Multinationals in Mexico undeterred by violence

While local businesses have been devastated by high murder rates and criminal gangs in Mexico's most deadly city of Ciudad Juarez, multinational industry is booming. Many small shops lie empty on the desolate streets of the border city across from El Paso, Texas, while foreign manufacturers are setting up more plants known as "maquiladoras", which import and assemble duty-free components for export. Once a hive of activity, Rafael Garcia's restaurant is now shuttered, another victim of a vicious shakedown campaign by local drug cartels. Gang thugs were after their "cuota", a monthly tax they charge to thousands of local businesses. "The threats came every few days, every few weeks, until after about a year of holding on without being able to come to the restaurant, I decided to close," Garcia told AFP. Violent killings have exploded in Ciudad Juarez since 2008, with more than 3,100 deaths attributed to drug violence last year alone. As tougher border control measures make it harder to move drugs into the United States, organized crime networks are branching out into other revenue streams, including extortion. But crime bosses rarely target the area's most profitable businesses -- the factories set up by companies from the United States to Asia, drawn by close proximity to the US market and Mexico's low wages. Nearly 10,000 new jobs were created just this year at factories by companies such as MFI International manufacturing. "The security situation in Mexico and Ciudad Juarez has not affected the maquiladora industry at this point," director of operations Lawrence Wollschlager told AFP. Some companies have increased their security costs in northern border cities such as Ciudad Juarez but officials say maquiladoras are not threatened because they lack what gangs want most. "The big corporations manage everything in checks and international transfers, they don't work with cash," said Juan Benavente, deputy secretary of the economy for northern Chihuahua state. "Here the local businesses manage everything in cash, depositing in banks here in the city, so they're more vulnerable," Benavente added. The factory workers enjoy some social benefits from the foreign companies but are also vulnerable to the city's violence -- last October gunmen fired on a bus carrying maquiladora workers near Ciudad Juarez, killing four people. Some 390 maquiladoras employing almost 180,000 people operate in the city of 1.3 million, according to city authorities. Some have gained from plant closures in the United States, and Mexico picked up faster than its close business partner to the north after the economic crisis, with its economy expanding 5.5 percent last year. Foreign direct investment in Ciudad Juarez reached 1.4 million dollars last year, compared with one million in 2009, according to city authorities. But Benavente admitted the government still has much work to do to improve the situation for local businesses. They created a small "green zone" guarded by federal police a couple of months ago in an attempt to keep extortionists at bay. But until real progress is made, people like Rafael continue to suffer, forced to choose between payoffs or closing their doors.