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Mexico’s Position on Dealing with Negative Publicity to Damage Tourism and Real Estate Investment
By Harriet Cochran Murrray • Cochran Real Estate - May 2010

Negative Publicity

Because Mexico is in a unique position to reap many of the benefits of the decline of the US economy, the US has reacted. In order to not violate NAFTA and other agreements, the U.S.A. cannot use direct protectionism, so it is content to allow the media to play this protectionist role.  The U.S. media – over the last year – has portrayed Mexico as being on the brink of economic collapse and civil war. The Mexican people are either beheaded, kidnapped, poor, corrupt, or narco-traffickers. The American news media was particularly aggressive in the weeks leading up to spring break. The main reason for this is money. During that two-week period, over 120,000 young American citizens poured into Mexico and left behind hundreds of millions of dollars.

It is critical to understand, however that the horrific violence in Mexico is over 95% confined to the three transshipping cities for these two businesses, Tijuana, Nogales, and Juarez. The Mexican government is so serious about fighting this, that they have committed over 30,000 soldiers to these borders towns.

Is there corruption in Mexico? YES. Is there an equal amount of corruption related to this business in the U.S.A.? YES. When you have a pair of illegal businesses that generate over $300,000,000,000 in sales you will find massive corruption. Make no mistake about the Mexican Drug Cartel; these “businessmen” are 100 times more sophisticated than the bumbling bootleggers during Prohibition. They form profitable alliances all over the U.S.A. They do cost benefit analysis of their business much better than the US automobile industry.

Drug Cartels have found over the years that the cost of bribing U.S. and Mexican Border Guards and the transportation costs of moving marijuana from Sinaloa to California have cut significantly into profits. That is why over the past 5-7 years they have been growing marijuana in State and Federal Parks and BLM land all across America. From a business standpoint, this is a tremendous cost savings on several levels.

Let’s look at California as an example as one of the largest consumers. When you have $14.2 billion of Marijuana grown and consumed in one state, there is savings on transportation, less loss of product due to confiscation and an overall reduction cost of bribery with law enforcement and parks service people. Another great savings is the benefit to their employees. The penalties in Mexico for growing range from 5-15 years. The penalties in California, on average are 18 months, and out in 8 months. The same economic principles are now being applied to the methamphetamine factories.

FOX News continues to scare people with its focus on kidnapping. There are kidnappings in Mexico. The concentration of kidnappings has been in Mexico City, among the very rich and the three aforementioned border Cities. 

With the exception of Mexico City, the number one city for kidnappings among NAFTA countries is Phoenix, Arizona with over 359 in 2008. The Phoenix Police estimate that twice that number of kidnappings goes unreported, because like Mexico 99% of these crimes were directly related to drug and human traffic. Phoenix, unfortunately, is a geographically profitable transshipping location.*

April 2, 2010 News Release

President Felipe Calderón urged Mexico to defend Mexico’s image, which is why he asked Congress, the states, municipalities and businessmen in the sector as well as workers to embark on a new stage for tourism in the country.

“Let us begin a new stage for tourism in Mexico. To achieve this, I confirm my commitment to turn tourism into a motor for economic growth and job creation for more Mexican families,” he said. During the inauguration of the working sessions on “Commitment to Mexican Tourism”, the President said that the goal is now to reinforce the sector, since the point is to boost it to create the jobs for Mexicans.

“We are going to consolidate Mexico as a world leader in tourism,” added the President. However, he said that despite the positive data in this field, we must not let our guard down but rather redouble our efforts to ensure that recovery is sustained.

Calderon stressed that this is not only a task for Federal Government, but also for the authorities, businessmen, legislators, media, analysts and all Mexicans who must serve as promoters and ambassadors for Mexico abroad.

“And we do in fact have problems of perception and image. We have real, undeniable problems, of course. And the point is not to hide the problems we have. On the contrary, we must say that we have problems and that we are dealing with them with strength and determination and that we are going to solve them. We have a problem of law and order. But we must put things in perspective, we must objectively describe what is happening in Mexico and the rest of the world and although there will probably someone who says this sounds inadequate, we must also speak well of Mexico,” he said.

Among the measures for promoting tourism, President Calderón announced that both the National Institute of Migration and the Secretary of Foreign Affairs are preparing a new regulation, whereby citizens from other countries that already hold a US visa will not be required to obtain a visa to enter Mexico. Email to a friend

Harriet C. Murray
E-mail: harriet@casasandvillas.com.

*Courtesy of Charles Simpson with “Invest in Mexico”
** “Mexico Premier”

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