If we believe media reports alone, the U.S.-Mexico border is nothing but a never-ending territory in crisis. If you, however, call the border region home, as 30 million of people do, you would know spirits around here are much higher than the national media of both countries would like you to believe.
You see, with the pandemic caused by Covid-19 not only did the word “amidst” increase in popularity but so did the attention given to value chains. Further fueling this discussion is the recent passage of the CHIPS and Science Act aimed at strengthening the U.S. industrial base by manufacturing semiconductors domestically. If Covid-19 demonstrated the urgency of securing value-chains, then the CHIPS Act is encouraging economic stakeholders at the border to seriously think how the United States-Mexico-Canada Agreement (USMCA) can help usher this new industrial policy and what role will Mexico, in particularly along the border, will play.
Their optimism is not misguided. What is misguided, however, is to think that the potential of USMCA can be achieved while simultaneously disregarding criminal dynamics that target productive economic activities along the U.S.-Mexico border. In 2022, the Center for U.S.-Mexican Studies partnered with Mexico-based think-tank México Evalúa, the Center for International Private Enterprise (CIPE) and the Global Initiative Against Transnational Organized Crime (GI-TOC) to better understand how protection rackets operate in Tijuana and how state and criminal actors compete or collude to offer “protection” to victims who pay in exchange for safety to the very same actors that threaten their income and their lives.
The full report “Business Extortion and Public Security in Tijuana: Who Is Protecting Whom?” provides robust evidence that should give the business community pause for concern. Two findings stand-out for their relevance to economic activity:
1) The successful economic integration of CaliBaja, the mega region that includes the counties of San Diego and Imperial and all municipalities in Baja California, has obscured the multiple Tijuanas that co-exist. On the one hand there is a Tijuana of economic prosperity with deep ties to California that can boast that nearly all the pacemakers in the world are made in this border city. On the other is the Eastern Zone, a label, as the report explains, that is an umbrella term for “dangerous” areas of the city which residents characterize as the forgotten Tijuana.
These “Two Tijuanas” also create invisible borders that create territories where local criminal dynamics can thrive. While Tijuana is often associated with transnational criminal activities, such as drug trafficking, our findings show that activities that take place within city boundaries can be highly predatory. This includes the collection of “protection payments” ranging from $400 pesos every Friday up to US $3,000 per month after an initial payment of US $5,000. Absurdly, and as a result of the imposition of this criminal tax, it is residents in low-income areas who end up paying more for basic necessities and food staples.
2) Operating a functioning and viable protection racket is not a simple task. Arguably, more so at the U.S.-Mexico border where you do not want to kill the goose that lays golden eggs. After the riot-like violence of August 12, when the major of Tijuana infamously requested criminals “to only target those who have not paid” the business community reported that ninety percent of medical appointments from patients coming from the U.S. had been cancelled as a result of the violence. These cancellations are not minor incidents; every year Baja California welcomes 2.5 million patients coming from the United States.
This matters not only from the point of view of lost revenue but also because it should be a wakeup call to the business community that thinks that violence, and its consequences, only happens in the Eastern part of the city. One of the key features of protection rackets is that they have to issue credible threats of violence to potential victims. These credible threats can sometimes escalate and will result in events like the ones that took place on August 12 but even homicides of victims who refused to comply.
In the time I have lived in the border region I have witnessed how Tijuana’s business community has often diagnosed the lethal forms of violence in the city as the result of drug trafficking and drug users. This falls short of addressing the region’s realities of complex transnational criminal dynamics, like drug trafficking, that co-exist with local criminal dynamics, such as protection rackets. Equally important, in the time that I have lived in the border region, I have also witnessed first-hand what pragmatism and innovation between the U.S. and Mexico can accomplish. If the Baja California business community is seriously thinking about their role in this semiconductor venture, then it is time to take off the blinders and acknowledge and address the protection rackets that are suffocating productive activities in the Tijuana that exists outside the prosperous CaliBaja.