September 26 2014 image description
by: jmhumire 0 Comments

Obama’s global retreat leads to Gangsta’s Paradise in Latin America

With world leaders back in New York this week for the UN General Assembly, most of the attention was focused on Russia’s power grab in Ukraine and the so-called Islamic State’s march through Syria and Iraq. Yet as nearly three dozen heads of state in Latin America and the Caribbean know all too well, the power vacuum left by Team Obama’s withdrawal of U.S. leadership has sprouted chaos in their region too.

After spending much of August in Mexico, I was saddened to see the damage wrought by the drug wars. Once a relatively safe country, Mexico has been overrun by half-a-dozen powerful cartels which have battled each other and government forces leading to over 100,000 deaths within the past decade.

While the body count continues to climb there and in Central America, fueling the ever-worsening immigration crisis, it’s natural to look to Washington for answers. Though the 2008 Merida Initiative authorized over $2 billion on training and equipping Mexican forces while reforming their judicial system, it isn’t close to turning the tide…. (more…)

June 16 2014 image description
by: jmhumire 0 Comments

The Hidden Costs of Doing Business in Mexico

China’s low-cost production of manufactured goods led to a sharp drop in global prices mainly benefiting developed countries and its demand for commodities benefited primary producers in the developing world.  Some developing countries like Mexico, with similar labor-intensive production, found themselves in direct competition with China, while also losing out on foreign direct investment.

As China’s manufacturing costs rise some companies are now giving Mexico a second look.  This month The New York Times ran a story raising the prospect of a rush to locate U.S. investments south of the border.  The rush may be premature given Mexico’s underperforming economy and the deeper structural challenges to further progress.

Statistically, Mexico’s primary attraction rests on a trend seemingly gaining momentum as U.S.–Mexico trade has grown by 30 percent, or $507 billion annually, and U.S. foreign direct investment rising to $35 billion.  For many, Mexico is seen as a major link in a new global supply chain.