Integral Dynamics

Bloomberg featured a story how ‘Weak Mexican Peso Shows Oil Threatens Growth, Surplus‘ (link).

Our oil reserves have been consistently falling” and the decline is “severely threatening” government finances.
– Felipe Calderon, President of Mexico, in a nationwide television address at the National Palace.

Some tidbits:

• Oil accounts for 40% of the Mexican government’s revenues.
• The oil field Cantarell is crashing, with a 40 percent annual decline rate projected ahead, meaning a couple of years and it’s out.
• The oil field Cantarell alone is practically the whole Mexican oil industry.

And government finances are needed to keep Mexico in a healthy state: a healthy economy, a stable political situation, and good security for all.

Well, the economy isn’t that healthy as the title of Bloomberg article shows.

The political situation is also problematic. One example from many: on Monday, 2007-09-10,

guerrillas from the Popular Revolutionary Army, or EPR, took responsibility for blowing up three Pemex oil and gas pipelines in the energy hub of Veracruz state. It was the third EPR strike against Pemex’s distribution network since July. (link)

And security is certainly problematic with Mexico

locked in a bloody battle with rival cartels fighting over territory and President Felipe Calderon has deployed thousands of troops across the country against traffickers who are often better armed than police. More than 1,000 people have been killed in drug violence in Mexico this year as a three-way war between cartels and the Mexican military spirals to unprecedented levels. (link)

The war on drugs is an expensive war. The Mexican ambassador to the United States said today,

Mexico plans to put up $7 billion, to go with $1.4 billion offered by Washington, to fund a three-year crackdown on its violent drug cartels. (link)

As a result of these problems, Mexicans migrate, legal and illegal, to the United States.

An estimated half-million Mexicans leave their own country for United States every year. (link)

Agreed, Mexico has some problems but to call it a Key Global Issue (KGI) and put it in the same league as the war in Iraq or the nuclear programme controversy with Iran seems a bit strong. it is, unless one looks at the integral dynamics of the situation. (See causal map with this article).

If Mexico’s economy deteriorates, as well as the security and political situation, then the number of Mexicans emigrating, legal or illegal, to the United States will grow strongly.

At a certain level, the United States will try to stop this flow of immigrants and this could possible result in a border war between Mexico and the United States.

And in this scenario we are talking a real KGI.

IDEA of Open-Ended Issues

Based on the above I see the following impact on OEIs

KGI Mexico - Causal Map