2012 white paper developed by Crossborder Group for the Tijuana Economic Development Corporation (DEITAC) combining updated security data for the City of Tijuana, background information about business visitation, and other topics to inform potential investors about the current risk levels and security issues in that city. Developed by Crossborder Group as one in a series of research-based informational documents for our client.
2. Lowering Competitive Risks – Locating in Tijuana
Deciding where to establish your company internationally should always include an
objective analysis of various risks – using facts, independent assessments, and the real
experiences of business visitors, investors, and international officials to a region – not
sensational hearsay, old data, or questionable media reports.
Tijuana – only minutes from Downtown San Diego, and the
second-largest city on the West Coast of North America “The level of security
(with nearly 1.7 million residents) is the focus of this coordination among federal,
analysis. The goal: to provide some fact-based context state and municipal
authorities in Baja has been
about this major metropolitan area to help potential
impressive, as has been
investors understand why – in 2012 – Tijuana is still cooperation with U.S.
Mexico’s leading city for nearshore operations, with counterparts.”2
over 550 maquiladora (IMMEX) manufacturing
companies1. — U.S. Ambassador to Mexico
Anthony Wayne, Sept. 2011
Also critical: to highlight the significant progress that
Tijuana and Baja California have made in addressing
public security challenges – with success that even U.S. officials (like U.S. Ambassdor
Anthony Wayne, quoted at right2) and many U.S.
media now acknowledge.
Baja California & Tijuana Rebounding
Independent data collected by Reforma (one of
Mexico’s major newspapers) and analyzed by the
University of San Diego’s Trans-Border Institute
(TBI), shows that Baja California has achieved
major security improvements throughout 2011. As
seen in TBI’s map data at right, from January to
December of 2011 the vast majority of security
incidents and violence in Mexico (dark blue) Source: USD’s Trans-Border Institute
now occur 500 or more miles from Tijuana3.
Total Crime Incidents
In fact, Tijuana’s investment in security Tijuana: Jan. 2006-Dec. 2011
(Secretaría de Seguridad Pública
equipment, personnel improvements and training, del Estado de Baja California)
and close coordination with State and Federal 7,500
officials (including agencies within the U.S. 6,000
32.8%
Decline
government), have resulted in a 32.8% reduction
2008 Peak
in total crimes within the City since well- 4,500
publicized peaks in 2008 (see graph at right).
3,000
These security successes in Tijuana and Baja 1,500
California have been notable enough that the
0
Washington Post commented in October 2011
Sep-06
Sep-07
Sep-08
Sep-09
Sep-10
Sep-11
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
May-06
May-07
May-08
May-09
Jan-11
May-10
May-11
of the City’s ―turnaround‖, and ―recovery‖4.
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3. The Facts: Putting Tijuana’s Security into Context
Like all of Mexico, Tijuana has been the subject of negative media coverage about
security. Often lost in these reports, however, was the fact that criminals were fighting
amongst themselves (or law enforcement), and that business visitors are not a target – as
even the U.S. State Department acknowledged: ―Millions of U.S. citizens safely visit
Mexico each year for study, tourism, and business, including more than 150,000
who cross the border every day…there is no evidence that Transnational Criminal
Organizations (TCOs) have targeted U.S. visitors…5.‖
More recently, the media has overlooked the effect of a 2011 City Homicide Rates 7
Jan-Dec 2011, per 100K population
sustained and serious effort to regain security – 0 10 20 30 40 50 60
resulting in a 42% decline in homicides in the City of New Orleans 57.9
Tijuana during 2011 versus 20106. As seen in the Flint, MI 55.6
Detroit 48.2
comparison at right, using verified data directly from St. Louis, MO 35.4
city police departments in the U.S. (and independent Newark 32.8
media sources for several cities)7, the facts are clear: Baltimore, MD
Tijuana 28.8
31.6
despite sensational media accounts, Tijuana’s Oakland, CA 28.2
homicide rate during 2011 had dropped below or was Birmingham, AL 25.4
Cleveland, OH 22.9
similar to several major cities in the United States. Memphis, TN 22.7
Philadelphia, PA 20.7
Washington DC
Tijuana’s return as a more secure community has Chicago, IL
18.1
15.5
contributed to a notable increase in business visitors to
Tijuana. While recent surveys have shown an average
Business Visitor Visas
of 30,000-40,000 business-related trips are made by
Issued in Tijuana
Southern California-residents into Tijuana each (Otay Mesa & San Ysidro/Puerta
month8, in 2011 there was also a 34.7% increase in the México, January-December)
number of Business Visitor Visas issued by Mexican 22,500
immigration authorities at Tijuana’s Ports of Entry 20,000
compared to the same period in 20099. 17,500
15,000
One reason that formal business visits are on the
20,121
12,500
16,893
increase: Tijuana is close by and easy to get to. This
14,941
10,000
proximity is also, in fact, a security benefit – as 7,500
investors and business visitors are often in Tijuana for 5,000
daytime hours and have only a short drive to cross back 2,500
0
into the U.S. to be with their family – something not
Jan-Dec Jan-Dec Jan-Dec
possible at non-border or offshore locations. 2009 2010 2011
Source: Mexico's Instituto Nacional de Migración
Investment in Security Infrastructure
While Tijuana’s overall security situation in 2012 is by
some measures comparable to other U.S. and
international business cities, the City Government,
along with State and Federal agencies, continues to
invest in technology, equipment and personnel.
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4. In addition to a state-of-the-art Centro de Control y Mando – Command and Control
Center (pictured on previous page) with 60 real-time video screens, there are over 400
high-resolution CCTV cameras spread throughout Tijuana’s industrial, commercial, and
residential areas; 67 sound detectors; over 1,940
“Emergency Buttons” in businesses, tourism and Monthly Salary: Municipal Police
Selected Cities 2011 or *2010, pesos
shopping centers that allow the public to sound
alarms that help direct City police to potential - 6,000 12,000 18,000
criminal activities; a mobile security Control Center; Tijuana, Baja CA. 14,949
and over 500 new police vehicles to increase patrol *Guadalajara, Jal. 9,167
coverage and reduce response times 10. *Chihuahua, Chih. 8,930
*Monterrey Municipio, NL. 8,774
Beyond technology, there have also been efforts to Silao, Guan. 8,351
further professionalize Tijuana’s municipal security García, NL. 7,759
services – including not only a thorough review and *Distrito Federal, DF 6,486
screening process of police personnel, but also Piedras Negras, Coah. 6,328
training and increased pay that now place Tijuana as Matamoros, Tam. 6,011
having the highest-salaried municipal police force
*Guaymas, Son. 5,900
in Mexico (an important investment to improve
morale and the quality of their work). Source: Secretariado Ejecutivo del Sistema Nacional de
Seguridad Pública, October 2011; amounts in MXN pesos/mo.
Tijuana: Lowering the Competitive Risk for Your Business
Tijuana’s and Mexico’s economic stability and competitiveness don’t sell newspapers
or draw hits on the internet, but they are facts – and also part of what investors consider
when assessing today’s turbulent global economy. In fact, understanding how Tijuana
can leverage Mexico’s benefits in a nearshore environment just “next door” to California
and under NAFTA’s protective legal framework is a key element of any careful risk
assessment – so how do Mexico and Tijuana rank today?
In 2010, Deloitte and the U.S. Council on Competitiveness ranked Mexico #7 in
their assessment of 10 factors for global manufacturing competitiveness, noting,
“Proximity to the United States has boosted Mexico’s manufacturing potential
and has helped position it firmly in the top rankings of the most competitive
manufacturing locations.”11
Mexico also moved up to #38 in IMD’s 2011 World Competitiveness Yearbook 12,
above the Philippines (#41), Brazil (#44), and Colombia (#46).
Worried about global financial turmoil? Moody’s has stated that “…Mexico is
considered to be one of the countries better positioned to confront an adverse
global macroeconomic environment…”13, and in August 2011, Fitch Ratings gave
Tijuana an AA- rating (only two cities in Mexico were rated higher)14.
Reducing Risk: Mexico & Tijuana’s Rankings
Mexico #7 of 26 on the Deloitte/USCoC 2010 Global Manufacturing Competitiveness Index
Mexico #38 of 59 on IMD’s 2011 World Competitiveness Yearbook
Tijuana rated AA- for Municipal Public Finances by FitchRatings
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5. Tijuana: Looking Forward
Nearly four years after the peak of security “My visit to Tijuana vividly showed
challenges in 2008, Tijuana is regaining its place as what a wide-ranging and productive
a major, low-risk and high-return investment relationship we have with Mexico…
President Obama has said that the
destination in North America – as seen by the
fates of the United States and Mexico
growth of new companies like Siliken (solar) and are more intertwined than ever
expansions at companies like Greatbatch, Samsung, before. What I saw in Tijuana
and others. Within two years of its June 2009 definitely supports that statement.”
recession low-point, in fact, Tijuana’s
IMMEX/maquiladora industry had regained nearly — Arturo Valenzuela,
18,000 employees – one of the largest IMMEX former U.S. Assistant Secretary of State
for Western Hemisphere Affairs
employment increases for any city in Mexico 15.
April 8, 2011
As has been shown with data from agencies and
institutions on both sides of the border, the
combination of better security technologies, the further professionalization of law
enforcement personnel, and increased coordination with authorities in both Mexico and
the U.S. has resulted in significant reductions in crime in this dynamic city to levels
similar to some locations in the U.S. – a situation that presents both low levels of risk for
investors and visitors, as well as a trend that will likely support continued growth and
innovation in Tijuana’s economy.
For more information about this Analysis, or about the City of Tijuana, please
contact the Tijuana Economic Development Corporation.
1
Website of Mexico’s official statistical agency, Instituto Nacional de Estadística y Geografía, accessed February 2012
(http://dgcnesyp.inegi.org.mx/cgi-win/bdieintsi.exe/NIVR2501100070#ARBOL)
2
Embassy of the United States Mexico City, Press Releases, Sept. 2011 http://mexico.usembassy.gov/press-releases/ep110930-bajagob.html, accessed
October 4, 2011
3
University of San Diego’s Trans-Border Institute, Mapping Project, Justice in Mexico Project,
http://www.sandiego.edu/peacestudies/tbi/projects/current_projects/mapping_project.php , accessed February 2012
4
Anne-Marie O’Connor, “In Tijuana, taking a risk on a turnaround”, Washington Post (Oct. 8, 2011),
http://www.washingtonpost.com/world/americas/in-tijuana-taking-a-risk-on-a-turnaround/2011/10/05/gIQARhsSWL_story.html
5
U.S. State Department website, accessed February 2012 (http://travel.state.gov/travel/cis_pa_tw/tw/tw_5665.html )
6
Analysis of Tijuana homicide trends by Crossborder Group Inc., using data provided by Baja California Procuraduria General de Justicia del Estado
(PGJE).
7
Calculations made by Crossborder Group Inc., using city-level homicide data from January-December 2011 obtained directly from websites of police
departments, media quotes from police officials of those cities, or (as homicide data is either not available or delayed from several cities) on regional
media accounts and/or crime tracking websites. Rates were calculated for 2011, using 2010 Census data for population.
8
Estimates based on at-border survey data collected in 2008 and 2009 by Crossborder Group Inc. (www.CrossborderBusiness.com), for Southern
California-residing individuals that selected “business” as their primary reason for visiting Tijuana.
9
Crossborder Group Inc. analysis of INAMI visa data, Jan-Dec 2009-2011 (http://www.inm.gob.mx/)
10
Crossborder Group Inc. analysis of data provided by the City of Tijuana, October 2011.
11
U.S. Council on Competitiveness and Deloitte, 2010 Global Manufacturing Competitiveness Index
(http://www.compete.org/publications/detail/1378/2010-global-manufacturing-competitiveness-index), p. 19
12
IMD World Competitiveness Center, 2011 World Competitiveness Yearbook (http://www.imd.org/research/publications/wcy/World-Competitiveness-
Yearbook-Results/#/ , accessed October 2011)
13
Moody’s Investors Service, “Mexico’s sovereign rating stable despite U.S. negative outlook” (August 18, 2011).
14
Fitch México, Finanzas Públicas, Municipios – Listado de Calificaciones (August 31, 2011)
15
Crossborder Group analysis of INEGI data for IMMEX industries (June 2009 to June 2011 data)
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