08/30/2011 12:25 pm ET Updated Oct 30, 2011

Analysis: New nadir in Mexican drugs war puts PAN in trouble

By Dave Graham

MONTERREY, Mexico (Reuters) - Hopes that Mexico's conservative ruling party would usher in an era of clean government and establish order have given away to despair as drugs war violence increasingly hits ordinary civilians.

At least 52 people died last week when an arson attack by suspected drug cartel members gutted an upscale casino in the prosperous northern city of Monterrey, a bastion of President Felipe Calderon's National Action Party, or PAN.

The drugs war has become more and more brutal since Calderon deployed the army to fight the cartels in late 2006, but Mexicans were still shocked by the Casino Royale attack.

Attending a funeral for one victim, retired local businessman Carlos Garcia struggled to grasp how Monterrey, a city that was once a beacon for urban development in Latin America, had become so violent.

"I've never seen anything like it. And it's getting worse," the 80-year-old said. "This government is doing nothing. I've always been a PAN supporter but we need a change."

Over the past two years killings have surged in Monterrey, the capital of Nuevo Leon state and home to major companies like cement maker Cemex and conglomerate Alfa. Long viewed as a jewel in the crown of the Mexican economy, it is now is a potent symbol of how the drugs war can quickly ravage major cities.

The violence has eroded support for the PAN, which promised law and order as well as honest, efficient government when its candidate Vicente Fox won a historic presidential election in 2000, ending 71 years of authoritarian and often corrupt rule by the Institutional Revolutionary Party, or PRI.

"We thought the change would bring less robbery and violence, and more order," said an angry 72-year-old called Maria, who also attended the weekend funeral. "But it would have been better if the PAN had never been in power. Things were bad before, but not like this."

President Calderon condemned the casino attack as an act of terrorism, and sent hundreds of extra troops to patrol Monterrey, a city of 4 million which has been ravaged by the brutal Zetas cartel since the start of 2010.

Over 42,000 people have died in the explosion of killing in Latin America's second biggest economy since Calderon declared war on the cartels soon after succeeding Fox as president.

Security forces have captured or killed several senior traffickers and Calderon says the violence is a sign of the cartels' weakness. He insists they would have held Mexico to ransom if he had not pushed them onto the defensive.

Police on Monday arrested five suspected Zetas over the casino fire, and Calderon vowed things would improve. But he conceded that he still had work to do. "We have to speed things up because we know the criminals have corrupted the institutions at all levels of government," he said.

Mexican voters, who elect a new president in July 2012, are growing tired of government assurances that it is winning the war as new milestones in violence are reached.

With every new beheading, shooting and kidnapping, a change in government next year appears more likely.

Hundreds took to the streets of Monterrey on Sunday to demonstrate. One protest banner read simply: "Calderon -- Your government has brought us fear, terror and death. Resign now."


Hitmen, local traffickers and police initially made up the bulk of the drug war dead, but the civilian death toll is mounting. Most of the largely female victims in the Monterrey casino were middle class voters, the kind of people that have made the city a PAN stronghold.

The chaos has helped put the PRI in pole position to regain power, despite lingering misgivings among voters.

A recent opinion survey showed the PAN's level of support at less than 20 percent, roughly half that of the PRI. Calderon is barred by law from seeking re-election but his government's record on security campaign will be a key election issue.

Among the hundreds who turned out for the funeral of Eduardo Martinez, a 54-year-old businessman and father of three who died in the casino fire, few had a good word for the PAN.

His younger brother Edilberto said the party had let down Nuevo Leon, where its win over the PRI in a state election in 1997 helped pave its way to the presidency three years later.

"People go out in the morning here and don't know if they'll make it home at night," he said. "And the PAN are even more corrupt than the PRI used to be when they were in power."

When Calderon won the 2006 election, his party crushed the PRI in Nuevo Leon but at federal and state elections just three years later, the PRI was again dominant.

The PAN still controls Monterrey, which is at the heart of Mexico's hopes to join the top tier of developed economies. But the steady stream of massacres, extortion and shoot-outs have unsettled investors, and sent many locals packing.

"The situation is affecting everyone, all businesses, and there's no immunity to this," said David Robillard, managing director of risk consultancy Multilatin Advisors.

In Monterrey, as in other parts of Mexico, more and more people believe the government's drugs war is costing too much.

"For every bad guy they get, ten innocent people die," said 25-year-old Ana Casillas as she looked at the charred remains of the Casino Royale being patrolled by soldiers.

Many believe the government can no longer win the war.

Looking on somberly as his nephew's body was lowered into a grave beneath cypress trees at a Monterrey cemetery, Eduardo Martinez's uncle said his country needs outside help.

"It's time we got the United Nations into Mexico," said Carlos Cavazos, 68. "That's how bad things are now."

(Editing by Kieran Murray)