By Robin Emmott
July 9, 2010 7:21 AM EDT
Mexico's richest city, once a poster child for development with its high-rise office blocks and flourishing industries, is being gripped by drug war terror with rising violence forcing dozens of its factories to freeze investment.
The battle between the powerful Gulf cartel and its brutal former armed wing, the Zetas, has killed some 290 people in Monterrey and surrounding areas since the start of the year.
While dangerous border cities like Ciudad Juarez suffer worse violence, the surge in killings in Monterrey, where income per head is double Mexico's average, is a major worry for President Felipe Calderon as foreign companies question the safety of doing business there.
Zeta hitmen have dumped bodies in Z-shaped formations in the Texan-style city and pulled people out of smart hotels to execute them, while both gangs sporadically block off dozens of major roads with trucks and cars to derail security forces' anti-drug operations.
Even as Hurricane Alex drenched Monterrey this month, armed hitmen chased rivals down busy avenues. In one gunfight, an injured police officer fled into a McDonald's restaurant and people threw themselves to the ground in panic.
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Authorities in the city once lauded as having the best police in Mexico seem unable to stop the violence despite sending soldiers to storm quiet suburbs and raid cartel safe houses as military helicopters fly overhead.
The local government is preparing teachers and children for the now frequent gunfights that stray into schools.
"People are starting to think that this kind of thing is normal because it is happening so often. It isn't normal," said a Monterrey businessman who last month was held at gunpoint by Gulf cartel hitmen in his office. They stole his SUV, phone and his ID documents, possibly to extort money from him later on.
Monterrey, 140 miles (230 km) from the border with Texas, long considered itself as apart from the rest of Mexico, where corruption and crime is part of daily life.
With its private universities, good water supply and sleek U.S.-style highways, the city was chosen to host a United Nations conference on development in 2002 and was lauded by U.S. President George W. Bush as a model for poor countries.
But as bloodshed soared across Mexico since Calderon came to power in 2006 and launched his drug war, the violence has spread to the city that is home to global cement maker Cemex and General Electric plants.
HURRICANE HEADACHE
More than 26,000 people, mainly traffickers and police, have been killed in Mexico's drug war since December 2006, worrying U.S. officials about the political stability of their oil-producing neighbour.
A quarter of the more than 100 assembly-for-export factories, or maquiladoras, in and around Monterrey have frozen investment this year as killings, extortions and abductions have surged, according to the city's maquiladora association.
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