Doing business amid the coronavirus: some entrepreneurs find silver lining

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August 5, 2020

Jim Gallas of Sayulita conducts a yoga class via Zoom.

The governor says close. The president says stay open. Local authorities say open, but with restrictions. Then they say you should close again.

In the meantime, customers are coming and you and your employees are desperate for income. What’s a business owner to do?

This is the scenario not just in Mexico, but in countries around the globe. It’s a challenge like no other, with no clear path forward. The Mexican government estimates millions of businesses will close, and the economic shocks are already reverberating through communities of every size.

Some business owners have found a silver lining in the midst of all this. Unexpectedly, they’ve discovered or been thrust into new business models they’d never imagined before the coronavirus turned the world upside-down.

Jim Gallas has worked in the healing arts for 30 years, as a yoga and Qi gong teacher and massage therapist. For two decades he’s been splitting his time evenly between Sayulita, Nayarit, and Santa Cruz, California, a lifestyle that affords him “the best of both worlds.” This year, though, everything changed with the arrival of the pandemic.

Paco Shingadia found a new customer base through Facebook.

“By the middle of March, all my work in Sayulita was gone,” he recalled. “Many people left early. Initially we continued classes outside. People had to disinfect their hands, wear masks, be six feet apart. Then it became apparent it was better not to come out.”

Things changed when a student who was tech savvy said he should be online. Within a week of her saying that, Gallas was set up on Zoom.

“I would never have thought of that,” said Gallas. “I’m not oriented that way.”

“There’s a learning curve in teaching to a screen and not seeing my students,” said Gallas, who mutes and turns off participants’ video during class. “I’m used to having hands-on, to be able to look out and see something that needs adjusting.”

People can email questions or ask after class, when he turns the video and sound back on. His students are all around the world, from British Columbia, Canada, to New Zealand. Some had taken his classes in Sayulita or California and others heard of them through mutual friends. Zoom has expanded his ability to offer classes anywhere, to anyone, easily and effectively, he said. And he’s also free to travel, as he can set up his laptop and hold a class anywhere there’s a good WiFi signal. It’s an unexpected bonus to what he’d thought was an untenable situation.

“That’s been a very valuable part of this, to be able to offer a place for people to meet in this way and to see each other, in what I call their Hollywood Square,” said Gallas. “A couple in Florida said this is the best thing they do all week. People absolutely feel like they’re doing something good for themselves.”

Kelly Casey of The Living Room: ‘We’re going to get through this.’

Pankaj (Paco) Shingadia was making and selling authentic Indian food at five busy outdoor farmers’ markets in the Puerto Vallarta area each week. His Bites of India was popular and successful, and customers loved his butter chicken, spicy chutneys and naan flatbreads. Although the markets were all seasonal (November to April) he and wife Griselda were happy to have the summers off to relax, do a little catering, visit family or travel.

Unaware of the extent of what was happening with the pandemic in China and Europe, they were taken by surprise as suddenly and without warning the Jalisco and Nayarit state governments shut down all outdoor markets.

“All the markets closed preemptively before the end of the season,” said Shingadia. “We didn’t know that Sunday, March 15, was our last market. The next day we got word from the market managers.”

Since they already had food prepped, they decided to try and sell through Facebook, posting in various expat groups. That first week there was absolutely no response.

“People were reeling,” said Shingadia, who watched Canadians and American friends trying to decide what to do. “They didn’t know if they were coming or going.”

Bites of India offers take-home meals with frozen entrees plus fresh-made Basmati rice, flatbreads, samosas and chutneys. The couple decided to go ahead with full production since they had all the ingredients. This also gave them something to do during a self-quarantine that ended up lasting seven weeks.

As stores began to reopen with safety measures in place, Shingadia started posting on Facebook again, offering home delivery, and this time there was an enthusiastic response from other full-time expats and stranded snowbirds — a new customer base. The couple invested in an FDA-approved professional vacuum sealing machine and are working on making their order system more efficient. Because it’s just the two of them working in a professional kitchen and doing deliveries, overhead is low and they can completely control the protocols, such as masks, gloves and other sanitation measures.

Now, he said, they’re so busy they can barely keep up.

“It’s gone very, very well,” he said. “The last post I did I was overwhelmed.”

Although there’s a chance the markets may reopen in November, Shingadia said this new business model has proven to be a blessing in disguise.

“Who knows what will happen? Will they quarantine again?” he mused. “And even if they reopen, how much tourism will happen? That’s why I want to focus on what I’m doing now.”

The Living Room Bookstore & Cafe was enjoying its first season and had quickly become a popular community gathering place in the Puerto Vallarta marina. As the coronavirus reached Mexico, owner Kelly Casey watched people starting to fly home in mid-March and made the wrenching decision to close on March 20.

Kelly Casey welcomes a customer to her Puerto Vallarta bookstore and cafe.

“It was scary! People who were always here for the winter were coming in and getting ready to leave,” she said. “So many of the full-timers decided to go home, especially the Canadians, because they had health care there.”

Casey had been saving money for the slower summer season, but used it instead to pay her two employees what they said was the minimum they needed to get by.

“Emotionally this took a huge toll,” she said. “What do I do? Not just about the business, but being away from home, on my own. But you pull yourself together.”

She tried to pivot to go online, but had no electronic inventory of the thousands of used books she’d had shipped from the U.S. Her original plan had been to open other stores in other expat communities around Mexico.

“What this did was make me change my business focus,” said Casey. She hired a software developer to create a database and opened a Shopify account so customers can easily search and pay online. “Now I’m looking at shipping, rather than other brick-and-mortar locations.”

The store and cafe are now open six days a week — until the government closes everything again — and Casey is promoting the store’s new online ordering and sales too.

“All in all, everyone has been very supportive. People are happy I’m back, and they’re happy to get new books,” she said. “We’re going to get through this.”

Mexico News Daily

Coronavirus has meant rapid growth for courier service

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Susy Buchanan

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August 5, 2020

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DHL has hired 1,000 new employees so far this year. — DHL México has hired 1,000 new employees so far this year.

DHL Express México announced that it has created more than 1,000 new jobs in the last four months as the demand for its services has increased due to the coronavirus pandemic.

New jobs have been added in various sectors of the company and existing employees are in line for a significant bonus this fall, the company said.

During the first seven weeks of the pandemic, existing staff were paid double and triple-time wages as they worked to meet round-the-clock demand, attaining volume levels in 2020 that the parcel service had projected for 2022.

DHL said it normally sees spikes in business during the country’s Hot Sale in May when retailers offer special discounts for online purchases during a four-day period, and during a similar program in November called Buen Fin, or “Good Weekend.”

However, this year’s Hot Sale numbers continued even after the event was over. In 2019, 40% of shipments made by DHL Express in the Americas were business to consumer. In the first six months of this year, business-to-consumer sales amounted to 50% of the company’s total volume.

The company, said the increased demand represents an operational challenge, having to maintain coronavirus health protocols including lockdowns and other restrictions imposed in certain states that delayed delivery times.

“We are very proud of the great commitment and efforts of our front-line collaborators. Every day, they work with the best attitude and are very aware of the responsibility they have as an essential activity in Mexico,” said CEO Antonio Arranz while announcing a bonus equivalent to about US $350.

“Currently, we are still in a state of alert due to the health situation, however, we have restored 100% of our delivery times thanks to the timely investment in technology and infrastructure and without a doubt in the most important thing: our human capital,” Arranz said.

Source: T21 (sp)

AMLO sees reversing energy reform as a means to ‘higher goal’ of saving Pemex

By

MND Staff

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August 5, 2020

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AMLO speaks out against energy reforms at a rally in Tabasco in 2014.

The previous government’s sweeping energy reform, which opened up the energy sector to private and foreign companies, may need to be reversed in order to save Pemex, President López Obrador said in a memorandum to government officials and energy regulators.

In the July 22 memorandum, seen by the Bloomberg news agency and the newspaper El Financiero, López Obrador wrote that a constitutional change shouldn’t be ruled out in order to allow his administration to achieve its “higher goal” of recovering state control over the oil and electricity industries.

The president has made rescuing Pemex, the heavily indebted state oil company, and the Federal Electricity Commission (CFE) a central aim of his government.

“We must advance to the limit permitted by the current legal framework. However, if in order to apply the new rescue policy to Pemex and CFE we need to propose a new energy reform, we don’t rule out that possibility,” López Obrador said in his memo.

The president also floated the possibility of scrapping the 2013 energy reform at a news conference last week, saying he could present a new reform in 2022.

To get rid of the existing energy reform, López Obrador would need the support of two-thirds of Congress. A coalition led by the ruling Morena party has a majority in both houses of Congress but it falls short of the two-thirds needed to make constitutional changes.

However, the Morena-led coalition could increase its majority at next year’s midterm elections or by persuading opposition party lawmakers to join its ranks.

López Obrador, long an outspoken critic of the energy reform enacted by his predecessor, has already suspended oil block auctions, through which the former government sold exploration and drilling rights to private and foreign companies, while the Energy Ministry (Sener) published a new energy policy in May that imposed restrictive measures on the renewable energy sector, paving the way for the CFE to consolidate control.

The moves have angered private energy companies, some of which launched legal action against the Sener policy, and the proposal to reverse the 2013 energy reform will only rile them further.

In his memo, the president charges that the 2013 reform, through which more than 100 contracts were awarded to private companies, amounted to “politics of pillage.”

He also claims that the reform was approved due to “bribes given to the majority of lawmakers and through media deception.”

Former president Enrique Peña Nieto announces the energy reform package in 2013.

Former Pemex CEO Emilio Lozoya, currently awaiting trial on corruption charges, reportedly told the federal Attorney General’s Office that part of a US $6-million bribe paid to the government by Brazilian construction company Odebrecht was used to buy the support of opposition party lawmakers.

However, Lozoya’s evidence – including at least 12 videos that allegedly show lawmakers accepting bribes – has not yet been presented in court.

In his memorandum, López Obrador also seeks to persuade energy sector regulators to support his plans for the industry.

According to El Financiero, the president summoned the chiefs and commissioners of the Energy Regulatory Commission (CRE), the National Hydrocarbon Commission (CNH) and the National Energy Control Center (Cenace) to a meeting in late July at which the memo was read to them.

“I maintain that the regulatory bodies created during the neoliberal period must adjust to the new economic and energy policies and their mission must be to join efforts with the Energy Ministry, Pemex and the CFE to rescue the nation’s oil and electricity industry,” the memo says.

The CRE, CNH, Cenace and other “supposedly autonomous” regulators mustn’t be allowed to become “mere instruments” for the benefit of the private sector, “as was the intention of the privatizing [government] technocrats and their bosses,” it says.

Unnamed sources who attended the meeting told El Financiero that López Obrador asked the regulatory body officials whether the government’s new energy policies could be carried out within the framework of the 2013 reform or whether it needed to be changed.

The presidential memo asks the regulators to abolish subsidies currently provided to private energy companies and to stop issuing new project permits to them.

In addition, it sets out a range of government aims. Among them: not increasing fuel and electricity prices in real terms, achieving energy self-sufficiency, increasing oil production to 1.8 million barrels per day this year and 2.2 million by 2024, upgrading existing refineries and completing the new one on the Tabasco coast and building power plants on the Yucatán and Baja California peninsulas in order to meet electricity demand.

The memo also proposes limiting private sector energy generation to 46% of Mexico’s consumption and increasing the use of hydroelectric power, and says that criminal complaints will be filed if proof of corruption is found in existing contracts with private companies.

Pemex and the CFE must be supported so that their participation in the national market doesn’t decrease further, López Obrador writes while also asserting that corruption within the two state-owned companies must be eliminated.

Source: Bloomberg (en), El Financiero (sp)

TV broadcasters sign on to program to deliver virtual classes

By

MND Staff

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August 4, 2020

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Four television broadcasters have reached an agreement with the federal government to screen virtual classes to students whose schools are closed due to the coronavirus pandemic.

Multimedios, Televisa, Televisión Azteca and Televisión Imagen inked a deal with the government on Monday that will see them paid a combined 450 million pesos (US $19.9 million) to broadcast educational content.

The Education Ministry said in a statement that an estimated 30 million students from preschool to high school will access the virtual classes, so the cost works out to just 15 pesos (US $0.66) per student.

At a signing ceremony with the TV company bosses, President López Obrador described the agreement as historic and thanked the broadcasters for their support.

The government and the television stations are “joining efforts,” he said, likening the agreement to that struck between his administration and private hospitals to ensure that there are enough beds for coronavirus patients.

The president stressed that the televised classes won’t amount to an “emergency” course, asserting that they will be based on and meet the requirements of the national curriculum.

The broadcasters have committed to screening the classes from August 24 – the start of the 2020-21 school year – until December 18.

Education Minister Esteban Moctezuma explained that virtual classes and educational programs will be broadcast on four TV channels operated by the private broadcasters as well as two public ones.

Educational content will be screened 24 hours a day, seven days a week, he said, estimating that 94% of the nation’s households will be able to access it.

“It’s a robust, official scheme that will provide a service to 30 million students of 16 school grades,” Moctezuma said.

“With six channels we’ll achieve broad national coverage. Those who don’t have access to the signal will have radio [classes], free textbooks, workbooks and special attention.”

Moctezuma said that the televised educational program isn’t meant to be a replacement of schools because teachers and their face-to-face classes are “irreplaceable.”

However, the television education content, developed by teachers and the Education Ministry, “provides certainty“ for students and their families, he said.

Televisa CEO Emilio Azcárraga said the pact between the private broadcasters and the government was unique in the world and showed that challenges can be met and goals can be reached by working together.

For his part, Benjamín Salinas of TV Azteca said that education is the most valuable gift for the nation’s youngsters and investing in students’ learning is “investing in the future.”

As the coronavirus pandemic shows no sign of abating in Mexico, the 2020-21 school year looks set to be like no other.

Something else that shows no sign of abating is students’ screen time, with many now likely to spend just as much time staring at a TV as they do their computers and phones.

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

Mexican migrants send more money home to help virus-hit economy

By

Jude Webber

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August 4, 2020

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For Jorge Hernández, the prospect of a cut in United States unemployment pay came as a shock.

His hours at the Manhattan restaurant where he works as a chef have been slashed since the start of the coronavirus pandemic, so he has come to rely on the benefit to support his elderly relatives back home in Mexico.

Hernández used to send a quarter of his salary to his parents and grandmother in Huajuapan in the highlands of Oaxaca, a poor state in southwestern Mexico. More than 10% of Oaxaca’s gross domestic product comes from remittances from family abroad.

“They’re going to halve my unemployment pay — I won’t be able to send as much. This will mean more poverty at home,” said Hernández, aged 65.

He is not the only Mexican abroad who has continued to send money home since the pandemic began.

Remittances to Mexico have proved resilient since the start of the Covid-19 crisis, after hitting a record US $36 billion last year. Mexico now earns more in remittances than it does from foreign direct investment, tourism or oil exports.

In the opening weeks of the crisis in March, remittances hit a record monthly high of $4 billion. And data published on Monday showed that in June, they rose 4.7% month on month to $3.5 billion, according to the Bank of México.

As a result, total remittances in the first six months of this year reached a record $19.1 billion — 10.6% higher than in the same period in 2019.

The figures suggest that some U.S. benefit checks are finding their way to Mexican families back home.

“It’s an unusual recession in the U.S. because average incomes haven’t fallen due to government aid,” said Carlos Serrano, chief economist at BBVA in Mexico City.

Hispanic unemployment in the U.S. is running at more than double the pre-pandemic level, according to the Bureau of Labor Statistics, and Serrano noted that about 60% of Mexicans in the U.S. had official immigration paperwork and could therefore be eligible for official aid.

And some workers’ incomes have proved resilient. About 10% of Mexicans work in the agriculture sector, which largely kept going through the pandemic-related shutdowns, and another 17% work in the construction industry, which has suffered less disruption than other sectors.

Even if the U.S. slashes unemployment benefits, “this could be the year in which remittances rise 6 to 7% [from 2019],” Serrano said. If benefits are not cut, the rise could be higher yet “because we’re past the worst in U.S. unemployment,” he added.

One Mexican who earns $11 an hour plus board picking peppers, cucumbers, aubergines and courgettes in Georgia, and who asked to be identified as Juan, usually sends as much as $700 home every two weeks to his father and 8-year-old son.

Work is scarce at the moment, and the 30-year-old can only send about $200-$300, but “for me, it’s a blessing because I haven’t stopped working.”

“A blessing” is also how Mexican president Andrés Manuel López Obrador describes his country’s migrants. He has hailed the rise in remittances as “a positive indicator.”

The pandemic is wreaking havoc on the Mexican economy, where GDP fell by more than 17% quarter on quarter in the three months to June, data published last week showed. Mexico has no federal unemployment pay and Coneval, the state agency responsible for measuring poverty, found 55% of workers did not earn enough to buy a basic basket of food in May, a surge from 36% in the first quarter.

As a result, the number of Mexicans heading to the U.S. is rising. Apprehensions of Mexican adults at the U.S. border have nearly doubled since February, hitting 135,626, according to U.S. Customs and Border Protection data compiled by the Washington Office on Latin America, a think tank. This is the highest tally since September last year.

Adam Isacson at WOLA said that, unlike 2018 and 2019 when caravans of Central Americans arrived at the border to turn themselves in to the U.S. authorities, migrants were now “just going and trying not to get caught” as they sought to cross between legal points of entry.

“The Mexican economy is cratering — that pushes people forward,” Isacson said. “No matter who wins the [November U.S.] election, once Covid restrictions pass, we will see a large wave of migrants … Democrats are dreading having a caravan situation in their first 100 days [if Joe Biden wins].”

For many undocumented and legal migrants alike, there is no better alternative to working in the U.S.

“I’ll keep on coming,” said Juan, whose remittance dollars sent back over the past five years are being used to revamp the family home. But for now, his main goal is to avoid Covid-19 because he would be laid off without pay for two weeks if he got sick.

“There’s no shortage of people to infect you,” he said. “And things are so hard at home, our families rely on us.”

Purchases without tenders, lack of transparency a recipe for corruption

By

MND Staff

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August 4, 2020

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A government that has declared corruption as Public Enemy No. 1 might be expected to make a great effort to ensure that procurement practices are designed to minimize the opportunities for officials to engage in corrupt practices.

But the administration of President López Obrador appears unworried that the purchase of supplies and awarding of contracts is less transparent than it was under the previous government of Enrique Peña Nieto.

Federal government departments and state-owned companies can make purchases and award contracts via three different processes: open tendering, a competitive public procurement method in which companies are invited to submit bids; invitation-only tendering, a process in which only a limited number of selected companies are asked to submit bids; and direct adjudication, a procurement process in which officials make purchases or award contracts without seeking any bids.

In 2019, the first full year of President López Obrador’s government, the state oil company Pemex made far greater use of invitation-only tendering to purchase goods and services from outside contractors than it did in 2018, the final year of Peña Nieto’s presidency. More on that later.

Now, the federal Congress has passed a legal reform that will allow the government to purchase medicines and medical supplies abroad using the direct adjudication procurement method.

Officials sign a medications procurement agreement with UNOPS.

Congress passed the reform even though the Constitution establishes that the government should favor the use of open tendering in order to ensure that the prices it pays are fair and the goods and services it receives are of high quality.

The law change was praised by President López Obrador and led to an agreement between the federal government and the United Nations Office for Project Services (UNOPS) to collaborate on the international purchase of medicines, medical supplies and vaccines.

But anti-corruption campaigners have condemned the move to make such purchases abroad without an open tendering process.

The National Network of Citizens Participation Committees, an organization that is part of the government’s National Anti-corruption System, called for the reform to be revoked.

The network said in a statement that the direct adjudication faculty in the reform is “highly discretional” and has “no limit.”

It said the government will be able to purchase medicines directly at any time, even in the absence of a health emergency such as the coronavirus pandemic.

The citizens’ network, made up of people known for their efforts to make government more accountable and transparent, said the changes to the Acquisitions Law that Congress passed last week will make government spending less transparent and as a result more prone to corruption. It also said the law change will have an adverse impact on competition.

In addition, the absence of open tendering will mean that citizens will not know whether the government had an available option to purchase higher quality or cheaper medicines and medical supplies, the network said.

The citizens’ committees called on lawmakers and others to launch legal action against the reform and expressed confidence that they would.

“We’re confident that legislators who oppose this reform, as well as the Federal Economic Competition Commission and the National Institute for Transparency and Access to Information [INAI], will present the legal recourses conducive to the judicial power guaranteeing … transparency and competition in the awarding of public contracts.”

Another critic of the reform is the general director of Mexican Transparency, a chapter of Transparency International, a global coalition against corruption.

Eduardo Bohórquez told the newspaper El Economista that purchasing medications abroad via direct adjudication will result in greater government opacity. He said the Acquisitions Law reform allows the government to deposit resources in a fund over which the Federal Auditor’s Office and the Ministry of Public Administration – which serves as the government’s internal corruption watchdog – will have no jurisdiction.

Transparency's Bohórquez: — Transparency’s Bohórquez: ‘a fertile breeding ground for corruption.’

“A fund that is not able to be overseen by the Mexican state is a risk, … it’s a kind of outsourcing for the purchase of medicines,” Bohórquez said, referring to the partnership with the UNOPS.

“Mexico loses sovereign power and the second issue is transparency. An international organization is not subject to Mexico’s Transparency Law,” he said.

Bohórquez said that UNOPS regulations might be transparent by international standards but “our analysis is that they are below those of Mexico.”

INAI will have no jurisdiction over the medical purchases the government makes abroad, he added.

This means that the direct purchase of medicines in foreign countries via the collaboration with the UNOPS could create a fertile breeding ground for corruption even though López Obrador says it will put an end to the malfeasance that has plagued such purchases.

Pemex’s recent increase in spending on contracts awarded via invitation-only tenders shows that there is a broader shift away from open tendering even though the Mexican Constitution encourages the government to make wide use of that process.

An INAI study found that 40.6% of the funds Pemex spent last year on goods and services was paid to companies that won contracts via invitation-only tendering. By contrast, spending on invitation-only contracts in 2018 accounted for just 0.8% of the state oil company’s total outlay on goods and services.

Total spending on those contracts in 2019 was 72.8 billion pesos (US $3.2 billion at today’s exchange rate), with a large part of the money used to hire contractors to work on Pemex’s new refinery on the Tabasco coast. The government has justified its use of invitation-only tendering by saying that it allows the process to be completed more quickly, allowing the refinery to be completed sooner.

However, it doesn’t take away from the fact that the state oil company’s spending on open tendering contracts fell to 42% – 75 billion pesos – of total expenditure in López Obrador’s first full year in office compared to 67.7% in 2018.

One positive sign, anti-corruption campaigners would likely argue, is that Pemex’s direct adjudication spending fell to 17.4% – 31 billion pesos – of total expenditure on contracts last year compared to 31.5% in the final year of the Peña Nieto administration.

It is also worth noting that the heavily indebted state oil company spent more than double on outside contracts in 2019 than it did in 2018. Spending totaled 179.3 billion pesos last year (US $7.9 billion) while the outlay in 2018 was 85.8 billion.

The main factor in the much higher spending is the government’s decision to build the new refinery, a move that has been criticized by many analysts who say that it will divert funds from Pemex’s more profitable exploration business.

The question now is: are those funds being spent wisely and honestly? Mexicans will have to rely “on the president’s word,” as Reforma columnist Miguel de la Vega wrote on Tuesday, and his “self-proclaimed moral superiority to sanctify what anywhere else would raise all kinds of suspicion.”

Mexico News Daily

Arresting Santa Rosa cartel leader took all of 15 minutes: army chief

By

MND Staff

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August 4, 2020

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The gates behind which El Marro was hidden when he was captured Sunday.

It took just 15 minutes to arrest Santa Rosa de Lima Cartel leader José Antonio “El Marro” Yépez Ortiz, army chief Luis Cresencio Sandoval said Tuesday.

Speaking at the president’s news conference in Tepic, Nayarit, the National Defense Minister gave a blow-by-blow account of the operation to arrest Yépez at a property in a small Guanajuato town in the early hours of Sunday morning.

Cresencio said that 260 soldiers including 120 special forces troops began mobilizing for the operation at 3:00 a.m. Sunday.

Backed up by hundreds of state police, marines and members of the National Guard, they raided a farm property in the municipality of Juventino Rosas at 3:30 a.m., based on evidence that El Marro was on the premises. Intelligence had also revealed that the gang leader never slept more than one night in the same place.

At 3:45 a.m., El Marro, considered one of the main instigators of violence in Guanajuato, and five accomplices were taken into custody, Cresencio said. A 52-year-old businesswoman who had been held hostage by the cartel was rescued at the same time.

El Marro shortly after his arrest on Sunday.

The army chief said the cartel members didn’t put up significant resistance, although they did fire shots. The soldiers returned fire and one suspected cartel member was wounded.

At 4:00 a.m., Yépez was put on a helicopter and he arrived at a state police facility at 4:30 a.m. The other five suspected criminals left the farm property at 5:30 a.m., Cresencio said.

One of them, Yépez’s presumed security chief, Saulo Sergio N., was taken to hospital to be treated for a gunshot wound to the leg, while the other four were turned over to state police.

By 7:15 a.m., El Marro and his four uninjured accomplices had all been placed in state police custody. They were transferred on Monday night to the Puentecillas state prison.

Cresencio said that security forces located Yépez last week and had been monitoring four properties in the area where he was detained. The Milenio newspaper reported on Monday that drones were used to search for the criminal leader and monitor his movements.

At the property where El Marro was detained, soldiers seized five rifles, three handguns, a grenade launcher and an explosive device, Cresencio said.

After highlighting the “great effort” and dedication of the military to detain the cartel members, and the risk the operation entailed, the army chief called on law enforcement authorities and state and federal judges to do their part to ensure that the suspected criminals are held to account.

Yépez was detained on charges of fuel theft and organized crime but will likely face accusations of murder as well.

President López Obrador also called on the judiciary to act with honesty and integrity to ensure that there is no impunity in the case.

(There have been countless cases in Mexico in which judges have released suspected criminals after they received, or allegedly received, bribes).

López Obrador declared that state and federal judicial authorities must “apply the law” in the case against Yépez and the other suspects.

“All this [violence and corruption] that we’re suffering in Mexico … has a lot to do with impunity,” he said.

Army chief Sandoval presents a report on El Marro's arrest during Tuesday's press conference. — Army chief Sandoval presents a report on El Marro’s arrest during Tuesday’s press conference.

“Authorities of all levels of the three branches [of government] have been involved in illegal activities and impunity has resulted in the culprits not being punished. There’s no adherence to the law, suspected criminals are set free because of decisions by both federal and state judges. I don’t want to generalize because there are very good and honest public servants but in Mexico we’ve suffered from impunity,” López Obrador said.

The president said that it’s up to Guanajuato authorities to carry out the judicial process against the Santa Rosa de Lima Cartel members but added that the federal Attorney General’s Office is seeking to lay federal charges.

“We’re all going to be vigilant so that there is justice,” López Obrador said, adding that the suspects won’t be accused of fabricated crimes but nor will they have crimes they did commit removed from their records due to the “complicity of authorities.”

El Marro himself appeared to be resigned to his fate after his arrest.

“Everything has a beginning and an end,” he told security forces on Sunday. “My own end has now arrived.”

Source: Reforma (sp), Milenio (sp)

4th sighting: AMLO dons face mask for Guadalajara flight

By

Susy Buchanan

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August 4, 2020

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The president aboard a flight Monday to Guadalajara.

AMLO-watchers recorded another rare sighting of the president wearing a face mask this week.

It was the fourth time that President López Obrador has been seen wearing a protective mask in public since the coronavirus pandemic began earlier this year.

Despite recommendations by Mexican health authorities that wearing a mask helps mitigate the spread of the virus, López Obrador has been reluctant to do so.

He wore one for the first time on his flights to and from the United States in early July, and also on July 17 when he flew from Colima to Mexico City.

Yesterday he donned a mask for a commercial flight to Guadalajara, days after he vowed not to wear one until there was no longer any corruption.

“I am going to put on a mask, you know when? When there is no corruption anymore, then I will put on my mask,” he said.

López Obrador’s refusal to follow health guidelines has drawn criticism from other politicians.

National Action Party legislators in the Chamber of Deputies announced Thursday they will seek a legal order to compel the president to wear face masks at public events, and Citizens Movement party Deputy Mara Robles of Jalisco has also launched a plea on change.org that the president wear a mask. It had drawn nearly 20,000 signatures by Tuesday.

A poll has revealed further evidence that the public disagrees with the president’s stance.

According to a survey by the newspaper El Financiero, 71% of Mexicans said it was a bad or a very bad thing that the president refuses to wear a mask in public.

In addition, 28% of the 820 adults surveyed condemned the president for embarking on a tour of states during the coronavirus pandemic, while 49% thought the tour was a good idea.

State visits continue, and López Obrador will travel to Nayarit, Sinaloa, Sonora and Baja California Sur this week.

Source: El Debate (sp), La Razón (sp), El Financiero (sp), El Universal (sp)

López Obrador offers dark hint about his plan for Mexican energy

By

Jude Webber

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August 4, 2020

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Emilio Lozoya's corruption charges are being used to discredit energy reform.

Change is afoot again in Mexico’s energy sector, and investors are worried.

First came two new pipeline permits, signed by United States President Donald Trump last week, enabling hydrocarbons including crude oil to be exported across the border to Mexico. Then came Mexican President López Obrador’s warning that he could reverse Mexico’s energy sector reforms.

The permits will allow NuStar Energy, a San Antonio-based company, to connect its 46-kilometer Burgos pipeline to a Pemex gas plant in Reynosa, Tamaulipas.

Gonzalo Monroy, an energy analyst, said the infrastructure would allow refined products to reach the industrial Monterrey area in northern Mexico, which would “make a lot of business sense.” Some investors, he added, have also talked about building mini-refineries in the area, a potential outlet for Texan crude oil.

Yet López Obrador has made energy self-sufficiency a cornerstone of his policy and is building a new refinery so the country can stop exporting crude and importing fuel.

So the possibility of even more imports from the U.S. hardly fits the plan, although López Obrador usually acquiesces to demands from Trump.

If all this suggested that López Obrador might be softening his stance on private and foreign investment, the mood quickly changed when the president offered his darkest hints yet that he would reverse the landmark 2013 energy reform that stripped Pemex of its monopoly and opened up a sector that was closed to outside investors for 75 years.

His potential U-turn on those reforms, threatened hours before Trump’s pipeline announcement, triggered alarm in the private sector, which invested billions in Mexico’s upstream auctions until López Obrador put them on ice in 2018.

The president has so far stopped short of reversing the energy reform. But if it has not demonstrated its merit by 2021, he now says he could seek to turn back the clock.

He insists that the more than 100 contracts already awarded are safe, but analysts say permit hold-ups and rule changes that benefit Pemex will stymie competition in the sector anyway.

López Obrador, an anti-graft crusader, also appears keen to use the corruption trial of Pemex’s former chief executive, Emilio Lozoya, to discredit the energy reform, arguing, without yet providing proof, that politicians were bribed to change the law.

To change the law, the president would need support from two-thirds of Congress, something he cannot yet command. The energy reform is also enshrined in the USMCA, the new trade agreement, making it hard to change outright.

But investors have learned to take López Obrador’s words at face value, even though many doubt that the energy sector plans will help the industry or fix Pemex’s mounting financial problems. Monroy said canceling the energy reform was a “credible threat.” The president says he would do it “in the third year” of his term.

In Mexico, tuna is not a fish but a fruit

By

Leigh Thelmadatter

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August 4, 2020

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Pithaya fruit at a market in Acatlán, Puebla. leigh thelmadatter

Growing up in New Jersey in the 1970s, I would have thought the idea of cacti producing anything edible to be crazy. It turns out that all cactus species produce fruit you can eat, and it happens that we are currently in one of the major seasons for cactus fruit in Mexico.

In general, these fruits considered quite healthy, often containing significant levels of vitamin C, other antioxidants, fiber, B vitamins and even some minerals. They tend to contain less sugar and more water than other fruits so are often recommended for diabetics. Some cactus is economically important as a commercial crop, and others are only harvested wild as a local delicacy.

By far the most common cactus fruit grown and sold in Mexico is the tuna or prickly pear. Mexico has 20,000 farmers harvesting about 350 tonnes yearly, with most grown in Zacatecas, Puebla, and Hidalgo. It is so ubiquitous that the name for it can be used by extension to all cactus fruit.

For our purposes, tuna will be used only to describe the sweet varieties of fruit that come from the Opuntia cactus family, better known as the paddle cactus or nopal. It is cultivated all over central and northern Mexico as the plant itself is eaten along with the fruit. There are over 60 types of Opuntia in Mexico, all slightly different from one another.

Tunas are generally classed as two types, blanca (white) and roja (red), depending on whether the species produces betalain, the same antioxidant found in beets. (There is a less common orange variety, which is like the red but less intense.) All have a husk, which may or may not be easily peeled, and the seeds may be clustered in the center or interspersed in the flesh.

Tunas for sale in Colonia Doctores, Mexico City. leigh thelmadatter

They are not especially sweet, especially compared to most tropical fruits, and depending on the variety and location are available between April to October. At the height of their season, they fill traditional markets and are often sold on the streets as a snack with chile pepper and lime. They can also be used as the base for salsas, juices, fruit drinks, compotes, liquors, and gelatins.

There is a sour variety of the tuna with the name xoconostle (Nahual: sour tuna) from the Opuntia joconostle. It is popularly distinguished from tunas because it is available year-round, and generally only in the center-north of the country. Its use is different from other tunas in that it is not only used in sweet preparations but savory ones as well. The most noted of these is mole de olla, but there are regional specialties such as the xoconostle soup of Pénjamo, Guanajuato.

Another confusion is with fruits called pitaya or pitahaya. Both are used to describe fruits from two cactus species. The first is the Hylocereus family, found growing vine-like in various arid and semi-arid regions. The best known of this fruit is from the Hylocereus undatus and for clarity, we will use its secondary name of dragonfruit. The fruit’s husk lacks thorns, has reptilian-like scales, and comes in red, magenta, or yellow.

The pulp is white or red with tiny black seeds. It is typically eaten raw but can be whipped in a blender to make a beverage. This fruit is relatively easy to grow and there has been some successful exportation to Asia and the Middle East.

The other pitaya is fruit from the columnal Stenocereus cactus family. They are sometimes called pitaya tunas, etchos or echos. The cactus grows like the saguaro and organ cactus but is smaller. The fruit is like a round tuna and has thorns. The husk can be bright red or yellow, and the pulp can be white or red, often sweet with many tiny seeds.

This fruit mostly grows in the arid regions of Oaxaca and southern Puebla, but varieties can be found in Michoacan, Jalisco, Zacatecas, Sinaloa, Sonora, and Baja California Sur. Most fruit is produced in family gardens or collected in the wild. They are also used much the same way as tunas.

The garambullo (Myrtillocactus geometrizans) is a small fruit that looks like very dark cherries or blueberries and has a flavor similar to cranberries. Their range extends from parts of Oaxaca northeast into Tamaulipas and it is available between April and June. It is popular in the Bajío region in central Mexico and strongly associated with Otomí culture. They are often used to make liquors, ices/ice cream, marmalades, and candies. They are sometimes used in natural therapies for cancer and diabetes.

One important but highly regional fruit is that from the saguaro (Carnegiea gigantea) cactus of the Sonoran Desert. It is found in Sonora and Arizona and has been an important food for millennia for the Pima, Papago, and Tohono O’odam peoples. Its harvest has been used to mark the new year, with camps set up in June for this purpose. The fruit has a slightly nutty flavor, and can be used to make marmalade, syrup, juice, and wine. When dried and ground, it can be used to make cakes.

There are other regionally important cactus fruits in Mexico. Both the flowers and fruit of the barrel cactus are edible. Fruits from the Epiphyllum and Cactus orquidea families are small but also eaten. Copao (Eulychinia acida) is a cactus native to Chile that has made it way up to Mexico. Its fruit is characterized by an intense green color.

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 weekly on Mexico News Daily.