EVENT FRIDAY | The Problem of Power: Mexico Requires a New System of Government

problem of powerWHEN: Friday, June 24, 2016, 10:00-11:30 AM

WHERE: 5th Floor Conference Room, Woodrow Wilson Center

Click to RSVP

The Wilson Center’s Mexico Institute invites you to a book launch and discussion on Mexico’s political system. Wilson Center Global Fellow Luis Rubio will present his book, The Problem of Power: Mexico Requires a New System of Government. After his presentation, leading analysts will discuss the system of governance and concentration of power in Mexico, as well as policy prescriptions to improve Mexico’s political system.

The Problem of Power is a reflection of the internal and external causes of the weakness of the Mexican political system, as well as an analysis of the opportunities to transform it. As stated in the introduction, the main message of the book is the need to build institutions and strengthen the rule of law based on due process so that government and the political sector in Mexico is more responsive to its citizens’ needs and aspirations and less focused on preserving the benefits inherent in the status quo. This implies a need for the transformation and professionalization of all three branches of government at all three levels, municipal, state and federal.

Download the book (available in both English and Spanish)

Speakers

Luis Rubio
Global Fellow & Advisory Board Member, Mexico Institute, Wilson Center
President, Centro de Investigación para el Desarrollo (CIDAC)

Verónica Ortiz-Ortega
Political Analyst, El Economista and Canal del Congreso

Oliver Azuara
Economics Specialist, Inter-American Development Bank

Moderator

Duncan Wood
Director, Mexico Institute, Wilson Center

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US Border Security: Drug King Joaquin ‘El Chapo’ Guzman Was Hiding In California Before He Was Captured By Mexico

3/43/16 International Business Times

elchapoMexican drug kingpin Joaquin “El Chapo” Guzman illegally traveled to California twice last year after he escaped from a Mexican prison in 2015, raising questions about the security of the U.S. border. Guzman’s daughter, Rosa Isela Guzman Ortiz, a U.S. citizen, claims her father crossed the border in late 2015 to visit relatives and tour a five-bedroom house he had purchased for her, the Guardian reported Friday.

Guzman was captured in January following an interview with actor Sean Penn in Mexico after a massive manhunt that lasted for seven months. Guzman Ortiz, 39, said her father bankrolled Mexican politicians to help him stay on the lam but would not explain how he crossed the U.S. border.

“My dad deposited the money in a bank account with a lawyer, and a while after, he came to see the house, his house. He came twice,” she said of the drug cartel leader.

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Pemex: Passing the Baton

2/17/2016 The Expert Take, Mexico Institute

By Jesús Reyes Heroles

expert I (2)The recent restructuring of Petroleos Mexicanos requires a reflection on the causes. Since 1980, there have been 13 general managers with an average duration of 2 years and 9 months.

This “management” instability is not only explained by the complexities of the company and the miscalculations of its administrations; but rather, it is better explained by the applicable corporate governance framework and fumbling public policy. Over the years, it has repeatedly been observed that the regulatory framework of Pemex became sluggish and inefficient, and even the intensive energy reform of 2013 proved unable to correct this problem.

PEMEX evolved reasonably well when the federal government and the country had not yet become deeply dependent on oil revenues. However, in 1979, the exploitation of the Mega Cantarell Complex started, and the company achieved a greater financial and operational dimension. At this point, the government sought to have an opinion, to influence and even to participate in the handling of policies applicable to Pemex.  Here lies the origin of the replacement of last week.

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What next for Pemex?

2/9/2016 Forbes.com

By Duncan Wood, Director of the Mexico Institute

Pemex LogoThe news that Emilio Lozoya, CEO of Mexican National Oil Company Petroleos Mexicanos (Pemex) would be stepping down came as no great surprise to many observers of Mexican oil politics. The company has been in deep trouble for over a decade now and, although Lozoya only took over 3 years ago, he has been able to do little to stem the tide of bad news during his tenure at the top of the organization. From a high point in crude oil production in 2004 of 3.4 million barrels per day (bpd), Pemex now only produces around 2.2 million bpd, and that total is predicted to fall further in the coming months. Combined with the low oil price internationally, that means a lot less revenue for Pemex, but more importantly, less fiscal revenue for Lozoya’s political bosses in the government of President Enrique Peña Nieto. Mexico’s government has depended on oil for up to 35% of its revenue over the past decade, but with lower prices and lower production, that total has fallen closer to 20%, leaving a growing gap in the federal budget, that has been covered by cutting spending in infrastructure projects and government salaries and services.

The money problem afflicting Pemex has largely been caused by successive Mexican governments treating the NOC as a cash cow, and the truth is that the company has been milked to death. This year’s cuts in the Pemex budget and the calls for layoffs are only the latest manifestation of a long-running abuse of the company by the Mexican federal government. But the decline in Pemex and government revenues is only one part of the unholy trinity of problems that has been afflicting the NOC in recent years.

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[Video] Former Mexican Governor Detained in Spain

1/19/2016 Wilson Center Trending

viri wilson center trending

It’s been a good week for Mexican law and order. Following the recent capture of El Chapo, comes the news that Former Mexican Governor Moreira has been detained in Spain as part of an ongoing money-laundering investigation. Wilson Fellow Viridiana Rios provides analysis.

Watch the Video. 

Viridiana Rios, a Global Fellow with the Wilson Center’s Mexico Institute, is an expert in Mexico’s subnational economy, citizen security and rule of law. She analyzes labor markets, productivity, and development indicators at Mexico, and disentangles how violence, conflict, rule of law, and corruption have affected them. Her career has taken her from positions as public officer and applied researcher, to entrepreneur and journalist. As a public officer, Viridiana has served as adviser to Mexico’s Minister of Finance, and to Mexican President’s Spokesman. As a researcher, she has worked with the Guggenheim Foundation of New York City, the United Nations, USAID, The World Bank, The Center for US-Mexico Studies at the University of California in San Diego, the Trans-border Institute at the University of San Diego, and Mexico’s ministries of social development (SEDESOL), education (SEP), and security (SNSP). In a more entreprenuerial gig, Viridiana directed México ¿Cómo Vamos?, a start-up think tank specialized in translating academic knowledge to the language of policy makers and the press. Finally, as journalist, she has a weekly column at Excélsior, a Mexican national newspaper.

Watch the Video.

New Publication: Now for Public Debt in Mexico: Policy Lessons for the Effective Oversight of State and Municipal Government Finances

mexican pesosBy Heidi Jane M. Smith

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While Mexico has a very low debt-to-GDP ratio that is slightly above forty percent, its state and municipal portion hovers around 2.5% (IMF, World Economic Outlook Databases, 2012). Subnational governments have consistently been accused of taking on too much debt, allowing irresponsible repayment plans and consenting to outright political corruption. Especially since 2001, the first full year since the country revised its laws governing subnational borrowing rights, Mexico has experienced a significant rise in the indebtedness of its states and municipalities. During the past decade, total subnational debt went from $990 pesos per capita in 2001 to $3,450 pesos per capita in 2011 (ASF 2011). Although Mexico’s overall subnational debt is still at reasonable levels compared to other countries, this nation’s high vertical fiscal imbalances and de facto soft subnational budget constraints could continue to fuel observed trends unless national legislation governing the rights and responsibilities of subnational governments are made. One can argue that the pace of increasing debt has been constant, but it accelerated during the 2009 economic crisis when National GDP decreased substantially (around -6%). Actual proposals to harmonizing accounting standards among state and local governments, increase transparency and improve reporting requirements by the Mexican Ministry of Finance (Secretaría de Hacienda y Crédito Público, SHCP) are only a few steps towards improving fiscal policy at the local level. Reviewing policies to understand debt sources and improving bankruptcy laws to cope with moral hazard issues will help to maintain strong sustainable fiscal balances into the future.

This policy paper argues that alternative revenue sources are necessary for economic growth at the local level, but continued soft budget constraints and lax regulatory environments may also put Mexico’s future into jeopardy. Lessons learned from the United States’ state and municipal financing could provide valuable policy options for Mexico–thus, the paper provides policy recommendations for future public financial management considerations.

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Mexico offers $3.8M reward for ‘El Chapo’

07/15/15 USA Today

Mexico BricksThe Mexican government put a $3.8 million pricetag on his head, the Chicago Crime Commission once again dubbed him Public Enemy No. 1, and Donald Trump had a beef with him on Twitter.

Still, Mexican drug lord Joaquin “El Chapo” Guzman remained a free man Tuesday, three days after he disappeared from a Mexican prison shower, slipped through a mile-long tunnel and vanished into the night.

The director of Altiplano, the notorious yet apparently pregnable maximum security prison 50 miles outside of Mexico City, and two other prison employees have been fired. Mexico’s Interior Secretary Miguel Angel Osorio Chong provided few details, other than to say all “had something or a lot to do with what happened.”

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