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Mexico Drug War - as Violence Spirals, So Does Spending on Security
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September 30, 2010
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A pavement stained with blood after an unidentified man was murdered in Ciudad Juarez, just another victim of Mexico's spiralling drug war. (Rodrigo Abd/AP)
Boom in demand for alarm systems and personal bodyguards with a 33% rise in security business on US border.

Spending on alarm systems, personal bodyguards and risk consulting is booming in Mexico as headlines each day herald news about the country's spiralling drug war, and companies aim to protect their assets.

Spending on private security services in Mexico has risen by 11% this year on 2009, according to the National Council of Private Security, an umbrella group for the sector.

Over the same period security spending jumped 33% along the US-Mexico border, which has seen the most dramatic rise in violence since the government launched its offensive against drug cartels almost four years ago, the council said.

More than 29,000 people have died since December 2006 as rival drug cartels fight each other for turf and attack the army and federal police with grenades and automatic weapons.

While Mexico's per capita murder rate remains below other Latin American countries such as Venezuela, Brazil and Guatemala, businessmen and foreigners are barraged by images of beheadings and even a rash of small, unsophisticated car bombs.

"There has been a rise in calls and a rise in sales," said Carlos Aguilera, the director of Mexico's largest distributor of security equipment, Inalarm. "It's the fear."

Mexico, Latin America's second biggest economy, is slowly recovering from a deep recession triggered by the slowdown in the top market for its exports, the US.

While most Mexicans have not been touched personally by drug violence, even the perception of deteriorating security can have bottom-line implications. Some financial analysts warn the drug war could take a toll on the economy as the violence drives up the cost of doing business.

But that is an opportunity for a security industry that the council estimates rakes in some $1bn a year in Mexico.

The American Chamber of Commerce in Mexico City surveyed 286 of its corporate members and nearly 60% said they felt less secure in 2009 than they did a year earlier, with half reporting crimes or threats against their employees.

The states of most concern to AmCham members were Baja California, Chihuahua, Durango, Sinaloa and Sonora, all near the US-Mexico border in areas most strategic to traffickers.

Mexico City, the country's sprawling capital of 20 million people, has so far been largely spared drug gang attacks, but wealthy residents live on high-alert of kidnapping for ransom.

The companies surveyed said they spend 3% of their operating costs on security, in line with the rest of Latin America but behind the 7% spent in the US.

There are also concerns about what a growth in private security firms, which have earned a reputation for heavy-handedness in places like Iraq, could mean for Mexico.

While bodyguards who carry guns require a licence, the Mexican government does not certify the quality of private security companies. That has encouraged a wave of operators whose employees' professionalism and training may be suspect.

Mario Gonzalez-Roman, a former head of security at the US embassy in Mexico City, said some unregulated security firms have hired unemployed police with ties to drug gangs.

"Getting people that have the skill set to do this kind of work is what it's all about," said Bob Oatman, a US-based security expert who specialises in executive protection. "Are you going to let anyone do this? That's the question."


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