Political Risks Analysis Mexico 2012

In: Business and Management

Submitted By rodbar87
Words 750
Pages 3
Political Risks Worsening Drug Related Violence There is constant fighting among the Mexico’s various drug cartels to establish supremacy, which has led to an increase in the number of murders over the last few years. The cartels have attacked the government and each other, demonstrating vicious acts of violence such as hanging victims from bridges, dumping bodies in piles and displaying severed heads on stakes (Trotta & Hughes, 2012). These displays generally seek to establish pre-eminence in their area of operation and influence. Drug related violence has spread from cities along the U.S. border to Monterrey and various other regions around the country. Gunmen have increased attacks on public officials and armored car sales are spiraling. Many cartels are cross-border criminal organizations also involved in kidnapping, extortion, cargo robbery, smuggling, and piracy (Marketline, 2012). Moreover, drug trafficking and other criminal activities launder billions of dollars into the Mexican economy through a fine network of bankers and business figures. With many cartels branching into other crimes, the problem has compounded, expanding into US territory. For instance, North Carolina-based Wachovia Wells Fargo Bank recently had to pay USD160 million to settle federal investigations on allegations of laundering Mexican drug money (Marketline, 2012).
Table 1 Mexican Drug Cartels Main Areas of Influence, 2010-2011

Source: Nieto, 2012

Mexico’s Industrial Chambers Federation informed that the cost of insecurity in Mexico reached 7% of the country’s GDP, the equivalent of 9,640 pesos per person (El Universo, 2010). An

estimate of lost money due to the fight against drug traffic and crime in general represents 154 billion pesos (El Universo, 2010). This aspect presents Mexico’s most important political risk, as recently elected president Enrique Pena Nieto (PRI)…...

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