Mexican Government Denies Claims of Business Exodus Latin American Herald Tribune
go to original April 6, 2012

MEXICO CITY – Mexico’s government slammed as “baseless” the remarks made earlier this week by the Coparmex employers’ federation chief, who said violent crime and insecurity drove more than 160,000 businesses from the country last year.

The Economy Secretariat said in a statement that it “categorically rejects the baseless affirmations” of Alberto Espinosa, whose figures “are disproportionate” in light of information from methodologically rigorous studies.

The secretariat noted that the leader of the Mexican Employers’ Confederation, or Coparmex, “without mentioning the source being used,” said that more than 160,000 businesses ceased operating nationwide in 2011.

“That information is not consistent with figures on formal job creation that year (590,797 net jobs) nor Mexican economic growth in 2011 (3.9 percent), and the increase seen in the number of employers affiliated with Social Security, which totaled 828,529 (up 0.3 percent on an annual basis),” the secretariat said.

It said that, according to the government’s statistics office, for every 100 small and medium enterprises registered in the 2009 Economic Census, “just over six had closed and just over seven (new businesses) had started up” six months later.

“While it’s true that the smallest establishments are the ones that ... have the most difficulty surviving, they are the one that registered the biggest growth at the same time; in other words, newly opened establishments outnumbered those that closed,” the secretariat said.

According to official figures, 5.14 million companies providing employment to 27.7 million people were in existence at the close of 2010.

More than 95 percent of that total, some 4.8 million; were microenterprises; 4.3 percent, or some 221,000, were small businesses; 0.3 percent, or 15,400, were medium-sized businesses; and 0.2 percent, or 10,300, were large companies.

The government, which said no formal statistics exist on the number of companies that closed due to violent crime, invited the employers’ confederation chief “to back up his words or share the figures with the authorities in the spirit of working together to address the problems that companies and business leaders may be facing.”

Espinosa said Tuesday that “business leaders and entire families are leaving for other countries in search of security and wellbeing” due to levels of violent crime “not seen in decades.”

He added that violence not only has altered the lives of ordinary Mexicans but is increasingly affecting the economy, noting that insurance premiums have risen 30 percent and construction firms have raised their costs to cover expenses incurred in protecting their infrastructure investments and workers.

Since President Felipe Calderon took office in December 2006 and deployed tens of thousands of army troops nationwide to combat organized crime, some 50,000 people have died in conflict among rival drug cartels and between the criminals and security forces.

Critics of Calderon’s strategy say the military deployment has only exacerbated Mexico’s violent crime problems.

Espinosa’s remarks came just days after the official start of the campaign for the July 1 general elections, in which Mexicans will choose Calderon’s successor, senators and lower-house lawmakers and state and municipal authorities.

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