How an overlooked impact of Mexico’s drug violence is holding back its economy – by Christopher Woody (Business Insider – March 19, 2016)

The war on drugs that has raged across Mexico over the past decade has led to the deaths and disappearances of hundreds of thousands of people. The human costs of the drug war and related violence are well known, but the chilling effect on Mexico’s economic vitality has been harder to measure.

Recent research has shown that high levels of violence in Mexico — like the 7.6% increase in homicide rate the country experienced in 2015 — not only have a negative impact on workers, but also prevent complex economic activities from starting and growing.

“Increasingly economists are arguing that what really matters is not how much [people] participate in the market, but the particular sectors and industries in which these persons are participating,” said Viridiana Rios, a scholar at Harvard and fellow at the Wilson Center in Washington, D.C.

“What violence is causing … is killing the industries that are complex. In those regions that are very violent, complexity cannot flourish,” Rios said during a presentation at the Wilson Center in January.

“Those sectors that are complex require a lot of skills, like technology, like professionals, like … software development, the aerospacial industry, the automobile industry, that require way more abilities,” Rios added.

Mexicans are also leaving the country for higher education, in part because of violence, a trend that is depriving the country of workers with the requisite skills for advanced industries to grow. Violence has a measurable effect on economic opportunity and growth in Mexico.

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