Thread: Drug violence shutters promising business on Mexico border w

Drug violence shutters promising business on Mexico border with US




A decade ago, economists hailed Tijuana as a place where cheap Mexican labour and US financing could meet, attracting Asian firms eager to set up manufacturing plants to export to the US.

Now, that vision is slipping away, a victim of drug violence that has been exploding this side of the US-Mexico border for the past three years.

Once a freewheeling city that has served Americans cheap tequila since the US prohibition era, Tijuana is at the centre of a three-way drug war between rival gangs and Mexico's military. Drug-related murders are a daily occurrence.

The violence is scaring away tourists who came for everything from prostitutes, dental work and medicine. A lively artistic community is also dwindling.

While most assembly-for-export businesses, or maquiladoras, continue to operate normally, drug violence is such that they risk losing new investment to competitors like China. Other businesses are seeing their livelihood disappear.

Just a few years ago, downtown Tijuana was bustling and the main drag, Revolution Avenue, was a busy thoroughfare. But today, it is deserted, lined with "For Sale" and "For Rent" signs.

"Many big companies are pulling out and many small companies are going bankrupt,'' said Manuel Cesena, who owns a shoe shop on Revolution Avenue. ''Business isn't enough to even pay the rent for the shops and factory space."

Cesena, who has seen his sales fall fivefold since 2005, said it was crucial for him to end his day before nightfall or face being robbed or kidnapped.

After 30 years in the shoe business and exporting to the US, Cesena is considering closing shop.

More than 1 000 people have died so far this year across Mexico in battles between drug gangs and security forces, the highest murder rate since bloodshed escalated in 2006. Tijuana is one of the most violent cities in Mexico.

A group of gangs from the pacific state of Sinaloa have set out to destroy the Tijuana's Arellano Felix cartel and to take over lucrative smuggling routes into California. The feud between the Sinaloans and the Arellano Felix gang has not only scared away tourist dollars.

Business executives face daily telephone threats of extortion. Kidnappings to finance narco gangs have jumped this year, creating a climate of fear and scaring away new investment.

"Those of us who remain only stay because we have properties we don't want to leave,'' said Andres Mendez, who runs an arts and crafts business in Tijuana. ''We are very afraid and have to be careful not to get kidnapped."

In Tijuana this year, drug gangs have killed more than 200 people, with cartel hitmen and soldiers spraying bullets on busy city avenues, outside shops, schools and kindergartens.

Seventeen drug hitmen were killed in a shooting in April. Even children have been murdered. "Overcoming this insecurity is the single biggest issue for Tijuana right now," said Jorge Cruz, a business leader in the city's maquiladora industry.

In March, a plant in Tijuana assembling Panasonic electrical goods for export closed with the loss of 3 000 jobs. Plant managers declined to comment on the closure, but a city official said insecurity was a big factor.

Days before the Panasonic closure, soldiers in Tijuana made one of the biggest arms seizures in Mexico after raiding a house, uncovering grenade launchers, machine guns and other weapons encrusted with golden images of skulls.

The exodus of businesses was painful for Tijuana, as many people had high hopes that it could move beyond its seedy roots and become a key trade, manufacturing and service centre, given its proximity to the US.

But a dozen local building companies closed over the past year, putting infrastructure development on hold.

"Many were sick of the threats of kidnapping and extortion," said Sebastian Lanz, who heads a group representing local construction companies.

Some business owners, who have chosen to keep operating in Tijuana, have moved to live over the border in San Diego and only cross back into Mexico with bodyguards.

One prominent restaurant chain owner said he had swapped his flashy sports utility vehicle for a beaten-up sedan. "I call it my anti-kidnap vehicle,'' said the business executive, who asked not to be identified. ''It is the way not to attract attention."

Mexico's federal government says it is doing everything it can to restore security in Tijuana and other cities in Baja California, one of Mexico's most violent states.

Since January last year, thousands of troops patrol Tijuana's streets and highways, and are engaged in a daily battle to destroy the Arellano Felix and Sinaloa drug cartels and clean up the corrupt police forces that ally with them.

But winning the fight will not be easy. As the Arellano Felix cartel weakens, the gang is increasingly relying on kidnapping and extortion.

A bid to introduce closed-circuit televisions in the city had meanwhile failed, as gangs sabotaged cameras and corrupt police switched them off to allow crimes to be committed.

Published on the web by Business Report on May 19, 2008.
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In March, a plant in Tijuana assembling Panasonic electrical goods for export closed with the loss of 3 000 jobs. Plant managers declined to comment on the closure, but a city official said insecurity was a big factor.

Thats what happens when you deal with countries like this. They can whine all they want about poverty, but until they get a grip on this.....who is going to risk all this? Even cheap isn't cheap enough when your life is on the line.

I can't believe I used to hang out in TJ in my younger days...never again. I have not been down there in about 15 years and have no desire what so ever to visit any part of mexico. I've seen too many scary, nasty things down there.

That place sucks! It's like a hell on earth and now more violent than ever! The drug cartels need to be treated like the terrorists they are.