Aguascalientes, Ags. February 21, 2023.- It is a fact that the situation of insecurity in Mexico is worrying and its effects have spread to the business world.
Jorge Perez Mar, director of the School of Business Administration at the Aguascalientes campus of our Panamerican University Panamericanagives us a statistical overview of the impact of insecurity on business.
Insecurity
The Mexican Institute of Statistics and Geography (INEGI) presents the National Business Victimization Survey (ENVE), 2020 with information that refers to the January-December period in 2019.
The information provided by the survey is that, during 2019, 30.5% of the country's economic units were victims of a crime. Despite the fact that the percentage of companies that were victims of crime decreased, going from 33.7% in 2017 to 30.5% in 2019 -that is, three percentage points less-, the costs of insecurity have increased for the business sector.
According to this survey, the cost of insecurity and crime affecting businesses grew 34% between 2017 and 2019.
In terms of the number of companies, 34.2% of the economic units in the commerce sector were victims of crime; 25.4% in the industrial sector and 27.8% in the services sector. As we can see, it is the commerce and services sectors that suffer the greatest concentration of crime.
If we analyze companies by type of sector, we find that extortion is the most frequent crime in industry and services, regardless of the size -micro, small, medium or large- of the economic unit, while theft or robbery of merchandise, money, supplies or goods affects businesses more.
Large losses to Mexican businessmen
Crimes against Mexican businesses and the rampant insecurity in several states of the Republic cause losses to Mexican businessmen for 277.6 billion pesos per year, estimated the Mexican Employers' Confederation (Coparmex)..
José Medina Mora Icaza, national president of Coparmex, commented that every day there are 237 robberies to businesses in the country, to which must be added 23 robberies to transporters, who transport the merchandise of the different companies established in Mexico, and added that these 277.6 billion pesos are equivalent to 1.85% of the Gross Domestic Product (GDP).
How does insecurity affect the Mexican economy?
The lack of new investment in a country means that the productive base does not expand and therefore jobs are not created, but when investment not only does not arrive, but also leaves the country, then the productive base shrinks, unemployment is generated and wages are less competitive.
Another point that cannot be overlooked is the fact that companies are allocating more and more resources to protect themselves from insecurity, and these resources could be invested productively, generating a greater number of jobs, which would reactivate the economy and lead to greater economic growth.
Insecurity, crime and violence diminish the competitiveness of companies by impacting their cost structure through increased expenses and associated losses. Crime also reduces business profits and hinders their investment processes.
In our country,foreign investment has been consolidated as a complementary source of resources to finance economic growth; in addition, foreign investment represents a source of employment generation and technology transfer.
There is no doubt that the issue of insecurity is linked to the development and economic growth of the country, affecting not only national companies, but also the perception of us abroad; hence the importance and relevance of the issue.
