Organized Crime Affects Business Activity In Morelos, Mexico

Forbes

30-05-2025

Mexican marines guard the entrance of the building complex where the leader of the Beltran Leyva's ... More cartel, Arturo Beltran Leyva, was shot dead by security forces, in Cuernavaca on December 17, 2009. Arturo Beltran Leyva, a Mexican drug kingpin aka the "Boss of Bosses," has been killed in a dramatic shoot-out between cartel members and the military, at south of Mexico City, Navy said. Beltran Leyva was Mexico's third most wanted man, with a 1.5-million-dollar (one-million-euro) reward on offer for information leading to his capture. AFP PHOTO/Luis Acosta (Photo credit should read LUIS ACOSTA/AFP via Getty Images)
The small state of Morelos, just outside of Mexico City, has quietly emerged as one of the worst hotspots for organized crime activity in Mexico.
In 2024, Coca-Cola FEMSA decided to shutter one its facilities in Morelos due to threats from organized crime. The state's former governor, Cuauhtemoc Blanco, has faced widespread accusations of collusion with drug trafficking groups and is even accused of ordering the killing of a local businessman. Local business owners are complaining about threats and extortion from criminal groups in Morelos.
If you look at the statistics on homicide totals, it's shocking to see just how much violence has increased over the last few years in Morelos.
In 2024, the number of murders in Morelos was more than ten times higher than it was in 2007.
The total annual tally of homicides has ridden steadily over time. Data from INEGI and press ... More sources.
In particular, during the last six years during the '4T-era" of the presidencies of Andres Manuel Lopez Obrador and Claudia Sheinbaum, the violence has reached a new high.
I asked the Council on Foreign Relations' Will Freeman how he assesses the 4T-era security policies in Morelos. He gave Lopez Obrador and Sheinbaum an 'F.'
In fact, in Morelos, in 2024 the violence reached the highest level ever recorded in Modern Mexico's history. The state as a whole is now more than three times as violent as the city of Chicago.
In total, Morelos recorded over 1,300 homicides in 2024, making it one of the top ten most violent states in Mexico.
Overall, in terms of population-adjusted homicide rate, Morelos is now the 2nd most violent state in Mexico.
There is a major lag in the perception of the problem of violence in Morelos, particularly among foreign executives and tourists. Many of the shootouts in Morelos seem similar to scenes we see in Mexico's worst organized crime hotspots, but many visitors still perceive Cuernavaca to be safe.
In Morelos, tortilla-makers are complaining about local organized crime groups threatening and extorting them.
More broadly, politicians and police are struggling to deal with a splintering roster of organized crime groups that are diversifying away from drug trafficking into a vareity of new rackets including extorting local business owners, hijacking cargo trucks, and stealing lumber.
One of the biggest challenges Mexico's President Claudia Sheinbaum will face is whether or not she can improve security and reduce violent crime in places such as Morelos.
Security analysts speculate that right now there are over a dozen organized crime groups operating in Morelos.
During a recent podcast discussion, Washington Post journalist Mary Beth Sheridan, who recently published an article about how organized crime groups are targeting tortilla-makers in Morelos, explained 'They prey on the local population. Extortion is one of the primary activities: thousands of tortillerias are being extorted.'
When it comes to the risks foreign companies and executives face when investing in Morelos, I characterize the state as being low risk for targeted, high-impact crimes such as executive kidnappings, arson attacks, or extortion, but high risk for employees and operations from general, non-targeted violent crime such as shootings, armed robberies, carjackings, and cargo truck hijackings.
Some tourists may be wondering whether Morelos is safe to visit. There is a real disconnect where the popular perception of Morelos and Cuernavaca among tourists and foreign executives has not caught up with the on-the-ground reality.
Many foreign visitors still view Cuernavaca as a beautiful colonial city, the city of eternal spring or 'primavera eterna.'
But, locals are acutely aware of the risks of shootouts, armed robberies, and carjackings and have referred to their city as the city 'la balacera eterna' or eternal shootout for over a decade and a half.
The problems in Cuernavaca highlight the fact that while Mexico City is generally safe for foreign tourists to visit, many of the areas surrounding Mexico City in states including Puebla, Estado de Mexico, Morelos and Michoacan are affected by high levels of organized crime activity and violence, including violent carjackings on major highways.
Part of the problem in Morelos is limited institutional capacity for policing. It's helpful to compare Morelos with Mexico City when it comes to police. Mexico City has by far the highest number of police patrols of any state in Mexico. There are more than 92,000 state police patrol officers in Mexico City. In contrast there are only 2,000 state police officers in Morelos. Overall, Morelos has around 2 percent as many state police as Mexico City.
Furthermore, we know that around 99.8 percent of all murders in Morelos go unsolved.
To put that differently, right now the police and prosecutors in Morelos are solving almost none of the murders that are happening in the state.
So, foreign executives managing operations in Morelos need to be aware of the risks stemming from organized crime activity in the state.
It's true that the problem of extortion in Morelos primarily affects local businesses, not large foreign-owned firms. But, the threats tortilla-makers in Morelos are dealing with highlight the fact that organized crime activity in Mexico affects the legal economy in significant ways.
Check out the full conversation here.