“Attacks on Mexican state energy firms, continuing energy and fiscal reform debate in Mexico, and is immigration reform in the US ‘undead’?”

coffee-by-flikr-user-samrevel1The Mexico Institute’s “Weekly News Summary,” released every Friday afternoon summarizes the week’s most prominent Mexico headlines published in the English-language press, as well as the most engaging opinion pieces by Mexican columnists.

 What the English language press had to say…

The week began with reports that in the state of Michoacán, an unspecified number of electricity substations and six gas stations were attacked and damaged early on Sunday. According to a report by Al Jazeera, local media said blackouts affected more than 400,000 people across the mountainous state of some 4.4 million. Parts of Michoacán “have fallen under the control of criminal gangs who are fighting among themselves and against authorities. It is not clear who may have been behind the attacks in Michoacán, where clashes between the powerful Knights Templar drug cartel and rival gangs have sparked much violence.”  As reported by The New York Times, there was also an incident involving an explosion in Ciudad Juarez. A Chihuahua state attorney general’s spokesman said that three people died from injuries in a candy factory explosion on Mexico’s border with the United States. Finally, The Washington Post reported that “a geyser of gasoline spewed into the sky from a state-owned pipeline in western Mexico, forcing officials to evacuate about 5,000 people Wednesday. Authorities blamed the accident on fuel thieves tapping into the pipe.

The fiscal reform was once again the focus of several articles and reports. According to the New York Times, Mexico’s Congress on Thursday “passed a package of measures aimed at bolstering the country’s weak tax revenues, but only after watering down a plan that is expected to have a moderate impact at best. The ruling Institutional Revolutionary Party (PRI) pushed the package through with the help of leftist lawmakers, making final tweaks in the Senate to pare back a planned income tax increase. The lower house then gave final approval to the bill that President Enrique Pena Nieto is now expected to sign into law.

Also featured in the press, and related top the fiscal reform, were articles on Mexico’s proposed “soda tax”, an initiative which has received support from former NYC Mayor Michael Bloomberg. According to Forbes, “Bloomberg’s foundation is providing a “three-year, $10 million grant to support anti-obesity advertising campaigns, finance research at Mexico’s National Institute of Public Health and to promote policies like the soda tax, nutrition labeling and controls on junk-food television advertising aimed at children.” Early on Friday morning, The New York Times reported that Mexico’s Congress approved the new taxes on sugary drinks and junk food. The article stated that lawmakers “approved a tax of one peso per liter, or about 8 cents, on soft drinks and an 8 percent sales tax on high-calorie foods, including potato chips, sweets and cereal”, and that President Enrique Peña Nieto is expected to sign the taxes into law in January. The soft drink and food industries lobbied heavily to defeat the plan, but lawmakers said it was necessary to reduce rising rates of obesity and diabetes, as well as to raise revenue.

Both the Financial Times and the Economist wrote about the future of mining in Mexico in the face of new taxations. Quoting the FT Mexico has levied “some of the world’s harshest royalties on mining companies potentially hurting its business-friendly image just as, paradoxically, it seeks to open its energy sector up to private investment.” The Economist explained that “The government needs to raise revenue in a country where tax avoidance is rife. The mining levy—a royalty of up to 7.5% on profits, plus 0.5% on revenue from precious metals.” Although Mexico has seen a mining boom since opening the industry to foreigners in 1990, the “sovereign take”, as some call the royalty, means this kind of productivity-boosting investment may now come more slowly.”

The debate on energy reform in Mexico continues to be covered. The Financial Times highlighted that “the energy sector reform is considered essential to power Mexico’s growth in future years, and a failure to pull it off would be a crushing blow for Mr. Peña Nieto.” The piece noted that after the uproar over tax reform, which despite being watered down raised the ire of the conservative National Action party (PAN) on some key issues, energy reform is vulnerable.

Finally, journalists and columnists in the US questioned the future of immigration reform. In an op-ed article for the Washington Post, Greg Sargent wrote that the fact that three House Republicans signed onto the House Dem comprehensive immigration reform bill officially puts immigration reform back in the “undead” category. He wrote, “It’s unclear whether there will actually be a House vote on anything involving immigration before the year runs out, and it seems very unlikely that there will be a vote on the House Dem measure, which is essentially the Senate comprehensive immigration reform bill, without the Corker-Hoeven border security amendment that House Dems dislike, and instead with another border security amendment House Dems like swapped in.”

What Mexican columnists had to say…

This week’s columnists penned over the NSA spying scandal on former President Felipe Calderón. For Sergio Aguayo, the Mexican government has not addressed the issue directly since, from his view, the government does not wish to call attention to the asymmetric nature of the relationship with the U.S. He argues against this decision and claims it is time to embrace a culture of contest. John Bailey on the other hand, argues that President Peña Nieto’s priority is to ensure Mexico’s economic competiveness and growth, and his response is viewed through that lens. He is impressed at how Mexico and the US have improved their capacity to overcome these crises in the last 25 years.

In another note, Leo Zuckermann argues that the Energy Reform will be difficult to pass. The PAN does not entirely support President Peña Nieto’s proposal and will be pushing for more concessions. Peña Nieto will be in a dilemma in order to ensure the PAN’s support. For Jorge Fernández Menendez it is worrisome that the PAN might not be willing to support the PRI in the Energy Reform after the approval of the Fiscal Reform. He argues that Mexico’s right party is the only one willing to pursue a comprehensive reform and if it refuses to participate, the Reform will turn out to be merely cosmetic.

On a final issue, Leo Zuckerman argues that if a “Veto Power” by the Parties’ leadership over legislators is included in the Political Reform, reelection will make no sense and it will further distance public officials from their electorate. He claims that under these circumstances it would be better to not have reelection. José Antonio Crespo discussed weather creating the National Electoral Institute to replace all local authorities is such a good idea. He proposes changing the way council members are elected in the local electoral institutes making them more independent from local politics.

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