Emerging Markets

Mexico, US need to 'collaborate' on drug cartels

Mexico, US need to 'collaborate' on drug cartels: Fin Min

The U.S. must "share responsibility" on clamping down on the trade in illegal drugs between it and Mexico by stepping up efforts to reduce the demand for banned substances, Mexico's finance minister told CNBC.

Speaking at the International Monetary Fund's spring meeting in Washington, Mexican Finance Minister Luis Videgaray said it is a challenge to have a neighboring country like the U.S. that has a demand for illegal drugs, as it will always create "disruption". Videgaray said the matter was one of "shared responsibility".

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Mexican security officials stand guard outside of a factory where a drug tunnel was discovered leading into the U.S.
Sandy Huffaker I Getty Images

"Just as Mexico should fight these organisations and reduce supply, all the efforts that the U.S. can make to reduce demand and to make sure that the younger population in the U.S. does not go into drugs, that's first of all going to help the U.S. a lot, it's going to be very good for the U.S. society," he told CNBC.

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More than 60,000 people are estimated to have died between 2006 to 2012 in drug-related violence in Mexico according to charity Human Rights Watch, with Mexican drug cartels taking in between $19 and $29 billion annually from U.S. drug sales, a report from the U.S. Department of Homeland Security found.

"But it's also going to be good for Mexico because the demand for drugs will be lesser. So it's collaboration, it's a shared responsibility," he said.

He added the prevention of violence as a result of illegal drug trafficking and the creation of a safer environment for the people of Mexico was a priority of this government.

Mexico has been dubbed the kidnap capital of the world, a name which Videgaray disputed, but he agreed that a strategy for fighting kidnapping is needed.

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"Well I'm not sure that that statistic is correct but the fact is that we need to have a strategy, which we do, for fighting kidnapping," he said.

"As we weaken criminal organisations, we will weaken kidnappings, we will weaken extortion, which is a very damaging social phenomenon. I think we're making good progress in cities like Monterey, or cities like Juarez on the border that are very violent, and now the levels of violence have been reduced substantially," he said,

The Mexican economy is also in a "better position," with stronger fundamentals than other emerging markets at the moment, Videgaray said, adding the "market is pricing Mexico differently, and that has a lot to do with the prospects of growth. "