If Monterrey falls, Mexico Falls

7/30/2019 If Monterrey falls, Mexico Falls

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IF MONTERREY FALLS,

MEXICO FALLS

REUTERS/TOMAS BRAVO

In just our years, Mexico's business capital has gone rom being a model ordeveloping economies to a casualty o the escalating drug war.

BY ROBIN EMMOTT

MONTERREY, MEXICO, JUNE 1

MARIO RAMOS THOUGHT it was a bad

joke when he received an anonymousemail at the start o this year demanding$15,000 a month to keep his industrialtubing business operating in Monterrey,

Mexico's richest city and a symbol oprogress in Latin America.

Sitting in his air-conditioned oce lookingacross at sparkling oce blocks dotting themountains on that morning in January, hecasually deleted the email as spam.

Six days later, the phone rang and athickset voice demanded the money. Ramos

panicked, hung up and drove to his in-lawshouse. It was already late and he had littleidea what to do. Then, just ater midnightmasked gunmen burst onto his premisesset re to one o his trucks, shot up his ocewindows and sprayed a nearby wall with theletter "Z" in black paint, the calling card oMexico's eared Zetas drug cartel.

JUNE 2011

SPECIAL REPORT


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MONTERREY JUNE 20

"They were asking or money I could neveraord," said Ramos by telephone rom San

Antonio, Texas, where he fed with his amilythe next day. "I should have taken the threatmore seriously, but it was such a shock. Icouldn't quite believe this could happen inMonterrey."

In just our years, Monterrey, amanuacturing city o 4 million people 140miles (230 km) rom the Texan border, hasgone rom being a model or developingeconomies to a symbol o Mexico's drugwar chaos, sucked down into a dark spiral ogangland killings, violent crime and growinglawlessness.

Since President Felipe Calderon launchedan army-led war on the cartels in late 2006,grenade attacks, beheadings, reghts anddrive-by killings have surged.

That has shattered this city's internationalimage as a boomtown where captains oindustry built steel, cement and beer giantsin the desert in less than a century -- Mexico'sversion o Dallas or Houston.

By engulng Monterrey, home to someo Latin America's biggest companies andwhere annual income per capita is double

the Mexican average at $17,000, the violenceshows just how serious the security crisishas become in Mexico, the world's seventh-largest oil exporter and a major U.S. trade

partner.Almost 40,000 people have di

across the country since late 2006, and Monterrey, the violence has escalated to

Nuevo Leon drug murders, car theft

* Data for drug murders through May 24, data for car thefts through April 30.Source: Mexican government, media reports, Mexican Insurers Association, AMIS

Reuters graphic/Stephen Culp

Drug murders hundreds

Monterrey has gone from being a model city to a symbol of Mexicos drug war chaos.

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MAKING THEIR MARK: The letter 'Z' is seen painted on a hill next to the toll booth at the reeway between Monterrey and Torreon, in the Mexican state o Coahuila Mar13, 2010. REUTERS/TOMAS BRAVO


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level that questions the government's abilityto maintain order and ensure the viabilityo a region that is at the heart o Mexico'sambitions to become a leading worldeconomy.

CAUTIONARY TALE

ALREADY DRUG KILLINGS have spread to

Mexico's second city Guadalajara and whileMexico City has so ar escaped serious drugviolence, the capital does have a large illegalnarcotics market. I the cartels were to declarewar on its streets, Monterrey's experienceshows that Mexico's long-neglected policeand judiciary are not equipped to handle it.

"I we can't deal with the problem inMonterrey, with all the resources and thepeople we have here, then that is a seriousconcern or the rest o Mexico," said JavierAstaburuaga, chie nancial ocer at topLatin American drinks maker FEMSA, which

helped to spark the city's industrialization inthe early 1900s.Lorenzo Zambrano, the chie executive o

one o the world's largest cement companiesCemex, is equally concerned. "The trendis worrying," said Zambrano, whosegrandather helped ound the Monterrey-based company that has become o a symbolo Mexico's global ambitions.

"But we won't let Monterrey all."That is what residents want to hear.

Calderon has made two high-prole visitssince September, swooping in by helicopterto oer his support and sending in moreederal police to the city.

But the day-to-day reality is a violencethat is out o control. Just over 600 peoplehave died in drug war killings in and aroundMonterrey so ar this year, a sharp escalationrom the 620 drug war murders in all o 2010.

The dead include local mayors and anundetermined number o innocent civilians,including a housewie caught in cross-rewhile driving through the city, a just-marriedsystems engineer shot dead by soldiers on hisway to work and a young design student shotby a gunman in the middle o the aternoon

on one o Monterrey's busiest shoppingstreets.

Almost every resident now has a story osomeone they know who spent a horriyingevening ace-down on a bedroom foor whilegunmen ought battles in the streets outside.

More than a thousand people havedisappeared across Nuevo Leon state, owhich Monterrey is the capital, since 2007,according to the U.N.-backed human rightsgroup CADHAC, which says they were orcibly

recruited by the Gul and Zetas gangs.Human Rights Watch has documented

more than a dozen orced disappearancesover the same period that it says were carriedout by soldiers, marines and police workingor the cartels.

On the surace, Monterrey, which generates

8 percent o gross domestic product with 4percent o Mexico's population, is still a cityeatured in shiny business magazines.

Executives can still touch down at itsmarble and glass airport terminals and takeits sleek highways to posh hotels and businessconerences, admiring the impressive vista oSaddle Mountain that dominates the skylineto the south o the city. On Sundays, barbecuesmoke and brassy Norteno music emanaterom houses across the city.

Known or its private universities, larmiddle class, modern subway netwoand 1,800 oreign-run actories, Monterrwas even chosen to host a United Natioconerence on development in 200attended by some 50 world leaders.

Like the Catalans o Spain, Monterrresidents liked to think o themselves as apa

rom the rest o their country -- eciereliable and led by decent political leaders

TEQUILA FOR THE NERVES

BUT TURN ON THE TELEVISION news, fithrough the local newspapers or chanto hear the intermittent sound o gunin the city's streets and it quickly becomclear that there's a battle being waged Monterrey between the powerul Gul carand its ormer enorcers, the Zetas. And thknow no bounds.

On New Year's Eve, gunmen hanged

woman rom a road bridge. They've dumpsevered heads outside kindergartens akilled trac police as they helped childrcross the road. In a matter o minutes, they cshut down large parts o the city by hijackivehicles at gunpoint to block highways wtrucks and buses to allow hitmen to escathe army. Police, once considered Mexicobest, have been inltrated by both gangs.

On two consecutive days in April, a reco30 people were killed in shootouts, main

"IF WE CAN'T DEALWITH THE PROBLEM INMONTERREY, WITH ALLTHE RESOURCES ANDTHE PEOPLE WE HAVEHERE, THEN THAT IS A

SERIOUS CONCERN FORTHE REST OF MEXICO."

IN RECOVERY:Former gang member and drug addict Sergio Alvino at a Catholic shelter in a low-incomeneighborhood in Monterrey March 24, 2011. REUTERS/TOMAS BRAVO


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hitmen and police, but also a student whowas run down by a atally wounded policeocer trying to escape gunmen.

Jaime Rodriguez, the mayor o Garciamunicipality in the Monterrey area, survivedtwo attempts on his lie in March, savedonly by his armored vehicle. "I couldn't stopshaking," said Rodriguez, speaking days

ater the second attack and with soldiers nowas his bodyguards. "Ater they tried to kill methe rst time, I got home and downed hal abottle o tequila. Ater the second, I nishedit."

Some o the city's jobless have joined thechaos ater seeing the impunity that druggangs enjoy. They are trying their luck at alltypes o crime, robbing drivers at gunpointat trac lights, bursting into restaurantsto steal clients' cash and holding up cardealerships, banks and even the oces o alocal zoo or as little as $500 a time.

Gunmen stole a record 4,607 vehicles inNuevo Leon in the rst our months o thisyear, almost double the number stolen in allo 2004 and more than in Mexico City, whichhas ve times the population, the MexicanInsurers Association says.

Kidnapping, almost unheard o beore2007, is now more o a concern to businesspeople in Monterrey than it is in Mexico City,where kidnap-or-ransom has long beena scourge, according to a recent study byconsultancy KPMG.

Both the Gul gang and the Zetas, led bya ormer elite Mexican soldier who calls

himsel "The Executioner," want not just thesmuggling routes to the United States, butcontrol o Monterrey as a place to live, laundermoney and prey on private companies orextortion, U.S. and Mexican experts say.

"Monterrey is a strategic point in Mexicoor tracking. It's a kind a crossroads on thenortheastern corridor and it is very lucrativeterritory," said a U.S. ocial at the Bureau oAlcohol, Tobacco, Firearms and Explosives inMexico City.

The cartels are erociously well-armed,mainly with weapons rom the United States.

But, more alarmingly, since late 2009 justprior to the Zetas' breakaway rom the Gulgang, Zeta henchmen have been bringingin weapons -- ully automatic M-16s andmilitary explosives -- rom Central America,the ATF says.

"These were legitimate military sales tooreign governments during the 1980s and90s, and those guns are walking out theback door and nding their way to northern

Mexico," the ocial said. "Not only the guns,but military grade explosives: Claymoremines, C-4 (plastic explosives) as well asgrenades."

UNEASE IN THE BOARDROOM

TO THE ALARM OF MANY investors, theviolence is undermining economic growthin the region, as some businesses putinvestment on hold, companies' securitycosts rise, restaurants shutter, tourists cancelvisits, and students are scared o.

Business leaders worry Monterrey is losinginvestment to Texas, to other parts o Mexicoand to the rest o Latin America, while ailingto capitalize on the advantages that risingChinese labor costs bring to a region thatalready produces about 11 percent o allMexico's manuactured goods.

"Business people come to me almost everyday with horror stories about how they'rebeing extorted, how they've been robbed,how their employees have been abducted,things you just can't imagine," said GuillermoDillon, the head o Nuevo Leon's industrychamber CAINTRA that counts 5,000companies as its members. "O course all

this is having an impact on the economy," said.

Mexico is rebounding strongly rom a sterecession in 2009, helped by a bounce exports to the United States. Investmehas also risen and Monterrey, with a skillworkorce and location close to the border,reaping the benets.

Nuevo Leon state government orecasthe economy will grow 5 percent this yeand expects more than $2 billion in oreiginvestment this year, similar to 200although slightly less than in 2010, whHeineken bought Femsa's brewing division

Deputy state minister or oreiinvestment, Andres Franco Abascal, sa12 manuacturers ranging rom Chito Germany conrmed $498 million investment in the rst quarter o this year.

But i not or the drugs war, things woube even better.

Business leaders including Dillon estimathe violence will shave 1 to 2 percentapoints o economic growth this year, holdiback the local economy. It grew 6.5 percelast year and 7.2 percent in 2006, prior to tglobal recession and beore the violence tohold.

Having grown at almost double the rateMexico as a whole between 2005 and 200Monterrey's economy is likely to expand thyear at about the same 5 percent pace as tnational economy.

Economists also warn that the damadone by the drugs war to the economy cou

Mexico, Nuevo Leon new company growth

Source: Mexican social security, IMSS, INEGI


Nuevo Leon All Mexico GDP quarterly annualized pct change

Growth in number of registered companies percent

Drug violence is undermining economic growth in Mexicos richest city, Monterrey.

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Claudia Daut recounts her experienceediting photographs and directingcoverage o the drug war storyrom Mexico.http://link.reuters.com/mez79r


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get worse."At lot o companies are still in wait-and-

see mode, they are still here, still doingbusiness," said Jorge Garza, an economist atthe University o Monterrey. "But i security

continues to deteriorate and they startpulling out, then we could be looking at amuch more serious impact."

The "wait-and-see" mood is pervasiveamong the 680 assembly-or-export

"maquiladora" plants operating in tstate. A quarter o those actories have thexpansion plans on hold or a second yerunning, meaning ewer new product linchurning out laptops and car parts, aultimately ewer jobs being created, saEmilio Cadena, head o an industry grothat represents Nuevo Leon's maquiladora

"The big question is: how much astwould we be growing i it were not or tviolence?" Cadena asked.

Helicopter maker Eurocopter this yeditched plans to invest $550 million Nuevo Leon to build its second plant in LatAmerica, instead choosing the central stateQueretaro, which has so ar been unscathby drug violence.

A survey o major businesses operatiin the country this year by the AmericChamber o Commerce in Mexico ound thNuevo Leon is now considered one o the omost dangerous states in Mexico. It used

be considered the saest.State Governor Rodrigo Medina conced

last year that some oreign investors hbeen put o by the violence.

"We have to recognize (violence) could haaected the decision-making o the invest... I've come across some cases (o investoreezing plans to set up in MonterreyMedina said in a Reuters interview laOctober. His aides declined recent requesto elaborate.

Mexico drug-related murders in 2010

Source: Mexico federal government


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P a c i f i c

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G u l f o f

M e x i c o

G U A T HOND

B E L

EL S.

1

1. Chihuahua

2. Sinaloa

3. Durango

4. Nayarit

5. Tampaulipas

6. Guerrero

7. Morelos

8. Sonora

9. Baja California

10. Colima

11. Coahuila

12. Nuevo Leon

13. Micoacan

14. Jalisco

15. San Luis Potosi

16. Oaxaca

17. Quintana Roo

18. EdoMex

19. Aguascalientes

20. Tabasco

21. Guanajuato

22. Zacatecas

23. Veracruz

24. Distrito Federal

25. Hidalgo

26. Baja California Sur

27. Chiapas

28. Campeche29. Puebla

30. Queretaro

31. Tlaxcala

32. Yucatan

In 2010, for every 100,000 people living in Mexico,

an average of more than 14 were murdered in

a drug-related killing.

State rank/murders per 100k

129.4

68.3

53.6

38.8

37.4

36.3

19.9

19.5

16.6

16.6

14.5

13.8

13.2

8.4

5.4

4.7

4.7

4.1

4.0

3.5

3.0

2.7

2.5

2.2

2.1

1.7

1.7

1.20.9

0.7

0.3

0.1

Monterrey

BOOMTOWN TO DRUGTOWN : A military helicopter ies over Monterrey July 18, 2010. REUTERS/TOMAS BRAVO


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ZETAS ON THE ROAD AHEAD

EVEN IF MANUFACTURING is showing someresilience, security costs are growing, whilemoving goods up to the U.S. border and toneighboring states is getting riskier.

Small and medium-sized companiesoperating in and around Monterrey are

spending 5 percent o cash fow on security,a cost that was negligible just ve yearsago, while rms selling GPSs, alarms, locksand cameras in Monterrey have seen a 20percent jump in annual prots in three years,according to Monterrey's commerce, retailand tourism chamber.

"I you look at the gures, companies arestill investing, but there's a lot o evidencethat the money is being diverted into security,not into research and development," saidRaael Amiel, a Peruvian economist whocomes to Monterrey once a year to attend

a conerence or U.S.-based orecaster IHSGlobal Insight. "This is money that's goinginto barbed wire ences, not solar panels andthat is going to hurt competitiveness in thelong term," he added.

Drug war lawlessness in the neighboringstates o Tamaulipas and Coahuila is alsoweighing on regional business.

One Monterrey-based businessmansupplying piping to drinking water plants inCoahuila said it is common to see black-clad,masked Zeta hitmen stopping cars on thehighway west out o Monterrey, even with thearmy patrolling nearby.

"I try to stay calm every time, it is terriying,but what choice do I have? I can't aorda helicopter," he said, locked in his oce,having been robbed at gunpoint by Gulcartel hitmen who burst in on him last year.

The route rom Monterrey to Nuevo Laredo,Tamaulipas and across into Laredo, Texas isa crossing used by 2.5 million trucks everyyear, or some 40 percent o U.S.-Mexicancross-border trade. It used to be sae at anytime but can now only be traveled in daylighthours or ear o attacks by Zeta gunmen.

The Zetas have taken to supplementing

their drug smuggling income with robberieso trucks carrying everything rom copperpipes to car parts, U.S. and Mexican securityocials say.

Many manuacturers here work on a"just-in-time" basis to avoid a build-upin inventories and storage costs, and areincreasingly rustrated by the delays incrossing the border.

Tough saety checks by U.S. customs agentsand the sheer size o truck trade already

mean long waits, so crossing at night had orlong been a way o avoiding the bottlenecks.

"Either you have to pay the bad guys

something or the right to travel at night andnot be robbed, or you go by day and pay extrastorage in Nuevo Laredo, which drives up ourcosts," said one Monterrey-based truckingcompany owner moving auto parts, whodeclined to be named due to saety concerns.

"We've got trucks idle waiting or longerat the border and we're spending time andenergy on saety logistics, which was never aactor beore."

Rising premiums or insurance againstrobbery o goods can eat up over hal ocompanies' prot margins, truckers say.

CANCEL MY APPOINTMENT

WORSE FOR SOME is the damage toMonterrey's image. Never a big tourist town,ar rom any white beaches and lacking theAztec ruins o central Mexico, the city wasbuilding a reputation as a place or Americansto seek medical treatment at a third o thecost o the United States.

With 15 million Americans expected to seekhealthcare abroad by 2016, up rom 750,000

in 2007, according to consultancy DeloitMonterrey was going beyond the chedental care Mexican border towns o

Americans, providing operations rangirom gastric bypasses to heart surgery.

Even as recently as early 2010, when drkillings had increased noticeably, Monterreprivate hospital group Christus Muguerwas receiving about 70 oreign patientsweek, mainly rom the United States, sompaying thousands o dollars a time. "Busineis practically zero now," said Eduardo Garca doctor who helps oversee medical policy the University o Monterrey, which is linkedChristus Muguerza.

Four hospital groups including Christ

Muguerza invested several million dollarsexpanding and modernizing their capacor so-called medical tourists betwe2007 and 2008, while the prestigious TUniversity's Zambrano Hellion MedicCenter is under construction and is billed oering "innovative medical care to Mexiand to the world."

One Monterrey-based company, NursNow International, was training Mexicnurses in English to better serve visiti

GUNNED DOWN: Paramedics looks inside a car at the bodies o dead hitmen at a crime scene where fve menwere gunned down in a drive-by shooting in the municipality o San Nicolas de los Garza, Monterrey, May 11, 201REUTERS/TOMAS BRAVO


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U.S. patients, but is now ocusing its eortsat hospitals in beach resorts that have beenspared the drug violence.

Perhaps hardest o all or city leadersto stomach is the exodus o some 2,500students, some 20 percent o the student

body, studying at the Tec University,considered one o Latin America's top schoolsor engineering and business and at the hearto Monterrey's industrial success. Accordingto the university's ormer rector RaaelRangel, undergraduates started packingtheir bags last year ater two students wereshot dead accidentally by soldiers whomistook them or hitmen in a reght outsidethe campus.

The Tec's ame as Mexico's answer tothe Massachusetts Institute o Technologymeans that more than hal its students are

rom other Mexican cities or rom abroad,and while many have transerred to other Teccampuses within Mexico, Monterrey is losingtalented youngsters.

"Yes (the insecurity) has hit the institution,it's hit us more than the economic crisis,"Rangel said at an event to mark his retirementin late April.

That has orced the university to lay oabout 300 sta, also having a knock-on eect

on the hundreds o shops and rental agenciesthat depend on the student population.

Proessors consulted by Reuters say thereare also concerns that student numberscould all by another 10 percent at the starto the new academic year in August. The

university declined to comment.Some residents, who are known as

"regiomontanos" or the mountainous regionthey live in, have already seen enough,sparking concerns o a brain drain.

Wealthy small and medium-sized businessowners are taking their money and ideasnorth o the border to set up shop in Texas.With anything upward o $100,000 toinvest in a U.S.-based business, Mexicanscan obtain a ast-track U.S. investor visa orthemselves and their amilies.

Demand at the U.S. consulate in Monterrey

or the "E" visas is surging: the number oinvestor visas issued by the consulate almostdoubled to 390 between July 2010 and theend o March this year, compared to the priornine-month period.

Those who haven't already let can'tdeny they are worried. "I'm thinking 'I'mOK, nothing's happened to me,' but i itdoes, I know I'll have to consider it," said abusinessman with a mid-sized ood exporting

business who declined to be named security reasons.

In the meantime, he has switched his SUor a low prole sedan and he stays out o tlimelight, avoiding the local paparazzi threly on the business elite to ll local goss

rags. "I denitely don't want my photo in tsociety pages these days," he said.THE CRAZY GUYS

MANY WHO KNEW MONTERREY as oo Latin America's saest cities wonder hothings got so bad so ast.

Part o the answer lies in the drugged eyes o 18-year-old gang member Alan, wspends his days bored and jobless wanderithe city streets, and his nights getting higon glue and marijuana with his riends the dirty concrete stairways o his parenapartment block.

With his arms elaborately tattooed withe name o his gang, "Los Vatos Loco(The Crazy Guys), Alan is part o Monterrerarely mentioned underclass that the Gand Zetas cartels have seized on to recrudealers, smugglers and hitmen to uel thbitter war.

Though drug violence is more associatwith the inamous border towns o Tijuaand Ciudad Juarez, Monterrey has also se

BRINGING OUT THE DEAD: Members o a orensic team carry one o our bodies toward to the coroner's vehicle in Monterrey, May 24, 2011. REUTERS/TOMAS BRAVO


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a surge in gangs over the past decade aterneglecting its poorer citizens, who see little

uture other than joining the cartels."School bored me. Now's there no work,"

Alan said, his ace partly hidden under atilted baseball cap.

Alan is not a hitman, but he soon could be.On the street corners o Monterrey's

poorest barrios and the region's neglectedrural towns, the cartels recruit dropouts likeAlan, oten as young as 12 or 13, to sell drugsor diversiy into other crimes like carjacking

and burglaries, paying handsomely with"gits" such as SUVs, cash or drugs.

That is a liestyle that Monterrey's urbanpoor can only dream o on the actory wagespaying $350 a month.

But the gits come with strings attached.I anyone decides they want out, they have

to pay back the gits -- an impossible task. Sothey keep going.

They are pushed into worse crimes untilthe street corner gangster becomes a ully-fedged cartel henchman, willing to torture

a rival gang member, throw grenades civilians or open re in a crowded street.

"You get pushed into it because there's work and you dropped out," said 26-yeaold ormer gang member and addict SergAlvino, who sold crack or about $10 a hit the cartels beore nding a way out with thelp o a Catholic shelter. "It is the perepreparation or a career with the cartels, evi it is likely to be a short one," he said.

Monterrey's politicians and captains industry are only now waking up to the realthat the city has huge pockets o poverty aabout a third o all Nuevo Leon's residenlive on $5.25 a day or less. Poor amilibarely get by on about $600 a month.

Despite a steady all in the number o poin Nuevo Leon, Coahuila and Tamaulipbetween 1970 and 2000 as Mexico benetrom an oil and manuacturing boopoverty on the border today is as high as

MOVING ON: Young men who have worked organgs such as Sergio Alvino (above) are helpedto excape the drug cartels at a Catholic shelter inMonterrey. Above let, three youths including Sergio

(let) and Alan (center), chat with a nun. Lower let, anun prays with gang members as part o eorts to pthem away rom crime. Pictures taken March 24, 20REUTERS/TOMAS BRAVO


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was a decade ago, according to governmentdata. With a median age o roughly 27 years,Mexico should be at a huge advantageas developed nations struggle with agingpopulations. Over the last decade, Mexico'srate o jobless young has doubled to about 10percent, according to a United Nations study.

Being poor does not make you a criminal,

and certainly not a hitman. "But without ajob, without your sel esteem, you are easyprey or the cartels," said Catholic mothersuperior Guillermina Burciaga, who hasworked or more than a decade with streetgangs in Monterrey, seeking to help manyleave drugs and the gangs behind.

Jaime Rodriguez, the mayor o Garciamunicipality in Monterrey who survived twoattempts on his lie, is even more candid."Ask yoursel who is doing all this killing. It isour young people. We have ailed our young,"he said.

NEVER HEARD FROM AGAIN

MORE CHILLINGLY, WHEN the cartels ndthey can't entice youngsters into the gangswith money, they abduct them and orcethem into the business, the CADHAC humanrights group and U.S. anti-drug ocials say.

CADHAC has logged 36 cases o orceddisappearances in Nuevo Leon since 2007but says the real gure is more than 1,000, asew victims' amilies come orward out o earand state ocials don't take them seriously.

"The crime o orced disappearancesdoesn't exist in the penal code and the

government is in denial. The ew parentswho come orward are met by ridicule romauthorities," said Carlos Trevino, a lawyer orCADHAC.

"The prosecutor's oce says to the mothers:'I'm sure your son's just out partying, he'll behome soon," he added.

The state attorney general's oce deniedsuch accusations and said many cases areunder investigation. But many law-abidingMonterrey residents have allen into the habito assuming that anyone who goes missingis a criminal, inhibiting proper investigation.

"People want to be rid o this situation, so yousee a lot o comments in chat rooms such as:'kill them all' or 'that's one less bad guy,' butthat is no way to deal with the problem," saidCADHAC investigator Maria del Mar Alvarez.

Victims' amilies interviewed by CADHACreported two cases o mass kidnappings o40 to 50 young Mexicans during raids onworking class districts in Monterrey in July2010 and a string o individual cases over thepast our years, oten o men aged between

18 and 20 years old."I don't let my boys play on the street at

night anymore because they are kidnappingthe youngsters," housewie Berta Luna said ina poor area o the Guadalupe municipality inMonterrey. CADHAC believes the youngstersare taken to other states within Mexico towork as hitmen, to smuggle drugs or to packmarijuana in sae houses.

SOMETHING ROTTEN

FOR MONTERREY, THE BIGGEST lessono the drugs war is that, despite its

entrepreneurial fare, it aces the sameinstitutional crisis as the rest o the country.The drug war has ripped the skin o theillusion that it is dierent.

Its municipal and state police services havebeen inltrated. Ocials acknowledge its

justice system ails to resolve most crimes.Its youngsters are caught up in the country'sdysunctional education system. Hugeinequalities between rich and poor havecreated a estering underclass that is cannonodder or the cartels.

I Monterrey could make even a littleheadway on these challenges, it could leadMexico once again.

The signs that it is about to do so are mixed.Monterrey's business elite appears

determined to help. Both Cemex's Zambranoand FEMSA's Astaburuaga say they aretaking a central role to support the stategovernment by putting resources into socialprograms to help youngsters, backingcampaigns that urge citizens to denouncemore crimes and putting some o theirexecutives into government.

The number two ocial in the stagovernment, Javier Trevino, is a long-timCemex man who joined the newly-electeadministration in late 2009.

Jorge Domene, security spokesman Nuevo Leon, reels o a list o achievemenincluding progress on ring hundreo police ocers suspected o workinor the cartels over the past year, rollipolice checkpoints across Monterrey, mocollaboration with the military, and eortsmodernize the police with military personn

In the San Pedro Garza Garcia municipali

part o Monterrey and the richest in MexicMayor Mauricio Fernandez, himsel a wealtbusinessman, is investing $65 million security equipment, more modern polibuildings and 2,000 cameras to monitevery street corner in the area.

But Nuevo Leon's eorts to reorm its justisystem have slipped badly ater being trst state to introduce U.S.-style oral triain 2004, making little progress adoptinopen court hearings where prosecutors adeense attorneys present their cases beoa panel o judges.

A plan to build a new high security priso

in Nuevo Leon has stalled and the CAINTRbusiness chamber eels the state governmeis slipping behind on fushing out corrucops.

Twelve o Nuevo Leon's rural towns awithout any local police as cops have quater brutal drug gang attacks.

U.S. ocials admit privately thMonterrey's best hope is to contain tviolence and get it o the ront pages.

And there is still a lot o denial.

Video story rom Monterrey:http://link.reuters.com/gef89

REUTERSINSIDER


10/10

MONTERREY JUNE 20

"Is there a problem? Yes there is, but it isa problem between the cartels, not againstsociety," said Mayor Fernandez in his oce,adorned with paintings, in San Pedro.

Unlike in Mexico City, wealthier residentsseem reluctant to protest against thegovernment, seeing it as vulgar.

"That's or a dierent class o people, no?"

said Lorena, a young mother who declined togive her last name, struggling to explain whythere is not more public outrage in Monterrey.

Many o the Monterrey diaspora admit theywould like to go home. They are strangersin Texas, they miss riends. The enchiladasnorth o the border are terrible, they say.

But many, like businessman Ramos, say

they are too araid to return. "I don't smuch progress. They've got to do somethiabout the Zetas. They are the ones robbiMonterrey o its uture."

(Additional reporting by Tim GaynorPhoenix; Editing by Kieran Murr

and Claudia Parson

COVER PHOTO: Members o a orensic team remove the body o a slain hitman rom the bed o a pick-up truck ater a gunfght with ederal policemen in the municipalityJuarez, on the outskirts o Monterrey April 5, 2011. REUTERS/TOMAS BRAVO

Thomson Reuters 2011. All rights reserved. 47001073 0310Republication or redistribution o Thomson Reuters content, including by raming or similar means, isprohibited without the prior written consent o Thomson Reuters. Thomson Reuters and the ThomsonReuters logo are registered trademarks and trademarks o Thomson Reuters and its afliated companies.

FOR MORE INFORMATION CONTACT:

CLAUDIA PARSONS,

DEPUTY ENTERPRISE EDITOR

+1 646 223 6282

[email protected]

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LATIN AMERICA EDITOR

+52 55 52827153

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ROBIN EMMOTT

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GETTING BY:Peopstand outside hous

in the low-incomneighborhood Cer

de la Campana Monterrey Janua

13, 2011.REUTERSTOMAS BRAV

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