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TRANSNATIONAL CRIME, LOCAL CRIMINALS
Rethinking the size and shape of Mexican organized crime
December 2011
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DTO revenues: USG estimates
Source: ONDCP, NDIC, ICE*/ Includes revenues accruing to Colombian DTOs
USG estimates of Mexican DTO revenues (USD bn)Agency Date Low High
ONDCP 2006 13.8 13.8
NDIC */ 2009 18 39
ICE 2010 19 29
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Source: Kilmeret al 2010
DTO export revenues: RAND estimate (2010)
Mexican DTOs: Best estimate of gross export revenues, 2010 (USD bn)
3.4
1.5
1.1
0.6
Cocaine Marijuana Heroin Meth
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Source: IMCO / Mxico Evala (2011, unpublished)Note: estimates within 90% confidence interval
DTO export revenues: Our estimate (2011)
Mexican DTOs: Estimates of gross export revenues, 2011 (USD bn)
Drug Low Best High
Marijuana 1.4 1.9 2.5
Cocaine 2.1 2.8 3.6
Meth 0.5 0.6 0.8
Heroine 0.7 0.9 1.2
Total 4.7 6.2 8.1
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DTO income: missing pieces
GROSS EXPORT REVENUES
- COST OF DRUGS
= NET DRUG EXPORT REVENUES
+ NET DOMESTIC DRUG REVENUES
+US DOMESTIC DISTRIBUTION REVENUES
= TOTAL DRUG INCOME
+ NON-DRUG INCOME
= TOTAL INCOME
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Source: INEGI
Evidence from BOP?
Mexico: Errors and omisssions account , 2000-2010 (USD bn)
-14.0
-12.0
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
(USDb
n,
invertedscale)
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Evidence of Dutch disease?
MX Peso: Trade-weighted exchange index, 2000-2011
(100=Jan. 2000)
60.0
70.0
80.0
90.0
100.0
110.0
120.0
130.0
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
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Evidence in banking system?
Mexico: Commercial bank deposits, 2000-2010
(% GDP)
Source: CNBV, BBVA-Bancomer
16.1 16.4 16 16.1 15.9 15.915.2
16
18
19 18.9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Evidence in housing market?
Mexico: Real housing price index by state, 2005-2010
( average annual real growth)
Source: SHF, Banxico
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Tabasco
Campeche
Puebla
Veracruz
Hidalgo
SLP
DistritoFederal
Moralos
Chiapas
Oaxaca
Guerrero
Mxico
QuintanaRoo
Yucatn
Nayarit
Tlaxcala
Colima
Nacional
Sinaloa
Michoacn
Quertaro
Coahuila
Tamaulipas
Durango
NuevoLen
Sonora
Aguascalientes
Chihuahua
Guanajuato
BajaCaliforniaSur
Jalisco
BajaCalifornia
Zacatecas
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Evidence in stock market?
Selected LATAM stock markets, 2000-2011
Source: Bloomberg
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Vertical integration?
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Importer
Producer
Money laundering
Wholesaler
Retailer
Mule
Possession
Unspecified
US, Non-Mexican Mexican-American Mexican Other nationals
Drug-related state and federal inmates by self-specified ro le and
national/ethnic origin, 2004 (%)
Source: Caulkins/Sevigny 2010, with data from Survey of Inmates in State and Federal Correctional Facilities (2004)
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A taxonomy of criminal groups
Illicit traffic
Rent extraction
Local Transnational
Sinaloa
AFOBLO
Jurez /
BAZetas
Templarios
Prison
gangs
Human
traffickers
Migrantkidnappers
Local
kidnappers
Acapulco
gangs
Fuel
thiefs
Fakers
Local drug
distributors
Traditional
smugglers
Domestic
traders
Gulf
Muscle men
Piracy
rings
Borderextortionists
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Three conclusions and some implications
Conclusions CW about size, most likely wrong
Network, not vertically-integrated structure
Highly diversified criminal forms: TCO denominationobscures the issue!
Implications No long-term threat to Mexican national security
Key issue: law and order
Need for local responses (while leveraging federal +
US resources)
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Thank youAlejandro HopeProyecto MC2 (Menos Crimen, Menos Castigo)Blog: http://www.animalpolitico.com/blogueros-plata-o-plomo
Twitter: @ahope71
http://www.mexicoevalua.org/index.php