Secretary of Health Mercedes Juan Lopez

Mexican officials have estimated violence costs the country up to 15 percent of its annual GDP, although it is unclear how this is balanced against the huge influx of foreign currency as a result of the drug trade that generates much of the violence. 

Speaking in Mexico City at the World Health Organization's conference for its Global Campaign for Violence Prevention, Secretary of Health Mercedes Juan Lopez declared that Mexico's violence costs the country between 8 and 15 percent of GDP annually, reported Animal Politico.

According to Lopez, the losses come from a combination of factors, including physical damage, lost productivity, medical and disability care, the cost of security services and disinvestment.

Lopez said productive sectors were the area of the economy most affected by violence, and singled out homicides as a particular concern, reported Milenio

InSight Crime Analysis

The economic impact highlighted by the minister is undoubtedly a major strain on both public resources and the private sector, which aside from the losses experienced in the areas mentioned, also suffers financially from criminal activities such as widespread and often large scale extortion. However, the booming drug trade in other respects has been a boon, not just a bane for Mexico's economy. 

See Also: Mexico Organized Crime News

Estimates of the flow of drug profits into Mexico from the United States vary wildly but always run in to the billions every year -- from the $4.7-8.1 billion calculated by analyst Alejandro Hope (pdf), to the $8-25 billion estimated by the US State Department. Much of this is laundered in Mexico through legitimate businesses, creating an investment boom in certain regions and sectors. In 2012, Mexico's Ministry of Finance estimated that over $10 billion had been laundered in the country the previous year.

Added to this is the employment the drug trade provides, as cartels often recruit among the most economically excluded sectors for whom legitimate employment is difficult to find and poorly paid. 

It is impossible to accurately balance the costs of the drug trade to the Mexican economy against the profits it brings in and its contribution to investment and employment. However, what is certain is that the brutal violence associated with the trade is not a price worth paying.

Investigations

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
Prev Next

InSide Colombia's BACRIM: Power

InSide Colombia's BACRIM: Power

  The Bajo Cauca Franchise BACRIM-Land Armed Power Dynamics The BACRIM in places like the region of Bajo Cauca are a typical manifestation of Colombia's underworld today: a semi-autonomous local cell that is part of a powerful national network.

InSide Colombia's BACRIM: Murder

InSide Colombia's BACRIM: Murder

  Life of a Sicario Anatomy of a Hit   The BACRIM's control over territories such as the north Colombian region of Bajo Cauca comes at the point of a gun, and death is a constant price of their power.

Counting Firearms in Honduras

Counting Firearms in Honduras

Estimates vary widely as to how many legal and illegal weapons are circulating in Honduras. There are many reasons for this. The government does not have a centralized database that tracks arms seizures, purchases, sales and other matters concerning arms possession, availability and merchandising. The laws surrounding...

Venezuela Prisons: 'Pranes' and 'Revolutionary' Criminality

Venezuela Prisons: 'Pranes' and 'Revolutionary' Criminality

In May 2011, a 26-year-old prison gang leader held 4,000 members of the Venezuelan security forces, backed by tanks and helicopters, at bay for weeks. Humiliated nationally and internationally, it pushed President Hugo Chávez into a different and disastrous approach to the prison system.

Closing the Gaps on Firearms Trafficking in Honduras

Closing the Gaps on Firearms Trafficking in Honduras

As set out in this report, the legal structure around Honduras' arms trade is deeply flawed. The legislation is inconsistent and unclear as to the roles of different institutions, while the regulatory system is insufficiently funded, anachronistic and administered by officials who are overworked or susceptible to...

Nariño, Colombia: Ground Zero of the Cocaine Trade

Nariño, Colombia: Ground Zero of the Cocaine Trade

The department of Nariño in southwest Colombia is the main coca-producing area in the country and in the world. It is a place scarred by poverty and years of armed conflict between guerrillas, the state and paramilitary groups. Perhaps nowhere else in the country are the challenges...

Trafficking Firearms Into Honduras

Trafficking Firearms Into Honduras

Honduras does not produce weapons,[1] but weapons are trafficked into the country in numerous ways. These vary depending on weapon availability in neighboring countries, demand in Honduras, government controls and other factors. They do not appear to obey a single strategic logic, other than that of evading...

InSide Colombia's BACRIM: Money

InSide Colombia's BACRIM: Money

  Drugs Extortion Criminal Cash Flows Millions of dollars in dirty money circulate constantly around Bajo Cauca, flowing upwards and outwards from a broad range of criminal activities. The BACRIM are the chief regulators and beneficiaries of this shadow economy.

Trafficking Firearms in Honduras

Trafficking Firearms in Honduras

The weapons trade within Honduras is difficult to monitor. This is largely because the military, the country's sole importer, and the Armory, the sole salesmen of weapons, do not release information to the public. The lack of transparency extends to private security companies, which do not have...