Corruption, violence and drug trafficking adversely affect the economy of a nation. Mexico has been grappling with high levels of these vices for several years. It makes the country unattractive to business investors as they lack confidence on getting a substantial return in the future. Furthermore there have been reports of businesses closing in the country due to threats from gangsters. These gangs demand certain fees per month from the businessmen for protections. Those that attempt not to comply are informed that their families will be killed.The drug related violence causes the country to have a tarnished image in the international scene. It affects the tourism sector affecting the business levels of hotels, restaurants and pub owners.
With decreased businesses in the country unemployment levels will continue decreasing. Mexico economy forecast predicts that the unemployment levels in the country will decrease from 3.6 to 4.2 in the four year period 2006 to 2009. These vices cripple the businesses and the industries causing the GDP growth to decrease over the years. Mexico’s GDP forecast growth analysis, 2006 to 2009, shows that the GDP growth may decrease from 4.8 to 1.6 over the four year period (Cadieux, 2011).
Political Strategy to deal with Drug Trafficking
The Mexican government should reduce on the military efforts that it uses to combat drug trafficking and instead empower the police to deal with the situation. The military have been accused of human rights abuses. The police are not allowed to receive crime information or reports from the public. Furthermore they lack knowledge to carry out crime investigations or preserve the crime evidences and the evidence (Cadieux 2011). They should be equipped with the necessary authority and skills. The police live on low income causing them to turn a blind eye to the traffickers. The government should improve the income, working conditions and the standard of living of the enforcement officers. Secondly, the government should deal with the corruption in the judicial and legislative system by investigating and exposing the involved senior officials. An independent organization should be set up to ensure transparency and accountability.
Monetary Policies to deal with Drug Trafficking
The governments should adopt several monetary policies in order to improve its ranking in the Doing Business Global Ranking by the World Bank. First of all the government should increase the ease with which companies may get credit to expand their businesses by decreasing the lending rates. The government should also reduce the period for getting construction permits. The businesses will be encouraged to expand even more since they will now have excess liquidity. The licences and monetary consideration required to start a business should also be reduced in order to encourage new business development in the country (Cadieux, 2011). Trade barriers should also be reduced to increase the competitiveness in the country. Businesses will even expand globally as they now have access to higher amounts of credit.
Repairing and Elevating Mexico’s International Image
Corruption, violence and drug trafficking has dented the image of Mexico internationally. The country should adopt strategies to improve its image. Mexico should partner with international organizations and influential nations to show its commitment to building and developing the nation. The recommendations by the international organizations on liberalising trade and addressing human rights abuses should be highly considered and implemented strategically in the country. The government should also work to eradicate corruption in the highest levels in the judicial and legislative institutions. If the government needs help in terms of setting up independent investigative institutions it should seek assistance.
Cadieux, Danielle. Mexico’s economy, 2009. University of Western Ontario: Ivey