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Latino Daily News

Thursday April 5, 2012

160,000 Businesses Left Mexico in 2011 Due to Violence

160,000 Businesses Left Mexico in 2011 Due to Violence

Photo: Violence in Mexico Negative Effect on Business

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More than 160,000 businesses left Mexico last year due to persistent violent crime woes, according to the president of the country’s largest business group, Coparmex.

“Business leaders and entire families are leaving for other countries in search of security and wellbeing,” Alberto Espinosa said.

Since President Felipe Calderon took office in December 2006, some 50,000 people have died in conflict among rival drug cartels and between the criminals and security forces.

Espinosa said violence not only has altered the lives of ordinary Mexicans but is increasingly affecting the economy, noting that insurance premiums have risen 30 percent and construction firms have raised their costs to cover expenses incurred in protecting their infrastructure investments and workers.

He added that over the past five years some 24 million Americans have avoided travel to Mexican border areas, representing some $800 million in lost revenue.

“Organized crime is weakening the competitiveness of (Mexico’s 32) states, discouraging domestic and foreign investment, causing the closure of formal companies. In 2011 alone, more than 160,000 companies ceased operating nationwide,” the head of Coparmex said.

Espinosa, who did not indicate the size of those companies or how many workers lost their jobs, lamented frequent prison breaks, road blockades and multiple homicides in states such as Nuevo Leon, Guerrero, Coahuila, Durango, Chihuahua and Tamaulipas.

He added that the security plans that have been adopted have been insufficient and that investment to equip police with cutting-edge technology has not succeeded in bringing down crime rates.

Espinosa said the number of homicides has doubled and kidnapping rates have climbed 81 percent over the past five years.

According to figures from prosecutors, four kidnappings, 2,000 robberies and 4,600 acts of extortion were reported daily nationwide in 2011, mainly in Chihuahua, Baja California, Jalisco and Mexico City.

“Ninety-eight percent of the crimes go unpunished and of all cases that go to trial just one in 10 criminals is sentenced,” the employers’ federation chief said.

Citing recent surveys, he said eight in 10 Mexicans believe crime is worse today than a year ago and three out of 10 say they have been crime victims in the past three months.

Half of Mexicans say organized crime gangs are winning the battle against the government and 40 percent deem Calderon’s strategy of deploying army troops nationwide to combat the drug gangs to be a failure, Espinosa added.

His remarks came just days after the official start of the campaign for the July 1 general elections, in which Mexicans will choose Calderon’s successor, senators and lower-house lawmakers and state and municipal authorities.

Espinosa called on all authorities and candidates to evaluate the situation and design new programs to meet the challenge posed by organized crime.

“We’re demanding clear commitments from the presidential candidates. It’s not enough just to criticize the current policies or offer to change the strategy,” Espinosa said.

The latest polls show Enrique Peña Nieto, candidate of the opposition Institutional Revolutionary Party, or PRI, with a 13-percentage-point lead over Josefina Vazquez Mota of the governing National Action Party, or PAN.

The candidate of the center-left Party of the Democratic Revolution, or PRD, Andres Manuel Lopez Obrador, is a distant third, 10 percentage points behind Vazquez Mota.

Mexico’s constitution limits the president to a single six-year term.