Transcript Juarez - University of Minnesota

Presenters:
Melanie Sarkissian
Phillip Zeller
Austeja Vidugiryte
Micah Maland
Alex Pickett
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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
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Population ~ 111,211,789
GDP is $1,473 billion (2009)
GDP by sector (2007 est.)
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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
Chihuahua State
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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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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 1990-2000 of
5.3%
15 of Mexico's largest banks
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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.
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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
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The PRI (Institutional Revolutionary Party)
held power in Mexico since 1929
1977--- electoral reforms
2000 --- Vicente Fox (PAN) elected
• 2006 --- Felipe
Calderon (PAN)
• Calderon made
abating drugtrafficking one of the
top priorities of his
administration
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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
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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
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1960s---the Border Industrialization Program
started promoting maquiladoras
1994---North American Free Trade Agreement
(NAFTA)
• Favorable conditions
for foreign capital
• Factories now
use more sophisticated
production techniques
and require more
skilled labor
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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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Factories on U.S. –
Mexico Border
U.S. Inputs
Cheap Mexican Labor
Shipped back to West
(i.e. USA)
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NAFTA signed 1994
Opened trade barriers
Maquiladora growth
attributed to NAFTA
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Agreement led to
easier trade
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Maquiladoras be mutually benefit border
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Increase in exports
Decrease in labor cost for importer
Capitalizing upon competitive advantages =>
efficiency
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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.
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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
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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
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This is experienced because industrialized nations
are generally capital abundant as compared to labor
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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
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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
Year 2000
Year1999
3590
3270
1285
1122
54
Plants
Employment
(thousands)
43
Imported Raw
Materials
(Billions)
2
1
Domestic
Materials
(Billions)
55
44
Total Raw
Materials
(Billions)
18
12
Value added
(billions)
79
60
Exports
(billions)
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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
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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
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“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
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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
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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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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
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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
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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
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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
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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
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Estimates say 90 percent of drugs that pass
through Mexico go to the US
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Approximately 65% of all cocaine smuggled in the
US enters via Mexico
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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
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Drug cartels spend about 10% of their gross yearly
income (over US $3 billion) on bribes
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Although Mexico has signed international antitorture 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
“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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US Prohibition
Columbia’s Diminished Role in Drug
Smuggling
Demise of Columbian Cartels, Medellin and
Cali
1989: Closing Trafficking Route in Florida
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7 Cartels: 3 Major
Gulf Cartel (21 States)
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Eastern US-Mexico Border, down the gulf coast
Simaloa (17 States)
Juarez (13 States)
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Smuggle cocaine down Western part of border
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Tiajuana and Gulf
“Federation”
Simaloa
 Juarez
 Valencia
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Mexican Cartels - wholesale distribution
Street Gangs - retailing
Utilize approximately 200,000-300,000 employees
Some involved in transportation, security, banking, and
communications industries
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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.
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24,000 soldiers and police to 9 states
Increase salaries of troops in anti-cartel 50%
“Platform Mexico” initiative to improve
exchange of information
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“Interdiction and eradication”
International Narcotics Control and Law
Enforcement (INCLE)
$27.8 million to Mexico
 35% of budget to border security
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Benefits
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Employment
Cash flows
Investment
Negative Externalities
Corruption
 Violence
 Productivity losses
 Increased demand
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Impact of
Maquiladoras
on Mexico’s
GDP
•Correspondence
with NAFTA
• Exports grew 16%
annually thanks to
VAT of
Maquiladora’s (‘95’96)
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Helped in
offsetting weak
national job
creation
70% of
Maquiladora
production; 62%
of employment
Unemployed
Mexicans are
provided
employment
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
• 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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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
“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”
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