HomeNewsBriefCrime Costing Mexico Companies $5.8 Bn a Year
BRIEF

Crime Costing Mexico Companies $5.8 Bn a Year

EXTORTION / 3 JUN 2014 BY KYRA GURNEY EN

The head of Mexico's employers' association reported that crime and insecurity cost the country's businesses $5.8 billion annually, underscoring the enormous financial impact of criminal activity in the country. 

Juan Pablo Castañon, the leader of employers' association Coparmex, said 37 percent of Mexican companies had been victims of crimes including extortion, corruption, robbery of merchandise or kidnapping, reported Latin American Herald Tribune.  

According to Castañon, business in the states of Tamaulipas, Michoacan and Guerrero have been the most impacted by organized criminal activity. 

Castañon suggested the government coordinate federal and state forces under one command structure to combat criminal activity, an approach he said had worked in the cities of Tijuana and Juarez on the US-Mexico border.   

InSight Crime Analysis

Although criminal organizations in Mexico use a variety of methods to take money from companies, extortion is particularly common and on the rise. According to a report issued by Mexico's National Citizen Observatory (pdf), overall extortion in the country increased by 818 percent between 1997 and 2013, with 8,042 cases reported last year. 

As InSight Crime has reported, the growing popularity of extortion among criminal groups is likely in part a result of the fragmentation of cartels and proliferation of smaller criminal groups, which have had to diversify revenue streams to make up for lost drug profits. 

SEE ALSO: Mexico News and Profiles

Insecurity in Mexico has also affected the tourism industry, which was the country's third-largest source of foreign income in 2013. The number of cruise ship passengers stopping in Mexico dropped by three percent in 2012 and the number of tourists visiting the border region fell by 5.3 percent in the same year. 

Despite these threats, Mexican businesses don't spend a larger percentage of their operating budget on security than their regional counterparts, according to a survey conducted by the American Chamber of Commerce of Mexico (pdf). Mexican businesses spent an average of four percent of their operating budget on security in 2012, which is consistent with what other companies in Latin America spend and less than the seven percent spent on average by US businesses. 

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

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.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

MARIJUANA / 6 DEC 2022

The shift from plant-based to synthetic drugs has upended the relationship between small farmers and crime groups in Mexico’s Golden…

FENTANYL / 10 JAN 2022

The hideous levels of violence plaguing Zacatecas, exemplified by ten bodies abandoned in a van outside the governor’s office, are…

MEXICO / 16 JUL 2022

Rafael Caro Quintero, Mexican drug lord and erstwhile head of the defunct Guadalajara Cartel, has been apprehended by Mexican authorities.

About InSight Crime

THE ORGANIZATION

InSight Crime Contributes Expertise Across the Board 

22 SEP 2023

This week InSight Crime investigators Sara García and María Fernanda Ramírez led a discussion of the challenges posed by Colombian President Gustavo Petro’s “Total Peace” plan within urban contexts. The…

THE ORGANIZATION

InSight Crime Cited in New Colombia Drug Policy Plan

15 SEP 2023

InSight Crime’s work on emerging coca cultivation in Honduras, Guatemala, and Venezuela was cited in the Colombian government’s…

THE ORGANIZATION

InSight Crime Discusses Honduran Women's Prison Investigation

8 SEP 2023

Investigators Victoria Dittmar and María Fernanda Ramírez discussed InSight Crime’s recent investigation of a massacre in Honduras’ only women’s prison in a Twitter Spaces event on…

THE ORGANIZATION

Human Trafficking Investigation Published in Leading Mexican Newspaper

1 SEP 2023

Leading Mexican media outlet El Universal featured our most recent investigation, “The Geography of Human Trafficking on the US-Mexico Border,” on the front page of its August 30…

THE ORGANIZATION

InSight Crime's Coverage of Ecuador Leads International Debate

25 AUG 2023

This week, Jeremy McDermott, co-director of InSight Crime, was interviewed by La Sexta, a Spanish television channel, about the situation of extreme violence and insecurity in Ecuador…