I've been visiting my sister in Chihuahua, Mexico, every year for six years. Every time I go back I notice considerable new development, usually American retail businesses, but also lots of local wealth being put into construction, from homes to restaurants and malls and highways. In fact Chihuahua is now ranked first in economic development in all of Mexico (see article).

I took these pictures on a walk with my sister at a gated residential community. There are several of them on the edges of the city. These homes start from about $300,000, considerably less than what they would cost in the US. In some places they have put English street signs to attract potential American and other foreign home buyers. Mexico's telecom mogul Carlos Slim, the world's second richest man, is building a hospital nearby. Restaurants like this one cost a million dollars, just for the land.

One of the main reasons for this rapid growth has been Chihuahua's proximity to the US. It's only 4 hours drive from El Paso on the Texas border. In the past decade, many American companies have set up factories across the border to take advantage of cheap labor and less restrictive regulations.

But some speculate that drug money is also a big reason for the recent growth. Chihuahua is on one of the main drug routes to the US and the border town of Juarez has suffered horrible bloodshed as the army has tried to fight the traffickers while armed gangs have turned on each other in the face of shrinking cash flows. The theory is that drug lords may be investing more of their cash in legitimate businesses.

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