Electricity bill is 15th initiative to undermine investor confidence in MX

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February 15, 2021

When President López Obrador swept to a landslide victory in July 2018, his government pledged to push public and private investment to 25% of GDP in a bid to jolt the country’s economy out of a longstanding rut.

Instead, investment has fallen as a series of investor-unfriendly moves deterred inflows. López Obrador’s step last month to push through a law that would drastically change electricity sector rules is just the latest example, investors have warned.

He has also scrapped a partially built airport and brewery, canceled electricity auctions, rewritten gas pipeline contracts, upset processed food manufacturers with new labeling requirements and pushed plans to ban subcontracting of jobs.

CEESP, a private sector think tank, said the recent decision to prioritize the state electricity company was the 15th initiative by López Obrador, his Morena party or the government to undermine investor confidence in the past 2 1/2 years.

Mexico is battling to haul itself out of its deepest recession since 1932 with only limited help from its government, which has held back from launching the kind of ambitious fiscal support measures undertaken by other major regional economies such as Brazil.

As a result growth is not expected to recover to pre-pandemic levels for another five years according to the IMF.

“They would have struggled to find a worse time to present this bill,” Carlos Salazar, head of Mexico’s biggest business lobby, the CCE, told the Financial Times. “There is no doubt that this will cause more problems. No investors will want to invest.”

López Obrador believes that playing hardball with a private sector he accuses of corruption and unfair competition gets results as part of his self-styled mission to “transform” Mexico by eradicating malpractice.

He frequently brushes off suggestions the economy is in trouble by claiming to have “other data.” He highlights record remittances — US $40.6 billion last year, some 3.8% of GDP — as a key aid to consumer spending.

López Obrador predicts the Mexican economy will grow by 5% this year — more bullish than all economists’ estimates — but even that would not make up for the 8.5% contraction in 2020.

And sustaining growth will be hard. “If anyone tells you that you can grow 5% without 25% [of GDP] total investment, they’re lying,” Carlos Urzúa, López Obrador’s first finance minister, told the FT in 2018.

With millions of jobs lost and businesses shut in Latin America’s second-biggest economy because of the pandemic, and 44% of workers unable to make ends meet on their salaries, economists say the president needs to boost investment to save millions more people from falling into poverty.

“Recovering lost ground is going to take a long time, the investment climate is very strained. The signals are not good,” said Jessica Roldán, chief economist at brokerage Finamex. “In the medium and long term, it’s impossible to grow without investment.”

Yet investment is falling further and further behind. Gross fixed investment — the sum of public and private spending on plants and machinery — was barely above 19% of GDP in the third quarter of last year. It has not fallen to such levels since 2009, during the global financial crisis.

Foreign direct investment has slumped by more than $10 billion during the pandemic and most of that is reinvestment of profits rather than greenfield projects, according to official data.

Private investment now only makes up 16.6% of GDP, down from nearly 20% in 2018, according to the Mexican Institute for Competitiveness (IMCO), a think tank.

And although López Obrador has touted a handful of major infrastructure projects, including a refinery, an airport and a train line, public investment has fallen to 2.5% of GDP — down from 2.9% when he took office, CEESP said.

“It seems like the current federal government is determined to limit investment, and as a result, economic growth,” CEESP said.

Alonso Cervera, managing director in emerging markets research at Credit Suisse, said: “Mexico doesn’t seem to have a clear model for economic growth. It looks like the model of development is to build a couple of landmark projects like the refinery, the train and the airport and hope people will be happy with cash transfers.”

López Obrador prides himself on social spending, including pensions to the elderly and educational grants.

But economists warn the lack of investment will translate into lower growth prospects in future. Mexico has failed to grow much above an average of 2% per annum for decades. Now, Cervera said potential growth was on course to reach just 1.5 to 2%.

“We’re facing a very clear fall in potential growth,” said Roldán.

The electricity bill, which has been fast-tracked and is widely expected to pass, has only deepened the gloomy outlook.

The U.S. Chamber of Commerce called it “the latest in a pattern of troubling decisions taken by the government of Mexico that have undermined the confidence of foreign investors in the country.”

And because of the pandemic, it said, now is “the precise moment enhanced foreign direct investment in Mexico is needed more than ever.”

Families of missing in Jalisco take courses in search techniques

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MND Staff

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February 15, 2021

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Members of a search brigade. There are many such groups across Mexico.

A Jalisco woman whose son was kidnapped in 2018 and never seen again is offering classes on search procedures to family members of other people who have disappeared in the state.

Adriana Méndez Cabrera, a former medical examiner, founded a collective that is now made up of more than 140 members of families who are searching for missing loved ones.

Assisted by former colleagues from the Jalisco Institute of Forensic Sciences, Méndez began sharing her knowledge of search procedures with collective members at an event in Guadalajara on Sunday.

“The little I know, or maybe it’s a lot, I’ll impart to the collective,” she told the newspaper Reforma at the Niños Héroes roundabout, which has been renamed by family members of the missing as the “Roundabout of the Disappeared.”

“[Then] we’ll go out to the field, we’ve already worked in several areas in various municipalities,” Méndez said. “… All the training will be on search techniques,” she added.

She said that ordinary people have to look for their missing loved ones due to the inaction of state authorities.

“My son disappeared two years ago and the [Jalisco] Attorney General’s Office never, never helped me,” Méndez said, adding that the investigators supposedly assigned to the case were changed frequently and no progress was made.

“You go to the state-run morgue and they don’t show you all the bodies, … and sometimes I was ignored,” she said. “Put simply, the Attorney General’s Office doesn’t work.”

Faced with the authorities’ apparent negligence, Méndez founded the Más Uno Igual a Todos collective last August and in the space of just six months it grew from 10 members to more than 140. Similar search brigades operate in several other states of Mexico.

There are more than 11,700 missing people in Jalisco, according to the National Search Commission, and about 80,000 across Mexico.

Source: Reforma (sp)

Family fears for life of Oaxaca official detained more than six days

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Michelle Aguilar

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February 15, 2021

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The official who has allegedly been held hostage since last Wednesday.

The family of a Oaxaca government official taken hostage Wednesday after he tried to negotiate with residents blockading a highway in San Juan Mazatlán Mixe say they fear for his life.

“It’s been six days today, and [the Oaxaca government is] unable to resolve a truly serious problem,” his wife told the newspaper El Universal Sunday. “Six days in which Jorge Toledo Toledo has been without support …”

The family’s comments came in light of photos his captors published Sunday, showing Toledo with his neck and wrists tied to a truck, and apparently being forced to collect money from commuters passing through the blockade.

The family said the photos reflected the inhumane treatment he was receiving from his captors.

“It’s outrageous what they’re doing to Jorge,” one family member said. “They are forcing him to ask commuters for money, and the drivers are insulting him, not to mention they’re putting him on display, photographing him, shaming him. They’re violating his human rights.”

They also accused the government of abandoning their own employee, claiming that officials have said that Toledo went of his own accord to the blockade and that he’s basically on his own.

One official told a somewhat different story, explaining that Toledo went of his own accord to negotiate with the group because he is familiar with the town and its issues. He said he has been keeping in touch with Toledo by phone and that he is in good health.

“They’ve known him in the area for several years. Supposedly they tied him up, but that was just for a photo and then they let him go; he’s OK,” he said.

Toledo and two other civil servants were taken hostage after they responded to the demands of residents of the indigenous community located in the Isthmus of Tehuantepec, who are responsible for the blockade, that government personnel appear to negotiate. The two other officials were released Thursday.

Since Tuesday, the residents have blockaded the trans-isthmus highway, which connects Oaxaca and Veracruz, demanding the removal of three-term Mayor Macario Eleuterio Jiménez, whom they accuse of corruption. They claim he has embezzled 5.7 million pesos in federal funds.

While García told El Universal on Sunday that the state government was going to continue negotiating with the residents to reach a peaceful solution, Oaxaca’s human rights protection office has filed requests with the state Attorney General’s Office and the National Guard to intervene in the blockade, saying that the situation is violating Toledo’s rights.

Source: El Universal (sp), Quadratín Oaxaca (sp)

State disarms, disbands municipal police in Orizaba, Veracruz

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Michelle Aguilar

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February 15, 2021

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Following a deadly ambush of state police officers last week, security authorities in Veracruz disbanded the Orizaba police department Saturday in a surprise move.

Orizaba Mayor Igor Rojí, who said he had not been informed beforehand, told the newspaper La Jornada that about 120 state police officers have been assigned to Orizaba indefinitely.

Ministry authorities, who took local officers into temporary custody for questioning and inspection at state facilities in Xalapa, said they were investigating whether any had been complicit in the ambush and determine whether any of the officers had links to organized crime.

According to the newspaper Proceso, the Jalisco New Generation Cartel is suspected to have ties to the attack, in which three police were killed.

“We inform Orizaba citizens that their security is guaranteed, now that the Ministry of Security will maintain aerial and land patrols, strengthening the combat against impunity and crime,” the ministry said in a statement.

Three state police officers, including Rita Cecilia Romero Vicon, 24, a newly graduated officer from the El Lencero police academy in Xalapa, died in the attack. An additional officer survived but remains in serious condition.

According to La Jornada, the deaths almost immediately triggered tension in Orizaba over the next three days as state authorities in the area conducted impromptu searches of municipal police officers’ homes and there were clashes between state and municipal officers.

Early Saturday morning, state authorities arrested two municipal officers, one of whom was a commander, and then began the process of disbanding the department, confiscating weapons and patrol cars, as well as detaining 40 local officers.

This set off a reaction by around 60 other officers on the force, who barricaded themselves in the local municipal palace, saying they wanted guarantees of safety before turning themselves over to state authorities. They claimed to know of cases in which officers had been taken into custody by state officials and “had not returned.”

Mayor Rojí eventually convinced the officers to turn themselves in with promise that the local government would take charge of the officers’ transportation to Xalapa and that they would continue to be paid their salaries.

In addition, the officers demanded guarantees of their families’ safety as well as the firing of a local official and a police commander, whose whereabouts, according to Rojí, are currently unknown.

Sources: Proceso (sp), La Jornada (sp)

Natural gas shortage triggers major power outage; nearly 5 million affected

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MND Staff

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February 15, 2021

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Mexico too is feeling the effects of cold front No. 35.

Almost 5 million people in northern Mexico were affected by a major power outage on Monday morning due to an interruption in the natural gas supply caused by cold weather.

President López Obrador said the blackout affected about 400,000 people in parts of Nuevo León, Coahuila, Tamaulipas and Chihuahua, including Saltillo, Reynosa, Matamoros, Nuevo Laredo, Ciudad Juárez, Chihuahua city, Cuauhtémoc and Delicias.

However, Federal Electricity Commission (CFE) distribution director Guillermo Nevárez Elizondo later said 4.7 million people were affected by the outages in the north of the country.

“It’s due to the winter storm, the bad weather; the CFE technicians are already working [to restore power],” López Obrador told reporters at his morning press conference.

“… It won’t last long, [the issue] will be resolved,” López Obrador said.

The National Energy Control Center (Cenace) said in a statement that 58% of affected electricity supply had been restored by noon.

Cenace said the power cut was caused by cold front No. 35, which brought snow to parts of northern Mexico on Sunday, as well as a lack of natural gas. It said that approximately 6,950 megawatts of load were affected.

Cenace called on residents of Chihuahua, Coahuila, Durango, Nuevo León, Sinaloa, Sonora and Tamaulipas to reduce their power use on Monday morning to reduce pressure on electricity infrastructure.

The CFE said in a statement that a cold snap in the United States had caused the supply of natural gas from that country to Mexico to be interrupted.

“In the face of the worsening of extreme temperatures in the United States and particularly Texas, where part of the population doesn’t have electricity today, significant cuts in the supply of gas started today due to the freezing of pipelines,” the state-owned company said.

Gas-fueled power stations in Sinaloa, Sonora, Durango, Chihuahua, Coahuila and Nuevo León were affected by the cuts, the CFE said.

The company also said that U.S. authorities were prioritizing the supply of natural gas for homes and hospitals, meaning that there was less to send to Mexico.

The CFE said it was using its reserves to inject gas into power plants in Chihuahua and Nuevo León to avoid a worsening of the power outage.

“The CFE has made available to Cenace all the energy originating from other sources of generation, and with a team in Mexico and the United states is working on the reestablishment and normalization of natural gas supply from the United States,” it said.

Mexico is heavily dependent on the United States for its natural gas needs, and natural gas shortages have affected industrial production at various times in recent years.

In July 2019, the Confederation of Industrial Chambers and the National Chamber of Industrial Transformation (Canacintra) described the gas shortage as critical, explaining that several companies were only operating at 30% capacity and that states in the north, west and southeast of the country were all affected.

Canacintra said there was “clear ignorance” of the situation on the part of federal authorities.

A year earlier, the then president of the National Hydrocarbons Commission warned that Mexico should produce more of its own natural gas to reduce dependence on imports from the United States.

Mexico relies on U.S. imports for 85% of its gas needs, Juan Carlos Zepeda said in July 2018, a situation he asserted creates not only a geopolitical risk but also an operational risk due to the possibility of a natural disaster interrupting supply.

“One of the first things we have to do . . . is produce more [of our own gas],” Zepeda said, sending a clear message to then president-elect López Obrador.

But 2 1/2 years later, Mexico remains highly dependent on U.S. natural gas as the government places more emphasis on attempting to reduce its reliance on gasoline imports from its northern neighbor.

Mexico’s capacity to store natural gas and López Obrador’s opposition to fracking are also seen as barriers to greater development of gas resources here.

Guillermo García Alcocer, former chief of the Energy Regulatory Commission, predicted Sunday that Mexico would face a gas shortage due to the cold weather in the United States and asserted that greater storage capacity has been needed for years.

“Perfect storm. Freezing weather in Texas with an excess in demand for gas and electricity, together with a reduction in natural gas production … will affect the availability of gas for Mexico. We’ve needed [additional] storage for years,” he wrote on Twitter.

His prediction proved prescient less than 24 hours later.

Source: Milenio (sp), El Financiero (sp)

Musician creates a piece of Mexico in wintry Ontario

By

Tony Richards

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February 15, 2021

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Musician Aiden McGill is a long way from Acapulco.

A Canadian musician who visits Mexico regularly has released a song and video designed to cheer up others who have decided to forgo travel due to the coronavirus.

“Here’s to all the folks who want to vacation but because of Covid-19 they cannot,” wrote Aiden McGill in a message accompanying the country tune and a video on his YouTube channel.

With plastic palm trees on a snowy lawn, Tan In a Can and the heat cranked up to 32 C, Our Own Mexico brings a Mexican beach vacation home to an Ontario winter.

It was written a few years ago by McGill and fellow musicians Tim Taylor and Shawn Christian during a visit to Nashville, and since then tweaked to reflect Covid and the new reality. The song was recorded at McGill’s home studio in Hastings, Ontario.

The video is made up of stills McGill shot during trips to Mexico and others while snowbound in Canada.

OUR OWN MEXICO Aiden McGill

Watch this video on YouTube

McGill says he travels to Mexico a few times a year.

“I love the food, I love the people and my favorite all-time place to go is Acapulco.”

Vaccination brigades begin inoculating seniors in remote, rural communities

By

MND Staff

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February 15, 2021

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vaccination brigade — 13-member brigades went to work in 333 municipalities Monday.

The vaccination of seniors against Covid-19 is underway in marginalized, mostly rural municipalities across Mexico after 870,000 doses of the AstraZeneca/Oxford University shot arrived Sunday from India.

Health Ministry official Ricardo Cortés said Sunday night that the inoculation of seniors would begin 8:00 a.m. Monday in 1,081 vaccination centers in 333 poor municipalities located in all 32 states of the country.

Thirteen-member brigades made up of doctors, nurses, government social program employees, volunteers and members of the military will be responsible for the rollout of the vaccination program to seniors. Some 1,080 brigades were to swing into action on Monday.

The commencement of the seniors’ vaccination program comes after a first shipment of AstraZeneca, two-dose vaccine manufactured at the Serum Institute of India arrived at the Mexico City airport.

An additional 1.16 million doses are expected to arrive from India in March, the Foreign Affairs Ministry said in a statement, while Mexico has an agreement to purchase more than 77 million doses to be manufactured in Argentina and bottled here.

The 870,000 doses, purchased for US $4 each, were taken to facilities of state-owned vaccine company Birmex for inspection prior to distribution across the country via air and land.

Foreign Affairs Minister Marcelo Ebrard, who was at the airport to receive the vaccines, noted that the shipment is the largest Mexico has received to date. Indian Ambassador Manpreet Vohra said the consignment is the first to reach Latin America from India.

President López Obrador announced Sunday that the initial shipment of AstraZeneca vaccines would be used to inoculate seniors in isolated and poor communities where there is scant medial infrastructure to treat Covid-19 patients.

Speaking at a press conference in Oaxaca, he stressed that all seniors – and all Mexicans – will be immunized free of charge but priority has been given to those who live in “the most remote, the poorest and the most needy communities.”

“We’re beginning in 330 municipalities … with these characteristics, all the seniors of those municipalities will be vaccinated. The next delivery will cover other municipalities, also from [all] 32 federal entities,” López Obrador said.

The president noted that vaccination will also begin Monday in the Mexico City municipalities of Milpa Alta, Cuajimalpa and Magdalena Contreras. He cited the Cañada region of Oaxaca and the Mixteca region of Puebla among the areas where vaccines will be administered starting today.

Vaccine arrives from India Sunday morning in Mexico City.

He predicted that the country’s approximately 15.7 million seniors will have received at least one vaccine dose by the middle of April, two weeks later than previously anticipated.

Millions of vaccines from Russia and China are expected to arrive in the coming weeks, while further shipments of the Pfizer/BioNtech shot, which has been used to inoculate health workers, are also slated for delivery, including a lot of almost 500,000 doses on Tuesday.

Speaking at the Health Ministry’s coronavirus press briefing on Sunday night, Cortés said the government had decided to prioritize vaccination in rural areas over cities because the “epidemiological impact” of administering the limited number of doses Mexico currently has would be minimal in urban areas – even though they have been hit hardest by the coronavirus pandemic.

“If we focused first on covering all the urban areas, with just 870,000 doses at the moment, the epidemiological impact that those 870,000 doses would have would be practically non-existent,” the health promotion chief said.

“… If we focus on vaccinating the 3 million older adults in the more remote rural areas, we will probably have … everyone vaccinated [with a first dose] in one or two weeks,” Cortés said, apparently overstating the pace at which vaccines are likely to be administered.

“… we’ll reduce the risk for people who are highly vulnerable due to their geographic location,” he said.

“[People in rural areas] have a lower probability of finding a secondary level health service or intensive care if they need it than people who live in urban areas,” Cortés added.

“… The decision has been taken to complete the vaccination in remote rural areas … to cover people who are highly vulnerable in that regard more quickly.”

In addition to health workers and seniors, other sectors of the population that can expect early access to Covid-19 vaccination include teachers, dentists, people with chronic illnesses and athletes who will represent Mexico at the Tokyo Olympics to be held in July and August.

“The demand of dentists [to be vaccinated] is legitimate, just as we have the necessity to vaccinate teachers to protect them for the return to in-person classes,” López Obrador said Sunday.

“We also have to vaccinate the sportspeople who will represent us at the Olympic Games, all of them, and we have to do it now because the is approaching and then the people with chronic diseases aged under 60 – people with high blood pressure, diabetics, those who suffer from obesity,” he said.

Meanwhile, Mexico’s coronavirus case tally is on the verge of reaching 2 million after 4,099 new cases were reported Sunday, pushing the accumulated total to above 1.99 million. The official Covid-19 death toll rose to 174,207 with 436 additional fatalities registered.

Source: El Universal (sp), Reforma (sp)

An unlikely modern icon, Sor Juana’s celebrity cuts across age and class

By

Leigh Thelmadatter

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February 13, 2021

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Sor Juana, one of the most recognizable female historical faces in Mexico, as she appears on the latest version of the 100-peso bill.

Iconic Mexican figure Sor Juana, a familiar face for years on the 200-peso bill, recently got a makeover and a new home on the 100-peso bill, part of Mexico’s regular updating of its “families” of bills and coins to respond to economic and technological shifts. But these sorts of changes also regularly provoke political and cultural discussions as to what and who should be honored on Mexico’s money.

Sor Juana herself speaks to the discussion in recent decades regarding the appearance, or lack thereof, of female personages. Since 1969, only 10 women have appeared on Mexico’s currency, as opposed to 46 men. And only three have been historically significant — Frida Kahlo, Josefa Ortiz de Domínguez, and Sor (Sister) Juana Inés de la Cruz.

Some female figures have appeared representing a class of women, such as the “Adelitas” — women soldiers of the Mexican Revolution. Others have appeared for questionable reasons, such as Gloria Faure’s image in the early 20^th century. Faure was the lover of Bank of México governor Alberto J. Pani.

Not surprisingly, most of the featured images are those of people involved in Mexico’s wars, especially the War of Independence and the Mexican Revolution. But in more recent times there has been pressure to honor those who have made contributions in the cultural realm, rather than just “national heroes.” Sor Juana’s image fits in well with this desire. However, when the Bank of México announced the introduction of a new series of bills, the fear was that all female images would disappear, including hers.

Alas, Frida Kahlo’s image seems to be gone, at least for now.

High inflation and currency devaluation, leading to even everyday goods costing thousands, moved Juana's image to a gold 1,000-peso coin in 1988. — High inflation and currency devaluation, leading to even everyday goods costing thousands, moved Juana’s image to a gold 1,000-peso coin in 1988.

Although Kahlo is far better known internationally, in Mexico Sor Juana has an appeal that crosses generations and social classes. Comments in support of her image on Mexico’s money come with enthusiasm from Oxxo cashiers to head librarians at universities. She is one of the most recognized figures in classical Latin American literature, but her life of pushing the limits of what society permitted appeals to a wide public.

Juana Inés de Asbaje y Ramírez de Santillano (1648–1695) was born in the small town of San Miguel Nepantla, southeast of Mexico City. Although learning was not absolutely forbidden to women at the time, it was highly discouraged. Fortunately, her grandfather had an extensive library at the family hacienda. It is claimed that she learned there almost entirely on her own, reading by age 3 and writing by age 8. Her intelligence attracted attention, allowing her to travel to Mexico City to learn Latin. In 1665, she became part of the court of the viceroy’s wife, Leonor Carreto, where she astonished with the depth of her learning.

Although she received marriage proposals, she chose the life of a nun as it would allow her to continue studying and learning. She became well known for her poetry, written in Spanish, Latin, and Náhuatl. Her intellectual work skirted the boundaries of what was acceptable for a woman, getting away with much because she had supporters in the church and the court. Unfortunately, the cloistered life and fame did not afford absolute protection. Newer church leaders frowned upon her writing and attitudes about women’s intellectual parity with men. She eventually was forced to stop writing, do penance, and spend the rest of her life doing charitable works. She died in 1695, a victim of a plague caught tending to others.

As Mexico’s “Tenth Muse,” Sor Juana remained important academically. But it was the research and writing of Nobel laureate Octavio Paz in the mid-20^th century that reintroduced her into the general Mexican consciousness.

Paz idolized her as someone pushing against a chauvinistic and authoritarian culture. However, because she lived over 350 years ago and nothing in her writings is remotely controversial today, she is a “safe rebel” to promote. She represents how far Mexican society has come, with her memory no threat to any current power structure.

This is likely why Sor Juana has appeared on various bills and coins for over four decades. She first appeared in 1978 on the 1,000-peso bill. High inflation turned this bill into a coin by 1988, which kept her image, but it disappeared with the 1992 peso revaluation. She then appeared again on the 200-peso bill, which did much to keep her alive in the popular imagination.

The classic image of Sor (Sister) Juana Inés de la Cruz, who often astonished her male contemporaries with the depth of her knowledge.

Despite her popularity, the Bank of México decided to return the images of Miguel Hidalgo and José María Morelos to the 200-peso bill, issued in 2019. She immediately stands out on the new 100-peso bill because of its vertical orientation.

The change does not signal a “downgrading.” In fact, the 100-peso bill has the widest circulation of all bills in Mexico, according to Alejandro Alegre, director of circulation of the Bank of México. Seventy million of the high-tech polymer bills will be printed before the end of 2021.

Fortunately, Sor Juana is not the only woman to appear on Mexico’s new series of bills. The others include Mexican revolutionary heroines Carmen Serdán and Hermila Galindo, sharing space with Francisco I. Madero on the new 1,000-peso bill. The last, poet Rosario Castellanos, is planned to appear with Octavio Paz on a proposed 2,000-peso bill, which is awaiting approval.

Leigh Thelmadatter arrived in Mexico 17 years ago and fell in love with the land and the culture. She publishes a blog called Creative Hands of Mexico and her first book, Mexican Cartonería: Paper, Paste and Fiesta , was published last year. Her culture blog appears regularly on Mexico News Daily.

A year after arrest of ex-Pemex boss, little progress seen in Odebrecht corruption case

By

MND Staff

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February 13, 2021

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A year after former Pemex CEO Emilio Lozoya was arrested in Spain, scant progress has been made in the Odebrecht corruption case, in which he has implicated a who’s who of Mexico’s political elite including three past presidents.

Lozoya, head of Pemex during the first half of the 2012-2018 government led by former president Enrique Peña Nieto, was taken into custody in Spain on February 12, 2020 and extradited to Mexico last July.

He is accused of receiving more than US $10 million in bribes from Odebrecht, a Brazilian construction company, in exchange for awarding it a lucrative contract for work on the Pemex refinery in Tula, Hidalgo, and taking a kickback in excess of $3 million from the president of Altos Hornos de México, a company from which Pemex purchased a rundown fertilizer plant in 2015 at an allegedly vastly inflated price.

The former state oil company chief, formerly a close ally of Peña Nieto, denied those charges in court appearances via video link shortly after he was extradited to Mexico. He hasn’t been required to appear in court, either in person or virtually, since.

A day after Lozoya’s arrest in Spain, President López Obrador pledged there would be “no protection for anyone” involved in the Odebrecht corruption case but after returning to Mexico the former Pemex boss was given protected witness status and has not been held in custody, apparently because he is in less than optimal health.

(Upon arrival in Mexico, Lozoya was immediately transferred to a private Mexico City hospital, where he was treated for anemia and an esophagus problem.)

In cooperating with authorities in the hope that he will be acquitted or given a lighter sentence, Lozoya has implicated former presidents Peña Nieto, Felipe Calderón and Carlos Salinas in corruption linked to Odebrecht as well as numerous other former and current officials. Based on Lozoya’s claims, the federal Attorney General’s Office (FGR) accused Peña Nieto of being the author of a bribery scheme that allegedly used Odebrecht money to buy lawmakers’ support for the former government’s structural reforms, in particular the energy reform which opened up the sector to foreign and private companies after an almost 80-year state monopoly.

While the government has been trying to obtain a warrant for the arrest of former finance and foreign affairs minister Luis Videgaray, whom Lozoya also implicated, none of the officials cited by the former Pemex chief has yet been brought before a court.

Estefanía Medina, a lawyer and co-founder of the anti-impunity organization Tojil, told the news agency EFE that it was “extremely worrying” that Lozoya was afforded the opportunity to cooperate with authorities as a protected witness given the gravity of the crimes of which he is accused. She predicted that he will eventually be exonerated of all charges against him in exchange for providing the information that implicates other former officials.

Medina said that authorities in other Latin American countries that have conducted probes into Odebrecht have given implicated government officials the opportunity to cooperate in exchange for exoneration or more lenient sentences. But such arrangements have typically been limited to lower ranking functionaries who were not at the center of the corrupt activities, she said.

Given that Lozoya was at the center of the Odebrecht scandal in Mexico, he should face a “full trial at which the facts are clarified,” Medina said.

As there has been little information in recent months about the progress of the FGR’s investigation into the corruption case, there is fear in some quarters that impunity, which has long plagued Mexico, will once again prevail.

“The Lozoya case, once he was brought to Mexico, began to exhibit strange signs,” constitutional lawyer Luis Pérez de Acha told the newspaper El País.

He claimed that it was never made clear why Lozoya was given the opportunity to cooperate with authorities on the case in exchange for potential acquittal, adding that it was strange he was given that chance given the serious nature of the accusations he faces.

Pérez also said that more than enough time has passed for Lozoya to provide information to the authorities and for them to build their case against those allegedly involved in the Odebrecht case.

The FGR said in late January that former Senator Jorge Luis Lavalle, one of the lawmakers who allegedly received cash in exchange for supporting the former government’s reforms, would be summoned to appear in court but no date for that to occur has yet been set.

El País said that if the case against Lavalle, whose former close collaborator Rafael Caraveo was seen receiving wads of cash in a video that surfaced last August, is not successful, other allegations made by Lozoya might not stand up to scrutiny in court either.

If authorities are unsuccessful in using Lozoya’s evidence to obtain guilty verdicts against the officials he has implicated, or even bring them before a court, they would presumably be more likely to seek a hefty sentence against the ex-Pemex CEO in order to avoid complete impunity and at least provide some evidence to back up the claim that the federal government is serious about prosecuting corruption.

However, it is possible that the authorities and Lozoya have already reached an acquittal deal, regardless of the final outcome of the case, that hasn’t been revealed: the entire case has been characterized by a lack of transparency, with information only arriving in dribs and drabs via leaks and infrequent, sometimes nebulous statements from the FGR.

Indeed, more information has been released by the president than justice officials, raising criticism that the case has been used for political gain. Earlier this week López Obrador went after opposition critics of new energy policies, suggesting they ought to be embarrassed in light of “millions of pesos” having been handed out to politicians to approve the 2013-2014 energy reform.

He claimed there is proof of the payments being made, yet no evidence has been presented in a court of law.

Whether Lozoya and those he has implicated in corrupt activity will be put on trial is as yet unclear but the probability of that occurring any time soon appears very low due to the slow pace at which the Odebrecht case is proceeding.

While the former Pemex CEO and others might be in lockdown due to the coronavirus pandemic, the chance that they will be locked up behind bars in the near future appears negligible. If impunity in the case – former Odebrecht officials have admitted bribes were paid in Mexico – does eventually prevail, as many ordinary Mexicans believe will occur, it will not only be yet another setback for the rule of law but a major blight on the record of the federal government.

Mexico News Daily

Covid takes its toll on job creation; January’s numbers lowest in seven years

By

MND Staff

-

February 13, 2021

0

Factory workers in Baja California, one of only three states where job numbers were up.

Mexico had its worst January in seven years in terms of job creation as a spike in coronavirus cases and a consequent tightening of restrictions put the brakes on the country’s economic recovery.

A net total of 47,919 formal sector jobs were added last month, according to Mexican Social Security Institute (IMSS) data, a 30.5% decline compared to January 2020.

It was the worst performance since January 2014 when only 22,000 new jobs were created. The weak job growth coincided with the worst month of the pandemic in terms of both new coronavirus cases and Covid-19 deaths. Ten states faced red light restrictions in the second half of January while Mexico City and México state, key drivers of the national economy, were red all month.

IMSS data published Friday also shows there were almost 670,000 fewer formal sector jobs at the end of January compared to a year earlier. Just over 19.8 million workers were registered with IMSS on January 31, a 3.3% decline compared to the same date last year.

Millions of people lost their jobs in the formal and informal sectors in the first months of the pandemic before a jobs recovery began in the middle of last year. The Mexican economy slumped 8.5% in 2020, its worst contraction since the Great Depression.

The sectors that suffered the biggest job losses in percentage terms over the past year were business services (-9.9%), construction (-6%), mining (-5.4%) and retail (-2.4%).

The sectors that added the most jobs were agriculture (+0.7%), social services (+0.3%) and transformation, or advanced manufacturing (+0.1%).

Only three states had more formal sector jobs at the end of January than at the end of the same month in 2020. They were Baja California (+3%), Tabasco (2.4%) and Chihuahua (+1.4%).

Quintana Roo, which is heavily dependent on the hard hit tourism sector, suffered the biggest drop in formal sector jobs, recording a 23.2% decline in the number of people registered with IMSS between January last year and the end of the first month of 2021.

The next biggest job losses occurred in Baja California Sur (-9.9%), Guerrero (-7.7%), Puebla (-6.6%) and Mexico City (-6.3%).

Mónica Flores, Latin America president of Manpower, a staffing firm, told the newspaper El Universal that the jobs recovery in Mexico in 2021 is uncertain.

“The recovery of employment depends on a lot of variables, such as the vaccination scheme, job creation incentives and economic performance at a global level,” she said.

“The big problem that Mexico faces is informality, which it hasn’t been able to reduce in order to move people into formal work.”

Source: El Financiero (sp), El Universal (sp)