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Mexico addressing corruption is positive sign for U.S. interests

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Commentary
“Abrazos, no balazos” (hugs, not bullets) was a catchphrase that Mexican President Andres Manuel Lopez Obrador (AMLO) used during his presidential election campaign in 2018. He explained it was his administration’s strategy not to attack or confront drug cartels, but rather to enact social and educational programs that would steer the country’s youth from the illegal drug trade. This strategy was controversial during his campaign, and it remains so today.

On June 29, reporter Antonio de la Cruz was gunned down in Ciudad Victoria, the capital of the Mexican border state of Tamaulipas. This was the twelfth murder of a reporter in Mexico this year. Since Mexican President Andres Manuel Lopez Obrador took office in 2018, more than forty print and radio reporters have been murdered. Many of these were murdered by drug cartels, while others are suspected to have been murdered by government officials. Mexico continues to have one of the highest murder rates in the world for reporters. So far this year, twelve Mexican reporters have been murdered. Meanwhile, drug cartels continue to operate with impunity in strategic parts of Mexico shaking down business owners and politicians, and killing people who won’t cooperate. It is estimated that 98 percent of all violent crimes in Mexico go unsolved.

These crimes are the result of what AMLO called during his campaign one of the most serious issues facing Mexico – corruption at levels, from the federal government to the smallest villages. I had the opportunity to hear AMLO speak in El Paso, Texas on a campaign stop and was impressed how openly he spoke about corruption and the negative effects it has on the overall Mexican economy. I have heard other Mexican presidential candidates speak frankly about attacking corruption in their country, but AMLO seemed especially passionate that this would be a key objective of his administration. Sadly, this objective remains unachieved. People continue to disappear in Mexico – estimates are more than 100,000 in the past fifteen to twenty years. These disappearances are thought to be the work of drug cartels and/or government officials working with the cartels to silence people who are opposed to them. Other cases of corruption are beyond the pale. Such was the recent case of former Mexican federal official Roberto Cabrera who was recently convicted of sharing genetic information with the private biotech company ADN Mexico, which gets paid to use genetic testing by people searching for missing family members. In this case, having access to vast genetic material obtained illegally, provided by the very person who is supposed to be helping these people, allowed ADN to get paid by family members of victims. It is not known how much Cabrera was paid or how much ADN made off of this illicit arrangement, but it was unconscionable.

And why should the U.S. care about the corruption problem in Mexico, especially when we are fighting our own corruption scandals here at home? Mexico is our neighbor and partner in trade. It is in an excellent position to recruit businesses from Asia that are caught in the middle of the U.S.-China trade war, due to Chinese aggression against Taiwan and supply chain security issues. Keeping the Mexican economy healthy and Mexicans employed in good-paying jobs helps the U.S. in areas such illegal immigration and the ability of U.S. suppliers to ship products to Mexico-based manufacturers.

Indeed, industrialized cities such as Ciudad Juarez, Chihuahua are benefiting from foreign companies locating within their boundaries. However, I believe that there are many that would follow suit, but are scared away by violence and corruption. It is true that not an inordinate amount of crime is wrought onto foreign companies operating in Mexico. However, perception is a huge factor in making a site selection decision.

On July 7, the anti-money laundering agency of Mexico’s federal government accused Enrique Peña Nieto, AMLO’s predecessor, of corruption while in office, by having two family companies awarded approximately $500 million in government contracts. Peña Nieto was dogged by various corruption accusations while in office. Upon succeeding him, many Mexicans were hopeful that AMLO would act quickly and decisively to investigate these accusations, but were disappointed by his inaction. Many speculated that AMLO didn’t want to create more problems for his government by digging into the past, or he didn’t want his successor to do the same thing to him or members of his administration. The very fact that the federal government is going public with the Peña Nieto corruption accusations is a good sign, albeit better late than never.

There is corruption in both Mexico and the U.S. However, if we are going to be good neighbors and strong trading partners, we have to have governments, at all levels, that instill trust among its citizens and foreign investors who are searching for new places to invest their money. Rooting out corruption and prosecuting corruption is a move by the government to build this trust.

Jerry Pacheco is President of the Border Industrial Association and Executive Director of the International Business Accelerator.