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Mexico: on the verge of a meltdown Mexico: on the verge of a meltdown
(14 days later)
I first came to Mexico as part of a college summer semester abroad program in 1987 and for the better part of the last 25 years have lived in Mexico. My college semester was based in the once lovely town of Cuernavaca, known by the nickname "City of Eternal Spring". Today, Cuernavaca is the 18th most dangerous city in the world, according to a report published by El Consejo Ciudadano para la Seguridad Publica y la Justicia Penal A.C.I first came to Mexico as part of a college summer semester abroad program in 1987 and for the better part of the last 25 years have lived in Mexico. My college semester was based in the once lovely town of Cuernavaca, known by the nickname "City of Eternal Spring". Today, Cuernavaca is the 18th most dangerous city in the world, according to a report published by El Consejo Ciudadano para la Seguridad Publica y la Justicia Penal A.C.
I still spend most weekends in Cuernavaca. From my informal study of local news reports, the daily death toll is between one and four. It's a rare day that there are no murders. In August, there were news reports that the morgue is full, 60 or so unidentified dead, the vast majority of them murdered.I still spend most weekends in Cuernavaca. From my informal study of local news reports, the daily death toll is between one and four. It's a rare day that there are no murders. In August, there were news reports that the morgue is full, 60 or so unidentified dead, the vast majority of them murdered.
Mexico has 9 cities listed in the top 50 most dangerous cities in the world. I have seen the violence first-hand. A good friend was killed due to wounds inflicted from being shot in an attempted robbery while eating a taco at an open taco stand in Mexico City on a Saturday morning . As a sales executive for a major home appliance company based in Monterrey, I have fond memories of many clients. My top client for high-end products is based in San Pedro, Monterrey. She now lives at an undisclosed location in the Yucatan Peninsula due to fears of being kidnapped. Another friend of mine, a former senior advertising executive, finally realized his dream of opening a furniture store in Mexico City, only to be kidnapped and extorted. He closed his business and told me quite simply that "You cannot do business in Mexico".Mexico has 9 cities listed in the top 50 most dangerous cities in the world. I have seen the violence first-hand. A good friend was killed due to wounds inflicted from being shot in an attempted robbery while eating a taco at an open taco stand in Mexico City on a Saturday morning . As a sales executive for a major home appliance company based in Monterrey, I have fond memories of many clients. My top client for high-end products is based in San Pedro, Monterrey. She now lives at an undisclosed location in the Yucatan Peninsula due to fears of being kidnapped. Another friend of mine, a former senior advertising executive, finally realized his dream of opening a furniture store in Mexico City, only to be kidnapped and extorted. He closed his business and told me quite simply that "You cannot do business in Mexico".
To be fair, Mexico has advanced at least from a macroeconomic perspective. When I first arrived, the Mexican peso had more zeros than one could count, inflation was close to 100% with high unemployment and all of the other issues affecting a very troubled economy. Today, GDP growth is positive, Mexico has many trade agreements, democracy exists, and economically speaking, Mexico is stable, although about half the population lives in poverty.To be fair, Mexico has advanced at least from a macroeconomic perspective. When I first arrived, the Mexican peso had more zeros than one could count, inflation was close to 100% with high unemployment and all of the other issues affecting a very troubled economy. Today, GDP growth is positive, Mexico has many trade agreements, democracy exists, and economically speaking, Mexico is stable, although about half the population lives in poverty.
Mexico is a fragile point, as President Enrique Peña Nieto, who is in his first year in office, knows well. I fear that much of the progress I have seen since I moved here will be undone.Mexico is a fragile point, as President Enrique Peña Nieto, who is in his first year in office, knows well. I fear that much of the progress I have seen since I moved here will be undone.
The violence is mostly drug related. The drug business for Mexico represents around $50 billion, according to some sources. Obviously, no one knows the full extent. That's a lot of money, more than tourism and remittances, which are two basic sources other than oil for the entry of foreign currency into Mexico. How is that money used? Payoffs to police and politicians perhaps, payoffs to border guards perhaps, saved in tunnels and safe houses for future use and, of course, the purchase of weapons principally from the US. What we do know is that the "drug war" has claimed 60,000 lives in Mexico since 2006 alone.The violence is mostly drug related. The drug business for Mexico represents around $50 billion, according to some sources. Obviously, no one knows the full extent. That's a lot of money, more than tourism and remittances, which are two basic sources other than oil for the entry of foreign currency into Mexico. How is that money used? Payoffs to police and politicians perhaps, payoffs to border guards perhaps, saved in tunnels and safe houses for future use and, of course, the purchase of weapons principally from the US. What we do know is that the "drug war" has claimed 60,000 lives in Mexico since 2006 alone.
The drug business won't disappear as long as drug users use. Assuming that we cannot stop drug use, the best solution may be to get that money into the formal economy. How, I do not know, nor do I wish to express an opinion on the legalization of drugs, but I do know that if that money could be saved legally, most of the corruption would disappear. How to reduce the violence, prompt the drug cartels to compete on quality and service and other commercial strategies for success, rather than fight over territories and routes through the US. It's easier said than done, and I don't have a plan to propose, but it seems unlikely any government can "win" a physical fight against the cartels.The drug business won't disappear as long as drug users use. Assuming that we cannot stop drug use, the best solution may be to get that money into the formal economy. How, I do not know, nor do I wish to express an opinion on the legalization of drugs, but I do know that if that money could be saved legally, most of the corruption would disappear. How to reduce the violence, prompt the drug cartels to compete on quality and service and other commercial strategies for success, rather than fight over territories and routes through the US. It's easier said than done, and I don't have a plan to propose, but it seems unlikely any government can "win" a physical fight against the cartels.
Many poor young people now see the drug business as their only real employment option. The official minimum wage in Mexico is just over (US) $5 dollars a day. One solution is to force multinational companies to pay something similar to their workers in Mexico as they pay their workers in their country of origin. Some might argue that would cause businesses to flee to China, but I'm not convinced. I was once a product manager at a Mexican based multinational company. I can clearly remember the stack of products now packed and lined up outside of the plant. Each product of the first row of stacked products was sliced many times. I was baffled until I was informed that the products were sliced by the workers as they left the plant. What is the real cost savings for multinationals paying these low wages?Many poor young people now see the drug business as their only real employment option. The official minimum wage in Mexico is just over (US) $5 dollars a day. One solution is to force multinational companies to pay something similar to their workers in Mexico as they pay their workers in their country of origin. Some might argue that would cause businesses to flee to China, but I'm not convinced. I was once a product manager at a Mexican based multinational company. I can clearly remember the stack of products now packed and lined up outside of the plant. Each product of the first row of stacked products was sliced many times. I was baffled until I was informed that the products were sliced by the workers as they left the plant. What is the real cost savings for multinationals paying these low wages?
There are clearly success stories in Mexico, demonstrated by the fact that Mexico is home to the world's wealthiest person, Carlos Slim, but unfortunately there are more sad stories of violence and despair. Mexico is a great country. Despite its troubles, I'm still here, but something is clearly not right. Maybe it's as former Mexican President Porfirio Diaz famously said "Poor Mexico, so far from God and so close to the United States!"There are clearly success stories in Mexico, demonstrated by the fact that Mexico is home to the world's wealthiest person, Carlos Slim, but unfortunately there are more sad stories of violence and despair. Mexico is a great country. Despite its troubles, I'm still here, but something is clearly not right. Maybe it's as former Mexican President Porfirio Diaz famously said "Poor Mexico, so far from God and so close to the United States!"
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