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Area Development

El Paso/Juárez - A Local Perspective

El Paso, Texas, and Ciudad Juarez, Mexico, offer outstanding economic benefits, in spite of some limited criminal activity south of the border.

June/July 09
Mexican President Felipe Calderón took office in late 2006 and has stayed true to his promise to loosen the drug cartels' control over his country. Mayor José Reyes-Ferriz of Juárez took office more than a year ago and boldly declared that he would stand with President Calderón in this effort. Both men have demonstrated a clear commitment to building a secure environment and continuing the fight against criminal elements. This has had a significant impact on the day-to-day operations of the drug cartels.  

There has been much written about the 1,600 homicides that occurred last year in our sister city, but the reality of the situation is far different from what is generally reported in the media. More than 98 percent of these homicides were perpetrated against drug cartel members, police, and military personnel. However, in spite of the spike in violent activity, we continue to see economic growth in our region.  

Ciudad Juárez has long been a vital hub of Mexican manufacturing, particularly for the "maquila" industry. At present, there are upwards of 360 "maquila" (manufacturing) operations in Juárez, about 85 percent of which are owned by U.S. corporations, employing more than 220,000 persons. In 2008, Mexico's Secretary of the Economy issued 51 new operating permits for "maquilas," an 88 percent increase over the number approved in 2007. Also in 2008, Ciudad Juárez attracted more than $800 million of foreign direct investment and absorbed approximately 4.2 million square feet of industrial space, making last year one of the top four years of absorption in the past decade.  

My organization has the primary responsibility for attracting new investment to both El Paso and Juárez, and during 2008-2009, 10 companies notified us of their intent to build a presence in Ciudad Juárez. These 10 companies will create approximately 1,770 jobs. At present, we are working with 46 additional corporations that are considering operations in Ciudad Juárez. That is not to say there is not concern about the violence in Juárez. As we assist our clients with conducting in-depth due diligence, we are able to demonstrate that the vast majority of violent crime has been in specific geographic areas of Juárez - most of it well away from our modern industrial parks, where more than 80 percent of the expatriate manufacturing and distribution business is conducted. Upon conducting the proper due diligence, our clients typically arrive at three conclusions:

•    Mexican government officials at the federal and local level are committed in their fight against crime.
•    The organized drug cartels are not targeting violence at legitimate manufacturing and distribution concerns.
•    Common sense measures can be implemented to mitigate against potential opportunistic crime.   

Our neighbor to the south is an integral part of our regional success and has shown remarkable resilience and competence in containing the violence to a very specific segment of the population. As a result, not a single one of our clients (as of the writing of this article) has rejected Ciudad Juárez as a business location due to the current security environment.  

In conclusion, I should point out that there has been no discernable spillover effect in El Paso. For more than a decade, El Paso has been one of the three safest major cities in America (according to FBI Uniform Crime Statistics). While El Paso's heart aches for our sister city, we remain undaunted in our effort to develop El Paso as a "world class" city. We are building America's newest four-year medical school, constructing a $4.5 billion expansion of our Army installation, undertaking a major downtown redevelopment effort, and my office is currently working with 165 corporations considering jobs and investment in El Paso alone. Stay tuned.   

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