What Do Foreign Executives Need To Know About Security Risks In Tijuana, Mexico?

Foreign executives need to understand the impact that criminal activity in Tijuana can have on their operations and employees. Tijuana is the most violent city in Mexico, but it is also one of the country’s biggest economic success stories. As powerful organized crime groups from the states of Sinaloa and Jalisco battle for control of the smuggling routes that run through Tijuana to the U.S., the border city recorded an average of over 2,000 murders per year between 2019 and 2023. In 2023, Tijuana recorded nearly five times as many murders as New York City, an astounding level of violence considering that Tijuana’s population is less than a third as big as New York City’s.

On January 5, 2024 a man driving a car with California plates was shot and killed on a busy road in Tijuana. In September, 2023, gunmen killed two innocent bystanders during a rush hour shootout in high traffic in Tijuana. In June, 2023 Tijuana’s mayor decided to move into an army base after receiving threats from criminals. Shootouts involving heavily armed paramilitary style criminal gunmen are an ongoing risk in Tijuana and the surrounding state of Baja California.

In our new report, Latin American Lens gives the state of Baja California a HIGH RISK rating for the risk of random crimes such as shootouts and violent carjackings.

The cartel violence, however, isn’t scaring foreign investors away from Tijuana. In 2023, semi-conductor manufacturer Qualcomm opened a new facility in Tijuana, joining an established cluster of foreign companies that includes Medtronic, Samsung, Lockheed Martin, and Toyota.

Even though Tijuana has earned an unfortunate reputation as the most dangerous city in the world in terms of per capita homicides, Tijuana’s economy hasn’t crumbled. Between 2016 and 2022 foreign aerospace, automotive, and electronics companies invested over $11 billion in the state of Baja California where Tijuana is located. Tijuana’s industrial sector helped Mexico export a record breaking $476 billion to the U.S. in 2023, and has also helped Mexico take the top spot as the U.S.’s number one trading partner. Over 2,500 cargo trucks cross the border from Tijuana to the U.S. every single day.

Overall, organized crime activity has a relatively minimal impact on Tijuana’s industrial sector.

Latin American Lens rates Tijuana as LOW RISK for kidnapping of foreign executives or direct extortion of large foreign companies.

Although 12 cargo trucks were hijacked in the state of Baja California in 2023, overall, Latin American Lens rates Tijuana as LOW RISK for violent cargo truck hijacking.

In our recent report "Mexico Nearshoring Risk Report: Baja California" we explain, "Baja California and its largest city, Tijuana, present a complex security environment and a MEDIUM level of overall risk due to the presence of powerful organized crime groups that engage in cross-border drug smuggling and other activities. Tijuana is one of the top hotspots for violent crime in Mexico."

Overall, we give Baja California a 4.5 out of 5 rating for the strength of the organized crime groups that operate in the state.

However, we also give Baja California's private sector a 4.5 out of 5 rating for it's relative strength.

In a context of relatively weak state capacity, the strength and consolidation of Tijuana's industrial manufacturing sector and criminal ecosystem has led to a status quo in which BOTH legal maquila businesses and illegal organized crime groups are able to export billions of dollars of product to the U.S.

In our new report, we explain, "The government in Tijuana has been effective at protecting foreign companies from direct attacks by drug trafficking groups but is far less successful at improving overall levels of security. Baja California has the second lowest number of state police per capita of any state in Mexico. Tijuana has only around 2,000 municipal police officers working. By contrast, Mexico City, a metropolis with a population that is just four times larger than Tijuana’s, has over 90,000 municipal police officers. Over 98 percent of the murders committed in Baja California go unsolved."

In Mexico, informal structures of power play an important role in establishing the de facto operating environment for companies. Industrial companies have built up a powerful industrial cluster in Tijuana that employs over a quarter of a million people and are able to successfully advocate for public security policies that protect their interests. Unlike criminal groups in in central Mexico, the cartels in Tijuana have direct access to smuggling routes and may be less inclined to disrupt their main drug trafficking business by causing problems for the industrial companies in the city.

The state of Baja California where Tijuana is located received $2.7 billion in foreign direct investment in 2022.

We don’t see evidence that powerful organized crime groups are trying to intimidate and extort foreign companies in Tijuana. So far, criminal groups haven’t diversified into kidnapping or killing foreign executives or burning down manufacturing facilities in order to try to squeeze protection money, what locals call cobro de piso, from industrial companies.

But, foreign executives looking at investing in Tijuana still need to do significant due diligence to understand the political risk impact of security problems and organized crime-related activity.

For more information on current security risks in Tijuana, check out our new publication, "Mexico Nearshoring Risk Report: Baja California."

Or, contact us to discuss how we can help your business overcome obstacles and successfully navigate Latin America.

This blog post is based on a recent article Latin American Lens's Director of Research, Nathaniel Parish Flannery, wrote for Forbes.com.