Mexico’s Monterrey still ranks as top city, despite violence

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MEXICO CITY -- How can Mexico’s “most modern” and “most prosperous” city also be one of its most dangerous?

That is the contradiction that often plays out in this country of great wealth and crippling poverty, of record tourism and skyrocketing homicide rates.

In a new study by the Mexican Institute for Competitiveness, or IMCO, the city of Monterrey, at the once-tranquil heart of Mexico’s industrial hub, was ranked No. 1 in most of the things that make an urban center attractive to business and residents. And yet, the report also noted that Monterrey’s murder rate grew by 300% between 2010 and 2011. (Links in Spanish.)

Part of the explanation, the report noted, is that homicides really soared after the cutoff date for the data used to rate competitiveness in the study, late 2010. But security in Monterrey had already begun to deteriorate in early 2009, and other factors apparently sustained the city’s ability to develop and attract investment.

“Before, [Monterrey] was like the United States or Uruguay” in terms of homicide rates, the report noted. “Now, it’s more like Guatemala.”

Yet it continues to have major strengths, the IMCO report said: the nation’s highest per capita GDP, 247,000 pesos (nearly $20,000), and second-highest rate of foreign investment; relatively good education; excellent infrastructure and services, like sewage treatment.

Those and other factors were used to measure competitiveness. Also counted were innovation, labor relations, and government efficiency. Monterrey was, in fact, the only Mexican city to score the rating of “highly competitive,” the top category.

Monterrey has long been the economic engine of Mexico. It is the center of textile, food-processing, beer and construction industries -- a modern, sophisticated metropolis where per-capita GDP is twice the national average.

It has always been considered Mexico’s wealthiest, and third-largest, city, and for decades its safest. But as long ago as 2006, foot soldiers from the Gulf cartel and its then-ally, the Zetas paramilitary force, were invading poor neighborhoods of the city to recruit followers. Violence exploded in early 2010 when the Zetas split from the Gulf cartel, and by May of that year, authorities were losing control; the air of safety vanished, roadblocks and brazen killings by narco-traffickers were a common occurrence, some of the elite fled or moved their families. And yet business went on.

‘In my opinion, it’s not a contradiction because we are saying Monterrey is competitive DESPITE the crisis of violence that it is living,’ the report’s author, IMCO urban development studies director Gabriela Alarcon, said in an email message.

‘So far, violence has had an impact on one aspect of competitiveness [security] that, despite being very important … is for now outweighed by Monterrey’s strengths in economic … [and] social aspects … as well as some areas of government that function well.”

Alarcon warned that the key to Monterrey’s future will be to what extent the bad security situation destroys the other areas of the city’s relative success.

For the report, IMCO studied 77 of Mexico’s largest cities, which together account for 80% of domestic economic production and 63% of the national population (link in Spanish).

Ranked at the bottom of the list were Acapulco, where worsening drug-war violence has succeeded in eroding tourism to the once-great coastal mecca, and, in the same state of Guerrero, the state capital, Chilpancingo.

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-- Tracy Wilkinson