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Mexico News Weekly- Mar.3

Posted by The Generals on March 6, 2011, 6:32 pm

Subject: Mexico News WEEKLY March 03, 2011

NOTE: For those of you not in San Jose, the Army has been raiding places in San Lucas and San Jose the last few days. In CSL over 500 kilos of marijuana, plus coke and pills. Raids in SJC have included Zacatal. Many arrests. Plus there are rumors that with the new governor there will be a show effort to root out corruption from the last administration. The new governor and mayor need to get ahead of the Army - and federal law enforcers. Presumably there will be firings and investigations in the police and the attorney general's office.

Weekly Report - 3 March 2011 (WR-11-09)
MEXICO: Security concerns to dominate Calderón’s US visit
President Felipe Calderón arrived in the US on an official two-day visit on 2 March. Mexico-US relations regarding security have come to the fore after two US officials were attacked as they travelled through San Luís Potosí (SLP), a central Mexican state not considered to be a focus of violence, on 15 February. The incident led to the death of Jaime Zapata, a US Immigration and Customs Enforcement (ICE) officer. This caused friction between US and Mexican authorities, including Calderón, who in a videotaped interview on 22 February complained about the lack of coordination between the two countries’ security forces. The US Homeland Security Secretary, Janet Napolitano, then expressed her disappointment at Mexico’s current security situation. The diplomatic frictions spurred Mexican security forces to act decisively on the case and only a couple of days later, they managed to capture two people accused of carrying out the attack.
Initially, one of the assassins maintained that they had attacked the vehicle with diplomatic US licence plates that was travelling through an SLP highway by mistake. Conversely, a second assassin confessed that they had been aware that the vehicle had US diplomatic plates and admitted that the people inside were indeed their intended targets. This did little to ease the tensions surrounding the attack on the US side as some congressmen, notably republican Texas representative Michael T. McCaul, are campaigning for the two arrested suspects to be extradited to the US to face trial and possibly even be handed the death penalty as a punishment. More controversially, McCaul has also called for US officials operating in Mexico to be allowed to carry weapons given that according to him “they are operating in a war zone”. Such a proposal would violate a 1990 bilateral agreement which currently bars US officials from carrying weapons in Mexico.
Meanwhile in Mexico another aspect surrounding the incident has gained a lot of media attention. Reports are circulating in the Mexican media that at least one of the weapons seized from the assassins, and presumably used in the attack, was legally purchased in Texas. This has once more raised questions about the adequacy of the US firearms policy and its effect on the violence that is currently afflicting Mexico. According to a US Bureau of Alcohol, Tobacco and Firearms (ATF) report, one of the assault rifles seized was purchased in Lancaster, north Texas.
The report was released on 1 March after three men were arrested in the US believed to be members of a firearm contraband network that supplies Mexican drug gangs. It highlights that there are an estimated eight thousand gun shops along the US-Mexico border that are believed to supply most of the weapons used in Mexico; in addition to the many gun fairs regularly held in Texas. It certainly seems to be the case that gang violence has recently shifted its focus from Mexico’s north-west towards the north-eastern states bordering Texas. This evidence in some way gives credibility to Calderón’s accusations, echoed by Mexico’s deputy foreign minister, Julián Ventura on 1 March, that there is a lack of coordination perhaps not between US and Mexican security forces, but to a certain extent between the two countries’ security policies that is ultimately affecting their joint security efforts.
This will provide the backdrop to the much-anticipated fifth meeting between President Barack Obama and Calderón set to take place on 3 March. Ahead of the meeting, and in an attempt to diffuse some of the tensions, US Deputy Assistant Secretary for Canada, Mexico and Nafta, Roberta Jacobson said the meeting would not “take place in a crisis atmosphere”, and had been scheduled well in advance of recent events. But Jacobson did recognise that there was “a lot to be done to improve cooperation in security” between the two countries. Similarly, the Director of the National Drug Control Policy, Gil Kerlikowski, mentioned that although there was a lot of room for “improvement” on security coordination between the two countries, understanding and communication levels have reached “unprecedented levels”. Nonetheless, it can safely be said that the recent events will be addressed by the two presidents, as security continues to be the issue that dominates the bilateral agenda.
Tourism Year
Despite the current surge in violence, and the fact that after Zapata’s death, the US Foreign Service advised its nationals against travelling to Mexico, President Calderón announced on 28 February that his government was declaring 2011 as “the year of tourism”. Calderón said his administration’s goal for this year is to invest heavily in the country’s tourism infrastructure in order to take Mexico from currently being the world’s tenth largest tourist destination to the fifth largest, by 2018. Interestingly, Calderón pointed out that the idea is to promote not only the well established Mexican tourist hot spots, but also to develop and promote other less traditional tourist areas of the country: “Mexico is much more than its best beaches and its best archaeological sites,” he said.
Calderón went on to lay out his administration’s plans to increase the country’s connectivity through “air, land and sea” by promoting the construction of new ports and highways. However, he made no mention of the increasing insecurity and violence that has become a recurrent problem in formerly peaceful areas of Mexico. The fact is that attacks such as those conducted against the ICE officials do little to attract tourists to some of the less traditional destinations. Moreover, it would also discourage tourists from travelling by land as more areas of the country appear to have gang presence.
Cassez case
French foreign minister Michéle Alliot-Marie has resigned under heavy pressure after media reports revealed her business ties to ousted Tunisian President Zine Al Abidine Ben Ali. This is good news for Mexican diplomacy as Alliot-Marie favoured a hardline on Florence Cassez, a French woman serving a 60-year prison sentence in Mexico for her involvement in a 2005 kidnapping case [WR-11-07]. Although President Nicolas Sarkozy backed Alliot-Marie over Cassez, the French opposition criticised her handling of the matter, which led the Mexican government to pull out of the “Mexican year in France” cultural event organised for 2011. On 24 February, EU representative in Mexico, Marie-Anne Coninsx declared that the bloc had no plans of getting involved in the Cassez controversy, describing the issue as a purely bilateral matter.


Weekly Report - 3 March 2011 (WR-11-09)
MEXICO: López Obrador prepares 2012 campaign platform
Former Partido de la Revolución Democrática (PRD) presidential candidate, Andrés Manuel López Obrador his given another indication of his intention to run in the upcoming 2012 presidential elections. On 28 February he met 200 members of the private sector in Mexico City to present them with his proposed plan of governance. López Obrador, who narrowly lost the 2006 presidential elections to current president Felipe Calderón from the right-wing Partido Acción Nacional (PAN), argues that ahead of those elections some prominent Mexican entrepreneurs demonised him as an extreme left-wing radical and successfully managed to turn the private sector against him. As a result he has decided to organise summits with members of the private sector in order to shed that negative image.
López Obrador’s actions seem to confirm that he intends to run in the presidential race even though his proposed candidacy is seriously challenged by the more moderate members of the PRD. They believe that López Obrador continues to be a divisive figure amongst the general electorate and should he become presidential candidate again, then the traditional Partido Revolucionario Institucional (PRI), which ruled Mexico for 71 years before losing to the PAN in 2000, could more easily return to power. The PRD and PAN leaderships are so opposed to the prospect of the PRI returning to power that for a couple of years now they have been experimenting with strategic political alliances in some local state elections; they are also seriously toying with the idea of establishing a broader alliance in key states and maybe even for the presidential elections.
The decision is far from made, however, as the PRD leadership continues to analyse whether it really needs PAN support on the national stage given its rather poor performance in its two terms in power. The PRD leadership will have to make a decision sooner rather than later since the next key election in the Estado de México is scheduled to take place on 3 July.
Crucially, the decision is to be in large part determined by the next PRD party president scheduled to be elected some time in March. Recently, PRD senator and López Obrador’s proposed candidate for Estado governor, Alejandro Encinas, stated that historic left-wing leader and former party president, Cuauthemoc Cárdenas Solórzano should be re-elected to the post. However, currently party statutes prohibit the re-election of former presidents. More importantly, outgoing party leader, Jesús Ortega rejected the idea out of hand, stating that Encinas’s proposal was ill-advised and would only deepen the party’s leadership crisis (see Sidebar). Ortega appears to be concerned about the possibility of a radical more aligned to López Obrador becoming the next party president. In this way, Ortega shows that he is aligned to the other prominent PRD presidential hopeful and main proponent of the PRD-PAN alliance, Marcelo Ebrard. These events provide further evidence that the PRD is politically divided ahead of its internal elections.
Meanwhile, the PAN has taken significant steps towards constructing a working alliance for the Estado elections. On 28 February, the PAN’s chief alliance strategist, Javier Corral announced that his team had recently concluded a poll that showed that a PAN-PRD backed candidate, would force a technical tie with a PRI candidate. The poll results led Corral to propose that the PAN should field the popular party congress coordinator Josefina Vázquez Mota as a potential gubernatorial candidate to compete in a preliminary popular consultation process with a PRD candidate in order to determine a consensus candidate ahead of the election. Corral revealed that negotiations with Estado PRD leader, Luis Sánchez, over a popular consultation method were already underway and that the possibility of an alliance “is on”.
PRD leadership crisis
On 15 February former Michoacán governor, Lázaro Cárdenas Batel (2002-2008), turned down an offer to become the next PRD party leader. Cárdenas Batel is Cárdenas Solórzano’s son and had been tipped by his father as a good choice for party leader, claiming that he is conciliatory figure. Since then, some PRD leaders have proposed that Cárdenas Solórzano himself should assume the party leadership once again. However, he also turned down the offer over the weekend. Interestingly, Cárdenas Solórzano then stated that Andrés Manuel López Obrador should be “given” the post. The candid comment sparked immediate reactions; with party president Jesús Ortega claiming that the comment was meant to be “ironic”. Meanwhile, López Obrador graciously declined the proposal claiming that currently he had “other aspirations”.


Weekly Report - 3 March 2011 (WR-11-09)
MEXICO | End of year figures. Mexican companies released their 2010 end of year figures this week. The big winner appeared to be in the construction sector, while the big loser comes in the form of one of the country’s leaders in the processed food sector. The civil engineering consortium, Ingenieros Civiles Asociados (ICA) reported a positive increase in its net present value (NPV) for 2010. ICA recorded a 36% increase in its NPV with respect to 2009, bringing the figure to M$1.2bn (US$99.5m) with net sales of M$34.9m (US$2.89m), a 13% year-on-year increase. Conversely, Gruma, the world’s largest corn flour producer, closed off a negative year marked by the recent surge in global food prices and reported an NPV of MS$742m (US$61.8m), a 65% decrease from 2009. This as total revenue for the year showed an 8% decrease despite a 4% increase in overall sales. The trend could be set to continue in 2011 as President Felipe Calderón’s announcement that his administration will look to invest in the development of Mexico’s tourist infrastructure is a boon to the construction sector. Interestingly, Cemex the country’s largest cement company announced that it is negotiating a deal to provide cement to Chinese companies.
MEXICO | Pemex crude production. The state owned oil company Pemex announced on 24 February that its crude production for January was 2.58m barrels a day, its highest production level in eight months. Pemex production levels have continuously decreased over a number of years. The spike in crude production also comes at a time when oil prices continue to rise given the political instability in Middle Eastern markets. However, Pemex continues to be inefficiently run as the government heavily relies on its revenues to finance its budget leaving little funds to be reinvested in the company. On 28 February, Latin America expert from the University of Notre Dame’s Kellogg Institute for International Studies, Prof. Scott Mainwaring gave a presentation in Mexico City where he explained that Mexico’s government should rethink its oil industry model if it intends to maintain a position of economic and political leadership in the region. He pointed out that Pemex’s performance starkly contrasts with that of Brazil’s state-owned oil company, Petrobras. He said Pemex could learn from Petrobras.

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