Mexico's drug violence is bad for business

The drug violence that continues to sweep across Mexico isn't only damaging citizen confidence in the country's government and public security. It also is taking a toll on Mexico's economy, according to Treasury Secretary Agustin Carstens.

The Mexican government estimates that the violence has slowed economic growth by more than 1%.

Increased safety concerns have meant that companies and businesses spend 5% to 10% more on security services. This has hurt domestic competition and sales, according to Carstens, as well as having a negative affect on national development generally.

Last week was another bloody one for Mexico -- on Thursday, 12 headless bodies turned up in the normally quiet southern state of the Yucatan.  Five bodies -- four of them decapitated -- were found earlier in the week in Tijuana. All the deaths are thought to have been drug-war related.

The ongoing drug wars and rising levels of crime and kidnappings in Mexico prompted thousands across the country to march over the weekend, expressing their anger and demanding action.

Carstens also announced that the security budget for 2009 will increase substantially, speaking to the newspaper Reforma.

Click here for more on the drug trade across Latin America.

For our special report on Mexico's drug problems, go to our Mexico Under Siege page.

-- Deborah Bonello in Mexico City

Comments

[Francisco Paripa]

Drugs are brought into the U.S. in large and small quantities. A few grams of cocaine can be distributed among friends and relatives. However if tons of cocaine come accross the border, to distribute and sell the drugs in the US, also requires a network of people in the US that buys and sells the drugs at the wholesale and retail level.

We here a lot in the news about the drug wars in Mexico, Colombia and other countries. I would also like to hear about the drug wars in hte US.

Cheers

Francisco

[southoc]

Ya think?

[jose]

I actually had an attorney from Guadalajara recently tell me that mexico's economy was insulated from the US slowdown because of all the Narco money circulating through their economy. That is indicative of the level of discourse that exists about economic matters in Mexico.

Need it be said that I am now avoiding mexico for investment and travel? I think its only a matter of time before significant problems develop (again) in that society.