The Truth Behind The Mexican Economy

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It is no hidden fact that much of Central and Latin American is financially supported by drug trading, but no country experiences this phenomenon the same as Mexico does. As a rough estimate, according to Reuters, in 2009 the Mexican economy probably gained more from exporting drugs than it did oil, which is considered to be their strongest good on the foreign market.

Furthermore, despite its highly illegal nature, it is no secret that Mexico contains the five strongest cartels in the world: the Guadalajara Cartel which eventually split to become the Sinaloa and the Tijuana Cartel respectively, the Juárez Cartel, and the Gulf Cartel. Prior to its split, the Guadalajara Cartel was the first cartel to privatise the Mexican drug trade through their use of using less significant drug bosses to trade cocaine with Colombia.

Currently, Sinaloa is the biggest drug cartel, led for much of its existence by Joaquin Guzman Loera, “El Chapo”. He is regarded as one of the most powerful drug lords the world has ever seen, was estimated by Forbes in 2013 to have a net worth of $1bn and is currently on trial in New York. In the past, the Tijuana Cartel, the other half of the former Guadalajara Cartel, was also considered to be one of the strongest and most violent criminal organisations in Central America.

Credit: Justine Vinuya.
Credit: Justine Vinuya.

Likewise, despite the fact that they are not as prominent in Mexico, the Gulf Cartel has gained its status as one of the oldest organised criminal groups in the country. It has diversified by entering the international criminal network and also becoming involved in assassinations and kidnappings worldwide which has resulted in them being known for their extreme widespread violence. However, they have lost their powers after clashing with a private army, Loz Zetas, which in 2010 resulted in thousands of deaths, several ghost towns, and many leaders becoming arrested.

Despite the negative connotations associated with drug cartels, they arguably seem to have provided a significant boost in the Mexican economy and the local communities. This can be attributed to the fact that they are regarded as one of the most profitable illegal trade schemes in the world and according to a study published in the Journal of Economic Geography, in 2010 they operated in 40% of all local municipalities.

Additionally, the RAND Corporation has estimated that Mexican drug cartels bring in over $6.6bn in trade through the US alone and Reuters also suggest that Mexican drug cartels bring in overall from their global operations an estimated $25bn-$40bn every year. Furthermore, even though being involved in drug cartels has many risks such as imprisonment and violent deaths, many local citizens have used employment in these organisations as a way to escape poverty and support their families.

Nevertheless, as can be expected, engaging with drug cartels is not always it’s cracked up to be. Official Mexican government figures state that since 2006 there have been over 200,000 killings related to drug violence in Mexico and it is increasing drastically with 29,168 homicides in 2017 alone. It can also be difficult for areas to develop when they are plagued by conflict and violence. This can be seen by the fact that the most undeveloped areas are in the north of Mexico where there is the highest percentage of drug-related homicides. On the other hand, even where cartels have operated “peacefully” there have been no visible benefits to the poverty-stricken areas both in employment and in socio-economic progress.

Therefore, although drug trafficking has boosted Mexican economic trade, it has not been to the benefit of society. This is especially reinforced by the number of people unjustly murdered or involved in a life of crime and simultaneously has had negative effects on a wide variety of countries around the world.

 

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