Photo: Esparta (flickr)

Mexican President Felipe Calderon's war on drugs targets the drug cartels that constitute a large portion of Mexico’s economy. Drug trafficking is an estimated US$50 billion a year business there. In fact, one study reported that the loss of the drug business would shrink Mexico's economy by 63 percent.

These statistics seem to beg the question: Can Mexico eliminate its drug trade without inflicting too much damage on its own economy?

The drug war's economic impact isn't necessarily positive, either. The Mexican government estimates that the jump in violence resulting from its crackdown on drugs has taken a percentage point off the country's economic growth. Costs for Mexican businesses, who need increased security, have increased by 5 to 10 percent.

But the cost in human lives is readily apparent. Earlier this year, for example, two children and a police officer's wife were murdered as Tijuana schools and neighborhoods were evacuated in the search of a drug-cartel official. The murders came in retaliation for the arrest of other cartel members days before. In August, gunmen killed 13 people — including a baby — when they opened fire in a dance hall. And kidnappings are now commonplace.

Mexico's drug war has resulted in over 4,000 drug-related deaths since 2006, including Mexico City’s federal police chief and 400 other police officers.

Last weekend tens of thousands of Mexicans gathered to protest the bloodshed. But despite the violence, residents of Badiraguato, considered the heart of the drug trade, told Newsweek they don't want trafficking to end.

"The drug traffickers do good things here. They employ people. There's no corn, no beans here — the people here are all about drugs," said 22-year-old José de Jesús Landell García, who co-owns a shoe shop with his father. He added that most of his friends took up employment with the drug cartels "because it was the only thing they could do."

Calderon's government faces a nasty predicament. How does Mexico dismantle a system so firmly entrenched in the state and the economy? For starters, at least, it will require steps to increase Mexicans' faith in their government — particularly in its ability to offer them good-paying jobs in licit trades.

Today, Felipe Calderon announced Mexico would freeze prices on 150 basic foods through the end of the year to help ease the pain of rising food prices.