HomeNewsAnalysisMajority of Businesses Hurt by Crime in Mexico: Report
ANALYSIS

Majority of Businesses Hurt by Crime in Mexico: Report

EXTORTION / 12 NOV 2018 BY PATRICK CORCORAN EN

A new report from Mexico’s statistics institute provides fresh evidence that the country’s ongoing security crisis has taken a toll on the local economy, particularly on large businesses.

Of more than 35,000 businesses surveyed in 2017, a third reported being victims of crimes, including robbery, shoplifting and extortion, according to the latest National Survey of Business Victimization (Encuesta Nacional de Victimización de Empresas – ENVE), by Mexico’s National Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía – INEGI).

This is the fourth time the INEGI has released its report, which has now found that large businesses are particularly targeted by criminal groups, both big and small.

Yet nearly 32 percent of Mexico’s micro-businesses, which are defined as those that employ ten or fewer people and represent around 97 percent of the number of Mexican firms, reported suffering a crime in 2017.

In contrast, small, medium, and large firms reported higher rates of victimization: 59.3 percent, 61.5 percent, and 51.4 percent, respectively.

InSight Crime Analysis

The findings of the fourth ENVE survey paint a devastating picture of how Mexico’s security crisis is affecting the nation’s economy.

Nearly one-fifth of the businesses surveyed reported that they had reduced their hours of operation as a result of criminal threats. More than six percent said they had simply pulled out altogether, and 13 percent reported having reduced investments.

Whether directly or indirectly, all of these responses represent a reduction of Mexico’s economic activity.

While the ENVE doesn’t look at how the high level of crimes against businesses affects Mexico’s Gross Domestic Product (GDP), there’s evidence that the nation‘s growth has lagged behind that of its Latin American and North American neighbors for most of the past two decades.

As the ENVE survey shows, the relentless difficulties legitimate business face from criminal groups is one major reason. A separate INEGI study recently estimated that insecurity costs the nation nearly 1.65 percent in annual GDP growth.

SEE MORE: Mexico News and Profiles

ENVE does not distinguish between petty criminals and organized crime groups. Certain common crimes like shoplifting and fraud have few natural ties to such groups. However, organized crime groups either engage in or enable several of the most frequent illegal acts that plague businesses: extortion, but also armed robbery and the corruption of government officials.

Similarly, the business community’s withdrawal from the economy was most pronounced in the three states where extortion and other aspects of organized crime have worsened: Veracruz, Guerrero, and Zacatecas.

The ENVE survey also inadvertently explains why the government has been unable to tackle this crisis. Businesses reported crimes against them only 16 percent of the time, which led to police investigations in 85 percent of those cases. When explaining their reluctance to report crimes, business owners cited a lack of faith in the government’s ability to prosecute criminals, a fear of the criminals themselves, and a distrust of the police.

Even in the small minority of cases that sparked investigations, it’s unlikely the perpetrators will be caught and punished. According to one recent study, just 12 percent of the nation’s criminal investigations resulted in a conviction or an acquittal.

Such a small chance that criminals will be brought to justice sends the message that illegal activities are effectively allowed. Against this backdrop, many businesses end up paying off criminal groups or choose to close down, and the result is Mexico’s economy continues to suffer.

Compartir icon icon icon

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Related Content

MEXICO / 27 JUL 2011

A clash between two street gangs linked to the Juarez Cartel and the Sinaloa Cartel in a prison in Ciudad…

JALISCO CARTEL / 6 JUL 2018

A relatively new party in Mexico won big in a recent election, while the long-dominant political force suffered a crushing…

BELTRAN LEYVA ORG / 29 NOV 2012

A village in Sinaloa, Mexico was burned to the ground by armed men in an attack likely linked…

About InSight Crime

THE ORGANIZATION

We Have Updated Our Website

4 FEB 2021

Welcome to our new home page. We have revamped the site to create a better display and reader experience.

THE ORGANIZATION

InSight Crime Events – Border Crime: The Northern Triangle and Tri-Border Area

ARGENTINA / 25 JAN 2021

Through several rounds of extensive field investigations, our researchers have analyzed and mapped out the main illicit economies and criminal groups present in 39 border departments spread across the six countries of study – the Northern Triangle trio of Guatemala, Honduras, and El…

BRIEF

InSight Crime’s ‘Memo Fantasma’ Investigation Wins Simón Bolívar National Journalism Prize

COLOMBIA / 20 NOV 2020

The staff at InSight Crime was awarded the prestigious Simón Bolívar national journalism prize in Colombia for its two-year investigation into the drug trafficker known as “Memo Fantasma,” which was…

ANALYSIS

InSight Crime – From Uncovering Organized Crime to Finding What Works

COLOMBIA / 12 NOV 2020

This project began 10 years ago as an effort to address a problem: the lack of daily coverage, investigative stories and analysis of organized crime in the Americas. …

ANALYSIS

InSight Crime – Ten Years of Investigating Organized Crime in the Americas

FEATURED / 2 NOV 2020

In early 2009, Steven Dudley was in Medellín, Colombia. His assignment: speak to a jailed paramilitary leader in the Itagui prison, just south of the city. Following his interview inside…