With the events in the Middle East and North Africa, let’s not forget about northern Mexico and its problems with organized crime. It is no longer just about drug trafficking. My friend Gancho reports both a study from Cancintra, Mexico’s most important business federation, and a personal experience:
An influential Mexican business group says that 10,000 businesses closed last year because of security problems. This is a pretty good reflection of the pernicious developments in the Mexican underworld over the past five years, even beyond the rise in the murder rates. It's not the spike in killings that made these businesses close, but, the group says, kidnappings and extortion. This is, in that sense, a qualitatively different challenge.
This also doesn't measure the businesses that never opened because of security concerns. I actually had an idea for a street-side food-stand during my last six months in Torreón that would have surely made a killing, and in the process also given me the incredible pleasure of telling my horrid boss that I was quitting due to a more compelling opportunity to sell sandwiches on the side of the road. The plan was taking shape. I talked to other people who'd done similar stuff, started to build a client base through friends and acquaintances, put together the figures giving me a rough idea of what my profit margins would be, designed the portable grill set-up I needed and talked to a guy who could build it for me, and scoped out the space where I was going to set up shop. In short, I was ready to go. This close. Then, the daughter of a successful restaurant-owner a couple blocks from me was kidnapped and murdered by an organized crime group and the Oxxo that was to let me use the parking lot for my cash cow was held up at gunpoint. Suddenly, being out on the street every night with lots of cash seemed less attractive, so I reluctantly deferred the idea to a later date.
For a time, it seemed as though the criminals had a modus vivendi with big business. A few months ago, a principal at a major security firm in Mexico assured me that was true, as did the head of a major business group. But the truth is that Mexico’s economic future lies as much with its small and medium businesses as it does with its major companies. So the costs of extortion are serious, even if they don’t affect large companies. Moreover, it’s only a matter of time before the extortion spreads ... if it hasn’t already.
While I’m here, let me add that the people who told me about corruption in Immigration and Customs Enforcement (ICE) and along the border were recently indicted for running guns into Mexico. The irony? Here’s what they told me (more or less, I paraphrase) when I wondered why corruption wasn’t a problem on the U.S. side: “The difference is that while you get a lot of corruption on the American side, it’s all at the individual level. Once you get two officials conspiring, you’ve got two officials who are going to be caught.”
In a bit of good news for Americans worried that the disorder might cross the border, it looks as though they were right!