Crime 'damages' Mexico economy

Other News Materials 4 September 2008 07:40 (UTC +04:00)

Mexico's finance minister has said that crime and violence have had a significant impact on the country's economy, cutting growth by 1%. ( BBC )

Agustin Carstens said the country's insecurity was stopping companies from investing and creating fewer jobs.

At least 2,700 people have been killed and 300 kidnapped in Mexico this year, mostly in drugs-related violence.

On Saturday, hundreds of thousands of people attended marches across Mexico to protest against rising crime rates.

The BBC's Warren Bull says that Mexicans are used to hearing about the impact of violent crime on their society, but now the government has said there is an economic consequence.

Mr Carstens told the Reforma newspaper that the need for extra security was increasing business costs by up to 10%, which was damaging job creation, sales and development.

"We estimate that this feeling of insecurity in the country takes away approximately one percentage point of growth," he said.

But he said that there were businesses which would be willing to invest in Mexico if the rule of law were stronger, and proposed a tougher regime against money laundering.

Last week, Mexico's political and security leaders drew up an emergency, 74-point plan to try to combat the wave of violence.

Measures include sacking corrupt police officers, equipping security forces with more powerful weapons, new prisons for kidnappers and strategies to combat money-laundering and drug-trafficking.

More than 30,000 troops have also been deployed in Mexico to tackle drug trafficking and related violence.

But our correspondent say those measures have not yet translated into safer streets, and there is mounting public pressure on President Felipe Calderon to get results.

On Saturday, rallies were held in all 32 of Mexico's states in protest at the continuing wave of kidnappings and murders in the country.

Correspondents say that despite public anger, the drug cartels and kidnappers are well organised and often have the acquiescence of corrupt police officers.