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

HOMICIDES / 31 AUG 2012

The Mexican government will not continue to release statistics on the number of homicides related to organized crime, leading critics…

HEROIN / 7 MAR 2011

Two of the most important annual reports about drug production have been released, and with them comes the inevitable diplomatic…

EL SALVADOR / 14 JUN 2013

Extortion of small businesses in El Salvador is getting worse despite the country's gang truce, according to business groups, and…

About InSight Crime

THE ORGANIZATION

InSight Crime Tackles Illegal Fishing

15 OCT 2021

In October, InSight Crime and American University’s Center for Latin American and Latino Studies (CLALS) began a year-long project on illegal, unreported, unregulated (IUU) fishing in…

THE ORGANIZATION

InSight Crime Featured in Handbook for Reporting on Organized Crime

8 OCT 2021

In late September, the Global Investigative Journalism Network (GIJN) published an excerpt of its forthcoming guide on reporting organized crime in Indonesia.

THE ORGANIZATION

Probing Organized Crime in Haiti

1 OCT 2021

InSight Crime has made it a priority to investigate organized crime in Haiti, where an impotent state is reeling after the July assassination of President Jovenel Moïse, coupled with an…

THE ORGANIZATION

Emergency First Aid in Hostile Environments

24 SEP 2021

At InSight Crime's annual treat, we ramped up hostile environment and emergency first aid training for our 40-member staff, many of whom conduct on-the-ground investigations in dangerous corners of the region.

THE ORGANIZATION

Series on Environmental Crime in the Amazon Generates Headlines

17 SEP 2021

InSight Crime and the Igarapé Institute have been delighted at the response to our joint investigation into environmental crimes in the Colombian Amazon. Coverage of our chapters dedicated to illegal mining…