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Mexico Business Intelligence Report (December 2002)
Reputational Due Diligence:
- Recent news coverage on businessman Carlos Cabal Peniche, (will he be jailed or won´t he?), serves as a useful reminder over the importance of due diligence before an acquisition, joint venture, or a relationship with an important vendor, client, or partner. Cabal had acquired in the early 1990s dozens of companies, including Del Monte, Banco Union, Banca Cremi, Quinta Real hotels, etc.
- Needless to say, Mexico has had its share of "Enron and WorldCom" scandals!
- A reputational due diligence should provide peace of mind in most cases regarding an important business decision, and in all cases should add clarity to this decision.
Crime Trends in Mexico City:
The Good News:
- "Sheriff Giuliani":
Former New York City major Rudy Giuliani and the Giuliani Consulting Group signed a US$4.3 million contract with Mexico City to help the city achieve the success Giuliani obtained in reducing New York City crime by 70%. Funding for this enterprise is being provided by a trust fund established by the Mexico City business community.
- This gives a new meaning to "citizen participation" in Mexico. The business community has been very vocal the past few years regarding its concern over the security problems in the city. Mexican businessmen are now putting their money where their mouth is!
- If you want to contribute to this civic endeavor, the trust fund "Ciudadanos Aliados por la seguridad pública de la Ciudad de Mexico" has been established at Banco Santander Mexicano, trust # F/112345. For additional details call Lic. Antonio Fernandez at tel# 5540-0903.
- Can Zero Tolerance be applied to Mexico City? Probably not in all its dimensions, but surely even a partial implementation will substantially reduce crime in Mexico City.
- The resulting "political heat" on city authorities because of Giuliani, attests to the seriousness city authorities are giving to addressing the security concerns we all share.
- According to a Reforma poll, 53% support the contracting of Giuliani, while 39% are against this initiative (Reforma, 6 November 2002).
Expansion of City Police Substations:
City authorities will be building 14 substations in the Lomas area, as part of a "Neighborhood Watch" program (Reforma, 4 November):
- Funding of this program will be provided by the business community, again a new dimension to citizen participation.
- Residential burglary alarms will be connected to these substations to facilitate an expeditious police response.
- This program should also facilitate greater community identification with their neighborhood police, and accountability of the police to the residents they serve.
Polygraphing of City Police:
Secretary of Public Safety, Marcelo Ebrard, announced that all city police including supervisory and administrative personnel would be taking lie detector tests beginning in January 2003 (Reforma, 28 October). Comment: Polygraphs, in the hands of competent operators, are an excellent vetting mechanism for new police applicants, as well as for all current employees. They should help weed out the more corrupt elements and deter their more corrupt practices. This vetting mechanism is already being applied to all personnel of the Agencia Federal de Investigacion, the Mexican equivalent to the U.S. FBI.
The Bad News:
November 2002 Reforma Poll on Crime in Mexico City:
Have you been a victim of a crime in the past three months? Yes - 20%! Consistent with the 19.5% averages over seven previous polls by Reforma dating back to February 2001.
- What crime were you a victim of?
- Mugging-65%
- Car theft-11%
- Home burglary-4%
- Express kidnapping-2%
- Where did the crime occur?
- Public street-42%
- Microbus-18%
- Public place-12%
- Home-9%
- Car-7%
- Taxi-3%
- Subway-2%
- Did you file a police report? Yes - 19%! A significant decline from the average 26% over the previous seven polls.
Comments:
- Despite the popular perception, the situation is remains very bad, but at the same time, it does not appear to be deteriorating further.
- Random street crime remains a profitable low-risk business activity, and is impervious to the cyclical ups and downs of the Mexican economy.
Thanks for your attention, and please continue to send us your comments, critiques and experiences to improve and enrich subsequent issues to:
Media Contact
Jillian Bernaiche
(602) 889 - 1626