Drug trafficking continues to represent one of the most persistent and costly threats to security and stability in Mexico. July 25, 2024, marked a turning point. The arrest of Ismael “El Mayo” Zambada and Joaquín Guzmán López, son of “El Chapo,” sparked a violent power struggle within the Sinaloa Cartel.
According to Sinaloa authorities, the most critical events began to occur on September 9. Since then, Culiacán has been the favorite scene of armed confrontations, narco-blockades, car thefts, kidnappings, and murders, reflecting the realignment of the criminal forces in conflict.
Despite this situation, the federal government reported a decrease in homicides. On May 8, the executive secretary of the National Public Security System, Marcela Figueroa, reported that daily intentional homicides had dropped 24.9% since the start of Claudia Sheinbaum’s administration, from 86.9 in September 2024 to 65.3 at the end of April of this year.
The Institute for Economics and Peace (IEP) warned that the economic cost of violence in Mexico reached alarming levels in 2024. According to its most recent report, the total impact amounted to 4.5 trillion pesos, equivalent to 245 billion dollars or 18% of the national Gross Domestic Product.
This represents an increase of 3.4% compared to the previous year, equivalent to an additional 149 billion pesos. “In per capita terms, the economic impact was 33,905 pesos, higher than the average monthly salary of a Mexican worker,” the document states.
An InSight Crime investigation published in 2024 details that violence directly impacts the economy; homicides eliminate the workforce and consumption capacity, while indirect victims also often temporarily abandon their activities.
“Criminals who are captured and imprisoned do not contribute to the legal economy. Similarly, crimes such as extortion, theft, and smuggling take money out of the legal economy and put it in the pockets of criminals,” explain specialists Liza Schmidt and Jerónimo López.
Furthermore, many companies are forced to abandon dangerous areas or relocate, affecting productivity and access to formal employment.
The deterioration is also reflected at the local level. According to an investigation by El País, violence between factions of the Sinaloa Cartel has hit the real estate sector in Culiacán, where until recently housing prices were on the rise.
Cristina Ibarra, president of the Federation of Colleges of Economists of the Mexican Republic, estimated a loss of 23 billion pesos in nine months and the elimination of some 12,000 formal jobs, according to figures from the Ministry of Labor.
Analyst Sam Woolston adds that border states or strategic drug trafficking routes, such as Colima, face an even greater impact: “The port (of Manzanillo) is a stronghold of the Jalisco New Generation Cartel (CJNG), and the confrontation between this criminal organization, its rivals, and security forces has turned the city into one of the most violent in Mexico.”
Government Investment in the Fight Against Drug Trafficking
Faced with the upsurge in violence in the country, Claudia Sheinbaum’s administration deployed a security strategy that, according to the Secretary of Security and Citizen Protection, Omar García Harfuch, achieved significant results in the first weeks of June.
Between June 10 and 22, 1,233 people were arrested for high-impact crimes, including 22 priority targets. In addition, nearly eight tons of drugs were seized, 48 clandestine laboratories and concentration areas were destroyed, and more than 1.8 million liters of fuel were seized. Also notable was the arrest of Irvin “N,” alias “8” or “Comandante,” a close associate of Jesús Alfredo “N,” alias “Mochomito,” leader of the Beltrán Leyva gang.
The so-called Operation Northern Border, for its part, resulted in the capture of 4,619 people and the seizure of 3,862 firearms, reinforcing the militarized line of combating crime. However, Sam Woolston’s analysis for InSight Crime warns that this strategy has proven insufficient.
In 2024, military spending reached record levels, while the inflation-adjusted budget for justice and civil police fell by 30% and 12%, respectively, in the last decade.
Mexico allocates just 0.7% of its GDP to civil security and justice, less than half the average for OECD countries. The country also suffers from a severe shortage of judges, which has generated severe procedural backlogs and high levels of impunity.
Even considering military spending, the allocated budget remains minimal compared to the economic impact of the violence. “For every dollar of economic impact related to violence in 2024, the government spent just 17 cents on combating it,” Woolston says.
Source: infobae
