MEXICO'S INVESTORS DISCUSS EFFECTS OF NARCO CRIME

UNCLAS SECTION 01 OF 02 MEXICO 003511

SIPDIS

SIPDIS

STATE FOR WHA/MEX
EB/IFD/OIA FOR JOHN FINN

E.O. 12958: N/A
TAGS: ECON EINV ECIN ELAB PGOV MX
SUBJECT: MEXICO'S INVESTORS DISCUSS EFFECTS OF NARCO CRIME

REF: A. MEXICO 2852


B. MEXICO 3246


1. (U) Summary: Narcotics-related violence in parts of
Mexico continues to raise concerns about its potential effect
on Mexico's investment climate. On June 28, the American
Chamber of Commerce (AmCham) addressed this issue, by holding
the International Forum on Investment and Security, where
business and government leaders met to discuss the threat of
narcotrafficking to the investment climate in Mexico. The
general consensus was that, through cooperation between all
its branches, the government is doing a good job and needs to
continue the fight against organized crime. Colombia's
successes in Cali and Medellin were cited as examples for
Mexico in their fight. However, it was noted that security
is not the only problem facing investors in Mexico. A lack
of infrastructure, economic reform and protection of
intellectual property were cited as equally severe threats to
Mexico's investment climate. End Summary


2. (U) The AmCham sponsored "International Forum on
Investment and Security: Proposals and Prospects" on June 28
in Mexico City. The conference was well attended by both
public and private sector members. Presenters included
Secretary of Interior Francisco Ramirez Acuna, Attorney

SIPDIS
General Eduardo Medina Mora, and Secretary of Public Security
Genaro Garcia Luna.


3. (U) A main theme among the government presenters was that
the fight against crime was a joint effort between all
branches of government. Ramirez Acuna noted that both the
executive and legislative branches were working together to
improve the economy and that includes tackling the security
issues. Medina Mora spoke of the move towards changing
Mexico's justice system to an accusatory system, to better
combat crime. A panel by PAN Senators Ulises Ramirez Nunez
and Alejandro Gonzalez Alcocer and PRI Deputy Patricia
Villanueva Abrajan, all members of the Mexican Congress's
Commission of Justice and Public Security, also touched on
the need for joint cooperation between all three branches of
government. In addition to the actions by the Calderon
government to fight organized crime directly, the legislators
said Congress was also taking steps to combat
narcotrafficking by combating the underlying causes of
organized crime, such as supporting reforms and encouraging
improvements in poverty levels, education and health.


4. (U) Another frequently mentioned point was that, despite
the media focus on security, there are other problems that
need to be rectified before investment in Mexico can reach
its full potential. To emphasize the point, Garcia Luna
commented on the fact that the homicide rate has fallen 39
percent in the past 10 years. He also noted that robberies,
not capital crimes comprise the majority of crimes in Mexico.
Among the improvements cited as needed to attract investment
are infrastructure development, particularly in the inner
regions on the country; increased intellectual property right
(IPR) protections combined with an attack on the major
sources of IPR violations not just the obvious activities;
fiscal and labor reforms; and increased competitiveness in
certain key sectors. Medina Mora noted that the National
Development Plan (ref A) and the recent fiscal reform package
(ref B) are both aimed at improving Mexico's competitiveness
overall. He said that the fight against organized crime is
just one piece of the competitiveness puzzle.


5. (U) Colombia's Ambassador to Mexico, Luis Camilo Osorio,
who is also a former Colombia Attorney General spoke about
Colombia's experience combating organized crime and how it is
possible for Mexico to succeed. He spoke of how the cities
of Cali and Medellin have been able to improve their security
climate and by extension their investment climate
dramatically over the past decade. Former Mexican Attorney
General, Ignacion Morales Lechuga, spoke of the
"Colombialization" of Mexico, and how it will take unity as a
society to combat criminal elements. Both speakers said that
the steps being taken so far by the Calderon administration
are steps in the right direction that need to be continued if
there is any hope for success.


6. (U) Comment: Conference presenters agreed that the
Calderon Administration will not give up the fight against
criminality, and will push to reinstall the rule of law
throughout the country. At the same time, they recognize
that security is not the only problem facing the Mexican
business community. The question is how successful the push
against organized crime will be, and what will be done about
the myriad of other problems that threaten Mexico's

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competitiveness. End Comment.


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