Article brought to you by: Catholic Online (www.catholic.org)

Money from illegal activities in Mexico flows on

By Catholic Online (NEWS CONSORTIUM)
May 24th, 2012
Catholic Online (www.catholic.org)

According to a new report, "Mexico: Illicit Financial Flows, Macroeconomic Imbalances, and the Underground Economy," Mexico lost a total of 872 billion dollars or approximately 5.2 percent of GDP in illicit financial flows from 1970 to 2010. Financial expert Edgardo Buscaglia says that Mexican crime lords are getting smarter about covering their tracks, making inroads into battling corruption even more difficult.

LOS ANGELES, CA (Catholic Online) - "On the one hand, they have become more powerful, because their wealth has not been touched, while on the other, they have diversified, placing their capital in different sectors, to diversify risks and obtain higher returns," Buscaglia says. The president of the non-governmental Institute of Citizen Action for Justice and Democracy, he adds that "You don't close down a bank by arresting the tellers."

Buscaglia says that the Mexican government's failure to take action against money laundering helps make it possible for Mexican and foreign criminal organizations to continue trafficking drugs and people and engage in extortion and smuggling.

Buscaglia studied 22 clandestine businesses, including trafficking in drugs and undocumented migrants, smuggling, kidnapping and extortion. One of his conclusions was that the narcotic trade has diminished in the last few years.

Mexican authorities have seized nearly one billion dollars in cash since 2006, which is only a tiny portion of the money that is moved by illicit trade and organized crime.

"These illicit financial flows were generally the product of: corruption, bribery and kickbacks, criminal activities, and efforts to shelter wealth from a country's tax authorities," the report concludes.

The report states that average annual outflows increased sharply, from three billion dollars in the 1970s to $10.4 billion in the 1980s, $17.4 billion in the 1990s, and $49.6 billion in the 2000s.

U.S.-based intelligence firm Stratfor estimates that the amount of drug money entering Mexico every year at 40 billion dollars.

Carlos Resa, a professor from the Autonomous University of Madrid has studied drug trafficking in Mexico for many years.

"A great deal more hope is put on measures against money laundering because of the low level of success in the fight against drugs," he says

Experts point out to the anti-drug policies of conservative President Felipe Calderón, which has emphasized the use of force over other measures, such as the dismantling of financial structures, which experts say is essential to undermining the corrupting influence of organized crime.

As soon as he took office in December 2006, Calderón deployed tens of thousands of soldiers and federal police officers around the country, to fight the drug cartels. According to press reports, more than 50,000 people have been killed in the drug war.
 
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.

Article brought to you by: Catholic Online (www.catholic.org)