MEXICO CITY, March 6, 2019 (BSS/AFP) – Ratings agency Moody’s warned
Tuesday that violent crime was hurting Mexican businesses, saying the crucial
oil and tourism industries were particularly vulnerable.
“Increasing insecurity, robbery and travel warnings hurt Mexican
companies’ top lines and profitability, and will particularly weaken revenue
and margins over the next 12-18 months for the oil industry and hotels and
resorts,” said Moody’s vice president Alonso Sanchez in a statement.
Mexico, Latin America’s second-largest economy after Brazil, is struggling
to deal with a more than decade-long surge in violent crime fueled by
powerful drug cartels.
Since the government controversially deployed the army to the streets to
fight organized crime in 2006, the country has registered nearly 250,000
murders — including a record 33,334 last year — as fragmented cartels wage
war on the authorities and each other.
Moody’s said in its report that insecurity-related costs also posed risks
in the food, retail and mining industries.
It is the latest tough assessment on Mexico from the big ratings agencies
since leftist President Andres Manuel Lopez Obrador took office in December.
Standard & Poor’s recently downgraded the country’s outlook to “negative,”
along with that of struggling state oil company Pemex. And Fitch downgraded
Pemex by two notches in January, triggering investor jitters and a drop in
the peso.
Lopez Obrador has dismissed the ratings agencies as “charlatans,” and
launched a new attack on Tuesday, saying they turned a blind eye to
corruption under previous “neoliberal” governments.
“The ratings agencies remained silent the entire time that corruption
reigned (in Mexico), they gave us a perfect 10,” he told a news conference.
Lopez Obrador, a populist widely known as “AMLO,” remains broadly popular
as he approaches 100 days in office this Sunday. But he has spooked the
business community with talk of overhauling Mexico’s economic model to
address entrenched poverty and corruption.