Mexico: Is it Really Money What Michoacan Needs?

What Michoacan society has been deploring is not a lack of public investment, but the massive corruption of its political and police forces. Businessmen and small-scale owners were actually doing well – for a reason Michoacan is one of the wealthiest states in Mexico, and for a reason they have been a priority target for the Knights Templar cartel, which has pulled the limits of extortion to a no-return point.

President Enrique Peña Nieto said its government is going to use those US $3bn in five pillars – job creation, education, health, infrastructure and pensions. Boosting those areas should improve, said Peña Nieto, the social and economic environment in Michoacan. However, Mexican president forgot to add a sixth pillar, maybe the most important of them all – applying justice and the rule of law across the state.

“What we need is a structural purge of local authorities”, says Ernesto López Portillo, CEO and founder of Democracy and Security Institute (Insyde). “Justice must initiate penal processes and condemn criminals and corrupt officials. That is going to be the acid test. Because if justice doesn’t work, if criminals continue free, all this strategy will be a lie. The proof that something is to change in Mexico is that judicial system starts doing what it never does – to put an end to these people’s impunity,” considers López Portillo.

“We have always been telling the government it needs to inject resources. We believe industry should open and productive projects should be supported”, said to this respect Estanislao Beltrán, a spokeman for the self-defense groups. But he added: “Above all, we must clean our state of organised crime. This is the main objective.”


Michoacan grows 80% of avocados consumed in Mexico and the United States. So big and profitable is that industry that some even branded it as “the blood diamonds of Mexico”. The state produces every one of the limes consumed in Mexico as well. It is rich in minery, cattle breeding and fisheries. That is why the Knights Templar, once they saw drug producing were not giving the expected results, began extorting the rich local businessmen.

So, as the experts point out, money is not the issue, but justice. So far, 128 alleged Knights Templar members, including one of its leaders, Dionisio Loya Plancarte, have been detained, thanks to the help of self-defense forces. The son of another cartel leader, in this case Jalisco Nueva Generación – enemy of the Knights Templar in the region, was arrested recently.

López Portillo warns Michoacan, and Mexico as a whole, needs “clear action plans”, and those plans “are yet to be seen”. The lack of clear guidelines, along with the general insecurity environment, might disencourage banks and other institutions to lend or invest money into the region. It is soon to know how far this new strategy against crime will get, or if it is going to make any change even.





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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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