Fears of insecurity in Mexico’s Guerrero state are reportedly pushing businesses both large and small to shut down or relocate, highlighting the deep economic toll that organized crime is taking in the region.
More than 300 businesses in Guerrero — specifically in its hardest hit cities of Chilpancingo and Iguala — have reportedly been forced to close indefinitely or relocate elsewhere. Leaders of local business associations in these two cities indicated that the closures and displacements are affecting a wide range of businesses, from large auto companies like Volvo and Volkswagen, to locally owned jewelers, restaurants, pharmacies, and gas stations.
Coca-Cola FEMSA explained that its recent decision to close down a factory in Guerrero was because of security threats posed by organized crime, in addition to concerns generated by political unrest. The recent kidnapping of a Pepsico-Sabritas executive — who was travelling in the northern part of the state — is one example of the kind of threats faced by larger companies operating in the area.
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News of the economic toll of Guerrero’s insecurity comes on the heels of deadly political violence that hit the state particularly hard in the lead-up to elections this past June. However, alarms about the increasing level of violence in Guerrero state have been sounding for some time. Since the disappearance of 43 students from the region in September 2014, dozens of mass graves have been discovered in the state and increasingly violent turf wars between rival gangs have been reported.
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The government has tried to champion Mexico as an appealing place for increased foreign investment, and this has prompted intensified efforts to improve security in the important oil-producing regions of Tamaulipas and Veracruz. Yet amid the security gains that President Peña Nieto has touted as of late, it is clear that Guerrero remains the dark spot in the national conversation about “the new Mexico.”
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