NUEVO LEON BUSINESS SURVEY SHOWS WORSENING SECURITY

UNCLAS MONTERREY 000034 SENSITIVE SIPDIS DEPARTMENT PLEASE PASS TO USTR E.O. 12958: N/A TAGS: KCRM EINV ECON ASEC SNAR CASC PGOV MX SUBJECT: NUEVO LEON BUSINESS SURVEY SHOWS WORSENING SECURITY SITUATION; INVESTMENTS GENERALLY UNAFFECTED ¶1. (U) On January 14 the Monterrey Chapter of the Overseas Security Advisory Council (OSAC) conducted a survey of 56 employees working in the security and human resources divisions of area companies. Survey participants represented 22 American companies, 24 Mexican firms and 8 other foreign companies. Although not a scientific sample, the findings track with comments we have heard from our business contacts. Post designed the questionnaire in conjunction with the local chapter of the American Chamber of Commerce. ¶2. (U) According to the results, 64% of the respondents said that the security situation in Nuevo Leon had worsened in the last year, 30% thought that it had stayed the same, and only 6% reported that it was better. Moreover, 70% of the companies surveyed have increased their spending on security issues, 30% have not changed their budget, and none have reduced their security expenses. In addition, the respondents stated that 68% of them or someone closely related to them had been kidnapped, had been the subject of an attempted kidnapping, or had been the subject of extortion to avoid being kidnapped. Only 32% did not know of any such cases. Finally, despite the increased security threat and additional costs, 66% of companies report that they have not changed their investment or business plans due to security concerns. ¶3. (SBU) Comment. Since the survey participants work in the security or human resources areas and are members of OSAC, they are far more likely to know about kidnapping or extortion cases than most employees. However, since Nuevo Leon authorities only received 26 official kidnapping complaints in 2008, the survey indicates that kidnappings are vastly underreported. One security expert estimated that there were 300 kidnappings for ransom in Nuevo Leon in 2008, not including the numerous `levantones' or kidnapping of people in the drug trade. End comment. WILLIAMSON