Woe is the diplomat who uses the wrong word, no matter its veracity. Over the past year, U.S. Secretary of State Hillary Clinton and Undersecretary of the Army Joseph Westphal separately have used the word “insurgency” to describe the Mexican government's fight against indigenous criminal cartels.

Maybe it comes too easily after the wars in Iraq and Afghanistan, but in Mexico the word stirs cultural memories of heroic freedom fighters—not exactly the message that the government wants to convey—and drew cries of outrage from Mexico City, resulting in diplomatic retractions from U.S. officials. Still, insurgency or no, one thing is for certain: The cartels present a serious, multifaceted, and increasingly well-trained and well-armed challenge to the state, but Mexico is reconfiguring its armed forces to meet the challenge.

Frequently outgunned and sometimes corrupted, entire police forces have been sacked and their duties assumed by the Mexican military in recent years. In December 2011, the entire Veracruz police force was fired, with the 800 officers replaced by 2,400 marines. The military has taken over policing in other places, such as Ciudad Juarez, Nuevo Leon and the border state of Tamaulipas.

At the same time, according to analysts, there also has been a real shift in the training and equipping of the military to meet the cartel threat. The army's training doctrine has been realigned to address stability operations, doing things like setting up checkpoints and working to implement law and order in towns that have been overrun by violence. “They're conducting stability operations in areas the size of Belgium,” says Inigo Guevara, a consultant on Mexican security and defense issues based in Washington. In one effort to rebuild its presence in the north, the armed service recently spent about $100 million to buy battalion- and company-sized “mobile headquarters” that can be easily constructed and taken down, in preparation for longer-term domestic stability operations, he adds.

Yet, these operations occur against an increasingly sophisticated enemy, with heavily armored “infantry” carriers dubbed “Los Monstruos” (the Monsters) by the Mexican media, as well as more professional infantry tactics refined at training camps in the barren spaces of northern Guatemala and southern Mexico. Cartel gangs are armed with everything from assault rifles and crew-served weapons, to military-grade explosives, .50 caliber rifles and rocket-propelled grenades, as well as using insurgent weapons like car bombs.

As a result, the army and marines have started to look for alternatives to the older, thin-skinned Humvees— Mexico has produced several thousand in local plants in a deal with AM General—and toward a variety of new armored vehicles like Oshkosh's SandCat, of which 250 have been delivered so far. The navy also has conducted operational testing of Renault's Sherpa light scout vehicle, most notably in operations in Veracruz late last year, but has not made a final decision on whether to buy it.

Still, while Mexican forces long have been structured around providing domestic humanitarian and policing missions, they remain startlingly fractured, and communications between the branches can be problematic. “They do not talk to each other and they do not have a common command structure,” says Christian Ehrlich, director of intelligence for the Monterrey, Mexico-based intelligence firm Riskop. “It further complicates the response of the Mexican government to internal threats.”

Indeed, in a structure reminiscent of U.S. forces during World War II, Mexican forces comprise two separate departments: the Secretaría de la Defensa Nacional, which encompasses the army and air force; and the Secretaría de Marina, for the navy and marines. Guevara adds that the two departments share intelligence only on a “need-to-share basis.”

The overall military budget between the two departments has been estimated at $4.8 billion, with the majority going to the army and air force. But analysts see the navy as the real innovator. The maritime service has been investing heavily in intelligence capabilities and building a cyber infrastructure, Guevara says, while boosting the Mexican marine corps to 44 from 12 battalions. The Marina department also is helped by the years it has partnered with the U.S. Navy and Coast Guard and its openness to joint operations with its southern neighbors, something the army is still hesitant—if not outright hostile—to taking part in.

Nevertheless, the Mexican navy's fleet is a mix of locally built corvettes and a variety of modified vessels purchased mostly from the U.S. and Israel, to patrol the nation's vast coastlines while increasing its presence along rivers on the southeastern borders with Belize and Guatemala. In 2011, the service accepted the sixth 47-ft. lifeboat from Textron Land and Marine that was based on a highly capable model used by the U.S. Coast Guard. Overall, Guevara says, the navy “has done wonders with its limited budget.” Riskop's Ehrlich echoes the sentiment, telling DTI that “the navy does a lot more with its small budget than the army,” which spends more on salaries and logistics needs. “The navy spends it on ships, helicopters and developing intelligence capabilities,” he says.

And the navy continues to reinvent itself with an intelligence-gathering arm and forming limited partnerships with the Pentagon, the Drug Enforcement Agency (DEA) and the CIA. Still, the army is adapting too, putting more boots on the ground in the north, where the Los Zetas gang (founded by former Mexican special forces), and the older, battle-tested Sinaloan cartel continue to terrorize the population with torture, beheadings and spectacular public attacks that leave dozens dead or wounded.

However, the biggest need is rotary-wing assets. As part of the Merida Initiative, the much-discussed $1.5 billion U.S. aid package to Mexico made up mostly of military equipment and training programs, the U.S. has delivered eight Bell 412 helicopters to the Mexican army and air force, along with four UH-60M Black Hawks to the navy and federal police for fighting drug traffickers. Other equipment such as four Airbus Military CN235 maritime surveillance aircraft, tens of millions of dollars worth of radar, ballistics identification machines and non-intrusive inspection equipment has also been sent south in recent years, while U.S. training teams are advising Mexican police, military and court officials. In 2010 alone, Congress appropriated $379 million in equipment and training assistance for Mexico, which comes on top of the Merida funding.

In addition, Mexican armed forces fly Russian-made Mi-17 helicopters (the air force flies 36, the navy has 23, and others are flown by the federal police). Moreover, in 2010 the Air Force ordered 12 EC725s from Eurocopter, with plans to outfit the aircraft with 12.7-mm gun pods and 70-mm rocket pods. The air force also purchased four CH-53D (Ya'sur) helicopters from Israel in 2005. As for fixed-wing aircraft, the air force flies a few F-5 fighters and has asked for money to buy F-16s “or another fourth-generation fighter” like the Saab Gripen, according to Guevara, although it has so far received the cold shoulder.

Last September, after spending about a year and a half as deputy ambassador at the U.S. Embassy in Kabul, Earl Anthony Wayne became U.S. ambassador to Mexico. In January 2012, Army Gen. William Caldwell, after spending two years overseeing the training of all Afghan security forces, took the helm at Army North in San Antonio, with responsibility for Army functions in the continental U.S. under U.S. Northern Command. While it would be foolish to directly compare the security situations in Mexico and Afghanistan, it is also impossible to ignore the bloodbath taking place in northern Mexico, with 12,000 victims killed by just one of a number of billion-dollar organized crime networks in 2011 alone.

But given these two high-profile moves from Kabul, and reports of increased training of Mexican troops and police from the U.S. military, law enforcement and the DEA, it is clear that while the U.S. is making a loud “strategic shift” to the Asia-Pacific region, it continues to, more quietly, shift toward its troubled southern neighbor.