Study finds drug war costs Mexico billions

World Today

New research by the Institute for Economics and Peace reports on how much that war has cost the country.

CCTV America’s Martin Markovits reports.Follow Martin Markovits on Twitter @MartinMarkovits

The Mexico Peace Index, an assessment of the cost of violence on the country’s economy, said the total economic impact of the violence in Mexico in 2015 was $134 billion, around 13 percent of the country’s GDP.

That comes to 7,525 pesos ($1,105) per Mexican citizen, which is the equivalent of about two months’ wages for an average Mexican worker, a high amount in a drug war that has killed nearly 160,000 people.

The study factors in not only extortion and kidnapping but also indirect costs like deferred investment and the potential flight of capital.

“The people don’t understand that the violence affects all of our productive sectors. It doesn’t matter what sector, tourism or industry. If you get on a bus and they rob you that means we are all affected,” Alexei Chevez, a security analyst said.

The study also points out improvements as economic costs have decreased by 38 percent since 2011 but progress has slowed down because of a rise in the homicide rate.

Despite the rise in murders, the statistics show that Mexico is slowly lowering the economic impact of violence.