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The Impact of the Drug Trade to Mexico’s Economy NS4540 Winter Term 2018 by LT Michael A. Tomsic

The Impact of the Drug Trade to Mexico’s Economy NS4540 Winter Term 2018 by LT Michael A. Tomsic. Outline. Background Drug Economics How is Economy affected? Conclusion. Overview: Mexico. Background : Gained Independence in 1824 Size: 1.964 km 2 Population: 123.5M (2017)

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The Impact of the Drug Trade to Mexico’s Economy NS4540 Winter Term 2018 by LT Michael A. Tomsic

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  1. The Impact of the Drug Trade to Mexico’s EconomyNS4540 Winter Term 2018 by LT Michael A. Tomsic

  2. Outline • Background • Drug Economics • How is Economy affected? • Conclusion

  3. Overview: Mexico Background: • Gained Independence in 1824 • Size: 1.964 km2 • Population: 123.5M (2017) Economy: (2017) • GDP (US$): 1,124.3B • Exports (359.3B) • Main Partners: USA, Canada, China, Spain, Brazil • Automobiles, electronics, televisions, computers, mobile phones, oil and oil products • Imports (372.8B) • Main Partners: USA, China, Japan, Germany, South Korea • Metalworking machines, steel mill products, agricultural machinery and metals

  4. Comparison Alex Bihar

  5. Mexico - 2017 • 65/100 Freedom of the World • 65/179 Economic Freedom Index • 20/180 Corruption Perception Index Alex Bihar

  6. What drugs are being trafficked • Mexican Drug Trafficking Organizations (DTO’s) are the largest foreign suppliers of: • Marijuana, heroin, methamphetamines and cocaine (to the US) • Legalization of marijuana? • Cartels have begun to abandon the transferring of marijuana across US because of 28 states legalizing it • Mexico has considered legalizing marijuana for medical use • Overall net? • Estimated tens of billions of dollars are made every year from drug sales

  7. Largest Operating Cartels • Sinaloa • Formerly lead by El Chapo, largest international footprint • Jalisco New Generation • Splintered from Sinaloa in 2010, more violent than the rest, has no problem openly engaging with authorities or other cartels • Juarez • Largest rival to Sinaloa • Gulf • One of the smallest due to recent arrests of high profile leaders • Los Zetas • Splintered from Gulf in 2007, originally a paramilitary group, the most technologically, advanced, sophisticated cartel • Beltran-Leyva Organization • Created by four brothers who broke off from Sinaloa in 2008, loyalists still operate in Mexico since brothers have either been killed or arrested

  8. Cartels – Gaining influence • Domestic • Neutralizing government opposition • Institutional Revolutionary Party (PRI) – in power for 70 years • Were exploited by DTOs to create a network of corruption for lucrative bribes • National Action Party (PAN) – Vicente Fox • His election in 2000 upended the 70 year equilibrium between the state actors and the cartels • 2017 violence can be associated with attempting to reestablish impunity in the government • International • After US stepped into the Caribbean ring in the 1980s, Mexican DTO’s became wholesalers instead of Colombian couriers

  9. President Felipe Calderon • Declared war on cartels in 2006 after he took office • Deployed military forces and assistance to replace local police • Killed 25 of the top 37 most wanted drug kingpins in Mexico • His more direct approach had drawbacks • Splintered bigger cartels into 60-80 smaller ones • Territorial rivalries intensified and violence spread • Cartels/gangs turned to kidnapping and extortion • Mayors and former mayors were killed, with the hopes of vying for local political power • 120,000 registered homicides during his reign

  10. How did drugs flourish in Mexico? • U.S. entrance in 1984, announcing “War on Drugs” • Kingpin Strategy

  11. Economic Implications How much does it actually cost?

  12. Questions?

  13. Bibliography • https://mwi.usma.edu/balancing-mexicos-economy-drug-war/ • http://www.huffingtonpost.ca/2016/05/03/mexico-drug-war-economic-costs_n_9825538.html • https://www.pbs.org/wgbh/frontline/article/the-staggering-death-toll-of-mexicos-drug-war/ • https://www.weforum.org/agenda/2016/05/this-is-how-much-violence-costs-mexicos-economy/ • https://www.pbs.org/wgbh/frontline/article/the-staggering-death-toll-of-mexicos-drug-war/ • http://www.businessinsider.com/drug-violence-and-economic-complexity-in-mexico-2016-3 • https://scholar.harvard.edu/files/vrios/files/rios2008_mexicandrugmarket.pdf • https://isreview.org/issue/90/political-economy-mexicos-drug-war • http://knowledge.wharton.upenn.edu/article/drug-trafficking-violence-and-mexicos-economic-future/ • https://www.degruyter.com/view/j/peps.2016.22.issue-3/peps-2016-0014/peps-2016-0014.xml • https://www.cfr.org/backgrounder/mexicos-drug-war • https://cddrl.fsi.stanford.edu/sites/default/files/128.theeconomic.pdf • https://www.statista.com/statistics/263597/gross-domestic-product-gdp-per-capita-in-mexico/ • https://www.focus-economics.com/country-indicator/mexico/gdp-per-capita-USD • https://data.oecd.org/mexico.htm

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