport now encounter uniformed marines, who direct them to immigration queues, supervise customs checks and patrol the terminal.

This is the most visible element of what amounts to a military takeover: 1,500 troops were deployed to Mexico City’s Benito Juárez airport after populist President Andrés Manuel López Obrador drafted in a retired senior naval officer to run the facility.

“There was corruption everywhere . . . [so] the president said: ‘I need the armed forces’,” says vice-admiral Carlos Vázquez Tiscareño, the airport’s general director since 2022, from his office overlooking the runways.

The airport’s administration will soon come under full military control, joining a growing number of armed forces-run assets in Mexico. 

To realise the president’s vision of stamping out corruption and running state-owned facilities efficiently, the army and navy will manage more than a dozen civilian airports, the national customs agency, maritime ports and two new train lines. 

There are plans for an army-run passenger airline to start operations in December, reviving the name of Mexicana de Aviación, which went bust in 2010. 

Hotels and nature reserves will follow.

Policing has also been militarised. 

A 113,000-strong National Guard force, which replaced the federal police, was moved under the defence ministry by presidential decree in September 2022. 

The Supreme Court ruled the move unconstitutional, but the government is yet to act on the decision.

For López Obrador, the military takeover of Mexico City’s main airport has yielded good results. 

“No suitcases are being stolen, as they were before; smuggling is not allowed and, most importantly, those operations when drug traffickers [temporarily] took control of the airport . . . no longer happen” he said in a June speech.

But as the economic and political power of Mexico’s military grows, with unelected military leaders overseeing more than 350,000 full-time staff, including national guards, and annual revenues of tens of billions of dollars, critics ask whether the president is creating a monster he and his successors will not be able to control.

“The Mexican army was left untrained, poorly equipped, corrupted, neglected and sidelined for 80 years as a deliberate state policy in order to avoid any temptations of power,” says Jorge Castañeda, an academic and foreign minister from 2000-03 in the National Action party (PAN) government.

“Now it’s the opposite. 

The army has lots of money and it is learning how to run customs, airports, trains and is building hotels. 

The army has become an entrepreneur. 

How do you put the toothpaste back in the tube?”

Military discipline

Mexico’s modern army evolved from the people’s militias that triumphed in the 1910-20 revolution. 

Revolutionary generals ran the country until handing over to a civilian president in 1946 and stepping down from politics.

Since then “the Mexican army has been totally institutional and loyal”, says Enrique Krauze, a Mexican historian. 

“There has never been any threat of military coups, as there was in the rest of Latin America.” 

Polls consistently flag the popularity of the armed forces, who are admired for assisting citizens after natural disasters such as earthquakes and floods. 

Military budgets used to be modest. 

When López Obrador took power in 2018, Mexico spent just 0.5 per cent of gross domestic product on defence, according to the World Bank, less than half the regional average of 1.3 per cent.

Andrés Manuel López Obrador, centre, secretary of defence Luis Cresencio Sandoval, left, and secretary of the navy José Rafael Ojeda Durán attend a parade in Mexico City this year © Luis Barron/Eyepix/Future Publishing/Getty Images

A veteran leftwinger, López Obrador had once been critical of the armed forces, even going so far as saying in 2019 that he would like to abolish the army. 

He changed his tune, however, when he realised that the military could help him cut through legal and budgetary obstacles and deliver his priority projects quickly. 

He increased military budgets and assigned the defence ministry, which oversees the army and air force, and the navy ministry a wide range of security, construction and management tasks. 

The military oversaw the $5.2bn conversion of a former air force base on the edge of the capital into a new civilian airport, Felipe Ángeles, which it also runs. 

It is also managing the construction of stretches of a $20bn tourist train around the Yucatán peninsula, and will run that and a newly revamped line connecting the Gulf of Mexico and the Pacific. 

The army has been pressed into service to help build 2,700 branches of the state-run Banco de Bienestar, two aqueducts and a new airport planned for the Maya Riviera resort of Tulum.

“The army is the only part of the Mexican bureaucracy which is disciplined,” says Lorenzo Meyer, a professor at the Colegio de México and a friend of the president. 

“When you give the order to the army to finish an airport in a certain period of time, it gets done.”

But critics argue that outsourcing to the military allows López Obrador to use national security as a pretext to avoid scrutiny of costs and contracts or to dodge environmental assessments.

“In areas where a lot of business is being done, there is no access to information for reasons of national security,” says María Amparo Casar, president of Mexicanos contra la Corrupción y la Impunidad (MCCI), an NGO that campaigns for official transparency. 

“Contracts are assigned directly by the military, whereas the constitution stipulates that all government purchases should be public tenders.”

The armed forces now sit atop a pyramid of public bodies and enterprises generating more than $60bn a year in revenues from customs alone. 

Military chiefs have a regular role in López Obrador’s marathon daily news conferences, appearing at least every fortnight to report on projects under their control.

Passengers walk past Mexican soldiers guarding Tijuana airport. Under López Obrador, the army and navy will manage more than a dozen civilian airports, the customs agency, maritime ports and two new train lines © Carlos Moreno/Sipa USA/Reuters

Behind the scenes, their influence is more significant. 

“The last person AMLO sees before the morning news conference is the military,” says Carlos Loret de Mola, a leading columnist critical of the government, referring to López Obrador by his initials.

The army has used that relationship to great effect.

Above the law?

When US agents arrested General Salvador Cienfuegos at Los Angeles international airport in October 2020 on charges of drug conspiracy and corruption, the news dropped like a bombshell across the border.

Cienfuegos, Mexico’s defence minister for six years until 2018, had overseen the military’s fight against drug trafficking and trained a generation of army leaders, making him the most high-profile Mexican official ever arrested by the US for corruption. 

The following morning, López Obrador described the arrest as “very regrettable”, calling it a sign that “the main problem of Mexico is corruption”.

Within days, however, the president’s tone changed. 

He emphasised that the army as a whole remained above suspicion and that Mexico “was not a US colony” in a bid to show voters that he would stand up to their powerful neighbour.

Many have wondered what prompted the shift. 

A person with knowledge of the events says that in the days that followed Cienfuegos’s arrest, the current defence minister General Luis Cresencio Sandoval took the case file to the president “to show him that it was made up by the DEA [US Drug Enforcement Administration]”, which has long had a tense relationship with Mexico’s army.

Mexico’s legislature passed a law severely restricting the operations of all foreign law enforcement agents and removing their immunity. 

Local news reports said the government had stopped issuing visas to DEA agents in the country.

The Trump administration quickly backed down. 

The charges were dropped, and the former general was returned to Mexico to face an investigation at home. 

In January 2021, Mexico cleared Cienfuegos of any wrongdoing.

Women in Mexico City protest against the presence of the National Guard in the capital’s subway. As the economic and political power of Mexico’s military grows, critics ask whether the president is creating a monster that cannot be controlled © Sashenka Gutierrez/EPA-EFE

By 2022, the general, wearing full military dress, joined guests of honour at the inauguration of the new Felipe Ángeles airport. He was back in the fold.

The Cienfuegos case was a key test of López Obrador, says Raúl Benítez Manaut, an expert on the armed forces at Mexico’s UNAM university. 

“The military put him under pressure. 

They told him: ‘The DEA makes things up, the DEA hates us.’ 

He believed all that.”

The president has maintained his loyalty to the military in the face of other challenges and has been unstinting in his praise of Sandoval, his defence minister. 

López Obrador ended his speech on army day, a civic holiday in February celebrating the army being established, with a special thanks for Sandoval, singling out “his dedication and honesty”.

Others in Mexico, however, wonder how true that is. 

In May, MCCI published documents showing that Sandoval had in 2020 bought a 407 square-metre apartment in an exclusive Mexico City suburb from the co-owner of an army contractor, at a declared price of 9mn pesos ($536,000) — only a third of the value of comparable apartments nearby, the NGO said.

The documents showed Sandoval financed the purchase with a 100 per cent mortgage from the army bank over 20 years at a fixed interest rate. 

Monthly payments were set at 70 per cent of his official salary of about $140,000 a year. 

Within two years, he repaid more than half the mortgage.

Sandoval has denied impropriety, saying the declared purchase price was low because the apartment had not been fitted out, that he dealt with an independent estate agent throughout and that he has made repayments from his income. 

There has been no official investigation. 

López Obrador’s support has not wavered, telling reporters probing the general’s purchase that “this is like an upside-down world in which the corrupt question those who are honest”. 

The general, he said, was “incorruptible”.

Sandoval has also been criticised after MCCI analysed a trove of leaked defence ministry emails showing that his office had drawn up plans for his family to take a 10-day trip to New York in December 2021 accompanied by a posse of army aides, as well as a two-week visit to Italy, staying in luxury hotels in Venice and Florence.

The defence ministry pointed to comments by Sandoval in May in which he said he had taken his family on official work trips in the Americas, in line with military protocol, but had never been to Italy and had not taken a holiday at all in 20 years.

Soldiers and National Guard members check vehicles in Chiapas. The armed forces have been accused of contributing to recent bloodshed in Mexico and carrying out serious human rights violations © Carlos Lopez/EPA-EFE

With the army’s role growing in overseeing large and potentially very lucrative revenue-generating organisations — the customs service alone collects around 15 per cent of Mexico’s entire tax revenues, for example — some local journalists worry that the potential for serious corruption in the military is significant.

“AMLO has planted a poisoned seed by empowering the military,” says Juan Pardinas, editor of the newspaper Reforma, which is critical of the government.

A dangerous legacy

Corruption is not the only problem with the military’s expanded role.

López Obrador’s six-year term is already the deadliest in Mexico’s peacetime history, with more than 155,000 murders and 43,000 disappearances reported so far. 

As well as violence wreaked by drug cartels, the armed forces have been accused of contributing to the bloodshed and carrying out serious human rights violations.

In June, 16 arrests were made after a security camera captured a group of soldiers chasing suspected drug traffickers close to the US border at Nuevo Laredo. 

The footage shows the soldiers ramming their vehicle, dragging five men from the wreckage, lining them up against a wall and later shooting them. 

Afterwards, one soldier could be seen placing automatic weapons in the hands of the dead suspects. 

Separately, four soldiers were charged with murder this year after allegedly shooting dead five unarmed civilians returning home from a disco in the same city.

A panel of international experts investigating the disappearance and suspected murder of 43 student protesters in the state of Guerrero in 2014 wound up its investigation on July 25, saying it had been repeatedly lied to and misled by the military about its involvement and, therefore, could not complete its probe.

Despite the alleged corruption and human rights scandals, and their growing role in public life, the US has avoided public criticism of Mexico’s military. 

In April, US ambassador to Mexico Ken Salazar praised the “strong relationship” between the armed forces of both countries.

Members of the National Guard salute López Obrador in Mexico City in June. The 113,000-strong force, which replaced the federal police, was moved under the defence ministry by presidential decree last year © Isaac Esquivel/EPA-EFE

Many observers in Mexico, however, are now worried about the consequences of what López Obrador has started.

In October 2024, the president, who cannot seek a second term in office under the Mexican constitution, will hand over power to his successor. 

Opinion polls indicate that whoever runs for his Morena alliance will be the favourite to win. 

Even if the next president wanted to, will he or she be able to put the military genie back in the bottle?

José Miguel Vivanco, adjunct fellow at the Council on Foreign Relations and former Americas director of Human Rights Watch, believes the militarisation of Mexico is the “main negative legacy” of López Obrador and something that will be hard to reverse.

“The military has been a very useful partner for AMLO, allowing him to deliver results, protect his big projects and project himself as an executive president,” he says. 

“Today the military has been empowered so much and has so much presence that it can exert control over AMLO.”

Senator Claudia Ruiz Massieu, formerly of the opposition Institutional Revolutionary Party (PRI), wants a public debate on the military’s role. 

“The [military’s] expansion into other government and administrative tasks which ought to be handled by civilians, and for which they are not prepared, is generating a lot more risks and problems,” she argues.

In the meantime, López Obrador is taking further steps to strengthen the military’s position. 

His allies in Congress approved a constitutional reform last October allowing the armed forces to keep responsibility for public security until 2028 — a law opponents are challenging as unconstitutional.

“The military are a fundamental pillar of the Mexican state,” López Obrador said in a speech last November. 

“Despite what our enemies claim, usually the conservatives, the armed forces’ increased participation in security tasks does not imply authoritarianism or militarism . . . 

On the contrary, it has demonstrated that society feels safer and more protected.”

Sat in his office at Mexico City airport, Vázquez Tiscareño concedes there could be corruption risks in the military’s new projects but says that, overall, the military is honest and would always obey the president’s orders. 

“The armed forces didn’t ask to be here,” the vice-admiral says. 

“The president ordered it and here we are.”