Mexico’s Energy Revolution: A Tank Half-Full

April 9, 2014

energy - oil barrelsForbes, 4/8/14

For the last few years, the challenging security situation has been the headline issue in Mexico. Turf wars between increasingly-fragmented cartels—enfeebled by the capture or killing of high-profile kingpins—not to mention the recent proliferation of vigilante groups, have overshadowed the remarkable progress that President Enrique Peña Nieto’s government has made on other fronts. Last year, Peña Nieto forged a broad political consensus around a set of revolutionary constitutional reforms touching everything from the country’s economy to its educational system to its fiscal management. Reforms to the energy sector have generated particular excitement, opening the door to foreign participation in the country’s energy industry and raising hopes of a new round of growth that will benefit Mexico and foreign investors alike.

These are indeed exciting times for Mexico, but as we explain in a new report, any exuberance about the country’s prospects should be tempered by the hard work that lies ahead. The coming months and years will see the country turn its state-run oil, gas and electricity monopolies into market-driven enterprises and establish new independent regulatory bodies to oversee these industries. Any challenges to the new order will play out before the country’s notoriously fickle judiciary. And there will certainly be challenges: from the staunchly opposed labor unions, political opponents, and any companies who feel they’ve lost out.

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President praises Mexican forces

March 28, 2014

drug warThe News, 03/28/14

President Enrique Peña Nieto presided over a ceremony presenting awards to Army, Navy and Air Force units on Thursday, praising Mexico’s armed forces for renewing their capacity to respond to violence through a process of internal transformation and improved inter-institutional coordination. “Today our soldiers and sailors have more technology and better information to act with precision and exactness, to minimize the risks to the population and maximize their effectiveness against criminal organizations,” Peña Nieto said, adding that this transformation has allowed the country’s armed forces to successfully carry out their duties with strict compliance with the constitution and the country’s laws, prioritizing clear respect for human rights at all times.

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Amnesty International calls on Mexico’s President to confront critical human rights situation

February 24, 2014

Mexico City - nunavut (Flickr)Amnesty International, 2/20/14

At a meeting with President Enrique Peña Nieto, Amnesty International’s Secretary General, Salil Shetty, delivered a memorandum demanding an urgent list of actions to combat entrenched impunity and serious human rights violations.  The meeting focused on widespread torture, the large number of disappearances, abuses against migrants and refugees, attacks on journalists and human rights defenders, and violence faced by women and indigenous peoples.

“While Mexico is an increasingly important actor on the world stage, not only in economic terms but in the field of human rights, it is failing to deliver at home. I told the President that he must demonstrate he is serious about ensuring human rights not just internationally but for all inside the country as well,” said Salil Shetty.

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Cocaine Boss’s Capture Signals Progress in Mexico’s Drug War

February 24, 2014

handcuffsBloomberg, 2/24/14

The capture of the world’s most-wanted narcotics boss shows Mexico is making headway in a drug war that has curbed economic growth while helping to leave at least 92,000 people killed or missing since 2006 . Mexican security forces captured Joaquin “El Chapo” Guzman early Feb. 22 in the Pacific beach town of Mazatlan after trailing him for more than a week. Thirteen people were apprehended in all, with no shots fired. Authorities also seized guns, a rocket launcher and 43 vehicles.

Guzman’s arrest caps a 13-year manhunt by Mexican and U.S. authorities and marks a victory for President Enrique Pena Nieto, who took office in 2012 after pledging to scale back the military’s role in fighting organized crime to curb bloodshed. Further progress against drug trafficking could help boost gross domestic product, according to Alonso Cervera, the chief Latin America economist for Credit Suisse Group AG in Mexico City.

Guzman was at the center of a cocaine, heroin and marijuana trafficking industry that converted swaths of Mexico into battlegrounds as competitors vied for lucrative trade routes and federal security forces attempted to restore order. The U.S. State Department had a bounty of as much as $5 million on Guzman, and Mexico was offering 30 million pesos ($2.26 million) for his arrest.

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Mexico’s President Says Drug Violence Has Been Contained, Isolated

February 19, 2014

federal police mexicoThe Wall Street Journal, 2/18/14

The wave of drug-related violence that swept through Mexico in recent years has been contained and isolated, and further improvement could allow the government to pull back the armed forces from the fray, President Enrique Peña Nieto said late Monday.

“I can´t say that this would happen over the short term, based on the decline of crime rates, but what´s desirable over the medium term is that at some point the army goes back to the barracks, and that the Mexican State could have civilian authorities that are much more reliable,” the Mexican leader said in an interview at the presidential compound in Mexico City.

 

There has been good news. The overall murder rate in Mexico fell about 16% last year compared with the previous year. But kidnapping and extortions rose. And in the western state of Michoacan, where the army had pulled back somewhat, the brutal Knights Templar cartel gained strength, Mr. Peña Nieto was forced to call an unprecedented deployment of federal forces.

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President Enrique Peña Nieto Is ‘Saving Mexico’: Time Magazine

February 19, 2014

Enrique PeñaNieto 2Latinos Post, 2/18/14

President Enrique Peña Nieto and his team of close collaborators are “saving Mexico”, according to Time Magazine, who dedicated their Feb. edition cover to the Mexican President, which includes a report on the policies his administration has made since Dec. 2012.

However, the new edition, which will be sold in the last week of Feb. in the US, has caused some controversy in Mexico, mainly on social networks and middle-class sectors, owing to the cover’s suggestive title: “Saving Mexico” and the positive comments Time made about the Mexican President.  According to Mexican magazine Proceso, for Time magazine, President Enrique Peña Nieto managed to pass the most ambitious reforms package in Mexico’s history.

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Dyer: Weak regulations could restrict Mexico’s energy market reforms

February 18, 2014

Energy -electricity_transmission_linesChron, 2/18/14

For the last seven decades, Mexico’s oil and gas sector has been a state-run monopoly, largely closed off to international investment. Thanks to new reforms championed by President Ernesto Peña Nieto, that’s about to change, and energy companies in Houston and around the world are salivating at the prospect. They may need to hold their horses. Though the reforms have the potential to be good for business, and for Mexico itself, the true fate of the energy reforms hangs in the balance of the Mexican congressional term that started earlier this month. The outcome is far from certain.

If Peña Nieto has his way, the energy sector will see increased competition and a huge influx of both foreign and domestic investment starting in three to four years. Energy costs will drop, boosting the country’s economy, creating jobs and, of course, profits for those investors.

It’s not likely to turn out so rosy. Although the constitutional reforms were approved in principle last December, the details of how to implement those reforms must be ironed out. Mexico’s Congress still needs to determine what regulations and oversight bodies will govern the newly opened energy sector. It is the sort of task that requires careful, deliberate lawmaking.

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Mexican President Pena Nieto can’t quit Castro

February 5, 2014

Enrique PeñaNieto 2The Register Citizen, 2/4/14

Enrique Pena Nieto, Mexico’s current president, should have set a different example during his recent official visit to Havana. He has, after all, styled himself as a bold reformer, as he boasted last week in Davos, showing off a plan that would allow private investment in Mexico’s energy sector for the first time in half a century.

Yet Pena Nieto had little to say about Yoani, or Guillermo Farinas, or “Las Damas de Blanco” (the Ladies in White), all dissidents persecuted by the Castro regime. That would have been incompatible with one of the main objectives of Pena Nieto’s visit: to have an encounter with Fidel Castro. In what has become a tradition for Latin American and Asian leaders, they go to Havana, wait for a couple of days and suddenly are spirited to some undisclosed location for a moment with the semi-retired old dictator who has mostly given up his green fatigues for Adidas sport suits. On Wednesday afternoon, Pena Nieto pointedly told the news media that he would meet that night with Fidel. “The moral and political leader of Cuba,” he called him — whatever that means. After that, he would see Raul.

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Vicente Fox Criticizes Cuban Government ‘Chupacabras’ After Mexico Waves Debt

February 4, 2014

taxes -- counting coinsLatin Times, 2/3/14

The administration of Enrique Peña Nieto announced on Friday that it would waive 70 percent of the $487 million in debt Cuba owes to Mexico, according to Reuters.  Former Mexican president Vicente Fox, never too keen on the island’s government, doesn’t like the move.  On Sunday, he compared the Cuban government to the chupacabras, a mythical blood-sucking creature.  “I don’t see why the debt ought to be forgiven,” said Fox.  “Let the Cubans get to work and generate their own money…They’re normally like chupacabras.  The only thing they’re looking for is someone to give them money for free.”

Mexican Finance Minister Luis Videgaray said on Friday that Mexico would pardon much of the longstanding debt (it’s been owed for 15 years) and give Cuba another 10 years to pay the other 30 percent, so that “things would flow well” between the two countries.  Mexico-Cuba relations were tight under the 70-year reign of the Institutional Revolutionary Party (PRI) – Animal Politico notes that Mexico was the only Latin American country which elected to defy heavy US pressure to join the 1959 embargo against Cuba – but things changed with the arrival of Vicente Fox in office in 2000.

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Mexico’s Pena Nieto Is for Reform, Just Not in Cuba

February 3, 2014

Photo by Flickr user Angelica RiveraBloomberg, 2/2/14

Enrique Pena Nieto, Mexico’s current president, should have set a different example during his recent official visit to Havana. He has, after all, styled himself as a bold reformer, as he boasted last week in Davos, showing off a plan that would allow private investment in Mexico’s energy sector for the first time in half a century.

Yet Pena Nieto had little to say about Yoani, or Guillermo Farinas, or “Las Damas de Blanco” (the Ladies in White), all dissidents persecuted by the Castro regime. That would have been incompatible with one of the main objectives of Pena Nieto’s visit: to have an encounter with Fidel Castro. In what has become a tradition for Latin American and Asian leaders, they go to Havana, wait for a couple of days and suddenly are spirited to some undisclosed location for a moment with the semi-retired old dictator who has mostly given up his green fatigues for Adidas sport suits. On Wednesday afternoon, Pena Nieto pointedly told the news media that he would meet that night with Fidel. “The moral and political leader of Cuba,” he called him — whatever that means. After that, he would see Raul.

Read more….


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