Mexico’s silent March for Peace falls on deaf ears

Calderón stands firm as thousands take to the streets to demand an end to drug gang violence.

Tens of thousands of demonstrators converged on Zócalo in Mexico City on Sunday, demanding an end to the wave of violence in which up to 40,000 people have been murdered in the past four and a half years.

Marching on the iconic square, protesters called for an immediate halt to the Calderón government's policy of fighting fire with fire as the country's ongoing "war on drug trafficking" shows no signs of relenting.

One of the event's principal organisers was the poet Javier Sicilia, whose son was murdered in brutal circumstances along with five companions, some exhibiting signs of torture, in March.

Thousands had marched the 50 miles from Cuernavaca, the site of Juan Francisco Sicilia's killing, to the centre of Mexico's gargantuan capital in complete silence, the procession gaining numbers along the way.

Since coming to power in an election marred by evidence of widespread electoral fraud in 2006, President Felipe Calderón has deployed about 50,000 troops to take on the armed cartels, which make their money by trafficking narcotics towards and into the United States.

As rival gangs compete for trade routes and regional supremacy, innocent people are invariably caught in the crossfire.

Killing fields

The fallout has been catastrophic. Since Calderón's disputed election, tens of thousands of Mexicans have paid with their lives as the conflict has spun out of control, turning the Mexican side of the border shared with the United States into one of the most dangerous regions on the planet.

Ciudad Juárez, population 1.3 million, sits a short distance over the frontier from El Paso, Texas, and has witnessed more than 600 murders since January – many of them women, and 50 claiming the lives of children under the age of 13. Three thousand people were murdered in the municipality in 2010.

Stories that would remain etched in the public consciousness for years in Britain disappear from the headlines in days in Mexico as news of fresh atrocities consigns them to the history books. In April, several mass graves, containing more than a hundred bodies in total, were found in the northern state of Tamaulipas.

Last August the corpses of 72 mostly central American migrants en route to the United States who had turned down offers to work for the potent Los Zetas cartel had been found in the same state.

Such incidents have become routine. The effect of the prolonged instability on business and tourism has been disastrous.

No more war

The government, turning a blind eye to the vociferous protestations of those who arrived in the capital on Sunday after several days' marching, insists it has played no role whatsoever in escalating the insecurity that today plagues much of the country.

"The military, the navy and the federal police do not generate violence," retorted an official government communiqué. "The federal government shares with its citizens the aspiration of making Mexico a safe country with opportunities for development for all."

For at least one former president, however, the war on drugs will never be won. Felipe Calderón's immediate predecessor, Vicente Fox, caused consternation last year when he pointed to the elephant in the room: the profit margins available to cartels because of the illegal status of marijuana and other illicit substances.

"What I am proposing is legalisation, so that the people running the trade are businessmen instead of criminals . . . They would pay taxes and this would generate jobs," said Fox, who, like Calderón, is a staunch conservative from the National Action Party.

The former president pointed out that, by every statistical measure, the war against the drug gangs has been an abject failure. "After four years of the war on trafficking in Mexico, the cartels are exporting more drugs, killing more people and getting richer than ever . . .

"Prohibition of alcohol in the United States failed. It just provoked violence and criminality until it was abandoned," Fox said.

President Calderón said he was against the proposal, but expressed a desire to see a national debate on the matter. He said that until the US alters its policy towards illegal substances, Mexico is in no position to do so: "This country would become a paradise for all the world's criminals."

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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: products-and-investments/ pensions/pensions2015/