Mexico's Foreign Investment: Business Unfazed by Bloodshed
 Ronald Buchanan - ft.com
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March 31, 2010
 |  | Violence has waxed and waned over recent years in Mexico’s northern states, and, while recently it’s got worse, it doesn’t ever seem to have had an effect on companies’ investment decisions, even in Ciudad Juárez.
- Luke Betts |  | | |
Newspaper front pages in Mexico these days are not for the faint-hearted. Mass murders and killings of innocent bystanders vie for space with ever-mounting death tolls in President Felipe Calderón’s war on drugs gangs. Beheadings have become almost routine.
It is not just in Mexico that the bloodshed is grabbing the headlines. The violence is regularly reported in the US press, since it largely occurs just across the long and often porous southern border, and also in Europe and elsewhere.
But Mr Calderón is keen to point out that – while Ciudad Juárez, across the border from Texas, may well be the world’s most violent city and a handful of others are almost equally dangerous – Mexico as a whole claims a much lower murder rate than its Latin American neighbours.
Mexico has a high murder rate: 12 for every 100,000 inhabitants, Mr Calderón said at a recent meeting with business leaders. But, he added: “In Brazil, the rate is 25 per 100,000, more than double Mexico’s.”
Mr Calderón might also have included a clutch of countries where the rate is even higher, with Venezuela, Colombia and most of central America among them.
Statistics aside, however, it is people’s perception that counts and that perception is keeping visitors away.
But foreign direct investment is another matter, says Luke Betts, publisher of BizNews North Mexico, a regional business journal and provider of outsourcing services to the leading Spanish-language newspaper group in the US.
“Violence has waxed and waned over recent years in Mexico’s northern states,” Mr Betts says. “And, while recently it’s got worse, it doesn’t ever seem to have had an effect on companies’ investment decisions, even in Ciudad Juárez. Through it all, plants have opened and business continues as usual.”
The reason, Mr Betts surmises, is that the advantages of investing in border cities, including low costs and the proximity of the US market, far outweigh the dangers, though these are undoubtedly taken into consideration.
State governments have done a good job overall, he says, in making clear to foreign investors that, while there is violence, it is unlikely to have any impact on them.
“If any plans have been cancelled or postponed recently, it’s much more likely to have been caused by the economic difficulties,” he says.
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