April 24, 2013
Associated Press, 4/23/13
The lower house of Mexico’s congress voted Tuesday to loosen longstanding restrictions on foreigners buying property along the coast and the nation’s borders, a proposal that drew stiff criticism from some quarters. The measure, which passed 356-119 in the Chamber of Deputies, still needs approval from the Senate and a majority of the country’s 32 state legislatures to become law.
For decades, foreigners have had to use real-estate trusts or Mexican front companies to buy beachfront properties, because Article 27 of the constitution prohibits non-Mexicans from directly owning land within 31 miles (50 kilometers) of the coast and 62 miles (100 kilometers) of the nation’s borders. The trusts and front companies have provided a lucrative income for banks, lawyers and notaries who are required to operate them, and the extensive paperwork has discouraged many foreigners from buying.
April 17, 2013
Financial Times, 4/17/13
It is in this beauty parade that Brazil, with economic growth of less than 1 per cent last year and a deteriorating current account, is looking less attractive to portfolio and foreign direct investors compared with countries such as Mexico, which are engaging in political and economic reform.
“The years of accelerated foreign direct investment (FDI) flows are gone,” says Flavia Cattan-Naslausky of RBS. “Those were very much aligned with the commodity boom, and now I think that FDI has a lot more to do with positive momentum in both the economic and the political spheres,” she says. “That’s certainly why Mexico is in focus and, unfortunately, Brazil is the mirror of Mexico, and it’s the ugly mirror image.”
April 16, 2013
Mexico’s commercial credit market, the smallest of any country in Latin America, has weighed on the nation’s economy, which expanded less than its regional peers over the past decade. Improving lending rates would boost gross domestic product expansion by about 1 percentage point a year in Latin America’s second-biggest economy, says Jose Perez, associate financial services regional director of Standard & Poors’.
Commercial bank lending as a percentage of GDP is 19 percent in Mexico, half the rate of Brazil’s and the lowest of any Latin American nation, according to the most recent comparable data compiled by the International Monetary Fund.
April 8, 2013
Foreign energy firms have flocked to a narrow region of southern Mexico, known as one of the world’s windiest places, to build towering wind turbines, but some projects have angered and torn indigenous villages. The construction of wind farms has soared across Mexico, with the gusty Isthmus of Tehuantepec in the state of Oaxaca attracting investors from as far as Europe, Japan and Australia.
The projects are a key part of Mexico’s efforts to combat climate change, one of the priorities of former president Felipe Calderon that has been picked up by his successor, Enrique Pena Nieto, who took office in December.
April 4, 2013
Financial Times, 4/3/2013
You have to read to the end of a JPMorgan report published this week to find out what the bank thinks are the most promising investment opportunities in Mexico over the coming months and years. But when you get there, it makes a lot of sense. The bottom line (literally, in this case) of the report is that investors should look to invest in new stock-market listings and non-dominant companies operating in areas that the new government wants to make more competitive.
In Mexico, that undoubtedly means the energy sector, where the four-month-old administration of Enrique Peña Nieto, president for the centrist Institutional Revolutionary Party (PRI), has promised to create a bigger role for the private sector alongside, or together with, Pemex, the state oil monopoly. But it also means sectors such as telecommunications, where the companies controlled by Carlos Slim, the world’s richest man, have long dominated but where the government is trying to introduce more competition and appears determined to attract foreign companies.
March 8, 2013
By Tim Padgett, TIME, 3/8/2013
I couldn’t be happier that Mexico’s economy is rebounding. After barely 2% average annual growth between 2000 and 2010, the country’s GDP expanded almost 4% in 2011 and 2012. Investment is booming and the middle class is enlarging. Mexico’s manufacturing exports lead Latin America, and its trade as a share of GDP tops China’s. Its No. 53 spot on the World Bank’s ease-of-doing-business rankings far outshines the No. 126 grade of its main regional rival, Brazil; it has signed more free trade agreements (44) than any other country, and it’s enrolling more engineering students than any south of the Rio Grande.
But I emphasize: it’s a trend. It’s not the miracle, the economic version of the appearance of Our Lady of Guadalupe, that so many Mexico cheerleaders from government officials to foreign investors to embassy diplomats are insisting we call it. Yes, good news from Mexico is more than welcome after a decade overshadowed by horrific narco-violence; a more positive conversation about the country is a relief. But no matter how loudly the enthusiasts scold the media for dwelling on Mexico’s mayhem, the cartel killing hasn’t stopped, and many of the socio-economic ills that help breed the brutality persist. The media didn’t just make up the 60,000 gangland murders of the past seven years, or the relentless massacres and beheadings, or reports like the one released last week by Human Rights Watch about the 27,000 Mexicans who have disappeared during the drug war.
March 7, 2013
The Texas Tribune, 3/6/2013
The Mexican ruling party’s recent decision to adopt a platform that could open up the country’s giant oil monopoly to private investment has caught the attention of some industry gurus in Texas, who say the move bodes well for U.S. business interests.
The Institutional Revolutionary Party, or PRI, remains adamant that the state-owned company, Petróleos Mexicanos, or PEMEX, will stay under state control. But the proposal, which requires legislative approval, could mean more oil is exported from Mexico to the U.S., and that Mexico might turn to Americans for guidance on how to increase production there.
February 13, 2013
Mexican tycoon Carlos Slim’s one-year effort to return Acapulco to its past glory has been overshadowed by the surge in drug-related killings, which nearly tripled in 2011 and made this port city in the southern state of Guerrero the second most violent city in the world in 2012. In recent weeks Acapulco has been in the international news after five masked men broke into a beach hotel and raped six Spanish female tourists at midnight. U.S. newspapers reported that the rapes have heightened fear and called into question the Mexican government’s ability to control crime and attract foreign visitors.
The crime, which took place in one of Mexico’s best known tourist resorts, was the most recent in a series of violent episodes that has tarnished the international image of what only a few decades ago was a favorite destination for celebrities, foreign leaders and American honeymooners. Acapulco and several other top beach resort cities are the core of the tourism industry, Mexico’s third source of foreign exchange income after oil and remittances.Despite this grim picture, the Consulting Board for the Restoration of Traditional Acapulco, a group of leading Mexican businessmen created in February 2012 and headed by Slim, continues its efforts to pool funding from the state and federal governments, as well as from the private sector, to rescue Acapulco’s waterfront. “Those who do not invest and go slow because they have doubts will be left behind. I am not afraid of investing here in Acapulco,” Slim said in 2012.