Doing Business in Mexico: Security Update

Retailers are trying to figure out what to do about Mexico.  On the one hand, retailers who are there are doing great business year over year and it appears the retail market is going to continue to grow over the next several years.  On the other hand, daily headlines about shootings, decapitations, and running gun fights in the streets would make any reasonable person cautious.

A few months ago, I had the opportunity to attend a CSO Roundtable meeting in Mexico City to get an update on the security situation in Mexico from experts from both the private sector and government.  I will leave the detailed “on the ground” intelligence to the experts who deal with it everyday, but I did come away from the meeting with some key takeaways.

The bad news is that any improvements in the levels of violence being generated by the cartel battles is going to be slow and we will not likely see a major improvement in the next several years.  There was a general consensus that until corruption issues in the law enforcement and judicial branches could be rooted out, there will be on-going problems.  There is a presidential election coming up and a change in administration has some potential to alter the government’s approach but it is unlikely to significantly alter the current issues.

The good news is that the vast majority of violence and murder is cartel on cartel or cartel on government.  There does not appear to be a targeting of innocent civilians or businesses other than for monetary gain through express kidnappings and extortion.  As a result, most companies are finding they can continue to operate successfully in Mexico albeit with certain areas providing challenges.

One of the other significant issues is the shifting of violence geographically.  The towns on the U.S. border have some of the most significant problems but new areas of concern are rising around the country.  Monterrey, a major center for international businesses, has become a battleground for the cartels.  Guadalajara was considered to be relatively safe a year ago, but is now experiencing some escalating violence.  It will obviously be imperative to continue to monitor these shifts and take appropriate actions.

Finally, I thought the other lesson learned was the importance of networking with other businesses who have either faced these challenges or who are in the process of trying to figure out how to be successful in this significant market.

Sorry, comments are closed for this post.