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Melanie Sarkissian Phillip Zeller Austeja Vidugiryte Micah Maland Alex Pickett Presenters:

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Presentation on theme: "Melanie Sarkissian Phillip Zeller Austeja Vidugiryte Micah Maland Alex Pickett Presenters:"— Presentation transcript:

1 Melanie Sarkissian Phillip Zeller Austeja Vidugiryte Micah Maland Alex Pickett Presenters:

2  General background of border towns in Mexico  Economic impact of maquiladoras  Social impact of maquiladoras and drug trafficking  Economic impact of drug trafficking  Impact of maquiladoras and drug trafficking on the Mexican economy as a whole

3  Population ~ 111,211,789  GDP is $1,473 billion (2009)  GDP by sector (2007 est.)  agriculture: 4%  industry: 26.6%  services: 69.5%  Export-oriented economy  More than 90% of Mexican trade is under free trade agreements with more than 40 countries

4 Chihuahua State

5  Largest state in Mexico  Population ~ 3.2 million  Represents 4.5% of Mexico's total GDP (29,826 million USD)  Strong focus on export oriented manufacturing (maquiladoras)  329,939 people are employed in the manufacturing sector (2005)

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7  The 1848 Treaty of Guadalupe Hidalgo established the Rio Grande as the border between Mexico and the US  Located in the Chihuahuan desert  Population ~ 1.5 million  Average annual growth rate from of 5.3%  15 of Mexico's largest banks

8  Over 135,000 workers working at more than 320 maquila-related plants  Exports: electronic circuits, leather goods, textiles, printing machinery, medical supplies, automobile engines, etc.  Overall, represents one third of Mexico's exports to the U.S.

9  Juárez­El Paso population ~ 2 million  Largest border community  Expanding population of more than 5% a year  4 international ports of entry connecting Juarez to El Paso, Texas  Major point of entry and transportation for Mexico

10  The PRI (Institutional Revolutionary Party) held power in Mexico since 1929  electoral reforms  Vicente Fox (PAN) elected Felipe Calderon (PAN) Calderon made abating drug- trafficking one of the top priorities of his administration

11  Current governor is Jose Reyes Baeza  9 federal deputies  3 federal senators  Hard for the Juarez government to keep up with required services, leading to more crime

12  Juarez is one of the fastest growing in Mexico  Immigration  Investments in maquiladoras  From 1980 to 2000, Ciudad Juarez's population grew by almost 1,000,000  People in search of better employment opportunities and higher standards of living  Large areas of slum housing

13  1960s---the Border Industrialization Program started promoting maquiladoras  North American Free Trade Agreement (NAFTA) Favorable conditions for foreign capital Factories now use more sophisticated production techniques and require more skilled labor

14  Before maquiladoras, border towns had highest unemployment rates in the country  Maquiladoras have become the leading industry in Ciudad Juárez  60% of all jobs in 2000  87% of the city's manufacturing jobs  Majority of those employed are single young women migrating from others states  Many men in border states resent the increasing presence of working females in public areas

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16  Factories on U.S. – Mexico Border  U.S. Inputs  Cheap Mexican Labor  Shipped back to West (i.e. USA)

17  NAFTA signed 1994  Opened trade barriers  Maquiladora growth attributed to NAFTA  Agreement led to easier trade

18  Maquiladoras be mutually benefit border  Increase in exports  Decrease in labor cost for importer  Capitalizing upon competitive advantages => efficiency

19  Sharp growth in maquiladoras during the 1990s proved unsustainable  After October 2002, there was a 21% unemployment increase in the maquiladora industry.  Sluggish growth wreaked havoc on border-town economies, as their success was often tied to exports of maquiladora created goods.

20  The program was meant to establish and foster trade and investment in cities along the border.  Maquiladoras viewed as de facto subordinates of the U.S. economy  Most goods are intended to be sold to the U.S. and other developed Western economies

21  Industrialized nations should experience an increase in income inequality through trade liberalization  This is purely a function of trade liberalization increasing returns to capital and decreasing returns to labor  This is experienced because industrialized nations are generally capital abundant as compared to labor

22  On the flipside, in less industrialized countries, where there is labor abundance and relatively low levels of capital we see a different story  Increasing returns to labor due to liberalization  Decreasing returns to capital experienced by liberalization decreases income inequality

23  Multinational corporations that participate in foreign direct investment typically pay higher wages than local companies  Foreign direct investment by multinationals often leads to an increase in wages for skilled workers versus unskilled workers, leading to income inequality

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26  Over 400 killed since 1993  Mainly in the city of Juarez but has spread to around the state  Most women are Maquiladora workers  Women activist movements have deemed it “femicide:” the mass murder of women simply because they are women

27  It is not just about these women being killed  It is an economic, social and cultural problem  “The men who are doing this have political and economic power and know that nothing will happen to them for doing these things.” Alma Gomez - lawyer representing victims’ families co-founder Justicia Para Nuestras Hijas  “From corruption and drug trafficking to the foreign owned companies, these menhave no regards for these women’s lives.” Lucha Castro – lawyer representing victims’ families co-founder Justicia Para Nuestras Hijas

28  Most women have been found with similar murder descriptions: - Raped (sometimes by numerous men) - Tortured in various ways - Strangled or stabbed - Bodies discarded in the desert

29  Until 2005 there was a 72 hour mandatory waiting period after the report was filed until the start of the investigation  Most victims’ families are poor with little influence over authorities to investigate the crimes  Many have started grouping together and creating marches, singing songs and painting pink crosses around the community as the official symbol  Many family members who cause too much of a stir have been found killed themselves

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31  70 percent of maquiladora workers are women  Majority of women are abducted on their way home for maquiladoras  Some companies provide busses home but only at certain hours and drop off points are far from homes

32  Very poor working conditions:  No protective devices  No unions  Psychological abuse from line manger  Inhalation of fumes – no ventilation  16 hour days  High injury rate without medical attention

33  Investigators believe many of the killings are done by men associated with drug cartels  Some are done to “celebrate” a successful run  "Sometimes, when you cross a shipment of drugs to the United States, adrenaline is so high that you want to celebrate by killing women.” Former drug cartel member

34  Some believe it is a combination of people who just have no regard for women’s lives: - Drug cartel members - Police Officers - Serial Killers - Copy-cats

35  The size of the Mexican drug trade is estimated to be at least $30 billion US a year  Juarez has become a potent symbol for Mexico’s escalating drug wars  The ongoing drug gang warfare in Juarez leads to more than 500 killings a year

36  Estimates say 90 percent of drugs that pass through Mexico go to the US  Approximately 65% of all cocaine smuggled in the US enters via Mexico

37  Officials believe at least 20 officers in Chihuahua state and Juarez police departments double as enforcers and traffickers for the Juarez drug cartel  2005 reports released by a Federal Prosecutor appointed by the Mexico’s President confirms police involvement  Some police officers are bribed by drug traffickers  Drug cartels spend about 10% of their gross yearly income (over US $3 billion) on bribes

38  Although Mexico has signed international anti- torture laws they do not follow them  Police try to find men, arrest them and torture them until they confess to the crimes  Once they find someone to blame, even if unjust, they consider the case closed and the investigation finished

39 “Whether justice can be found in Ciudad Juarez has become an important test of Mexico's efforts to establish a rule of law, human rights and law enforcement.” Mexican authorities

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41  US Prohibition  Columbia’s Diminished Role in Drug Smuggling  Demise of Columbian Cartels, Medellin and Cali  1989: Closing Trafficking Route in Florida

42  7 Cartels: 3 Major  Gulf Cartel (21 States)  Eastern US-Mexico Border, down the gulf coast  Simaloa (17 States)  Juarez (13 States)  Smuggle cocaine down Western part of border

43  Tiajuana and Gulf  “Federation”  Simaloa  Juarez  Valencia

44  Mexican Cartels - wholesale distribution  Street Gangs - retailing  Utilize approximately 200, ,000 employees  Some involved in transportation, security, banking, and communications industries

45  70% of cocaine, 30% of heroin, 80% of marijuana enter the US through Mexico (US State Department)  Earn $27-$30 billion in revenue, $7 billion in profits  Wholesale estimates are $13.6-$48.4 billion  Smuggle $8.3-$24.9 billion into Mexico for laundering.

46  24,000 soldiers and police to 9 states  Increase salaries of troops in anti-cartel 50%  “Platform Mexico” initiative to improve exchange of information

47  “Interdiction and eradication”  International Narcotics Control and Law Enforcement (INCLE)  $27.8 million to Mexico  35% of budget to border security

48  Benefits  Employment  Cash flows  Investment  Negative Externalities  Corruption  Violence  Productivity losses  Increased demand

49 Impact of Maquiladoras on Mexico’s GDP Correspondence with NAFTA Exports grew 16% annually thanks to VAT of Maquiladora’s (‘95- ’96)

50  Helped in offsetting weak national job creation  70% of Maquiladora production; 62% of employment  Unemployed Mexicans are provided employment

51 Employment within Mexico—Highlighting Drug Industry Just under 90% of illegal drug trade operates within border towns => 421,200 employed in drug trade along border towns

52 Drastic impact on tourism economics Decreasing profit gap within the industry Extortion of local businesses $200 million loss over past year in tourism industry alone; 5% decrease annually over past 3 years Cartels profit; nation suffers

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54  Various organizations throughout America have taken action to education people about the murders  Various celebrities have gone to the Mexican president to urge him to do more to stop the killings  Numerous human rights organizations have done protests and forced pressure on authorities to do more to solve the problem

55 “The US cannot just sit and enjoy the drugs, they are causing the misery of thousands of people.” Charles Bowden – Author, “Juarez: the Laboratory of Our Future”

56       /Fall2006/student_papers/final_papers/ABSTRACT3x.pdf /Fall2006/student_papers/final_papers/ABSTRACT3x.pdf   between-NAFTA-and-the-murders-of-maquila-women between-NAFTA-and-the-murders-of-maquila-women  Foreign Direct Investment and Income Inequality in Mexico,  Nathan M. Jensen and Guillermo Rosas  International Organization, Vol. 61, No. 3 (Summer, 2007), pp International Organization  Published by: Cambridge University Press on behalf of the International Organization FoundationCambridge University PressInternational Organization Foundation  On The Edge: The Femicide in Ciudad Juarez. Prod. Steev Hise. Illegal Art, Women Make Films,  No Angel Came. 15 Apr  Corchado, Alfredo. “Suspicion of Police Ties in Juarez Killings Mount.” The Dallas Morning News. March Apr. 2010

57  Andreas, Peter. "The Political Economy of Narco-Corruption in Mexico." Current History (1998):   Chabat, Jorge. "Mexico's War on Drugs: No Margin for Maneuver." Annals of the American Academy of Political and Social Science 582 (2002):  Paternostro, Silvana. "Mexico as a Narco-Democracy." World Policy Journal 12.1 (1995):   Recio, Gabriela. "Drugs and Alcohol: US Prohibition and the Origins of the Drug Trade in Mexico, " Journal of Latin American Studies 34.1 (2002):   Resa Nestares, Carlos “La organización de la producción de drogas en Mexico” uam.es 27 Feb Resa Nestares   Resa Nestares, Carlos. “El valor de las exportaciones mexicanas de drogas ilegales,  ” Colección de Documentos. Universidad Autónoma de Madrid. Madrid:   United States. Congressional Research Service. Foreign Affairs, Defense, and Trade  Division. Mexico's Drug Cartels. By Colleen W. Cook  From the Economic Policy Institute; A journal examining the impact of corporate globalization on communities:  Mexico's National Institute of Statistics and Geography; 2007 Economic census:   Journal: "Evaluating the economic impact of drug traffic in Mexico"; Harvard University's Department of Government; Viridiana Rios; www- old.gov.harvard.edu/student/rios/MexicanDrugMarket_Riosv2.doc+Evaluating+the+economic+impact+of+drug+traffi c+in+Mexico&cd=1&hl=en&ct=clnk&gl=us&client=safariwww- old.gov.harvard.edu/student/rios/MexicanDrugMarket_Riosv2.doc+Evaluating+the+economic+impact+of+drug+traffi c+in+Mexico&cd=1&hl=en&ct=clnk&gl=us&client=safari


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