Drugs impact on the Economy

There is no doubt that Mexico’s economy is booming. Majority of Mexico’s economy relies on exports of manufactured goods such as the production of oil. Mexico is the 15th largest exporter in the world with 78.8 % of its exports going to the United States. A big contributor to the increase in trade was the North American Free Trade Agreement implemented in 1994. Since then, Mexico’s trade with these countries has tripled! Mexico, being the world’s eighth largest producer of oil, produces three million barrels of oil per day, this also plays a major role in increasing Mexico’s economy. You would think that Mexico would be in a pretty good place however, Mexico is suffering the ongoing problem of drug cartels in the country. Drugs contribute to a large portion of Mexico’s economy and because of the close trade relationship with the United States, Mexico imports a lot of drugs into the United States causing a big issue for diplomatic relations. Mexico is currently the largest supplier of meth and marijuana to the United States as well as a major supplier of heroine. Over ninety percent of cocaine now travels through Mexico into the United States. These numbers have drastically increased since 2003 which means not only is the production of drugs increasing but also the consumption of drugs in the United States which allows more profits for Mexico. On average, drug trafficking contributes 50 billion US dollars to the economy a business year. So, if Mexico could get rid of the drugs in their economy the real question is, would they really want to? With such a booming economy the loss of this drug trafficking would make the Economy suffer a major setback. The drug cartels are determined to keep this current system going because they make such a large profit, 80 percent, of the growth and distribution of drugs so that it is in their best interests to keep this economic activity going. However, drugs also negatively impact the economy because, people who live in these areas with these cartels live in a constant state of fear. Due to this, we can see an influx of people leaving Mexico which negatively impacts the economy because, tax payers are leaving due to fear of getting hurt by these drug lords. Although, drugs may contribute to a major portion of the Economy they are still drugs which cause numerous negative health/Economic impacts and violence. So what is being done to stop this issue? Mexico’s plan is to increase spending for the prevention of drugs through things such as well-trained police and more time devoted to the drug cause in actual government agencies. However, by doing this, Mexico is spending a large amount of tax payer money as well as money they do not have thus further hurting their economy. In 2013, Mexico spent 172.7 billion dollars fighting the drug cartels, this is over twice Mexico’s foreign debt of 73.5 billion. In 2014, Mexico ranked 25th out of 162 nations for violence containment costs. This is higher than Syria, Iraq and Libya! Each year the government puts more and more money into stopping these cartels however, there hasn’t seemed to be a significant impact.