2 Dec, 2013
FREE Download: 30% drop in organized crime leads to 7.5% rise in Mexico Peace Index
28 Nov 2013 – Peace has improved by 7.5% over the last two years in Mexico as a result of a 30% decrease in organized crime, according to the 2013 Mexico Peace Index. The report analyses peace in Mexico over the last decade and identifies the key socio-economic factors associated with peace and violence. It says, “Mexico has the greatest potential of any country in the world to overcome its current levels of violence and build a more peaceful society.
The inaugural edition of the Mexico Peace Index produced by the Sydney-based Institute for Economics and Peace (IEP), provides a comprehensive measure of the levels of peacefulness within Mexico from 2003 to 2012. It includes an analysis of the measures that make up the Index, as well as other socio-economic factors that are normally associated with peaceful societies.
It also estimates the economic impact of violence and the economic benefits that would flow from increases in peace. The report does not make policy recommendations nor moral judgments on the appropriateness of government responses, rather it gathers and analyses data relevant to peace and violence in Mexico to better understand the drivers and economic value of peace.
Highlights of the report
- The most peaceful states have experienced an annual GDP growth of more than double the least peaceful states.
- The inefficiency of the justice system recorded a significant deterioration, in some states, as many as 95% of homicides go unpunished.
- One of the greatest challenges Mexico faces is corruption, with 9 out of 10 people perceiving the police and other government officials as corrupt.
- The top three most peaceful states are Campeche, Queretaro and Hidalgo. The most peaceful places tend to be located in the southeast, with the exception of Quintana Roo, while the least peaceful tend to be located in the northwestern states of Mexico, particularly along the US border. Morelos, Guerrero and Sinaloa are the three least peaceful states in Mexico.
TRENDS IN PEACE
The improvement in the levels of peace in Mexico over the last two years was largely driven by decreases in organized crime, violent crime, and weapons crime. However, over the past 10 years Mexico experienced a marked increase in direct violence as a result of the drug war, with peace declining by 27%.
A key factor was the 37% increase in the homicide rate since 2007. In addition, the number of firearms being smuggled into Mexico has tripled over the last decade. Consequently weapons crimes have increased by 117% per 100,000 people. Mexico has the institutional capacity to become more peaceful; the country has a strong business environment, performs well on measures of human development, and ranks better than world averages on education.
ECONOMIC IMPACT OF VIOLENCE
The study calculates that the direct cost of violence to the Mexican economy is 3.8% of GDP, while the indirect costs amount to 12% for a total of 2.49 trillion pesos (15.8% of GDP) in 2012. Under optimal conditions, if there was no violence in Mexico, the economy would have the potential to improve by up to 27%.
The report highlights that if all the states of Mexico were as peaceful as Campeche, the most peaceful state in the country, Mexico would reap an economic benefit of 2.26 trillion pesos. That’s equivalent to the amount required to pay each Mexican citizen living below the poverty line the minimum wage for two full years.
The most peaceful Mexican states in 2003 experienced the strongest economic performance in 2012. Over the past 10 years, these states’ GDP increased by 9% versus 4% in the least peaceful states.
Says the report, “The economic impact of violence to the Mexican economy is substantial, amounting to 4.392 trillion pesos (US$334 billion), equivalent to 27.7 percent of the Mexican economy. This is enough to either provide each Mexican citizen with 37,000 pesos (US$3,000), or to double the level of government funding provided to health and education.
These economic costs have been categorized in three ways. The first is the expenditure borne by governments to maintain law and order through the police, justice and the prison system, as well as dealing with the direct consequences of violence, such as asset destruction. Secondly, the lost productivity from crime that can consist of time-off work due to injuries or lost earning capacity from an early death. The third category is the job creation effects that come from the stimulus related to improving the first and second categories. Redirecting this expenditure away from containing violence could help support industry investment, improve schools, or build national infrastructure as these types of investments would improve the nation’s productivity and competitiveness.”
Loading ...
Liked this article? Share it!