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

EL CHAPO / 13 JUL 2011

Interpol’s Mexico chief says that the dominance of Joaquin Guzman, alias “El Chapo,” over Mexico’s drug…

JALISCO CARTEL / 19 OCT 2020

The recent discovery of drug tunnels confirms how Mexico City's largest market continues to attract criminal groups, competing to dominate…

ELITES AND CRIME / 12 FEB 2021

US authorities at both the federal and state level provided training to members of a Mexican special operations unit with…

About InSight Crime

THE ORGANIZATION

Guatemala Social Insecurity Investigation Makes Front Page News

10 DEC 2021

InSight Crime’s latest investigation into a case of corruption within Guatemala's social security agency linked to the deaths of patients with kidney disease made waves in…

THE ORGANIZATION

Venezuela El Dorado Investigation Makes Headlines

3 DEC 2021

InSight Crime's investigation into the trafficking of illegal gold in Venezuela's Amazon region generated impact on both social media and in the press. Besides being republished and mentioned by several…

THE ORGANIZATION

Gender and Investigative Techniques Focus of Workshops

26 NOV 2021

On November 23-24, InSight Crime conducted a workshop called “How to Cover Organized Crime: Investigation Techniques and A Focus on Gender.” The session convened reporters and investigators from a dozen…

THE ORGANIZATION

InSight Crime Names Two New Board Members

19 NOV 2021

In recent weeks, InSight Crime added two new members to its board. Joy Olson is the former executive director of the Washington Office on Latin America…

THE ORGANIZATION

Senate Commission in Paraguay Cites InSight Crime

12 NOV 2021

InSight Crime’s reporting and investigations often reach the desks of diplomats, security officials and politicians. The latest example occurred in late October during a commission of Paraguay's Senate that tackled…