Mexico: Opportunities and Challenges July 12, 2011

1. Mexico: Opportunities and ChallengesJuly 12, 2011 • OSAC Program • Mexico • Trends in Mexico • Area Overviews • Areas of Concern • Implications • Best Practices • Outlook

2. OSAC Overview • Formed in 1985 to Promote Security Cooperation Between U.S. Government and Private Sector • Over 7,000 registered users, 17+ analysts and coordinators • Email and telephonic consultations, detailed written analysis, events, and conferences • Country Council Program Promotes Information Sharing at the Local Level • Seven active country councils throughout Mexico • Opportunity to network and share best practices with Regional Security Officers (RSOs) and private sector participants For Further Information https://www.osac.gov/Pages/AboutUs.aspx

4. Trends • Mexico is Averaging 253 Cartel-related Homicides Per Week • Homicides in 2011 could reach or exceed the record set in 2010 • Cartels are Less Organized and Disciplined • Takedowns of leadership; fracturing and infighting • Collateral damage increasing • Escalation in Tactics • VBIEDs, large-scale shootouts, narco-roadblocks • Violence Continues to Intensify and Spread • Decapitations, mutilations, daytime shootouts • Guadalajara, Central Mexico • Corruption and Involvement of Authorities in Criminal Activity • Diversification into Traditional Criminal Activities

5. 2008 Source: University of San Diego’s Trans-border Institute

6. 2010 Source: University of San Diego’s Trans-border Institute

8. Monterrey • Epicenter of Gulf-Zetas Conflict • Over 4,000 cartel members • 663 Cartel-related Homicides in Nuevo Leon as of May • Exceeds all of 2010 • Unprecedented Levels of Corruption • Ineffectiveness of local authorities • Kidnapping and Carjacking • 56 percent increase in stolen vehicle reports • U.S. Government Response • Partially unaccompanied status, curfew, armored vehicles

9. Mexico City • Relatively Immune from Cartel-related Violence • Isolated incidents of violence in lower income suburbs; associated with small-scale narcotics sales • Crime Rates in Mexico City Remain Critical • Armed robbery, kidnapping, carjacking • Criminals Typically Select Victims Opportunistically Based on Perceived Wealth • Expensive watches, jewelry, electronics

10. Guadalajara • Significant Increase in Cartel-related Violence • Nacho Coronel’s death in July 2010 • Conflict Between La Resistencia and CJNG • Possible Zetas incursions • High-profile Incidents in January and February • Narco-roadblocks • February 12 Butter Club attack • Increased Security Presence for Pan-American Games February 2 Narco-roadblock in Guadalajara February 12 Butter Club Attack

11. Areas of Concern • Tamaulipas and Michoacán • Travel warning advises U.S. citizens to defer non-essential travel • Monterrey • Significant security concerns in the city • U.S. Consulate is a partially unaccompanied post • Chihuahua and Sinaloa • Statistically the two most violent states in Mexico • Travel warning advises U.S. Citizens to defer non-essential travel to Ciudad Juarez and Culiacan; visit Mazatlan only during daylight hours • Durango, Coahuila, and Zacatecas • Travel warning advises U.S. citizens to defer travel to Durango, Gomez Palacio, Torreon, Saltillo, Piedras Negras, Ciudad Acuña, Fresnillo and surrounding areas

12. Areas of Concern • San Luis Potosi • Travel warning advises U.S. citizens to defer non-essential travel on highway 57D • Nayarit and Jalisco • Travel warning advises to defer non-essential travel to Colotlan and Yahualica near the Zacatecas border; exercise extreme caution near borders with Michoacán and Zacatecas as well as in or near the cities of Tepic and Xalisco, Nayarit • Nogales and Surrounding Areas • Guerrero and Morelos • Travel warning advises to exercise extreme caution in northwestern Guerrero; do not take road through Ciudad Altamirano to Ixtapa and Zihuatanejo • Acapulco has experienced a significant increase in violence

14. Implications • Direct Impact of Violence Still Heavily Concentrated Among Cartel-affiliated Individuals • Indiscriminate tactics, such as large-scale shootouts, are leading to increased collateral damage • Restricted Travel in Some Areas Limits Ability to Operate • Rising Security Costs and Insurance Premiums • Reduced Expatriate Willingness to take Assignments in Mexico • Psychological Impact on Employees

15. Best Practices • Restricted Travel to High Risk Areas • Spending the night on U.S. side in border areas • Travel During Daylight Hours • Scheduling flights and overland trips • Maintain a Low Profile • Most criminals select victims opportunistically based on perceived wealth • Avoid High-risk, Compromising Situations • Excessive alcohol consumption and staying out late at bars • Minimize Overland Transportation • Travel on Toll Roads and Only Use Radio Dispatched Taxis

16. Mexico in Perspective

17. Homicide Rates

18. Outlook • Violence will Continue and Likely Rise in the Near-term • Violence will Continue to Spread • Guadalajara, Central Mexico • Continued Cartel Expansion into Traditional Criminal Activities • Rising crime in many areas • Any Improvement will Likely be a Long-term, Gradual Process • Institutional reform • Availability of legitimate opportunities • Despite Violence, Mexico Remains an Attractive Location for U.S. Investment and Expansion

19. Questions? Justin Lamb Regional Coordinator for Western Hemisphere LambJM@state.gov +1 571 345 2221 • Shari Peart • Country Council and Outreach Coordinator for WHA • PeartSJ@state.gov • +1 571 345 7747