A special guest post by Global Security Consultant and Political Risk Expert, Paul Crespo. This is the fifth post in the series.
Mexico is a top Latin American location for American business operations. A vast market with close proximity, Mexico represents the United States’s second largest export market and its third largest source of imports.
Recently however, the battle against, and between, powerful drug cartels has given Mexico a black eye. Roughly 70,000 people have been killed in drug-related violence since 2006. Constant reports of gruesome and escalating violence have dominated headlines for the past few years, making some American businesses wary of Mexico.
Mexico’s new President Enrique Pena Nieto, has vowed to reduce the violence by tackling crimes like extortion and kidnapping rather than hunting down drug bosses. The security situation however, remains problematic. Some parts of the country are still in virtual lockdown.
US businesses feel more secure
Despite all this, the security situation for US businesses in Mexico actually may be improving. In a survey conducted by the American Chamber of Commerce of Mexico, more than 80% of respondents said their companies were either as secure as or more secure than they were last year. Looking forward, 19 percent of companies surveyed said they expected the situation to improve by the end of the year, while 46 percent expected an improvement within the next five years
Eight of the ten security categories in the survey showed improvement over 2012.
The biggest exception was that of extortion by organized crime groups. More than a third of respondents (36%) said they’d suffered from extortion this year, double the 16% the prior year.
Additional conclusions from the AmCham Mexico survey:
The biggest security issue noted by these companies was threats or aggression against their employees — 41% of the participants had been on the receiving end of some sort of aggression or threat. This high number was a still a significant decrease from last year, when 58% of the respondents reported the same thing.
A third of the companies said they had faced security-related losses of up to $1 million, while 4 percent lost between $1 million and $5 million. Most companies surveyed said they spent between 2 and 4 percent of their budgets on security.
The most dangerous areas were the northern states of Nuevo Leon and Tamaulipas, followed by Mexico City. The central state of Queretaro was one of the safest places in Mexico to do business.
Corruption a huge