How the Business World Can Help Stop Latin America's Violence

A small but meaningful initiative in Mexico shows how the private sector can help address crime. The history of private-sector interventions in Latin American security is full of empty gestures, dubious intentions and deadly failures. The most notorious example was Colombia in the late 1980s and early 1990s, when tycoons furious over the rise of Pablo Escobar and other drug kingpins and guerrilla groups decided to create their own armies. These paramilitary forces quickly became monsters in their own right, running drugs and massacring thousands of innocent people.

Following their disastrous experience with the paramilitaries, Colombia’s business leaders had figured out how to play a more constructive role. Private-sector support was crucial in lowering the murder rate, which had dropped by more than 50 percent from its peak in the early 1990s. The Chihuahua group met with consultants and officials, including then-President Álvaro Uribe, who upon entering office in 2002 had imposed a 1.2 percent tax on the liquid assets of wealthy Colombians and large businesses, with the revenues earmarked for security spending.

The Colombian model also included a broad range of programs aimed at the root causes of violence, like Plan Cuadrantes, a community policing effort that helped police officers build personal relationships — and trust — with residents on their beat.

A group of Mexican business leaders copied the model and developed it further. A broad alliance of business leaders asked the governor to impose a new tax on all the state’s private businesses, equal to 5 percent of whatever they paid in payroll taxes. The revenues would be put into a fideicomiso, or trust, that could only be used for security, and would be administered by a nonprofit called the Trust for Safety and Competitiveness, or FICOSEC.

Read full article