Mexico killings: How the drug war crippled the Juarez economy

As officials search for a motive behind the Mexico killings of US consulate employees in Cuidad Juarez, a local business group president points to the economic disaster that Mexico's drug war wrought in this industrial border city.

Mexican officials in the violence-wracked border city of Cuidad Juarez are working hard to determine a motive for this weekend's brazen drive-by shootings of a US consulate employee, her American husband, and a Mexican citizen affiliated with the consulate.

So far, there's been no official word on whether the Mexico killings of these US government workers was a targeted attack by drug traffickers or a random act of violence. But one thing's for sure: The killings are a serious blow to a city besieged by a brutal drug war and now reeling from the US downturn and an exodus of residents and businesses.

IN PICTURES: Mexico's drug war

100,000 jobs lost

Long dependent on the US market, this industrial hub of maquiladoras (factories) has lost 100,000 jobs since the recession, says Carlos Chavira, the president of the local business group Coparmex.

A lack of American demand for the goods Ciudad Juarez produces has been the main culprit. But while Juarez is usually the first place in Mexico to feel the economic impact of US woes, it is also typically the first to bounce back.

The city’s recovery has stalled because of violence, says Mr. Chavira, particularly because of lost investments in the industries of information technology, automotives, and electronics. That represents about $450 million.

“It’s the first time in the history of the city that the recovery did not happen as usual,” he says, “and that is due to public security issues.”

Companies, he says, are also opting for other places to hold business meetings – a trend that will likely continue after the deaths of the Americans over the weekend.

Residents flee the city

Ciudad Juarez has long seen an ebb and flow of people – as many rural migrants move here temporarily in search of jobs. When the economy slows, many leave. But city officials say that thousands of homes have been left abandoned today.

The exodus is apparent in the Ex Hipodromo neighborhood, a middle class area where half the homes on one main street either have “for sale” signs up or are padlocked or abandoned, with graffiti splayed on walls and windows smashed.

In fancier neighborhoods, residents place huge tree trunks and rocks at the entrances of their streets, to dissuade would-be criminals.

“Do you live in El Paso?” is a common question that Mexicans receive, as so many – including the mayor of Juarez – have opted for residences on the US side of the border.

Pay up or we burn down your business

Mr. Chavira says some 10,000 businesses have shut down in the past 18 months, some because of the economy and others by choice, as no small owner seems impervious to extortion. Others do not have the means to leave or relocate, or to even shut down their businesses temporarily.

One restaurant owner, who wished not to be named out of fear, says that thugs called his local restaurant for months demanding monthly “protection” money. He ignored them, cutting off his phone line instead. But in December they came to the door of his locale with a gun and three options: pay, die, or the establishment will burn.

Chavira estimates some 50 establishments have been burned to the ground by criminals.

IN PICTURES: Mexico's drug war