World News
Businesses turn up heat on Mexican government over crime surge
MEXICO CITY, (Reuters) - Mexican business leaders called out the government yesterday over a recent wave of criminal activity that has terrorized large swaths of Latin America’s second-largest economy and led some prominent firms to cut back operations.
Two of Mexico’s top business groups urged the administration of President Enrique Pena Nieto and the candidates hoping to succeed him in a July 1 election to stem the violence and robberies, which they say are putting workers’ lives at risk and hurting investment.
“The high levels of violence have become the greatest obstacle to (economic) activity,” Mexico’s powerful CCE business lobby said in a statement.
Tens of thousands of people have been killed in turf wars between drug cartels and their clashes with security forces since former President Felipe Calderon sent in the military to crush the gangs soon after taking office at the end of 2006.
In recent weeks, dairy producer Grupo Lala shuttered a distribution center in the northern state of Tamaulipas and the world’s biggest Coke bottler, Coca-Cola Femsa , indefinitely shut down a 160employee distribution center southwestern Guerrero state.
Canada’s Pan American Silver Corp was the latest to act, saying yesterday it would reduce operations and suspend staff movements at its Dolores silver mine in the border state of Chihuahua because of recent security incidents.
Companies risk extortion, theft, attacks on their logistics chain and physical assault on their employees, according to the American Chamber of Commerce of Mexico (AmCham).
“The impact of corruption, public insecurity, an inadequate justice (system) definitely impacts the cost of investment,” while fear of crime even keeps some executives from coming to Mexico, said Luis Gerardo del Valle, AmCham Mexico’s head of tax affairs.
Train and truck freight thefts have jumped as criminals employ more sophisticated methods.
Last week, miner and infrastructure firm Grupo Mexico said seven freight train derailments between the port of Veracruz and central Mexico were due to “sabotage” and would cost the company 312 million pesos ($16 million).
Mexican industry association Canacintra estimates that small and in medium-sized companies spend the equivalent of 6 percent of their income on security, double what they did a decade ago.
Mexican employers’ federation Coparmex called on the government to stop waiting until the election was over.
“Time is running out for this government, as is the public’s patience. We can’t keep waiting. This is the last call,” Coparmex said in a statement.