| | |  News Around the Republic of Mexico | December 2008 
Juárez Violence is Boon to Non-Cartel Criminals
 Ramon Bracamontes - El Paso Times
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 |  | While it's difficult to separate out the specific effects of the increased violence and recent intensity of the drug war from that of the global financial crisis, it is not entirely implausible that the drug war may have contributed in small part to the peso depreciation.
- Dhaval Dave |  | | |
El Paso - An El Paso doctor who practiced for 33 years in Juárez abruptly closed his office last month after being threatened for a third time and told he must start paying 20,000 pesos a month in protection money.
What happened to him is happening to hundreds of other business owners, shop operators and professionals in Juárez, but those crimes go unreported because the victims do not want to become a part of the violence that has claimed 1,500 lives this year.
The extortions, such as the $1,428 monthly payments that were being asked of this doctor, are a result of the brutal year-old drug war, which has transformed Juárez into a lawless city, where opportunistic criminals steal ATM machines, rob banks and carjack luxury vehicles. These criminals are probably not affiliated with the cartels, but the damage they are doing to Juárez is costly and just as terrorizing as the drug war itself, U.S. law enforcement officials and experts said.
"The government isn't in control in Juárez," said University of Texas at El
Paso Professor Howard Campbell, who specializes in Latin America studies. "Lawlessness and other crimes are up."
The effects of the ongoing drug war are not limited to Juárez, where homicides have tripled since June, when it was reported that only 400 peopled had been killed. The violence is also increasing along the rest of U.S.-Mexico border.
In Mexican cities such as Tijuana, Nogales and Nuevo Laredo, kidnappings, extortions and brutal slayings are reported regularly.
Mexican officials estimate that more than 5,000 people have been killed in Mexico this year and that at least one drug-war murder has taken place in each Mexican state. Even the nation's capital, Mexico City has seen its share of cartel violence.
And though the violence has not crossed into the United States, aspects of the drug war spill daily into El Paso and elsewhere in the United States, costing taxpayers millions of dollars, local officials say.
Thomason Hospital has spent $1.4 million treating nearly 50 drug-war victims.
Congress is sending more than $400 million to Mexico to help the government battle the cartels.
Businesses in El Paso, especially those around the Downtown, are losing sales because Juárez residents, who account for 30 percent of the retail spending in El Paso, are not coming over to shop. The loss in sales means lower tax-rebate checks for the area's governments.
The city of El Paso is expecting to lose more than $1 million in revenue because toll collections at the ports of entry are down.
El Paso is affected
El Paso City Manager Joyce Wilson said that anyone who thinks the drug war isn't reaching El Paso needs to take a closer look.
"The violence is having an impact on city operations," Wilson said. "Border crossings are down 10 percent for the past three months, and I think that is a direct result of the violence. It is having an impact on our regional economy - retail sales are down; business at the malls and in Downtown El Paso are down. That is lost revenue for us."
"It's a two-way street. Not only are people from here not crossing to Juárez," she said, "but people from Juárez are not coming over here."
From the decline in bridge crossings alone, city officials have estimated a $1 million loss in city revenues. Every person who walks or drives to Juárez from El Paso pays a city toll at three of the four international bridges.
At the Paso del Norte Bridge in November, 298,065 people walked across, each paying 35 cents. That number was down from the 342,114 people who crossed in November 2007. The drop alone meant the city lost almost $15,000 from one bridge-toll site in one month.
In anticipation of a continued decline in 2009, Wilson said, city departments have already been told to start holding the line on expenses and to tighten all budgets.
The violence is also hurting El Paso's tourism. Sun Bowl officials have canceled all trips to Juárez related to this year's football game. The cancellations will probably dissuade thousands of out-of-town visitors from going to Juárez, too. The loss of that venue probably will mean those visitors will cut short their stays in El Paso.
"We have to respect the warnings by the State Department, and we have to respect the well-being of our tourists," said Bill Blaziek, general manager of the El Paso Convention and Visitors Bureau.
The State Department has issued a warning advising U.S. citizens to stay out of Mexico. Exactly how much the drop in tourism is affecting El Paso will not be known for several months, Blaziek said.
Effects on business
How the violence is affecting the twin plant, or maquiladora, industry in El Paso and other border cities will also be unknown for several months, said Richard Sinkin, a partner at InterAmerican Group, a San Diego company that helps U.S. companies set up factories in Mexico.
The El Paso-Juárez region has more than 100 twin plants, which employ more than 200,000 people.
"There is no question that Mexico's direct foreign investment, which historically has been substantially in manufacturing, is now in decline," Sinkin said from his office in California. "It is hard to separate the reasons for this, but clearly, the two principal causes are the global economic crisis and the shocking levels of violence in Mexico."
InterAmerican Group's consulting practice of helping companies structure and implement new investment projects in Mexico has come to an abrupt halt, he said.
"And in our ongoing projects where we are still actively involved, we have seen security costs escalate dramatically," he said. "Frankly, many executives (including Mexican) are very afraid. If this continues for much longer, Mexico could reach a tipping point in which the many advantages the country has for attracting large amounts of direct foreign investment will be overwhelmed by the fear factor."
Loss of foreign investment in twin plants could affect El Pasoans working in the industry. More than 25,000 people have dedicated commuter-lane permits, which allow them to cross into El Paso at the ports of entry without having to wait in line or be thoroughly inspected at the bridges. It is generally believed that this is the number of El Pasoans who work at the twin plants in Juárez.
Peso devaluation
The fear may also be one of the reasons the Mexican peso lost value two months ago. The peso is now trades at 14 pesos to the dollar, compared with 10 pesos to the dollar during the summer.
"While it's difficult to separate out the specific effects of the increased violence and recent intensity of the drug war from that of the global financial crisis, it is not entirely implausible that the drug war may have contributed in small part to the peso depreciation," said Dhaval Dave, who's an economics professor at Bentley University in Massachusetts and a member of the National Bureau of Economic Research.
Political instability in Mexico in 1994 contributed to the peso devaluation then, Dave said.
"Similarly, the increased violence and escalating drug-war-related conflict may, at least in the short term, raise instability and add to the risk premium, which may weaken the peso," he said.
The bottom line is that the drug war has led to several other problems in Mexico, and the Mexican government is to blame, University of Texas at El Paso Professor Tony Payan said.
"The state and local government are just waking up to what is happening. Their reaction is coming very late," he said. "And unfortunately, their reaction is coming way too late for some families and way too late for many businesses."
No documentation exists on the number of Juárez businesses that have closed since the drug war began, but stories of unplanned closures abound throughout the business communities in El Paso and Juárez. The closings are also visible to anyone who drives or walks along any Juárez thoroughfare, such as Avenida Juárez, 16 de Septiembre and Lopez Mateo.
Toll on business
Manuel Ochoa, the vice president of binational development for the El Paso Regional Economic Development Corp., said he has not seen any statistics on business closings or openings in Juárez.
But he said that when he meets with Juárez chamber officials, they sometimes talk about what is happening to businesses there.
"People in the restaurant business say that at least 20 restaurants have closed," Ochoa said. "The other businesses also say some are closing, but they don't say how many. But each industry has been affected, not really by the cartels, but by the other criminal acts."
It was these other criminal acts that forced the El Paso doctor to close his Juárez office, to which he probably will never return. While he did not want to give his name, he did give a detailed account of what happened to him.
"The first time I was asked to pay a fine, I was examining a patient," he said. "Once I finished, he pulled a gun out and said I needed to start paying. Immediately after that I started getting phone calls from somewhere in Mexico saying I needed to pay."
"I ignored them. Then one day a young woman came in for a checkup and we let her in the office. Once she was inside, a man came to the door, and she told us it was her cousin - to please let him in. We did and they threatened me, said I needed to pay or suffer the consequences.
"I tried to play it cool and reason with them," he said. "As soon as they left, I closed and left."
The doctor did not report the extortion or the threats to the police out of fear.
Juárez police officials said that while extortion attempts such as this may be happening, the criminal acts are not being reported by regular Juárez residents, and therefore, they can do nothing about it.
Ramon Bracamontes may be reached at rbracamontes(at)elpasotimes.com |
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