Mexico is the New Export Hub for Nissan in the Americas, John Boehner and Immigration, and Why Security Costs are 15% of Mexico’s GDP– Weekly News Summary: November 15

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…

There were several news articles focusing on the Mexican economy this week. Reuters highlighted that Nissan Motor LTD is projecting to build 1 million cars in Mexico by 2016, which will help the Country position itself as the export hub in the Americas. The Chicago Tribune noted that Chicago Mayor Rahm Emanuel took his first international trip to Mexico City to sign an agreement that commits the two cities to work together to build up exports, foreign investment, a skilled workforce and research endeavors. According to the article, Mexico City is the Chicago metro area’s second largest North American trade partner, after Toronto. The Wall Street Journal noted that the Mexican Congress has approved a fiscal deficit for next year equivalent to 3.5% of gross domestic product. With the additional spending, the government is trying to jump-start the economy and avoid another year of very low growth. Finally, Al Jazeera America published a piece stating that, despite claims of a growing middle class and increased jobs, poverty in Mexico is rising and the poor “don’t see any difference”.

On another note, according to the Washington Post, House Speaker John A. Boehner said Wednesday that the House will not enter negotiations with the Senate to hash out differences between its immigration plans and the Senate immigration bill, which represents a “significant blow to the prospects of comprehensive immigration reform by this Congress”. Nevertheless, Jennifer Rubin, also from the Washington Post, claims John Boehner still supports taking up discrete immigration issues for debate and passage but will be done on separate bills instead of one massive bill. Whether the Senate will be willing to break up it bill into separate legislative parts, is an open question.

As a final issue, the International Business Times reported that violence costs Mexico 15 per cent of its GDP in health care, security expenses and material loses. Mercedes Juan Lopez, Head of the Mexican Health Department, was quoted saying that insecurity is affecting foreign investment and tourism to the country, and it is increasing companies’ expenses since they have to pay for protection and safety. The Global Post published a report on how Michoacan has become a hub for drug production and trafficking. In the past decade, it’s become Mexico’s foremost producer of methamphetamine, with precursor chemicals easily imported from Asia through Lazaro Cardenas seaport and clandestine labs sprouting in remote mountain communities. Finally, The Washington Post  reported that a U.S. citizen who once served in the U.S. Navy and was a police officer in Texas had been detained in northern Mexico for allegedly heading a group of kidnappers.

What Mexican columnists had to say…

It was a busy week for Mexican columnists, as they debated many of the most pressing political and economic questions facing the country. Writing for El Universal, John Bailey expressed that the recent political and economic news coming from Mexico are a cause for concern. He wrote that the Mexican economy is slowing down and Mexicans are not content with the state of democracy, with political parties, or with the Mexican Congress. 34% of Mexicans have reported that they struggle to have enough food to eat. The author hopes that politicians pay attention to these findings and work to ensure that reforms improve the socio-economic conditions of the country. In a piece that echoed Bailey’s sentiments, Jorge Fernández Menéndez contended that the fiscal reform should stimulate competitiveness, and not merely serve as a mechanism for making the state wealthier. The author called for more equitable fiscal regimen, one which serves more than half of the population, one which makes paying taxes easier and more generalized; one that is efficient and stimulates the economy. What Mexicans want, he said, is for employment levels to go up, for security conditions to improve, for the law to be respected and for the country to be characterized by equality and peace.  For his part, Leo Zuckermann, argued that it doesn’t matter which political party is in power: the fact is that in Mexico, those in power incorrectly spend taxpayer’s money, particularly in the areas of security. Spending is not tracked and often disappears, and there is absolute impunity. The author stated that it is time to demand to know how much has been lost, who is responsible, and how they can pay.  

María Amparo Casar discussed the stalled nature of Mexico’s political and economic progress, noting that Mexico’s VAT rate fell by 8% and that the country “lost the opportunity to collect 1.4% of GDP for the 2014 fiscal budget”.  In the last year, she wrote, Mexico has incurred a series of worrying losses, under a government that has promised to transform the economy and to show that democracy can produce results. The lower rates in economic indicators can be attributed, to some extent, to the global economic situation and to the fact that various reforms are either yet to be passed or yet to produce results. However, the lower rates in political trust and confidence are the result of the way in which politicians in Mexico have acted. They are responsible for changing things, for ensuring that the country’s political system does not continue to lose legitimacy and instead represents the people and carries out their demands.

Several columnists addressed the continuous political negations over reforms. Jorge Fernández Menéndez contended that it’s not a bad thing – in fact it’s a good thing – for the government to negotiate with the PRD or with other political forces. What is a problem, however, is when the negotiations become an in and of themselves. The government can’t afford to continue to negotiate – even if it has its own plans and schemes – to such an extent that it seems like it is willing to give up its initial objectives. It is said that all of this has a political logic: to end the cycle of reforms, pay off some political favors, and begin a new political phase in January. The government can’t afford to continue to lose the public’s support and confidence from now until then. Ciro Gómez Leyva wrote that it is evident that the PAN and PRI are seeking to pass very, very different energy reform packages. One thing is clear: the EPN government’s energy plans are in the hands of the PAN.  Jorge G. Castañeda tried to explain some of the complexities of the energy reform. The first, he said, is the chronology. The reform needs to be passed before the end of the year, or there will be serious consequences for the regime and for Mexico’s future in economic markets. EPN must deliver on his promise to pass this reform. The second is the financial consequences of the reform. What will the reform actually achieve what will it look like? What impact can it have on our economy? The short answer, the author stated, is we don’t know. The third is the technical/energetic factor: will the government change its stance to allow for shared production, concessions, something more akin to what the PAN wanted? While this would arguably be better for the economy, it would be worse for politics, as the PRD would be right to accuse the government of having a hidden agenda. And finally, there’s the political factor, the most complex of them all. We know that the government depends on the PAN to pass this reform, and that the PAN has asked, in return for a political reform to be passed, one that will allow reelection, something the PRI doesn’t want. The authors asks: why has an energy reform not passed yet? The time is now.

Finally, Sergio Aguayo argued that Mexican society needs public human rights institutions that are separate from the authorities. Disorganized and unregulated urbanization is one of the biggest challenges facing Mexico, as, due to a lack of impartiality and to the existence of various interests, human rights institutions have failed to protect and promote the rights of citizens whose lives have been affected by various urbanization projects.

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