Mexico Drug War Death Toll Climbs to 30,196 Since 2006, Government Says

Bloomberg (Link) - Jens Erik Gould & Thomas Black (December 16, 2010)

Mexican Attorney General Arturo Chavez said that 30,196 people have been killed in drug-related violence nationwide since President Felipe Calderon took office four years ago.

The number of deaths from January to November this year was 12,456, Chavez said today in Mexico City. This year�s toll is the highest since Calderon took office, showing that violence is increasing instead of waning.

Despite the violence, Mexico�s economy will grow around 5 percent this year on the back of exports to the U.S., according to a central bank forecast. The government estimates the violence shaves 1.2 percentage points off economic output annually.

�It�s a serious problem and it matters,� said Ricardo Aguilar, an economist at Invex Casa de Bolsa in Mexico City. �But as long as private property and the rights of investors aren�t at risk, the economy doesn�t have any reason to stop growing.�

The violence hasn�t slowed a rally in Mexican equities this year. The benchmark IPC index has climbed 17.6 percent in 2010, helping the gauge advance to a record level on Dec. 14. That compares to a 2.1 percent decline for Brazil�s benchmark Bovespa index and an 11.3 percent advance for the S&P 500 in the same period.

Benchmark Index

The IPC added 0.2 percent to 37,749.89 at 2:52 p.m. New York time.

The Mexican peso has climbed 5.3 percent this year against the dollar. Today, the peso gained 0.3 percent to 12.4261 per U.S. dollar.

Calderon sent military troops to quell violence mostly in northern states and the western state of Michoacan shortly after taking office. While Calderon�s stance against drug traffickers has won praise from U.S. officials, the strategy has caused infighting within crime groups and between drug cartels.

In the border states of Tamaulipas and Nuevo Leon, a dispute between the Gulf Cartel and a former allied group known as the Zetas has sparked shootouts in the streets of Monterrey, Mexico�s third-largest metropolitan area, and the abandonment of small Mexican cities near the Texas border, such as Mier. A feud between the Sinaloa cartel and the Juarez Cartel has made Ciudad Juarez the deadliest large city in Mexico.

�La Barbie�

Calderon, whose term ends in December 2012, has vowed to continue to target organized crime. The government has highlighted the capture of drug kingpins and hit men, including Edgar �La Barbie� Valdez and Sergio �El Grande� Villarreal, and the deaths of Arturo Beltran and Ezequiel �Tony Tormenta� Cardenas in the last year.

Last week, Nazario �El Chayo� Moreno, a leader of Mexico�s La Familia drug cartel, was killed by authorities in Michoacan, according to Alejandro Poire, a government security spokesman. Moreno�s body hasn�t been recovered.

Authorities are seeking the arrest of Julio Cesar Godoy, a congressman with the Democratic Revolution Party who is accused of having ties with La Familia in his home state of Michoacan, Chavez said today. Godoy�s whereabouts are unknown, he said.

Legislators this week stripped Godoy of his immunity from prosecution after a recorded phone call of Godoy allegedly speaking with a La Familia member was made public. In a news conference on Sept. 23 Godoy said he is innocent and denied any ties to illegal groups.

The lower house of Congress yesterday passed legislation to help crack down on organized crime by stiffening jail sentences for the use of grenades or car bombs and making it a crime to hang banners with drug-cartel messages. Lawmakers have stopped short of approving other Calderon initiatives, including a measure to unify local police forces under state control to combat police corruption and help out-gunned rural forces. �