How far to trust a politician? Often a tricky subject – especially in a country like Mexico, where impunity is rife and many elected representatives appear still to live by the maxim of the late Carlos Hank González, an influential politician and businessman (with a statue to his honour in the city of Toluca), namely: “A politician who is poor is a poor politician.” Read more
It was hard to miss the massive demonstrations in Mexico City on Thursday night: tens of thousands of people marched to the main square, the Zócalo, many waving flags with Mexico’s green and white stripes turned black. They were demanding justice in the wake of the apparent murder of 43 students in September that has convulsed the nation. Many chanted from one to 43, then shouted the word “justice”.
Enrique Peña Nieto, the president, clearly heard the call: at a justice forum on Friday, he said: “One of the principal demands of Mexican society is to count on better results in the procurement and implementation of justice.
Mexico’s government has bowed to the inevitable and cut its 2014 GDP growth forecast, to between 2.1 and 2.6 per cent this year, despite hailing a pick-up in activity in the third quarter that it said should continue throughout the rest of the year.
No big surprise there – growth has been disappointing all year so the writing has long been on the wall. And indeed owing to a change in methodology (more on this shortly), the government is keeping its options open with a new range-based forecast. For 2015, its estimate is 3.2 to 4.2 per cent. The growth goal for 2015 in the budget was 3.7 per cent.
But is there a silver lining to all these cuts? Read more
All change: After a leadership conflict that sent shares tanking, Mexican bank Banorte, the country’s fourth biggest by loans, has a new chairman and CEO.
Replacing Guillermo Ortiz, a former finance minister and central bank governor, as chairman is Carlos Hank González, grandson of the former controlling shareholder “Don Roberto”. Mr Hank’s ascent was in the works for months and triggered the change of command, while also boosting the family dynasty’s influence over the lender in which it is the largest shareholder. Read more
It might sound like more bureaucracy, not less: Instead of four operating units, Pemex, Mexico’s state oil company, now has two, plus five separate subsidiaries.
However, in a statement to the stock exchange, company officials said its market-oriented reorganisation would bring greater efficiency and transparency as it moves into a new era of competition.
The long-planned restructuring scraps Pemex’s four divisions – exploration and production; refining; petrochemicals; and gas and basic petrochemicals – and replaces them with just two: upstream and downstream, or exploration and production on one hand and industrial transformation on the other. Its five non-core subsidiaries – drilling, logistics, co-generation and services, fertilisers and ethylene – are destined to become affiliate companies in the coming year. Read more
Never mind that Mexico last week stripped a Chinese-led consortium of a $3.6bn bullet train tender, prompting the China Railway Construction Corporation to announce that it was “extremely shocked” and could sue, according to official news agency Xinhua.
No, business confidence between the two nations – a key Mexican foreign policy goal – is growing, President Enrique Peña Nieto told a forum in Shanghai.
For proof look no further than Pemex, Mexico’s state oil company, which signed a “first” $10bn credit line with ICBC bank (more on them in a moment) for it and its service companies’ upstream projects and the acquisition of offshore equipment. Read more
For Mexico, which does not produce all the natural gas it needs, the benefits of importing from the US are clear – it’s cheaper, it’s cleaner and it’s going to bring lower tariffs for manufacturers more quickly than continuing to rely on costly fuel oil.
But what about the other side of the bargain? What’s in it for the US? Read more
Mexico, which battles for manufacturing competitiveness against China, is getting its first high-speed rail network – to be built and run by a Chinese-led consortium.
The more than $3.6bn contract for the new 210km line, to run from Mexico City to the manufacturing and aerospace hub of Querétaro, was awarded to a consortium led by China Railway Construction Corporation, CSR Corporation Ltd and including the Mexican companies Prodemex, Constructora y Edificadora GIA, Constructora Teya and GHP Infraestructura Mexicana.
A broker works at the Mexican Market Exchange
The veteran head of Mexico’s stock exchange, Luis Téllez, has announced his resignation from the start of next year.
The official reason, given in a statement, is that the former minister and member of Mexico’s new sovereign fund plans to “dedicate himself to new projects”.
It is not yet clear who will step into the role as bourse chief, a position Mr Téllez has held since 2009. Under his stewardship, the stock market has developed a flourishing market in so-called Fibras, akin to real estate investment trusts, or REITS, and has just joined the MILA bourse tie-up with Chile, Peru and Colombia. Read more
For months, the word “oil” in Mexico has gone hand-in-hand with “reform”, with the government giddily looking ahead to a rosy future filled with billions of dollars pouring into the sector.
Then oil prices tanked and people started whispering that maybe Mexico’s energy reform was not looking so attractive after all, and maybe Mexico’s fragile economic recovery might be given another knock. Read more
Several times in the past couple of weeks, your correspondent has been called up by Movistar, the Mexican mobile unit of Spanish firm Telefónica, urging her to switch phone service providers.
That could be a smart move, according to new research by Tarifica, a specialised telecoms pricing consultancy that monitors 312 mobile phone companies in 85 countries. No. 2 player Movistar comes out on top in Mexico in value-for-money terms, well above dominant market player Telcel, owned by tycoon Carlos Slim, which has a reputation for offering the best nationwide coverage but at higher cost and with poor customer service. Read more
Rather like someone at an Alcoholics Anonymous meeting, Mexico’s government has started by admitting that it has a problem.
The problem? Productivity. Or rather, Mexico’s historic lack of it.
The solution? A competition- and productivity-boosting set of policy initiatives contained in a draft bill sent to Congress by Enrique Pena Nieto, the president, aiming to redesign state industrial policy for the long term. Read more
There’s a new kid on the block as Mexico’s energy reform gets rolling.
Backed by Mexican pension funds and private equity firms Riverstone Holdings and EnCap Investments, the new company, Sierra Oil, has large ambitions and aims to bring new technology – like horizontal drilling – to Mexico, with the goal of securing returns of 15 per cent on its investment in the long term.
“We are small. We’ll stay small. But we can take on big challenges,” says its CEO, Iván Sandrea, a Venezuelan whose CV includes stints at Statoil, BP and OPEC. Read more
The sigh of relief coming out of Mexico has been practically audible. “Alleluia!” exclaimed Nomura in a research note.
It’s not so much that there was doubt that growth was really happening, though after last year’s shock slump (GDP expanded a meagre 1.1 per cent overall), taking growth for granted looks ill-advised.
However, the indication that GDP grew by a stronger-than-expected 2.52 per cent in July, the fourth consecutive monthly rise, is a reassuring confirmation that things are on the right track. Read more
The best industrial policy, so the saying among some economists and policy makers famously used to go, is no industrial policy. But a new study from the Inter-American Development Bank (IDB) suggests it is time to think again.
Why? Well, industrial policy may not fully explain Latin America’s dramatic productivity slide over the past decades, but it could perhaps help revert it. Read more