Drug war turns Mexico border city into ghost town

By Robin Emmott

NUEVO LAREDO, Mexico (Reuters) - With heavily armed Mexican soldiers patrolling Nuevo Laredo's graffitied, rubbish-strewn streets, Mario Cepeda is having a tough time convincing anyone to take his horse-drawn city tour.

Once an easygoing Mexican border town thronging with U.S. tourists, Nuevo Laredo is becoming a ghost town because of a brutal, three-year-old turf war between rival drug cartels that has driven residents and businesses across the Rio Grande to the safety and prosperity of its Texan sister city, Laredo.

"Business is no good, nobody comes any more," said Cepeda in broken English as he waited in vain for passengers on Nuevo Laredo's main avenue, a few steps from the U.S.-Mexico border footbridge.

Almost 200 people were murdered in often gruesome, daylight shootings in Nuevo Laredo last year in a war between drug gangs from Mexico's western Sinaloa state and the local Gulf cartel that that killed around 2,000 people nationwide in 2006.

The violence has overwhelmed the shabby, low-rise city and destroyed its economy. It is in stark contrast to the freshly painted shops and tidy cobbled squares of Laredo, visible from Mexico through trees and wire fencing along the Rio Grande.

Jorge Ramirez, a local representative of President Felipe Calderon's National Action Party, says Nuevo Laredo is in a "coma" as 2,400 stores ranging from beauty salons to restaurants have shut down since 2004. Membership of the city's chamber of commerce has fallen 80 percent since a 2000 peak.

The 600 shops and stalls that remain open sell about a third of what they used to when U.S. tourists came in bus loads on day trips to buy Mexican craft goods like ponchos and hats.

"For Sale" signs, weeds and graffiti adorn empty mansions in the once wealthy Madero, Jardin and Mexico districts, where property prices have fallen by a quarter.