Mexico’s Security Issue: Not a Barrier for InvestmentMon, 10/21/2013 - 14:17
Perhaps the most evident shift of Mexico’s new political administration has been in its communication strategy. The drug-related violence and the fight against drug trafficking that defined Calderón’s sexenio are no longer the central theme - the economy is. President Enrique Peña Nieto has proposed several reforms that look set to make the country’s economy more competitive and places it as the main focus of the administration. The country’s image revamp has become evident as more main media outlets have begun to focus on publishing the business opportunities available in Mexico. Seemingly, gone are the days when the Pentagon could issue a warning that the country risked becoming a failed state. “Mexico faces certain challenges of course, with public security being the most important. The country is facing a security-related problem, and even though the reality is that international businesses are able to operate effectively without many concerns, negative perceptions of the country remain strong,” says Jonathan C. Clare, Regional Director of Genric, a leading private security company with global operations.
When Felipe Calderón came into office in 2006, it became very clear that the administration’s main focus would be the security issue. His strategy was based on engaging with the armed forces more closely than the previous administration, as well as the publication of a list of the 37 most wanted criminals that his administration identified. The administration was successful in bringing together the different security forces to tackle this particular issue for the first time. This strategic partnership delivered results; arms, weapons, and drugs were seized, criminal groups were detained, and around two thirds of the most wanted list was captured or killed. Clare explains that Mexico is currently facing similar challenges to those that Colombia faced in the 1980s and 1990s, when very large criminal groups were tackled by the local authorities and atomized into smaller groups as a result. In order to improve this situation, Mexico is seeking to strengthen its institutions and authorities at the municipal, state, and federal level, in order to be more effective in combating crime. “There are many examples of how several countries have done this successfully, both at a federal and municipal level, but in a country as complex as Mexico it has become a serious challenge,” Clare says. “When most people look at Brazil the first things that come into their mind are not the security issues, but the upcoming WorldCup and the Olympics Games, or the fact that the country is a leading emerging market. Often, the first thing that comes to mind for an international observer regarding Mexico is insecurity, and the fact that the country is a leading emerging market is not generally well known,” explains Clare. The fact that the media focused its attention on the security situation, created a state of alarm for many years, as Clare highlights. “Until very recently, there was no real focus on its economic development, stable market, the diversified economy with huge investments coming in, and so forth,” he adds. Figures show that Mexico’s security situation is not close to that of a failed state; nevertheless, the country still faces security challenges.
Strengthening law enforcement agencies is just one step towards achieving legal certainty in the country. “Some of the initiatives that have been implemented in recent years by the British Council, with the support of the British Embassy, have demonstrated how effectively different areas of the judicial system can be strengthened. The introduction of oral trials and greater transparency is just one example we have seen of how Mexico can strengthen its rule of law,” details Clare. There is a positive feeling that judicial reform will take effect not only at the federal but also at the state level, even if the two sometimes operate independently. “We will see more police forces receiving better training from the beginning of their careers. This is already happening in places such as Nuevo Leon, where a new Civilian Police Force has been created to improve the system from a ‘boots on the ground’ level, in partnership with the local community, the business sector, and through collaborative efforts with federal and local authorities. We are likely to see more of those types of initiatives in the coming years,” he adds. Clare also stresses the importance of pushing forward the judicial reform as a priority for transforming Mexico’s security issues, without neglecting the importance of institutional collaboration. Another essential priority is training. “The government could approach more international partners that have experience of tackling security or implementing reforms and would be willing to share examples of best practices,” he emphasizes.
Security can become a concern given that some of the areas that have the biggest mining potential are located in very isolated regions, with a limited institutional support network that leaves room for potential risk. Nevertheless, Clare highlights that this should not determine investment because these risks can be mitigated without making vast investments in security. “There are thousands of examples of foreign investors in Mexico, whether big mining companies or small, that have faced and overcome this challenge successfully,” he points out.