U.S. Immigration and Customs Enforcement announced today that a study by financial experts shows that Mexico’s drug cartels deposit less than half of their cash proceeds in a bank. The rest is either stashed or directly spent in Mexico, the AP notes in its story.
The real point here is that this means that anywhere between roughly $10 billion and $20 billion in narco money is being properly (ie, through a bank) introduced to the Mexican economy each year. By my count, that makes drug cash the fourth-largest foreign exchange generator for the country. (And depending on exact numbers, it could be on a par or higher than remittances.)
The Mexican government wants to crack down on money laundering, or so it says. Seriously, what government in its right mind would want to do that if $20 billion a year is flowing in and being recirculated in legitimate business? If it’s just front companies that do nothing, sure, shut them down; they’re of no use. But if this money is going to real businesses in Mexico somehow (which i know it does at least in some cases), that’s one hell of a boon for the economy.