- February 1, 2013: Vol. 25, Number 2

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Mexico Fights Back: With Drug-induced Chaos Subsiding, Latin America’s Second-Largest Economy Is Manufacturing Its Way Out of the Red Zone

by Anna Robaton

By some people’s estimation, Mexico was turning into a failed state, driven to the precipice by powerful cartels waging a seemingly endless drug war. That led some to believe the U.S. border state was nearing a tipping point. If so, the ramifications for Mexican real estate investments, as well as for U.S. real estate along the extensive Mexican border, would be significant. But a lot has changed in a few years.

In late 2008, Mexico was already bracing for the fallout from the economic havoc playing out in the United States, its largest trading partner, when the Pentagon raised a red flag that sent a chill through the international investment community.

In a yearly report that highlights global threats in order to increase military preparedness, the Department of Defense warned that Mexico could become a failed state due to “sustained assault and pressure by criminal gangs and drug cartels” on its government, politicians, police and judicial infrastructu

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