How Mexico’s Army Became One of Its Biggest Businesses

Defense · Mexico

The Mexico military has quietly become one of the country’s largest economic players, running airports, customs houses, ports and a giant railway, in a transformation that reshapes how foreign companies do business there.

How the Mexico military became a business empire

In most countries, the armed forces guard borders and stay out of commerce. In Mexico, the military has been handed a sprawling portfolio of civilian businesses.

Over the past several years it has taken on running airports, supervising customs and managing ports. It has even launched its own commercial airline.

The crown jewel is the Maya Train, a huge new railway looping around the southern tourist region. The army planned, built and now owns and operates it.

The scale of all this is remarkable. By some counts, dozens of separate measures have shifted civilian functions to the armed forces over the past two decades.

The railway alone runs more than fifteen hundred kilometers around the Yucatán peninsula. To supply construction materials, the army has even sought mining permits, using a national-security designation to bypass restrictions that apply to others.

Customs is another prize. Controlling the ports of entry gives the military a hand on the flow of trade and the fees that come with it.

Why the generals got the contracts

The logic offered by the government is speed and trust. The previous president, and now his successor, argued that the military builds faster and is less corruptible than civilian contractors.

There is also a financial incentive at work. Running airports and customs generates steady revenue, giving the armed forces income streams that ordinary militaries never see.

President Claudia Sheinbaum has kept the policy on track. Her government continues to channel major construction and operating roles to the army and navy.

The latest example is aviation. The armed forces are set to receive well over a billion dollars to upgrade airports under their control, with the main Mexico City terminal being overhauled ahead of the World Cup.

The price of military business

The arrangement has drawn sharp criticism at home. Watchdogs argue that handing the military so much commercial power erodes transparency and civilian control.

Military contracts often sidestep the usual tender rules, making it harder to see where public money goes. Designating a project a matter of national security can shield it from normal scrutiny.

There are practical concerns too. Soldiers trained for defense are now running businesses they were never prepared to manage.

Supporters counter that the results speak for themselves. Big projects have been delivered on tight timelines that civilian agencies had struggled to meet.

Still, the build-up gives the armed forces a permanent stake in the economy. Revenue from airports and customs flows to institutions that answer to the president rather than to markets or shareholders.

That permanence is what unsettles critics most. Powers handed to the military in the name of efficiency can be very hard to claw back later.

Why it matters for investors

For foreign companies, this changes the basic map of doing business in Mexico. Increasingly, the counterparty for a port, an airport or a customs process is the military rather than a civilian agency.

That can cut both ways. Dealing with the armed forces may mean faster delivery, but also less transparency and a harder body to hold to account if things go wrong.

It also concentrates economic power in an institution outside normal market discipline. The military does not compete for these roles in the way a private firm would.

For anyone weighing Mexican infrastructure, the lesson is to understand who really controls it. The country’s economic gatekeepers increasingly wear uniforms.

Frequently Asked Questions

What businesses does the Mexico military run?

Mexico’s armed forces now operate airports, supervise customs, manage ports, run a commercial airline and own the vast Maya Train railway across the south. Over the past two decades, dozens of civilian functions have been transferred to the military.

Why does Mexico use the military for civilian projects?

The government argues the armed forces build faster and are less prone to corruption than civilian contractors, and the work also gives them steady revenue. President Sheinbaum has continued the policy her predecessor began, recently channeling more than a billion dollars in airport works to the army and navy.

Why does it matter for investors?

Foreign firms increasingly find the military, rather than a civilian agency, as their counterparty for airports, ports and customs. That can mean faster delivery but less transparency, and critics warn it concentrates economic power in an institution outside normal oversight.