Congress puts border region tax cuts on hold: conditions not right

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November 22, 2018

Tax breaks in the north are on hold. — Tax breaks in the north have been delayed,

The incoming government’s plan to cut tax rates in the northern border region has been put on ice by federal lawmakers.

At a meeting in Mexico City yesterday, the chairs of the budget and finance committees in both houses of Congress warned that conditions are not right to reduce the value-added tax (IVA) and income tax (ISR) rates near the Mexico-United States border.

President-elect López Obrador said during the election campaign that his government would establish a free zone extending 30 kilometers south of the border in which the IVA would be cut by half from 16% to 8% and the maximum ISR rate will be reduced from 30% to 20%.

But at least in the short term, it appears that he will not have the legislative support required to make the changes.

Alejandro Armenta, a senator with López Obrador’s Morena party and chair of the upper house finance committee, said there is a consensus in the Senate that “a lot of care” must be taken with regard to the design of the next budget and Federal Revenue Act.

“It’s going to be a transitional budget and in the Senate, for the good of the country, we’ll responsibly adopt the prudence [necessary] in the approval of the Revenue Act,” he said.

Patricia Terrazas, a National Action Party (PAN) lawmaker who heads up the lower house finance committee, spoke more bluntly about the López Obrador free zone proposal, intended to provide a boost to the economy in the north of the country and slow down migration to the United States.

“Adjusting taxes at the moment is not an option. Nobody is bound to the impossible,” she said.

Terrazas added that while the plan is currently under review, the possibility of it becoming a reality “appears very complicated” because of the impact the tax reductions would have on government revenue streams.

The PAN, a conservative party which was in office between 2000 and 2012, had previously supported the idea.

Even if reductions in the IVA and ISR tax rates for the northern border zone were approved, Terrazas said, “they couldn’t take effect in January” because changes required to electronic invoicing systems would not have been implemented.

The preparation necessary to adopt the free zone plan could, however, take place during the first half of next year, she added.

Her colleague in the lower house, Morena party Deputy and budget committee chair Alfonso Ramírez Cuéllar also said that cutting tax rates was “difficult” but stressed that the proposal was still being analyzed.

Even before taking office, the president-elect has been held partially responsible for the deterioration in Mexico’s economic outlook for 2019, with his decision to cancel the Mexico City International Airport project a main target of criticism.

Source: El Financiero (sp)

Blockades erected on Jalisco highway; one killed in gunfire

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Tony Richards

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November 22, 2018

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A bus burns on highway 200 in Tomatlán today.

Marines and armed civilians clashed in Tomatlán, Jalisco, this morning, leaving one person dead.

Federal authorities said the victim appeared to be one of the aggressors, thought to be members of the Jalisco New Generation Cartel.

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Gangsters blocked federal highway 200 near the village of La Cumbre with three vehicles which they set on fire in an attempt to stop the movement of security forces.

One of the vehicles was a bus that the serves the Manzanillo-Tomatlán route. It was parked across a bridge and set on fire.

The aggressors exchanged gunfire with navy marines, in which one person was killed. An operation to capture the rest of the gang was unsuccessful.

Source: Informador (sp)

Nearly 500 displaced indigenous people on the march in Chiapas

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MND Staff

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November 22, 2018

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Displaced citizens of Chiapas on their march to the capital.

Almost 500 indigenous people who have been displaced from their communities in Chiapas due to violence are marching to the state capital to seek a solution from authorities.

The 444 Tzotzil Maya people are from the municipalities of Chenalhó, Ocosingo and Zinacantán but were forced to leave their homes amid violent territorial and political conflicts.

Some have been displaced for more than two years.

The contingent left San Cristóbal de las Casas on Monday and yesterday reached a point 15 kilometers short of the town of Chiapa de Corzo after walking through fog and drizzle in cold temperatures.

The director of the Ku’untick Human Rights Center, Diego Cadenas, who is accompanying the Tzotzils on their “pies cansados” (tired feet) march, said the Chiapas government has made no commitment to restore security in highland communities so that the displaced people can return home.

Javier Hernández, a spokesman for the Chenalhó contingent, said that “as displaced people from the Puebla ejido [community land], we’ve decided to express our disagreement,” adding “until now, our problem hasn’t been solved and we haven’t been able to return [home].”

After setting up camp last night on the side of the San Cristóbal-Chiapa de Corzo highway, where humanitarian aid including food and clothes was distributed, the march towards Tuxtla Gutiérrez resumed today.

State and Federal Police have been escorting the indigenous caravan, which still has around 30 kilometers left to travel, meaning that it will likely arrive in the capital Friday or Saturday.

One of the displaced persons is 30-year-old pregnant woman who is traveling with her husband and two children.

Rosa Gutiérrez García, a Oaxaca native, had only been living in Chenalhó two weeks when on May 26, 2016, armed men attacked residents of the Puebla ejido, forcing Gutiérrez and her family to flee.

A 14-year-old girl was killed in the attack, which was triggered by political differences.

Thousands of indigenous people have fled their homes in the highlands of Chiapas during recent years due to violence stemming from political and territorial disputes.

Deaths due to cold and hunger have occurred in makeshift camps set up by displaced people and a year ago, a human rights organization and the Catholic church described the situation in parts of Chiapas as a humanitarian crisis.

Source: El Universal (sp), Noticieros Televisa (sp)

Is there an Oscar in the future for Oaxaca actress with no experience?

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MND Staff

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November 21, 2018

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Her performance in Roma, a new black-and-white film based on writer and director Alfonso Cuarón’s memories of growing up in Mexico City, has already been declared the best of 2018 by Time magazine.

But can Yalitza Aparicio, an actor from Oaxaca with no previous experience, win the most prestigious of all film industry awards – an Oscar?

As a nominee in the best actress category at the Gotham Independent Film Awards to be held next week in New York and with acclaim of her performance continuing to grow, Aparicio is increasingly being mentioned as a potential winner at the film industry’s night of nights.

That possibility is no more surprising than to the actor herself, who plays the role of a domestic worker in Cuarón’s movie.

When she first received a call about casting for it, Aparicio thought that it had something to do with human trafficking.

“Castings don’t exist in Oaxaca and I didn’t study acting either,” she told the newspaper Milenio via telephone from Los Angeles.

But undeterred, Aparicio went to meet with Cuarón, taking her mother with her for moral support.

She didn’t know it immediately, but that first meeting with the Oscar-winning filmmaker was to change her life.

Aparicio admitted that emulating Cuarón as an Academy Award winner was a daunting prospect.

“The truth is I’m really scared about [winning an Oscar], I didn’t expect anything like that. I feel like it’s something very big and a lot of responsibility,” she said.

“. . . A lot of people are excited because of the simple fact that I’m here [in the United States]. They tell me that they identify with me and feel inspired to move ahead and achieve their dreams, that’s what motivates me to be here.”

Cuarón has already won the the top award at the Venice Film Festival for Roma and the film is considered a front-runner for the next Academy Awards.

Set in Mexico City in the 1970s, the Spanish-language film explores Cuarón’s childhood memories and is centered around two indigenous domestic workers who take care of a small family in the middle-class neighborhood of Roma.

Aparicio said she took some inspiration for her role from her own experience as a domestic worker as well as that of her mother.

Roma is distributed by streaming service Netflix and will premiere on the website in Mexico on December 14 after a limited theatrical release.

Source: Milenio (sp)

National Guard will be 83,000-strong to begin; military will eventually be retired

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MND Staff

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November 21, 2018

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The Federal Police will contribute nearly half the strength of the National Guard. — The Federal Police will contribute nearly half the strength of the new force.

Mexico’s new national guard, the centerpiece of the incoming government’s national security plan, will initially be made up of 83,000 officers, according to the proposed constitutional reform that would create it.

The Federal Police will contribute 37,000 officers to the new security force, while 36,000 soldiers and 10,000 marines will also join its ranks. It will be under the control of the army.

The Morena party’s leader in the Chamber of Deputies, Mario Delgado, said the new government intends to add 50,000 more members to the national guard over the next three years.

He stressed that the Federal Police would not disappear – immediately, at least, explaining that its duties would be transferred gradually to the new force.

All officers admitted to the guard will be required to pass examinations, Delgado said, meaning that there will be no free passes into the force.

“The Federal Police won’t disappear [just] because there is movement of some officers to the national guard. It’s going to continue. According to this initiative, those who make up the national guard will have to comply with certain requirements . . . The officers who pass [the exams] will gradually go into the national guard,” the lawmaker explained.

At some point in the future, the new security force will also recruit ordinary citizens to bolster its ranks, according to details in the proposed constitutional reform presented in Congress yesterday.

Before joining the national guard, civilians would undertake physical and academic training at military bases following a curriculum that will be developed jointly by the secretariats of Defense, the Navy, the Interior and Public Security.

The federal Attorney General’s office (PGR) and the National Human Rights Commission (CNDH) will also be invited to offer input.

The fifth provision of the proposed constitutional reform states that the guard will remain active while high levels of violence and insecurity continue to afflict the country.

However, the force will be subject to review three years after its creation.

Although members of the military will initially join it, the proposed reform says that the aim is for soldiers and marines to cease carrying out public security duties and return, in the short term, to their role as defenders of the nation.

Non-governmental organizations including Human Rights Watch and Amnesty International have rejected the plan to create a national guard, arguing that it perpetuates a failed militarized crime-fighting strategy.

But the text of the initiative presented yesterday differed vastly in its assessment.

“. . . A disciplined and specially-trained force will be formed and deployed . . . to safeguard people’s rights and property and to preserve order and public peace. Our proposal makes progress in the sense of demilitarizing the streets of Mexico,” it said.

Delgado also rejected the claims that the incoming government’s security plan represents a continuation of the militarized strategy implemented by former president Felipe Calderón in 2006 and continued by the current federal government.

However, like the new Tabasco oil refinery and the Maya train, the whole plan is still subject to one small detail — the will of the people.

President-elect López Obrador said today that he will put the question of creating the national guard to yet another public consultation.

In an interview with journalist Carmen Aristegui, López Obrador, who has previously advocated for demilitarization, said he had not fully realized how corrupt Mexico’s civilian security forces were.

He also defended the nation’s military, stating that the human rights violations it has committed were “on orders received from civilian authorities.”

Source: El Universal (sp), Associated Press (en)

Tijuana job fair brings migrants, prospective employers together

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MND Staff

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November 21, 2018

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Central American migrants complete documents at Tijuana job fair. — Central American migrants complete documents at job fair.

The United States is just a stone’s throw away but for thousands of Central American migrants currently in Tijuana, the opportunity to pursue the American dream remains a distant and uncertain goal.

But another option has surfaced, giving them an opportunity to pursue a Mexican dream instead, even if it’s only temporary.

The National Employment Service (SNE), working in conjunction with local companies, has set up a job fair near the Tijuana sports complex where thousands of Central American migrants, who began arriving in the city last week, are being temporarily housed.

Nayla Rangel, chief coordinator of the month-long fair, told the news agency AFP that the fact that the members of the first migrant caravan traveled around 4,400 kilometers to reach Mexico’s northern border from San Pedro Sula, Honduras, showed they are both resilient and determined – qualities that are very attractive to employers.

“They’re very strong people, [they could be] a very valuable workforce for our industry,” she said.

In addition to company representatives, who have set up stalls to interview migrants who are interested in the positions on offer, immigration authorities including the Mexican Refugee Commission are attending the fair to help migrants regularize their immigration status and ensure they can access social security benefits.

“What they’re seeking to do is give them a humanitarian visa so that while their immigration status [in the United States] is being determined they have a work permit,” Rangel said.

Salvador Díaz, president of a local industry association, said that “between 7,000 and 10,000 jobs” are on offer at the migrant job fair including positions in factories and other sectors such as hospitality.

Everyone wins, he pointed out, “migrants get a legal job and business owners [get] tax-deductible labor.”

Wilmar Correa, a 27-year-old Honduran, is one of hundreds of migrants who have attended the fair.

He told AFP that he had studied to become a teacher back home but was unable to get a job due to lack of opportunities.

That, coupled with violence, forced him to leave Honduras. Correa held a sign announcing that he was looking for work as a laborer but said he was prepared to do any type of job.

Another Honduran migrant, 20-year-old César Elvir, said he already passed the first round of interviews for a job as a painter in a factory and was hopeful that he would get a call offering him the position. It comes with a weekly salary of 1,800 pesos (just under US $90).

“It looks good,” said Elvir, who traveled to the border with his wife and two young children.

“My actual goal is not Tijuana but while I wait for other opportunities I have to wait here a while,” he added.

Karla Vallecío, a 34-year-old Honduran woman, was also optimistic that she would find employment as a result of attending the fair.

In Honduras, “I looked after babies, cleaned houses, took in people’s washing, whatever came up,” she said.

“If I get a job the first thing I will do is find a room to stay here in Tijuana. The legal process to request asylum in the United States is slower and more trying than I thought. [Relatives in the United States] have told me to wait for the waters to calm, for all this commotion to pass . . .” Vallecío added.

Díaz, of the local industry association, said the current situation in Tijuana is similar to that of two years ago when thousands of migrants from Haiti arrived.

“The case of Haitians was very positive. There are 2,500 working [legally] now,” he said.

“The most important thing is that they integrated into society well, we haven’t had any problems with them. We want to achieve the same thing with the Central Americans,” Díaz added.

While a wave of anti-migrant sentiment has broken out among some Tijuana residents who claim that there are criminals among the caravan members, the business leader said the majority of migrants who traveled to the border came with their families and good intentions.

“They tell us that they can help us identify these people [the criminals] and turn them into authorities so that they are returned to their country [of origin],” Díaz said.

Source: AFP (sp)

Although work has begun, future of new refinery will be decided this weekend

By

Tony Richards

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November 21, 2018

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The new energy secretary: if the people don't want a refinery, there won't be one.

The new oil refinery in Tabasco is not a done deal because the new government will accept the results of this weekend’s public consultation on the project, according to incoming energy secretary Rocío Nahle.

The consultation process has already killed the multi-billion-peso Mexico City airport, and it might do the same for the Dos Bocas refinery, although little money has been invested in it so far.

Nahle said today that the results of the consultation this weekend will dictate the refinery’s future.

“If the people say no, well, we will respect what the people say.”

She said a new refinery is necessary but a vote against it would mean investing in and reconfiguring the existing six refineries but conceded that investments in recent years have not succeeded in boosting production.

Work has already begun to prepare the refinery site, triggering a complaint by an environmental group that claims the project has neither environmental permits nor authorization for a land-use change.

Meanwhile, the same pubic consultation will also ask citizens if they support the Maya train. Planning for that project is already under way and its inauguration has been scheduled for next month.

Today the new administration said in a statement that the first tenders would be announced in early December.

It was not specified what would happen in the event that the people say no.

Source: Milenio (sp)

Mexico City’s new mayor to allocate 10 billion pesos to transportation

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MND Staff

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November 21, 2018

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bicycle — New Mexico City mayor wants more of these on city streets.

Mexico City’s new government will invest 10.2 billion pesos (US $504.5 million) next year to improve and expand public transportation, the mayor-elect announced yesterday.

Claudia Sheinbaum, who takes office on December 5, said that almost half that amount – 4.8 billion pesos (US $237.5 million) – will be used for the maintenance of trains, tracks and stations in the capital’s large subway system, the Metro.

The city’s RTP bus system will be allocated 600 million pesos (US $29.7 million) to buy new buses and upgrade those it already has while the STE system will receive 500 million pesos to complete maintenance work on the light rail tracks it operates in the south of the city and to buy new trolley buses.

The Metrobús system, which this year began operating London-style red double-decker buses on one if its seven lines, is set to get 1 billion pesos to build two additional lines.

Sheinbaum also said that 3 billion pesos will be allocated to build two new cable car transport systems, one in the north of the city between Cuautepec and the Indios Verdes subway station and another in the eastern borough of Iztapalapa between the neighborhood of Santa Marta and the Constitución de 1917 subway station.

According to the incoming government’s strategic transportation plan, the objective is to “increase accessibility for citizens, reduce travel times [and] improve traveling conditions.”

The incoming mayor, who will govern for president-elect López Obrador’s leftist Morena party, explained that a single card would be introduced for the entire Mexico City public transit network and pledged that there would be no increase in fares.

Accompanied by future transportation secretary Andrés Lajous, Sheinbaum said the new government will also seek to encourage residents to travel more on bicycles and on foot.

Around 100 million pesos is expected to be spent on building new bike lanes and massive bicycle parking stations, integrating the ecobici bike-sharing program into the city’s transportation department and building new pedestrian walkways at subway stations.

In addition, Sheinbaum stressed that her government would eliminate corruption in the city government’s transportation bureaucracy.

“We can’t think about improving the [transportation] system if corruption isn’t eradicated. Bribery is going to end, paying coyotes [fixers] for [vehicle] inspections, to get [public transportation] circulation permission or a license, everything associated with kickbacks [will end]. Transportation operators having to pay fees to high-ranking officials to be able to work, that’s [also] going to end,” she said.

Sheinbaum, an electrical engineer by profession, will become Mexico City’s first popularly elected female mayor.

She previously served as chief of the Mexico City borough of Tlalpan and as secretary of the environment during López Obrador’s administration of the capital between 2000 and 2005.

Source: Milenio (sp), Animal Político (sp)

Bajío states join forces to create manufacturing region

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MND Staff

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November 21, 2018

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A factory in Mexico's industrial powerhouse region, the Bajío.

Four states have joined forces to create a new manufacturing region to be known as the Central Bajío Corridor.

Óscar Vega Pérez, who as president of the Regional Development Association of Central Mexico will lead the project, said the governors of Aguascalientes, Guanajuato, Querétaro and San Luis Potosí have agreed to work together to make the region – the first of its kind in Mexico – a reality.

“For us it’s very good news that the governors are organizing themselves, that they’ve found the will to work together to develop programs and coordinate around common objectives,” he said.

The four governors said earlier this month that the aim of the project was to create a new manufacturing region, where the states’ production and logistics capacities are combined.

It is also expected that the initiative will boost investment, social development and employment in the common region and increase the states’ export output.

In order to create the region, the governors agreed to set a work agenda aimed at developing infrastructure, promoting investment and linking supply chains and logistics.

Vega said the manufacturing and logistics industries as well as small and medium-sized businesses will be crucial to the success of the initiative.

Both government and the private sector will contribute to the new region’s development.

The Central Bajío Corridor Council is currently working on the project with a range of private and public organizations including the Inter-American Development Bank and the National Autonomous University (UNAM).

Source: El Economista (sp)

Airport trust investors who put up US $1.6 billion to consider their legal options

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MND Staff

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November 21, 2018

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mexico city airport — Sorry, all flights have been cancelled.

Investors who purchased securities designed to partially fund the new Mexico City International Airport (NAIM) will meet next week to discuss their legal options in light of the incoming government’s decision to cancel the project.

A notification document issued via the Mexican Stock Exchange (BMV) said that Mexican and foreign holders of Fibra E shares will gather on November 29 to assess the situation.

President-elect López Obrador announced on October 29 that the partially-built project would be halted after 70% of people who voted in a four-day public consultation favored converting a México state air force base and upgrading the existing airport and that in Toluca over continuing the new airport.

The trust that manages the Fibra E shares is administered by the Mexico City Airport Group (GACM).

Article 8 of the BMV notification document proposes that the security holders vote to appoint an investment advisor to conduct an “analysis and diagnosis of the financial situation stemming from the possible termination of NAIM construction.”

Article 9 proposes the appointment of a legal advisor to analyze “the inherent risks and consequences” of the project’s cancellation.

It also recommends that security holders consider what legal action they might pursue against the incoming government’s decision.

As of September 30, just over 32.1 billion pesos (US $1.6 billion) had been invested in the Fibra E trust but it is not clear what those investors might lose. The initial prospectus said that in the event of a cancellation the holders would receive revenue from the existing airport.

BMV director José Oriol said that 45% of bonds in the trust are held by four pension funds — Inbursa, PensionIssste, Profutura and Banorte Siglo XXI.

The trust contract anticipates a variety of ways in which it could be terminated, but it doesn’t consider that termination could be required due to an external decision.

In other words, it didn’t foresee the possibility that the airport project could be cancelled as the result of a public vote.

In fact, referendums are not described in Mexico’s constitution and the consultation held last month was unprecedented.

After meeting with contractors earlier this month, López Obrador said the companies that have been building the airport wouldn’t take legal action over the decision to cancel the project, but judging by the proposals contained in the BMV document, the new government won’t completely avoid a legal battle on the issue.

Alfonso Romo, the future president’s chief of staff, admitted last week that confidence in the incoming government had diminished as a result of the airport consultation.

The cancellation decision was slammed by prominent private sector leaders and the catalyst for a large protest in Mexico City.

“We got the process wrong. I say that for my part,” Romo said at a meeting with Mexico City’s Jewish community.

“. . . The result [caused] a considerable loss of confidence, more than we could imagine.”

Source: Milenio (sp), Reforma (sp), Bloomberg (en)