Mexico

Mexican President meets with business leaders to discuss 2030 agenda

Mexico President Enrique Peña Nieto met with the Executive Board of Global Enterprises (CEEG) on 19 December 2016 and received the Mexico Agenda 2030: Proposals for Inclusive Growth before the Fourth Industrial Revolution (El Economista). The agenda contains approaches to achieve economic growth with greater productivity and social inclusion, and CEEG President Frédéric García claimed the document laid the foundation for Mexico to become the world’s fifth largest exporter by 2030 (El Economista and SIPSE). Peña Nieto said the proposal matched his administration’s vision of improving society through the transformation of productive sectors. The meeting was moderated by Economy Secretary Ildefonso Guajardo Villarreal and addressed a variety of topics, including development of value chains, special economic zones, and research and development among others. The CEEG includes 50 multinational companies which together represent 10 percent of the Mexico’s GDP, 11 percent exports, and 40 percent of the country’s total foreign direct investment (SIPSE). 

Pemex gasoline production reaches lowest level since 1992

El Economista reported on 19 December 2016 gasoline production from Pemex has reached its lowest levels since 1992. Gasoline production reached an average of 341,023 barrels per day (bpd) from January to October 2016 (El Economista). Production of premium gasoline from January to October 2016 stood at an average of just 9,700 bpd, a 45.8 percent decrease from the same period of 2015 when the company produced 17,900 bpd (América Economía). Gas shortages across Mexico have recently caused concern and Pemex clarified the shortages were due to bad weather issues which have prevented ships from unloading supplies in Tuxpan, Veracruz. Although Mexican refineries have experienced operational issues which have led to decreased production, Pemex insisted it was not the cause of gasoline any shortages (América Economía).

Mexico among most dangerous countries in the world for the press

The organization of Reporters Without Borders (RWB) released its annual report on 19 December 2016 and found Mexico to be the third deadliest country in the world for journalists during 2016 (Zócalo Saltillo). In 2016, there were nine reported murders of journalists in Mexico, only behind Syria (19) and Afghanistan (10) (Zócalo Saltillo). The organization listed Mexico as the most lethal country for journalists in Latin America as well as the deadliest among countries not at war (Veracruzanos and La Vanguardia). RWB accused the criminal organization Los Zetas for using violence to dissuade journalists from meddling in their affairs. RWB also pointed to corrupt police and judicial authorities who turn a blind eye to the repression of reporters when not involved in direct violence against journalists themselves (La Vanguardia).

Mexican interior secretary urges states to strengthen police forces

Mexican Interior Secretary Miguel Ángel Osorio Chong requested that Mexican states and municipalities to strengthen their police forces on 20 December 2016, and suggested the army would not be used as a long term solution (Milenio). The Interior Secretary commented on security issues during the 41st Session of the National Public Security Council which also featured President Enrique Peña Nieto and other government officials (La Jornada and Milenio). Osorio Chong warned the armed forces should be used as a last resort in emergency situations and said the accusations of excessive force and a lack of legal framework have lowered morale in the military (Milenio). The Interior Secretary also highlighted the establishment of special anti-kidnapping units in every state and reported the Security Cabinet authorized the arrangement of operations in 50 of Mexico’s most problematic municipalities (La Jornada).

Mexico-U.S. Energy Business Council holds its first meeting

Mexico and the U.S. held their first meeting of their bilateral Energy Business Council on 16 December 2016 (América Economía). The objectives of the bilateral council include examining ways to strengthen economic and trade links within the energy sector, as well as increasing bilateral development and generating non-binding recommendations to the governments (Opportimes, and América Economía). Sources from the office of Mexican Energy Secretariat (SENER) reported council members agreed on a work plan for future council activities. SENER also guaranteed all sectors of the energy sector are represented on the council with twenty company and association leaders and representatives split equally from Mexico and the U.S. (Opportimes and América Economía).

PRD mayor murdered in Mexican state of Oaxaca

The PRD Mayor of Ocotlán de Morelos municipality in Oaxaca, Mexico José Villanueva Rodríguez, was shot and killed on 17 December 2016 (Excelsior). Villanueva Rodríguez received at least eight shots from point-blank range and witnesses reported the culprits fled a red explorer-type vehicle (Excelsior and Proceso). Oaxaca Governor Alejandro Murat condemned the attack and called for an immediate operation to secure surrounding areas and apprehend those responsible (Excelsior and Proceso). Villanueva Rodríguez died en route to hospital due to the severity of his injuries and was set to complete his term as Mayor on 31 December 2016 (Proceso). 

Senior Mexican and Chinese officials meet

Mexican Foreign Secretary Claudia Ruiz Massieu met with Chinese State Councilor Yang Jiechi in Mexico City on 12 December 2016 and pledged to strengthen ties between the countries in various aspects (Aristegui). Yang Jiechi also met privately with President Enrique Peña Nieto to he reviewed the agenda of issues regarding the bilateral relationship (Aristegui and Excelsior). The encounter was a follow up from a meeting held in September 2016 between Peña Nieto and Chinese leader Xi Jinping which formalized the creation of the China-Mexico investment fund featuring over US$50 million in various projects. Official figures showed trade between the two nations reached US$74.9 billion at the end of 2015 (Excelsior).

Veracruz governor announces creation of regional police

Governor of the Mexican state of Veracruz Miguel Ángel Yunes Linares announced a plan for the creation of regional police force on 11 December 2016 (La Razón). The proposal includes the formation of new security institutions called Regional or Inter-Municipal Police, which will be responsible for providing an immediate response to local incidences of violence (Sin Embargo). Yunes Linares sent a warning to criminals that the new regional police forces would be supporting security operations in the area and targeting illegal activities (La Razón). The Veracruz Governor made the announcement as he convened the start of a security operation in northern Veracruz targeting the municipalities of Tihuatlán, Coatzintla, and Álamo (La Razón).

Two transborder tunnels uncovered in Tijuana, Mexico

Mexican authorities discovered two hidden tunnels in Tijuana leading under the U.S. border on 13 December 2016 (Aristegui). The Attorney General’s Office (PRG) reported the tunnels were found in the Garita de Otay neighborhood of Tijuana and were thought to belong to the Sinaloa Cartel and used to transport drugs. The PRG also revealed one of the tunnels led to San Diego, while the other was still under construction. Sources at the U.S. consulate confirmed they had obtained information about the reactivation of the tunnels, which led to further investigations by the Mexican Criminal Investigation Agency and ultimately their discovery (El Sol de Tijuana and Aristegui).

Western Union to offer services in Mexican grocery chain Soriana

Financial services and money transfer company Western Union announced an alliance with Mexican grocery store chain Soriana on 15 December 2016 (Expansion). As a result of an agreement, Mexicans will be able to receive remittances from abroad at more than 649 Soriana supermarkets (Expansion). Western Union Mexico Vice President Rodrigo García Estebarena said the strategic partnership strengthens the bond between the company and customers, while Soriana representative Rodrigo Benet praised the deal as way to bring his brand increased value to Mexican families (Expansion and Forbes). Western Union sources show Mexico is the world’s fourth largest remittance recipient with more than 1.4 million households receiving them, most of which is spent on daily expenses (Forbes).

Banxico raises rate to 5.75 percent

The Bank of Mexico (Banxico) Board of Governors decided to increase the Interbank interest rate 50 basis points on 14 December 2016 from 5.25 to 5.75 percent (Excelsior). The increase is the sixth over last twelve months and stands in line with the U.S. Federal Reserve’s announced increase on 14 December (Excelsior). Banxico commented the increase was made with the goal of combatting inflationary pressures and considered the 25-basis point hike made by the U.S. Federal Reserve. The 5.75 percent rate is at its highest level since May 2009 (Milenio). 

Mexican state Veracruz to create special economic zone

Veracruz Governor Miguel Ángel Yunes Linares signed a letter of intent on 13 December 2016 for the creation of a Special Economic Zone (EEZ) along the state’s southern Gulf coast in the municipality of Coatzacoalcos (T21, El Financiero). The Coatzacoalcos EEZ will generate at least 27,000 industrial sector jobs during the first ten years of operations and is estimated to generate over US$12.9 billion in investments during the same period. Yunes Linares said the EEZ would provide investors with certain tax and administrative incentives within a single area to streamline their procedures. Mexican President Enrique Peña Nieto enacted an initiative in May 2016 to allow Mexico’s poorest states to set up EEZ to boost their economies (El Financiero, T21). 

Mexico agrees to reduce oil production

Mexico reached an agreement with OPEC and several other oil-producing nations on 10 December 2016 to decrease crude oil production by 100,000 barrels per day (bpd) (El Financiero). According to Pemex’s business plan, Mexico will join the global agreement to help alleviate the excess supply of oil, which has been blamed for low prices (El Financiero). Sources from the Mexican Energy Secretariat stated the agreement would restore balance to the oil market and ensure international energy security for both oil producing and consuming nations (Milenio). Altogether, non-OPEC producing countries agreed to cut their crude oil production by a total of 558,000 bpd, adding to the 1.2 million bpd reduction announced by OPEC on 30 November 2016 (Milenio, El Financiero).

Fitch gives Mexico a negative outlook

Fitch Ratings revealed on 9 December 2016 Mexico’s credit rating would remain at BBB+ but changed the country’s outlook from stable to negative (Proceso, Forbes México). The negative outlook signals a 33 percent chance Mexico’s credit rating will be downgraded under the next review (Proceso). The company justified the outlook change by pointing out the increase in risks associated with Mexico’s growth, along with uncertainty surrounding the renegotiation or termination of NAFTA and the strengthening of U.S. immigration control. The Mexican Finance Ministry brushed off the negative outlook as a consequence of statements made by U.S. President-elect Trump and pointed to the maintenance of the credit rating as the relevant part of Fitch's report (Forbes México).

Mexican President assures military will continue security tasks until civilian institutions can take over

Mexican President Enrique Peña Nieto on 9 December 2016 acknowledged the country’s security situation was not ideal and goals had not been met, but publicly thanked and recognized the Mexican military for carrying out security tasks which are beyond the scope of the country's civil institutions (24 Horas, Noticias MVS). Peña Nieto also revealed the Mexican armed forces will continue to work on security details until the civil institutions tasked with public security are fully professional and modern. The President’s remarks came after National Defense Secretary Salvador Cienfuegos suggested the military was not trained for work in chasing down criminals (24 Horas).

U.S. renews travel warning to Mexico

The United States Government renewed its travel alert to Mexico on 8 December 2016 following recent violence in the country and included detailed warnings for U.S. citizens who intend to visit any of Mexico’s 32 states (Debate, Forbes México). The travel alert replaced the April 2016 version and gave special mention to the risk of visiting the states of Sinaloa, Sonora, Coahuila, Chihuahua, and Guerrero, areas with a strong presence of criminal organizations linked to drug trafficking (Forbes México). Baja California, the State of México, and Tamaulipas were also included as areas where law enforcement is limited or does not exist. Mexican states listed without alerts include Campeche, Chiapas, Guanajuato, Hidalgo, Mexico City, Puebla, Querétaro, Quintana Roo, Tabasco, Tlaxcala, Yucatán, and Veracruz (Proceso). 

Wal-Mart Mexico announces big infrastructure investment

Wal-Mart Mexico CEO Guillermo Loureiro announced on 7 December 2016 the company would invest US$1.3 billion to improve and expand its logistics operations over the next three years (El Financiero). Loureiro spoke alongside Mexican President Enrique Peña Nieto and said the investment would strengthen logistics structure and add new distribution centers throughout the country (El Financiero). Wal-Mart México plans to double its business in Mexico and Central America by 2024 despite news surrounding the negative economic outlook and uncertainty of future policies from U.S. President-elect Donald Trump (Forbes México). President Peña Nieto noted Wal-Mart is the largest private employer in Mexico and its large investment demonstrated confidence in the future of the country (El Financiero). Peña Nieto also mentioned the investment in infrastructure would bring around 10,000 permanent jobs (Forbes México).

CNTE sets up roadblocks in Chiapas, Mexico

Members of Coordinadora Nacional de Trabajadores de la Educación (CNTE) teachers’ union blocked a number of roadways in the state of Chiapas, Mexico on 8 December 2016 and demanded the repeal of educational reform and the payment of back wages (Milenio and Excelsior). CNTE spokesman José Luis Escobar Pérez reported the group wanted to return to the negotiating table with the government due lack of responses on prior agreements reached on reforms (Excelsior) The CNTE call for a protest on 8 December did not yield expected results as most teachers showed up to work rather than join in the protest (Milenio). At least nine road blocks have been set up, including one at the Ciudad Cuauhtémoc – Guatemala border crossing (Excelsior and Milenio).

Santander Mexico to make big investment

Santander Mexico announced on 8 December 2016 it will invest US$763 million into operations over the next three years, the largest investment in the company’s history in Mexico (Aristegui). Santander Mexico Chief Executive Héctor Grisi Checa revealed the investment will be used to improve its infrastructure, modernize branches, and revamp its digital platform. Grisi Checa emphasized Santander Mexico was committed to becoming the best bank in the country and plans to increase its number of customers by providing a better service. The Santander executive also stressed its long-term commitment to the country and was not concerned by possible volatility created the future Trump administration (Forbes México and Aristegui).

Mexican auto industry reports positive November 2016 figures

The Mexican Automotive Industry Association (AMIA) released figures on 6 December 2016 showing production of vehicles increased by 7.4 percent and exports grew 9.6 percent in November 2016 (El Economista). AMIA reported the country produced 318,149 light vehicles and exported 245,330. Deliveries to the U.S. increased by 11 percent and shipments to other Latin American countries improved by 73.6 percent. Domestic sales reached 154,616 units, a 22.5 percent increase compared to November 2015 (Expansion). Mexico produced 3.22 million units from January to November 2016, a 1.5 percent increase from the same period of 2015 (El Economista).