The International Monetary Fund (IMF) has cut both its 2019 and 2020 growth forecasts for Mexico to below 2%, citing the government’s policy direction and cancelation of infrastructure projects as factors.
In its World Economic Outlook report published today, the IMF lowered its forecast for this year to 1.6% from the 2.1% predicted in January. For 2020, the organization trimmed its outlook to 1.9% GDP growth from 2.2%.
Changes to economic policy and moves to overturn or weaken the education and energy reforms introduced by the previous government were cited by the IMF as contributors to a weakened capacity for growth.
IMF chief economist Gita Gopinath told a press conference that a “more restrictive monetary policy and political uncertainty related to the new government” have had an impact on investment in Mexico.
Gian Maria Milesi-Feretti, a deputy director in the IMF research department, said investors’ confidence in Mexico was also down due to last year’s contentious negotiations between Mexico, the United States and Canada to reach a new trade agreement, and uncertainty about when it will be ratified.
The decision by President López Obrador to cancel the partially-built US $13-billion Mexico City airport was also a factor, the IMF said, as were “shifts in perceptions” about the policy direction of the new administration.
However, they are well below the 4% average growth that López Obrador has said his government will deliver during its six-year term.
The IMF also cut its growth outlook for the global economy this year to 3.3% from a 3.5% forecast in January but maintained a 3.6% prediction for 2020.
“This is a delicate moment for the global economy,” Gopinath said.
An indigenous actress and star of the award-winning film Roma has once again been thrust into the spotlight after racist comments were posted on Instagram in reaction to a publicity video for a new Huawei smartphone.
But when rival manufacturer Motorola’s name appeared in the comments, that company was quick to enter the debate.
In the promotional video for Huawei’s new P30 Pro actress Yalitza Aparicio says she has used her fame to rewrite the way Mexicans see themselves.
“I brought the color of Mexico to the world. I demonstrated that a Mexican can be wherever she wants to be, and that any day is a good day to rewrite the rules, rewrite the photography and rewrite Mexico.”
Several users reacted positively to the video but several others did not.
One stated that he intended to switch phone companies because of the actress’s appearance.
“No, if I have to keep seeing this ridiculous ugly chick, I’m going to have change over to Motorola.”
While some took advantage of the discriminatory comments to add their voices of prejudice others, including the rival cellphone maker, raised their voices in support of Aparicio.
“We love to receive new customers, but it would be better under other circumstances; Motorola applauds Yalitza’s success and that of all Mexicans who achieve their dreams!” Motorola México wrote.
Huawei had a more tepid response for another user who expressed his displeasure at seeing Aparicio in the video, and wrote that he intended to buy a different phone.
“We are sorry you will no longer get to try out the P30 Pro’s ‘Super Zoom.’ We hope you come back soon.”
This is not the first time that the Roma actress’s fame has drawn racist comments. In February, a video in which soap opera star Sergio Goyri expressed disbelief that a “damn Indian” who only says “yes ma’am, no ma’am” could be nominated for an Oscar for best actress, circulated widely on social media and in the news.
Natividad Gutiérrez Chong, a sociologist at the National Autonomous University of Mexico, said the young Mixtec actress’s talents have frequently been reduced in mainstream society because of a colonial mindset inherited from the Spanish, which diminishes the role of indigenous women to domesticity.
A Mexican think tank has proposed the cancelation of the federal government’s 160-billion-peso (US $8.5-billion) refinery project in Tabasco after determining that it only has a 2% chance of success.
The Mexican Institute for Competitiveness (Imco) carried out a financial analysis of the project planned for the Gulf of Mexico coast at Dos Bocas. The results were not positive.
The think tank said the purpose of the analysis was to determine whether the refinery project was compatible with the federal government’s austerity policy and if it would generate economic benefits for the state oil company.
Using the Monte Carlo simulation method, 30,000 different scenarios – each with varying refining margins, investment totals, construction times and operational costs – were considered.
“The analysis concluded that in 98% of the scenarios, the Dos Bocas refinery investment project generates more costs than benefits. In other words, it destroys value for Pemex,” Imco said.
Going ahead with the decision to build the refinery, it added, “could generate a serious crisis for the public finances of the whole country.”
Imco said that “Pemex needs a credible and reasonable business plan” and to achieve it, the company needs to focus on investments that generate value.
“In accordance with the available information that was incorporated in this exercise, construction of a refinery at Dos Bocas has a high probability of being an obstacle to reaching that objective,” the statement said.
The think tank also published an infographic outlining “five reasons why building a new refinery in Mexico is a bad idea.”
There is a global decrease in demand for fossil fuels and an increase in demand for clean energy sources.
In 2017, Mexico’s refineries operated at less than half their full capacity so the current refineries can increase their production.
Oil refining is the least profitable stage of the petroleum value chain.
Investment costs and construction times for a project of this nature are very high and volatile.
Production of crude in Mexico has fallen during the past 18 years. If the decline continues, petroleum will have to be imported to supply the new refinery.
President López Obrador has pledged that construction of the refinery in his home state will help reduce Mexico’s reliance on petroleum imports.
But Imco said the project should be canceled, and advised the government to explore “other options” to improve domestic supply of gasoline and diesel, such as directing investment to logistics and fuel storage.
Resources earmarked for the Dos Bocas refinery should be reassigned to “activities that increase the financial viability of Pemex, such as exploration and production,” the think tank concluded.
The government has announced construction will begin this year, although an environmental impact study has not yet been done.
Hot wheels: Guanajuato police unveil their new patrol cars.
That Corvette seen traveling at high speed on highways in Guanajuato is not fleeing the police — it is the police.
The state has added several luxury and sports cars to its fleet of patrol vehicles, but they didn’t have to purchase them.
The government announced that six Camaros, a Corvette, a Mustang and two Cadillacs seized from crime gangs have been repainted and furnished with the insignia of the state police.
The state security secretary said the new vehicles will help to meet the objective of converting the Guanajuato police into the best in the country.
During a ceremony led by Governor Diego Sinhué Rodríguez Vallejo, it was explained that the new patrol cars will give the force a new image, one of trust and one that reflects respect, admiration and strength, along with humility, service and courtesy.
The state government also announced the creation of two new police divisions. One is a 201-member rural police force that will be deployed in northern and southern Guanajuato municipalities with high rates of robbery.
Police will patrol in style.
A second, smaller force of 37 officers will make up the a tourist police division that will be stationed principally in Guanajuato and San Miguel de Allende, as well as in the “magical towns” of Comonfort, Dolores Hidalgo, Jalpa de Cánovas, Salvatierra, Mineral de Pozos and Yuriria.
Security has been a complicated issue for the state, which last year led the country in homicides with 3,290, three times more than the 2017 figure. The murders are largely the result of turf wars between crime gangs fighting over pipeline fuel theft.
United States President Donald Trump’s threats to close the U.S. border are “terrorism” aimed at coercing Mexico to implement stricter immigration policies, according to a Catholic priest and migrants’ advocate.
In an interview with the media organization Grupo Healy, Alejandro Solalinde also said that Trump “hates everyone but especially migrants,” denied the existence of the so-called “mother of all caravans” and claimed that United States “operators” manipulate information about migration flows for political gain.
Asked whether the U.S. president’s border shutdown threats were generating hysteria in Mexico, the priest responded flatly:
“It’s terrorism, it has to be said . . . even if he doesn’t end up doing it . . .”
Solalinde, director of a migrant shelter in the state of Oaxaca and well known human rights activist, said the threats have already succeeded in scaring the federal government, and there is evidence that Mexican authorities are helping the Trump administration carry out its immigration agenda.
A report in The New York Times last month said “authorities are blocking groups of migrants at border towns, refusing to allow them on to international bridges to apply for asylum in the United States, intercepting unaccompanied minors before they can reach American soil, and helping to manage lists of asylum seekers on behalf of the American authorities to limit the number of people crossing the border.”
Nevertheless, the U.S. president has often asserted that Mexico isn’t doing anything to stem migration flows from the Northern Triangle of Central America although he stated last week that “Mexico has been capturing people and bringing them back to their countries.”
Solalinde said that he wasn’t surprised by Trump’s tough stance on immigration because “Donald Trump hates everyone but he especially hates migrants.”
Referring to the United States’ decision to cut off aid to Central American countries, the priest said it was “undeniable” that Honduras, Guatemala and El Salvador had taken U.S. money without using it for its intended purpose, acknowledging that Trump sometimes “tells the truth as well.”
Solalinde added that “previous governments of Mexico have also stolen United States money – they deceived them, it’s not true that they did what they said they did because they provoked circular migration.”
The priest claimed “the only thing that is going to stop migration flows, especially from the Northern Triangle, is investment in development . . . employment is the only thing that is really going to stop migration.”
Migrants cross the Suchiate river between Mexico and Guatemala in October last year.
Solalinde said that there was no evidence that such a caravan was gathering and charged that “North American operators” were involved in creating a myth about its existence as well as generating hype and hysteria about real flows of migrants traveling through Mexico to the United States.
“There is a geopolitical and geostrategic interest of the United States to demonstrate that they [the migrant caravans] are a danger, an invasion,” he said.
“These manipulations of the caravans benefit Donald Trump,” Solalinde added, claiming that United States interests want to “destabilize Mexico . . . create a point of tension between the U.S. and Mexico, and that point is migration.”
The day after Sánchez Cordero referred to the “mother of all caravans,” Trump took to Twitter to assert that Mexico and Central American countries do nothing to stem “illegal immigrants” to the United States.
“Mexico is doing nothing to help stop the flow of illegal immigrants to our country. They are all talk and no action. Likewise, Honduras, Guatemala and El Salvador have taken our money for years and do nothing . . . May close the southern border!” he wrote on March 28.
In an extensive interview, the activist priest also asserted that Mexican criminal groups are involved in human trafficking and the organ trade and that he was aware that some of the migrants who were kidnapped in Tamaulipas last month have been killed.
Solalinde said that he believed that López Obrador “loves migrants because they are poor” and “wants to help them,” a claim supported by the federal government’s decision to grant more than 10,000 humanitarian visas earlier this year that allows emigrants to work in Mexico and access services.
However, the priest added that there was a risk that pressure from the United States and the influence of Interior Secretary Sánchez and National Immigration Institute chief Tonatiuh Guillén could persuade the president to adopt policies that don’t reflect his “political will.”
Expect the lights to go out again this month and next on the Yucatán peninsula, expert warns.
The Yucatán peninsula will suffer more power outages this month and next due to an increased demand for electricity and a shortage of gas, according to an energy sector expert.
There have been two major blackouts on the peninsula recently, one on Friday and another last month.
Both were blamed on fires beneath electrical transmission lines but energy analyst and researcher Edgar Ocampo Telléz said that a lack of gas to generate power was the real reason.
“. . . It’s ridiculous [to say fire was the cause] because fires have always occurred on the Yucatán peninsula and blackouts haven’t occurred, it’s absurd,” he said.
Ocampo, an academic at the Autonomous Technological Institute of Mexico (ITAM), told the newspaper El Financiero that residential and commercial growth in the peninsula’s two biggest cities – Mérida and Cancún – place additional pressure on electricity supplies, especially in the hottest months of the year.
“Our calculations were that we would have blackouts in May but they came earlier. If we’re having blackouts in April, I don’t want to imagine May,” he said.
“In reality, the problem isn’t serious . . . [but] from my point of view, the peninsula is going to suffer periodic blackouts.”
Ocampo said that the Federal Electricity Commission (CFE) may be forced to resort to turn off the power as part of a “scheduled blackouts” initiative to save electricity which, he said could provide a partial solution to the problem.
He explained that there is one pipeline that sends gas to the peninsula and that it has the capacity to transport 300 million cubic feet per day. But Pemex only sends between 60 and 80 million cubic feet, Ocampo said, which is insufficient to produce enough energy to meet demand at peak times.
A total of 400 million cubic feet of gas per day is needed to generate sufficient energy when temperatures soar in May, meaning that even if the pipeline operated at full capacity, blackouts would still occur.
Mexico buys around 5 billion cubic feet of gas from the United States every day but most “stays in the center of the country,” Ocampo said, “because the demand in the center is brutal.”
With a gas shortage already causing blackouts, the energy expert said that new residential and commercial developments on the Yucatán peninsula should be curtailed.
“If the commission [the CFE] knows perfectly well that it can’t generate [enough electricity], why continue to do electricity feasibility studies?” Ocampo said.
Hotels' spokesman Barrios offers advice to AMLO at Tianguis Turístico yesterday.
A tourism sector leader has called on the federal government to provide at least US $125 million annually for tourism promotion to ensure that visitors continue to vacation in Mexico.
But President López Obrador is more focused on attending to the needs of residents in the country’s top destinations than attracting foreign visitors to them.
Speaking in Acapulco, Guerrero, yesterday at the opening ceremony of the 2019 Tianguis Turístico – Latin America’s largest tourism industry event – Luis Barrios, president of the National Association of Hotel Chains (ANCH), said that private tourism companies are investing a lot of money in marketing but it’s not enough.
He pleaded with López Obrador to not “leave us [the tourism sector] exposed” to the risk of a prolonged downturn in visitor arrivals.
As other tourism representatives have warned, Barrios said the government’s decision to disband the Tourism Promotion Council (CPTM) will result in Mexico losing market share to other holiday destinations in the region.
“Mr. [President], you are a marketing genius, you’ve taught us catchy words every time you make a speech. Now, I tell you: he who doesn’t advertise, doesn’t sell,” he said.
But there is skepticism in the tourism sector and among former tourism officials that Mexico’s embassies and consulates will be as effective as the specialist marketing agency.
“The government committed a very serious error by disappearing the CPTM because tourism competition at a global scale is very strong and Mexico doesn’t have the possibility to continue promoting itself as it did before,” said Rodolfo Elizondo Torres, federal secretary of tourism from 2003 to 2010.
He agreed with Barrios that the task can’t be solely left up to the private sector because its funding alone will fall short of the amount that is required.
The Maya Train, which will receive funding previously allocated to the CPTM, has the potential to be a great project but there are other ways to finance it, Elizondo said.
President López Obrador is focused on social spending and addressing insecurity.
The former tourism chief’s successor, Gloria Guevara, stressed the importance of creating a body to replace the CPTM, arguing there is no point in developing new tourism products and destinations if they are not marketed.
Enrique de la Madrid, Sectur chief for the second half of Enrique Peña Nieto’s presidency, said that a lack of tourism promotion will place investment in hotels and restaurants – as well as the sector as a whole – at risk.
“If we take away tourism promotion money, the number of tourists [who come] to Mexico will fall and that’s dangerous [for the economy],” he said.
José Manuel López Campos, president of the Confederation of Chambers of Commerce, Services and Tourism (Concanaco), proposed the creation of a trust fund that combines private and public money for the purpose of tourism promotion.
“Nobody will visit a place they don’t know exists,” he said, adding that without promotion, Mexico’s tourism destinations “run the risk of becoming the best-kept secrets on the planet.”
For his part, the president told attendees at the opening of the 44th Tianguis Turístico that his administration is focused on two main initiatives in the nation’s primary tourism destinations.
One is the 8-billion-peso (US $421.8-million) Mi México Late (My Mexico Beats) infrastructure program, which López Obrador launched last month to put an end to the “offensive” contrast between luxurious hotels and poor neighborhoods in Mexico’s most popular resort cities.
The leftist leader said yesterday that 500 million pesos (US $26.3 million) has already been allocated to Acapulco’s El Renacimiento neighborhood to improve drainage and public lighting as well as to create recreational and sporting complexes, among other projects.
Similar urban development programs are planned or under way in marginalized neighborhoods of tourism-oriented cities such as Los Cabos, Baja California Sur; Playa del Carmen, Quintana Roo; and Puerto Vallarta, Jalisco.
López Obrador said the second priority in Mexico’s tourism destinations is to improve public security, charging that “for a long time,” the violence problem was “neglected.”
Despite the government’s withdrawal of tourism promotional funding, Tourism Secretary Miguel Torruco said that investors have “complete confidence” in López Obrador and that 22,000 new hotel rooms will be built annually during his six-year term.
He also said the government will aim to attract more high-spending tourists from countries such as China, Russia and the United Arab Emirates – presumably by promoting Mexico in those countries via its embassies.
López Obrador yesterday stressed the importance of tourism to the economy – it’s one of Mexico’s biggest foreign currency earners – and has pledged that he is committed to ensuring that the sector continues to grow.
But some question how wide and serious that commitment really is.
“. . . not everything should be [focused on] the Maya Train,” said Barrios, the hotel association president.
There are already signs that tourism has declined since the elimination of the CPTM, including lower hotel occupancy rates this year in Cancún and Mexico City and a fall in international visitor numbers to Cancún in January.
There were high expectations for a federal offensive against corruption in 2013 when authorities arrested the powerful head of Latin America’s biggest trade union.
The case against Elba Esther Gordillo was “solid,” said the attorney general at the time.
Last August, the former president of the SNTE union was freed from jail after a court deemed that evidence of money laundering and organized crime was insufficient.
The “solid” case now appears to have been a sham to portray the new government of Enrique Peña Nieto as being tough on corruption.
Yesterday, Gordillo, widely known as “La Maestra” (The Teacher), announced a return to public life: she will seek to regain the presidency of the SNTE, a post she held for 24 years until her arrest.
An outspoken figure in the teachers’ union and Mexican politics for half a century, the 74-year-old criticized teachers during a meeting in Cholula, Puebla, yesterday for not having taken a position on the new government’s education reform.
“It is not the reform we hoped for,” she said, describing it as old wine in a new bottle.
Today, faced with new protests by the CNTE, President López Obrador threatened to abandon his government’s plans to rewrite the previous government’s education reforms and leave things as they are.
He has promised teachers since the election campaign that he would abolish the reforms. But the CNTE union has not been convinced that the changes will go far enough to meet their demands and their protests in Mexico City have succeeded in shutting down the lower house of Congress for several days in the past month.
Should Gordillo win election for president of the SNTE, the president might have to face a combined opposition of more than one million teachers.
But her election is not guaranteed. She was not popular among Mexicans at the time of her arrest for her flamboyant and luxurious lifestyle.
The 2013 charges against her included the embezzlement of US $200 million from the union to buy real estate, a private jet, luxury goods, designer clothes, art and plastic surgery.
The real estate was reported to number 10 properties, including a $4-million house in California.
La Huerta, Jalisco, was one location flagged as being at risk of privatization.
The privatization of beaches is a “serious problem,” according to a high-ranking official at the Secretariat of Tourism (Sectur) who said that authorities are already working to open up access to Mexico’s coast.
Simón Levy, a tourism planning and policy undersecretary, told the newspaper Milenio that Bahía de Banderas in Nayarit, La Paz in Baja California Sur and the Quintana Roo resort cities of Cancún, Playa del Carmen and Tulum are the destinations that have been most affected by coastline privatization.
“It’s a serious problem [because] beaches are the natural heritage of all Mexicans,” he said.
Levy said that the purpose of a Sectur initiative that is collecting data about public access to beaches via an online survey is to inform the development of strategies to ensure that all beaches are open to everyone.
Federal authorities are already taking action in conjunction with state governments to open access to beaches that have effectively been privatized and to prevent future privatization, he added.
The official said that since the online survey was opened in February, Sectur has received 277 reports about access or lack thereof to Mexican beaches.
The survey gives citizens the opportunity to “denounce all types of infringements of public accesses to beaches and the privatization of windows to the sea,” Levy said.
The Secretariat of the Environment (Semarnat) and the federal Environmental Protection Agency (Profepa) are also contributing to the efforts.
Other privatized beaches identified by the online survey as of the end of February were in Ensenada and Loreto, Baja California; Los Cabos in Baja California Sur; Puerto Vallarta, La Huerta and Cihuatlán, Jalisco; and Tuxpan, Veracruz.
New statistics show that the chances of being involved in a traffic accident in Jalisco are significantly greater than in 2017.
But rather more people are dying from bullet wounds than from motor vehicle accidents.
According to a state police report, accidents spiked by 602% over the course of last year compared with 2017. In that year, police recorded 284 traffic accidents. In 2018, the number soared to 1,994.
According to Pedro Limón Covarrubias, a pavement and asphalt expert at the University of Guadalajara, one of the principal causes for the increase in accidents is the lack of maintenance on important highways in the state.
The professor said 16% of vehicle accidents are due to infrastructure, including road conditions and their design.
Infrastructure and Public Works Secretary David Zamora agreed. He told the state Congress last month that of 4,420 kilometers of highways, 1,547 were in critical need of repair, 1,989 were in normal to poor condition and only 884 kilometers were acceptable.
The municipality with the most accidents last year was Arandas, with 133. The most dangerous stretch of road was kilometer 314 of the Tepatitlán-León highway, with 56 accidents — up from 33 in 2017.
In second place, San Miguel El Alto registered 47 traffic accidents in 2018, 18 of which took place at kilometer 304 of the Jalostotitlán-San Diego Alejandría highway.
Limón said that a combination of heavy vehicular traffic and varying weather conditions cause the majority of potholes and cracks on state highways, for which he recommended regular preventative maintenance.
“With the studies that we have done, we have determined that preventative maintenance — not corrective maintenance — needs to be conducted every two to three years. [When they conduct] corrective maintenance, we are talking about a road that shows a lot of serious damage, and that is why we need rigorous maintenance.”
Meanwhile, the state’s Forensic Science Institute said firearms killed more people than either traffic accidents or various illnesses during the first three months of the year.
There were 469 people killed in gunfire, 189 in motor vehicle accidents and 178 by heart attacks, pulmonary edema and other ailments.
