Drug War and Mexican Economy - Essay Example

The economy has had its times of rising and hard times as well. During the period of 1940 to 1960, various measures were put in place by the Mexican government to reduce the inflation rate and promote its growth. Such measures were both fiscal and monetary policies, as well as import substitution. This saw the economy rise but the effect was not to last long since in 1970; the populists abandoned these strategies for increased consumer subsidies and facilitated state ownership of public entities.

This was together with uncontrolled state spending and over reliance on oil revenue thus raising the levels of inflation in the economy of Mexico. In the period between 1980 to 1990 several measures to prevent the increasing inflation rate and excessive borrowing were put in place, which included privatization of state owned companies, reduction of tariff and non tariff trade barriers among others (Library of congress, 20). This was crowned by the signing of the North America free trade agreement in 1994.

During this period, the gross domestic product was about 2.6% in contrast to the period 1983 to 1988, which was 0.1%. This trend has continued ever since set for the year 2001 when there was recession in the United States, which automatically affected the economy of Mexico negatively. . The war against drugs use and the cartels for its trade has been a major challenge in Mexico for quite some time in the past and it is still ongoing. Several efforts have been put in place to eliminate the drug cartels operating within the country, some which have succeeded while others have not seeing that the drug cartels are still operating within the country and beyond.

Some contributing factors for its thriving in Mexico are the availability of ready market for the drugs especially in the United States (Shirk, 6). Further, the availability of weaponry by the operators of these cartels has further boosted this illegal trade since they help offer security to the drugs while in transit and even to the people transporting them. The weapons are also used to eliminate anybody who tries to prevent the drug trade from taking place hence accounting for the numerous violent cases related to drugs.

The major suppliers of the arms are from the United States and this therefore requires that the United States have to play a major role in the war against drugs in Mexico if at all the war against the drugs will be won. The effect of drug wars on the economy of Mexico Apparently, there is a great relationship between the economy of Mexico and the existing drug cartels in the country. The drug wars in Mexico affect the economy negatively in various ways, one of the major effect being the loss of foreign currency due to the reduced activity in the tourism industry (Schneider, Para 4).

Due to the Mexican government’s rising attacks on the drug cartels in a bid to eliminate them in the country, the drug cartels that do not follow the rule of law are fighting back now more than ever especially with the increased supply of