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Foreign direct investment in Mexico totaled over US $36B in 2023

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MND Staff
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Mexico City view
Mexico City was the recipient of the lion's share of foreign direct investment last year, with other states in the north and center of the country rounding out the top 10. (Shutterstock)

Foreign direct investment (FDI) in Mexico exceeded US $36 billion in 2023, the highest preliminary data total on record, with almost 40% of the investment coming from the United States and half the money going to the manufacturing sector.

Data published by the Economy Ministry on Wednesday night showed that FDI totaled $36.06 billion last year, a 2.2% increase compared to 2022.

FDI in Mexico graph
Final quarter FDI in Mexico since 2006 in billions of dollars. (Economy Ministry/X)

Excluding the Televisa-Univisión merger and the restructuring of Aeroméxico — which together added $6.87 billion to the FDI total in 2022 — the annual foreign investment increase in 2023 was a more impressive 27%.

If the preliminary data for 2023 is compared to final data for previous years, last year was the second best year ever for FDI.

The best year on record is 2013, when the sale of brewer Grupo Modelo to Belgian multinational AB InBev added $13.25 billion to the final FDI total, which was $48.4 billion.

FDI wasn’t as high as expected

The preliminary data total for 2023 is just $3.1 billion higher than the total for the first nine months of the year and only $7 billion higher than the total for the first six months.

Just over 80% of all FDI in 2023 occurred in the first half of the year, indicating that there was a sharp slowdown in investment inflows in the final six months of 2023.

The final FDI figure is more than 20% below a $43.9 billion projection from the United Nations Conference on Trade and Development and over 5% below a $38 billion consensus forecast of 25 economists polled by the Bank of Mexico.

John Soldevilla, an economist and director of the financial consultancy ECOBI, said the FDI result for 2023 is “somewhat disappointing.”

Automotive factory worker
Mexico’s manufacturing industry is expected to benefit in the coming years from the nearshoring trend, but analysts say overall FDI fell short of expectations last year. (Gob MX)

He asserted that Mexico should already be seeing “tangible results” from nearshoring — the relocation of foreign companies to Mexico due to its proximity to the United States and other factors.

“It seems this is not occurring,” Soldevilla said.

In contrast, the SE was buoyant in its assessment of the “historic” foreign investment in 2023.

It is the “result of economic stability, competitive advantages and the good business environment in Mexico” and “affirms the confidence of foreign investors in the country,” the ministry said.

That confidence, it added, is shown through “record” reinvestment of profits by foreign companies that operate in Mexico.

New investment only accounted for 13% of FDI last year

The SE said that 74% of the FDI total, or more than $26.6 billion, came from reinvestment of profits. Many companies that have operated in Mexico for years have invested to expand their existing operations or announced their intention to do so. Those companies include French aerospace company Safran and Argentine steel manufacturer Ternium.

Ternium steel plant in Nuevo León
Ternium Steel was one of the major companies to announce expansions plans in Mexico last year. (Ternium Mexico)

Just over 13% of the FDI total, or $4.82 billion, was new investment while just under 13%, or $4.61 billion, was loans and payments between companies of the same corporate group.

Janneth Quiroz Zamora, director of economic analysis at the Monex financial group, said there were expectations that “new investment linked to nearshoring” would be higher.

“The fact that new investment was limited … appears [to show] that we’re not yet seeing that great wave of investment to the country [we were expecting],” Quiroz said.

One positive is that the contribution new investment made to the 2023 FDI total was up five percentage points compared to the 8% contribution it made to the total for the first nine months of last year. However, the 13% figure is well below the 48% contribution new investment made to the FDI total in 2022.

The figure should rise in coming years as foreign companies made investment announcements totaling well over $100 billion in 2023. One such company, Tesla, is expected to begin construction of its Nuevo León “gigafactory” this year.

Where did Mexico’s FDI come from?

SE data shows that 87% of total FDI in 2023 came from just 10 countries.

Around 38% of total investment, or $13.64 billion, came from the United States. The SE highlighted that Citigroup, General Motors and Ford are among the U.S. investors in Mexico.

While the United States remained the top foreign investor in Mexico, its investment total declined 9% compared to 2022.

A rendering of Tesla’s planned “gigafactory” in Nuevo León. (Tesla)

Via companies such as the energy firm Iberdrola and the bank BBVA, Spain was the second largest foreign investor in Mexico last year, contributing $3.77 billion, or just over 10% of the FDI total, while Canada ranked third, investing $3.47 billion, or almost 10% of the FDI total, through companies such as TC Energy and Scotiabank.

The other countries in the top 10 were:

  • Japan: $2.9 billion or 8% of FDI.
  • Germany:$2.4 billion or 7% of FDI.
  • Argentina: $2.2 or 6% of FDI.
  • United Kingdom: $936 million or 3% of FDI.
  • Netherlands: $892 million or 2% of FDI.
  • Belgium: $759 million or 2% of FDI.
  • South Korea: $497 million or 1% of FDI.

Which sectors and states did the money go to?

Just over 50% of the 2023 FDI total — $18.08 billion — went to the manufacturing industry.

The transport equipment sector, which includes automakers, was the biggest winner, receiving 41% of the manufacturing investment. The remaining 59% was split between a number of sectors including beverages and tobacco; metals; computer equipment; and chemicals.

FDI by state of Mexico in Q4 2023
Top 10 states for FDI (or IED in Spanish) in 2023. (Economy Minister/X)

The other 50% of total FDI went to several sectors including financial services; mining; and temporary accommodation.

Almost one-third of FDI — 31% — went to Mexico City, where many major international companies have offices.

Sonora ranked second, receiving 8% of total FDI last year, followed by Nuevo León (7%); Jalisco (6%) and Chihuahua (5%).

The federal government has invested heavily in Mexico’s southern and southeastern states, but none was among the top 10 recipients of FDI last year.

The development of the Interoceanic Corridor of the Isthmus of Tehuantepec, which will include 10 new industrial parks, could help Oaxaca and/or Veracruz enter the top 10 in coming years.

With reports from El Financiero and El Economista

How did the Mexican government become one of the world’s most important art collectors?

By
Leigh Thelmadatter
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Artist David Alfaro Siqueiros and bureaucrat Hugo Margáin were the architects of the Pago en Especie program. They devised a scheme to allow artists to pay their taxes in kind. Here they inspect donated paintings along with painter Raúl Angiano. (Gobierno de México)

Tax time in Mexico is coming, and more than a few of us foreign residents make our annual declarations between February and April. It is also the time that Mexican artists can take advantage of Mexico’s one-of-a-kind payment program for creators.

Called Pago en Especie (payment in kind), it is a barter system where works of art can be substituted for cash tax payments. 

Although not required to pay taxes for the rest of their lives, artists like Diego Rivera and Rufino Tamayo donated works to start what would become the Pago en Especie collection, like this painting, “Lucia y los Judas” by Diego Rivera. (Museo Luis Nishizawa)

The scheme was the brainchild of famous muralist David Alfaro Siqueiros. In 1947, the federal government began to require artists to pay taxes on their income and sales. Although post-Revolution greats such as Siqueiros and Diego Rivera would be exempt for the rest of their lives, they were concerned about this new burden on younger artists to whom they were passing the baton. 

In 1957, Siqueiros and other notable artists petitioned the government on their behalf. They convinced authorities to allow notable artists to “pay” their taxes by “donating” one artwork to the government for every five paintings sold.

For the aging muralists, it was a case of self-serving altruism. The arrangement not only helped to keep their movement alive but fit with their ideals, providing a “socialist” alternative for Mexican artwork in the face of a growing private market. The deal also included building a museum to house and promote the new public collection, but that would not happen until 1994.

Instead, when the Modern Art Museum (Museo de Arte Moderno) opened in 1964, the collection became a cornerstone of its work. Three decades later, the federal tax agency (SHCP) would finally open the Art Museum of the Secretariat of Finance and Public Credit. 

Portions of the collection are regularly packaged into themed exhibitions for showings all over the country. (Secretaría de Cultura)

One of the initial purposes of the program was to conserve muralism as Mexico’s dominant visual art form, and younger Mexican artists inspired by international trends in the mid-20th century had difficulty getting their work accepted. Eventually, however, this so-called “Breakaway Generation” succeeded in expanding the range of works the collection would accept. 

The basis of the program has remained the same over the decades, but its details have been tweaked various times. Initially, the program was quite generous, allowing artists to determine which works would count as payment. That began to tighten significantly with the death of the last great muralist, Rufino Tamayo, in 1991. The SHCP instituted a committee to accept artists and works into the program. In 2022 the agency switched to a system of valuation by certified appraisers instead.

The program was initially focused exclusively on the classic plastic arts – painting, sculpture, photography and prints in particular, but over time it began to accept installations and digital art as well. A more significant conceptual change occurred in 2017 when the SCHP began to accept works by nationally recognized artisans and folk artists.

The result is one of the largest collections of modern and contemporary art in Mexico with over 5,000 pieces. It is not Mexico’s only federally-managed art collection, but its history means that it is managed separately from those related to the Culture Ministry. The SCHP museum is located at the former Archbishop’s Palace in downtown Mexico City, but the collection is so large that parts of it are on permanent loan to other institutions. The purpose of the collection is exhibition within the country and such exhibitions appear regularly at museums all over Mexico.

The modern scheme now accepts more traditional forms of Mexican art and artisanal crafts, in addition to paintings and sculptures. (Galo Cañas/Cuartoscuro)

The collection covers Mexico’s major art movements from the muralism period to the present. It contains works by famous names such as Rufino Tamayo, Mariana Yampolsky, Vicente Rojo, Manuel Felguérez and José Luis Cuevas along with those of up-and-coming artists such as Verónica Villarreal, Manuel Carrillo Lara and Manuel Armando Solano Lozano.

The program is open to both Mexican and foreign resident artists, but applicants must be accepted by SHCP, and even then the agency will accept only works that are properly authenticated. Last, but not least, the artist needs to register with the tax system (and have no outstanding debts).

The SCHP says that the program is the only one of its type in the world, but there have been criticisms. One early objection is that the program skews the private market. Another common complaint is that most of the works are in storage, managed by bureaucrats and of questionable public value. The most common criticism has been that this tax option has not been extended to other types of artists, most notably those in the performing arts, leading to accusations that plastic artists “evade” taxes.

However, the program remains an important resource for more than a few artists in the country. Cecilia Santacruz, general coordinator of the Salón de la Plástica Mexicana (Mexican Hall of Arts) says that over 150 members have participated and that acceptance onto the scheme remains an important part of these recognized artists’ trajectories “…not only thanks to the economic support that Pago en Especie provides, but also the promotion of new markets for art.”

Leigh Thelmadatter arrived in Mexico over 20 years ago and fell in love with the land and the culture in particular its handcrafts and art. She is the author of Mexican Cartonería: Paper, Paste and Fiesta (Schiffer 2019). Her culture column appears regularly on Mexico News Daily.

Why is the Mexican military sending a mission to Panama?

By
MND Staff
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Catarino Erasmo Garza
Catarino Erasmo Garza was an opponent of Porfirio Díaz, leading an uprising against the Mexican dictator. He was eventually killed in Panama in 1895. (Wikimedia)

A Mexican delegation including 80 military personnel will depart for Panama later this month on a mission whose primary aim is to recover the remains of a revolutionary general who was killed almost 130 years ago.

At the request of President Andrés Manuel López Obrador, the Senate on Wednesday approved a mission to the Bocas del Toro Archipelago, where Catarino Erasmo Garza Rodríguez was killed in 1895 during the Colombian Civil War of that year.

López Obrador is a long-time fan of Garza, and even wrote a biography of the revolutionary fighter. (lopezobrador.org.mx)

Garza — born in Matamoros, Tamaulipas, in 1859 — was a staunch opponent of Porfirio Díaz, the authoritarian Mexican president who ruled the country for more than 30 years in the late 19th and early 20th centuries.

He is best known for leading the Garza Revolution, or Garza War, an uprising against the Díaz regime that lasted around 18 months between 1891 and 1893.

A summary of a book on the uprising — a precursor to the Mexican Revolution — notes that “on September 15, 1891, Garza, a Mexican journalist and political activist, led a band of Mexican rebels out of South Texas and across the Rio Grande, declaring a revolution against Mexico’s dictator, Porfirio Díaz.”

“Made up of a broad cross-border alliance of ranchers, merchants, peasants, and disgruntled military men, Garza’s revolution was the largest and longest lasting threat to the Díaz regime up to that point,” the summary continues.

“After two years of sporadic fighting, the combined efforts of the U.S. and Mexican armies, Texas Rangers, and local police finally succeeded in crushing the rebellion. Garza went into exile and was killed in Panama in 1895.”

López Obrador also authored his own book on Garza, prior to becoming president.

The mission to bring Garza’s remains to Mexico   

“We’re looking for him, … it’s already known how many mass graves there are and where he might be,” López Obrador said in early January.

He said that authorities in Panama had assisted a Mexican team seeking to locate Garza’s remains and declared that it was “very probable” that they would be found.

The ARM “Huasteco,” a Mexican Navy frigate, will depart with a cargo of soldiers and government officials, in search of Garza. (Seaforces-online)

Garza was an “exceptional revolutionary,” López Obrador added.

A mission to Panama involving military personnel was approved by the Senate in December, but the original plan was changed when it was determined that a military aircraft, a CASA C-295, would be unable to land at the Bocas del Toro “Isla Colón” International Airport.

It was subsequently decided that a naval vessel would instead transport 20 soldiers to the Bocas del Toro Archipelago, located off Panama’s Caribbean coast not far from the border with Costa Rica.

The Senate, in which the ruling Morena party and its allies have a majority, authorized the new plan on Wednesday afternoon. The soldiers will work with officials from the National Search Commission and the Ministry of Foreign Affairs to locate and exhume Garza’s remains.

The naval vessel ARM “Huasteco” AMP-01 will depart the port of Veracruz on Feb. 19 with 60 naval personnel on board in addition to the 20 soldiers — who will be unarmed — and government officials.

The navy personnel will carry out social and community work while in Panama. The vessel is scheduled to return to Veracruz on April 16.

Opposition to the mission

In an address in the Senate prior to the vote that approved the mission, National Action Party (PAN) Senator Kenia López questioned why the government wanted soldiers to leave the country to retrieve the remains of a person who died over a century ago when there are so many missing people in Mexico.

Opposition politician Kenia López asked why the government was searching abroad for a revolutionary soldier at a time when there are tens of thousands of people missing within Mexico’s borders. (Cuartoscuro)

She said that over 49,000 people have disappeared since López Obrador took office in December 2018, and insinuated that the government should focus its efforts on locating them rather than a 19th century revolutionary.

“How do you dare to propose today, to say here that you’re going to look [for remains] in other countries when you’re not even capable of looking for Mexicans,” López said to Morena senators after railing against the federal government for what she charged was a failure to adequately fund the National Search Commission.

Senator Mayuli Martínez, who also represents the PAN, made similar remarks.

“Fifty thousand missing people in Mexico, 50,000 missing men and women in this country! But the president doesn’t want anyone to look for them,” she said.

“… Instead of that, he wants this Senate to authorize the departure of troops to Panama to search for the remains of a general [who died] 130 years ago,” Martínez said.

“And who’s looking for all these people who are disappearing every day? … López Obrador has no shame,” she added before accusing ruling party senators of being “puppets” of the president.

With reports from El Universal, El Financiero and Quadratín

Inflation drives up the cost of Valentine’s Day celebrations in Mexico

By
MND Staff
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Inflation has driven up the cost of classic Valentine's Day gifts in Mexico this year. (Victoria Valtierra/Cuartoscuro)

Mexicans are expected to spend 22.3% more on gifts and dining out for Valentine’s Day, or Día del Amor y la Amistad, this year than in 2023, per a report from Mexico’s National Alliance of Small Merchants (ANPEC).

How much are Mexicans predicted to spend this year?

The cost of some Valentine’s Day gifts has risen by up to 40% from 2023. (Mario Jasso/Cuartoscuro)

According to the ANPEC report, the average cost of the celebration per household could be up to 2,208.69 pesos (US $128).

With inflation continuing — the annual headline rate was recorded at 4.88% in January — the cost of popular Valentine’s Day gifts has spiked. Between 2023 and 2024, the average cost of one dozen roses for Valentine’s Day increased by 40%, from 240.86 to 336.04 pesos, according to ANPEC.

Meanwhile, the Confederation of National Chambers of Commerce, Services, and Tourism (Concanaco) has predicted that the total national Valentine’s Day spend this year will exceed 28 billion pesos (US $1.6 billion).

What do Mexicans buy for Valentine’s Day? 

According to Concanaco chief Héctor Tejada Shaar, the sectors that will benefit the most are hospitality, restaurants, department stores, candy stores, and flower shops.

Some of the most popular affordable treats include heart-shaped lollipops, at an average price of 80 pesos, balloons for 119 pesos, a dozen roses for 336 pesos, a stuffed animal for 350 pesos and a romantic dinner for two at a mid-range establishment for 1,102 pesos. 

Many Mexicans have opted to celebrate at home this year according to analysis from consumer research firm YouGov.

Based on the survey results, 28.3% of the participants intend to celebrate Valentine’s Day by preparing a homemade dinner, while 25% said they would watch movies or TV shows at home. Giving sweets or chocolates was the top choice for 25% of the respondents, while 19.6% of them said they would opt for gifting flowers.

Just like in the rest of the world, flowers are a classic Valentine’s Day gift. (Edgar Negrete Lira/Cuartoscuro)

How many Mexicans are in a romantic relationship?

To provide insight into the romantic lives of the Mexican population in the lead-up to Valentine’s Day, the national statistics agency INEGI published data on the marital status of people aged 15 and above. 

In the third quarter of 2023, there were 100.6 million residents aged 15 or older in the country, and 36.9% are married, 33.1% are single, 17.8% cohabit unmarried with a partner, and 12.2% are separated, divorced, or widowed.

The highest proportion of unmarried people was those aged 15 to 29, who accounted for 72.7% of the population in this age group. Among adults aged between 30 and 59, 48.5% were married while 22.5% were cohabiting.

Among adults aged 60 and above, 52.6% are married or cohabiting, while 23.2% are widowed.

Meanwhile, the divorce rate in Mexico has shown an upward trend since 2010, registering a 50% increase since 2013 according to data published last September; however, in 2022, there were still around three marriages for every divorce.

With reports from El Informador, ADN 40, El País and Milenio

Got 1 min? Ash Wednesday and Valentine’s Day coincide for first time in 79 years

By
MND Staff
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0
Woman receives a blessing and smudge of ash
Ash Wednesday will be observed by Catholics all over Mexico today. (Cuartoscuro)

This year, Valentine’s Day, or Día del Amor y la Amistad as it is known in Mexico, and the Christian holiday of Ash Wednesday coincided for the first time since 1945. 

In a statement, the National Catholic Register said that the two holidays are closely linked to one another. “The intersection of the two holy days provides a providential opportunity for us all to remember the purpose of Lent, the nature of love, and the person of St. Valentine, bishop and martyr.”

Those fasting on the first day of Lent may find it challenging to refrain from enjoying some Valentine’s treats. (Luiz Paulo Santos/Unsplash)

However, those who fast on Ash Wednesday may find it challenging to celebrate both holidays.

What is Ash Wednesday and how is it observed in Mexico?

Ash Wednesday marks the beginning of Lent, or cuaresma in Spanish. It is a day of penance and fasting that originated with ancient Jewish rituals. 

In Catholic tradition, ash represents the idea that man is made of dust from the earth and will eventually return to it. On this day, a priest applies ashes to a person’s forehead while saying: “Remember you are dust, and you shall return to dust.” 

The name “Ash Wednesday” is comes from the rites administered by priests. (Thays Orrico/Unsplash)

Contrary to popular belief, Catholics are not obligated to be smudged with ashes because it is not a day when the faithful are required to attend mass. However, the faithful are expected to adhere to fasting and abstinence on Ash Wednesday.

This year, Lent will conclude on March 24.

What is the origin story of Valentine’s Day?

The origins of this holiday are said to date back to the Lupercalia festival of ancient Rome. This festival was celebrated in mid-February and included fertility rites and the consumption of alcohol.

As the Roman Empire became more Christian, Lupercalia was transformed into a celebration honoring the Roman Saint Valentine, who died in 270 A.D.

Legend has it that Saint Valentine was arrested for defying an order issued by Emperor Claudius that prohibited Roman soldiers from getting married. He was beheaded for his religious beliefs, and Roman men chose to commemorate his death by drawing the names of eligible young women from an urn. 

Today it is a popular and commercially significant holiday in many parts of the world, including in Mexico.

With reports from The New York Times, El Universal and El Informador

Pemex given billions of dollars of tax relief by Mexico’s government

By
MND Staff
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Olmeca refinery belonging to Pemex in Dos Bocas
Rodríguez acknowledged that leadership of the state oil company would be a challenge and "great responsibility." (Cuartoscuro)

President Andrés Manuel López Obrador has decreed major tax relief for Pemex, exempting the beleaguered state oil company from obligations to pay the government more than 100 billion pesos.

In a decree published in the government’s official gazette on Tuesday, López Obrador granted two new “fiscal stimuli” to Pemex, which has total debt in excess of US $100 billion.

AMLO at an event celebrating oil expropriation
The president, who has prioritized the recovery of Pemex during his administration, at an event marking the 85th anniversary of the national expropriation of oil in the Zócalo last year. (Lópezobrador.org.mx)

This exempts the company from the requirement to pay Shared Profit Right (DUC) levies and Hydrocarbons Extraction Right (DEXTH) levies that correspond to a period of four months between October 2023 and January.

The move came four days after Moody’s Investor Service downgraded its rating for Pemex from B3 from B1, putting the company deeper into speculative, or junk, territory. In April 2020, Pemex became the world’s largest “fallen angel” when Moody’s downgraded its credit rating from investment grade to junk.

To meet its DUC (Derecho de Utilidad Compartida) levy commitments, Pemex in 2023 was required to make payments to the government equivalent to 40% of its gross oil and gas income. The levy — which was 65% when López Obrador took office in late 2018 — was reduced to 30% for 2024.

The president’s decree didn’t say how much the four-month DUC exemption would save Pemex, but a high-ranking state oil company source told Reuters that the saving would amount to around 110 billion pesos (US $6.4 billion). DUC levies — when they are paid — are a significant source of revenue for the government.

Dos Bocas refinery, Tabasco
The Pemex Olmeca refinery in Tabasco is one of the president’s key infrastructure projects. (Gob MX)

DEXTH (Derecho de extracción de hidrocarburos) levies are payable by all oil drillers that operate in Mexico. Pemex’s exemption from paying those that correspond to the October-January period will save the company an additional undisclosed amount.

López Obrador has made “rescuing” Pemex a central aim of his administration, which will conclude Sept. 30. The company is set to get 145 billion pesos (US $8.5 billion) from the government in 2024 to help it meet its immense short term debt repayment obligations, and it has received large cash injections and tax relief in previous years.

Government support between 2019 and 2023 adds up to over 1.3 trillion pesos (about US $76 billion), while the amount of money Pemex paid into state coffers declined 46% in annual terms to 166 billion pesos in the first nine months of last year, the La Jornada newspaper reported.

Despite the government support, Moody’s analysts said in the rating agency’s Pemex downgrade report that they expect the company’s cash flow and credit metrics to worsen in the next three years.

Octavio Romero at a Pemex processing facility in Campeche
Pemex director Octavio Romero (left) at a site visit in January in the Bay of Campeche. (Pemex/X)

Although Pemex is in a poor financial state — a condition López Obrador attributes to decades of neglect by previous governments — it has increased its fuel production in recent years.

CEO Octavio Romero presented data last month that showed that production of gasoline, diesel and jet fuel at six Pemex refineries — those in Oaxaca, Hidalgo, Guanajuato, Veracruz, Nuevo León and Tamaulipas — was up 41% last year compared to November 2018, the month before the current government took office.

The company’s overall production has also been given a boost due to its acquisition of Shell’s share of the Deer Park refinery in Texas. Output will increase further this year as the new Olmeca refinery on the Tabasco coast ramps up production.

The data presented by Romero showed that national self-sufficiency for fuel — an objective López Obrador hoped to achieve before the end of his presidency — is possible by 2027.

With reports from El Economista, La Jornada, Bloomberg and Reuters 

Mexican Chile Peppers 101: Everything you need to know

By
MND Staff
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Nearly 40 chile pepper varieties are grown throughout Mexico. We break down the essential varieties for your kitchen. (Cabanaboy Cooks)

Chiles are a fundamental ingredient in Mexican cuisine, infusing traditional dishes with different flavors, complexity, depth, and spiciness.

Thanks to Mexico’s varied climate and geography, nearly 40 chile pepper varieties can be grown throughout the country, without altering the chile’s flavor or spiciness.  

A chile may change its name and flavor profile depending on whether it is fresh or dried. (Mexicanos por España/Facebook)

With so many varieties, it is no wonder that the average Mexican consumes 18 kg of chile per year, and that the country is amongst the top 3 chile producers in the world. 

A brief history of chile

When ancient civilizations in what is now Mexico discovered that wild chile peppers were edible, they began selectively cultivating them, developing various types with different flavors and levels of spiciness.

In Mexico, the oldest evidence of chile seeds in human settlements is in the Coxatlán cave in the Tehuacán region of Puebla. Likewise, the Guilá Naquitz site, near Mitla in southern Oaxaca, provides evidence of early chile domestication.

In his “General History of the Things of New Spain” Fray Bernardino de Sahagún wrote about different types of chile peppers and the dishes in which they were used. He also reported on the use of chile peppers to treat certain mouth diseases. 

Whether fresh, dried, raw or cooked, the type of chile you use can have a big impact on the flavor (and spiciness) of your food. (Odyssee Belle/Unsplash)

Over time, chile peppers became a popular seasoning for meats brought from Spain, like beef and pork and were combined with other native and foreign spices to recreate traditional dishes like the mole sauce.

The spiciness of chiles 

A chile’s level of spiciness depends on the amount of capsaicin, its main compound. For example, the habanero has the highest percentage of capsaicin of all Mexican chiles, while the poblano chile has the least. 

Whether fresh, dried, raw or cooked, the type of chile pepper you use depends on the desired dish and level of spiciness, so it is crucial to know which ones are best suited for your recipe.

To help you pick the right chile pepper for your dish, we have put together a list of the most commonly used types of chile peppers in Mexican cuisine, divided into fresh and dried chiles. The list includes information on the usage, spice level and recipe examples.

The habanero has the highest percentage of capsaicin of all Mexican chiles, making it the country’s most powerful pepper. (Chris Lawton/Unsplash)

Fresh chiles 

Poblano: The chile poblano is the largest type of chile consumed in Mexico. It is dark green in color and has a size similar to that of a large pepper. It’s ideal for use in soups and sauces or as a garnish. 

Among the dishes that use poblano are pollo con rajas (chicken stew topped with slices of poblano), chile poblano soup, and of course, chile en nogada, one of the most iconic dishes in Mexican cuisine. 

Spiciness: 🌶️

Jalapeño: About four inches long, the jalapeño is one of the most recognizable Mexican chiles. Its color changes from bright green to red once it is ripe. Some say the chile’s name comes from La Xalapeña, a food packaging company in Veracruz that popularized pickled chiles in Mexico, now the most common way to eat jalapeños.

In the United States, the jalapeño is used as an appetizer stuffed with cheese and fried.   

Spiciness: 🌶️🌶️

Serrano: It is the second most produced variety in the country following jalapeño. It is small in size, and its color varies from bright green to red depending on how ripe it is. Typically, it is sliced up and mixed into almost every salsa, pico de gallo and guacamole.

Spiciness: 🌶️🌶️🌶️

A typical Yucatecan salsa made with sliced red onion, habanero, orange juice, oregano and salt. (Wikimedia Commons)

Habanero: According to the story, this chile originated in Cuba and became popular in the state of Yucatán, where it turned into the staple garnish of the cochinita pibil. It is also used in acidic salsas containing fruit like mango or tamarind.  

As the spiciest chile in Mexico, a salsa negra (made of burnt onion and habanero without seeds) is a safe method to try habanero, as it reduces the chile’s spiciness and enables you to taste its flavor. 

Spiciness:  🌶️🌶️🌶️

Dried chiles

Ancho:  This chile is the dried version of the poblano pepper. The drying process gives it a smoky, earthy, and slightly sweet flavor, making it perfect for marinades and sauces like mole.

Spiciness: 🌶️

Guajillo: This is the dried version of the mirasol chile, a deep red chile about ten centimeters long. Once dry, the guajillo turns darker in color and becomes flat and hard. It is a bit spicier than a chile ancho or poblano and is used as the flavor base for enchiladas and chilaquiles.

It generally pairs well with any other dried chile. 

Spiciness: 🌶️

Dried Chile de Árbol, an important ingredient in a classic Mexican salsa roja. (Ramesh NG/Wikimedia)

Chile de árbol: Although small and thin (5-7 cm long and 1 cm wide), this is a spicy chile. It is also used in enchiladas and chilaquiles to give them a spicy kick and is the flavor base of the salsa macha and salsa roja, used to garnish everything from tacos to enchiladas, sopes, huevos rancheros and even pozole.

Spiciness: 🌶️🌶️🌶️

Chipotle: This smokey kind of sweet chile is the dried version of a jalapeño pepper. Due to its smoky flavor, the Nahuatl called it chilpoctli, which means “smoked chile.” 

The most popular form of dried chipotle is canned and prepared with adobo sauce. In this presentation, it is commonly used to add flavor to dishes like tinga de pollo, fideo seco, and sauces that accompany chicken. 

Spiciness: 🌶️🌶️🌶️

Pasilla: The second most popular dried chile in Mexico after chipotle, it is produced from the chilaca pepper, which is similar in appearance to the poblano but thinner. Its name translates to “little raisin” due to its dark wrinkly skin and a deeply sweet dried-fruit flavor. It is often found in mole and is the staple ingredient of the pasilla sauce, one of the most common sauces in any Mexican restaurant or fonda. 

Dried chiles are best stored in a sealed glass container at room temperature.  

Spiciness: 🌶️

Pro tip: If you ever find yourself overwhelmed by spiciness, remember that a glass of milk, a spoonful of crema fresca, or a big slice of cheese can alleviate the discomfort. Water is not enough!

Gabriela Solís is a Mexican lawyer based in Dubai turned full-time writer. She covers business, culture, lifestyle and travel for Mexico News Daily. You can follow her life in Dubai in her blog Dunas y Palmeras.

Mexico’s classic novels: Must-read books to add to your reading list

By
Montserrat Castro
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6
Sometimes the best way to learn about a place is by looking at it from a different perspective. Our list of essential Mexican novels provides an alternative lens to the national psyche. (Adolfo Felix/Unsplash)

Looking to update your reading list? It’s the second month of 2024 (already) and many of us included “read more books” in our resolutions this new year. Reading the books is one thing, but knowing which books to read is a whole other problem. 

Here is our list of must-read Mexican classics that everyone should have on their shelves. While you were in high school, reading The Great Gatsby, To Kill a Mockingbird, The Color Purple, Little Women, or Moby Dick, this is what Mexican students were reading. 

Whether you live in Mexico, are interested in Mexican culture, or simply want to add to your general knowledge, these books will give you a taste of Mexico’s greatest authors. If you’re looking for a more challenging read instead, why not browse through our list of Mexican authors that will take you out of your comfort zone? 

Pedro Páramo by Juan Rulfo

One of the best-known Mexican books, Pedro Páramo is considered by many to be one of the first works of Latin American magical realism. It was published in 1955 and is one of only two novels ever written by the father of Mexican literature, Juan Rulfo.

After his mother’s death, Juan Preciado decides to visit the ghost town of Comala and find his father, Pedro Páramo. The novel tells two stories: Juan’s journey to meet his father to denounce his and his mother’s abandonment, and Pedro’s own story of power and corruption during the Revolution. 

Why you need to read this: More than just a Mexican cultural staple, Pedro Páramo is a love poem to magical realism, mystique, and adventure. The book is like having a very vivid and complex dream that you’ll remember for years to come. 

There are over 30 translations of this work, however the amount of “Mexicanisms” it contains warrants a reading in Spanish (eventually!). 

Like Water for Chocolate by Laura Esquivel

In the 1980s, people thought magical realism had come to an end, but boy were they wrong. Laura Esquivel published Like Water for Chocolate in 1989, and it went on to become one of the most important works of Latin American literature ever created. 

This beautiful novel tells the story of Tita, the last daughter of the De la Garza family. Being the youngest and following family tradition, she’s destined to take care of her mother right until the day of her death, sacrificing love or a family of her own. 

Mirroring Tita’s devotion to cooking, every chapter of this novel starts with a recipe. Esquivel plays around with traditional dishes, flavors, feelings, and ingredients to envelop the story of a traditional family told through the eyes of a hopeless romantic culinarian who ends up falling in love. 

Why you should read this: If cooking is your love language, or you frequently think about the halfway point between food and love – this book is for you. 

The Memories of the Future by Elena Garro

The Memories of the Future is set in the fictitious town of Ixtepec during post-revolutionary Mexico. What makes this such a wonderful piece of work is its unconventional narrator: the town of Ixtepec itself. 

The town lives in a melancholy state of fear, experiencing both the trial and tribulations of military ruler Francisco Rosas, who has taken control of the town’s government and the life of the Moncada siblings. 

The Memories of the Future has been described novel that feels like a poem. 

Why you should read this: Elena Garro is sometimes known as “Octavio Paz’s wife,” a title that does her no justice. If feminism plays an important role in your media consumption, you need to read Garro’s work. 

Aura by Carlos Fuentes

The book tells the story of Felipe Montero, a young historian hired by Doña Consuelo to organize and write down her late husband’s memoirs. Felipe, who worked as a professor with a very low salary, will be paid a handsome sum by the old lady – under the condition that he lives in her house until the work is completed.

Set in Mexico City in 1962, this gothic-inspired novel is less than 100 pages long and considered one of Fuentes’s best works. 

Why you should read this: Aura is written completely in the second person point of view, making you, the reader, an intrinsic and exciting part of the story.

Confabulario and Other Inventions by Juan José Arreola

Arreola was one of the most prolific authors of his generation. He was deeply connected to Mexico and its cultural influences. He published Confabulario, his second work, in 1952. It consists of a collection and short stories that touch on the love, solitude, and frustration of modern humanity, told with a comedic, ordinary and sometimes absurdist touch.

Why you should read this: It’s considered a 20th-century Mexican literary masterpiece. If you like short stories that achieve more than some full-length books do, in less than 5 pages, Confabulario is for you. 

Balún Canán by Rosario Castellanos

Balún Canán was Rosario Castellanos’s first novel, published in 1957. It’s considered one of the pillars of the native “Indigenist” literature movement within Mexico – and an early example of Mexican feminist writing.

Castellano set her novel in Chiapas, where she was born and raised. It narrates the decline of Chiapan landowners, especially the Argüello family, triggered by agrarian reform laws during the Lázaro Cárdenas presidency of the 1930s. The story discusses the clash between white settlers and indigenous communities and the injustices that resulted. 

Why you should read this: If you want to learn more about racial and social issues in Mexico that are sometimes ignored in the modern era, this book is essential reading. Making it yet more intriguing, some consider this novel to be partly autobiographical, as Castellanos herself experienced some of what she narrates in her book.

The Labyrinth of Solitude by Octavio Paz

The Labyrinth of Solitude is a collection of 9 essays published in 1950. In it, Nobel Prize winner Paz sought to grasp and define the essence of the Mexican people – individually and collectively. He ponders through different historical events (going back as far as the Aztecs) that gifted, according to him, a certain quality of pessimism, alongside other characteristics, to Mexican society. 

Why you should read this: Paz provides an invaluable insight into the history, morals, and ideals that give Mexicans their identity. Although understanding the full essence of a foreign culture is quite impossible, reading this book will definitely leave you better than when you started, no matter your own identity or background.

Montserrat Castro Gómez is a freelance writer and translator from Querétaro, México.

Is Chinese electric vehicle manufacturer BYD coming to Mexico?

By
MND Staff
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0
BYD plant
Chinese automaker BYD is reportedly considering opening an electric vehicle manufacturing plant in Mexico. (BYD)

Chinese electric vehicle manufacturer BYD is considering opening a plant in Mexico, according to a Nikkei newspaper report that cited the company’s Mexico chief.

The Tokyo-based newspaper said Wednesday that it had spoken to BYD México country manager Zhou Zou, and noted that he expressed eagerness to have a production facility in Mexico. No potential investment amount was mentioned.

BYD manufactures vehicles for Bimbo, Lala, Cemex and FEMSA, as well as for ride-sharing app DiDi. (User3204/Wikimedia)

Nikkei reported that BYD has launched a feasibility study for a plant in Mexico, adding that the automaker is negotiating with federal and state officials over a location and other terms for the facility.

Zou, who spoke with the newspaper’s Mexico City bureau chief, didn’t mention a possible location for the plant, but Nikkei said that “the northern state of Nuevo León and the Bajío region in central Mexico appear to be leading candidates.”

“The Yucatán Peninsula and other places in southern Mexico are also likely options,” it added.

Tesla — BYD’s main competitor in the electric vehicle market — is set to begin construction of a “gigafactory” in Nuevo León this year, and several other automakers have announced plans to make EVs in Mexico.

Samuel García visits the Tesla gigafactory in Shanghai
Rival firm Tesla is set to begin construction this year on an EV plant in Nuevo León (Samuel García, Nuevo León’s governor, seen here). (Samuel García/X)

Zou told Nikkei that overseas production is essential for an international brand and described Mexico as a key market with vast potential.

BYD sold 520,000 EVs in the final quarter of 2023, more than any other company, but the vast majority of its sales are in China. It is opening a plant in Thailand this year and building one in Brazil as it seeks to increase production and sales around the world.

A factory in Mexico would allow the company to get its vehicles into the lucrative U.S. market at a significantly lower cost. Export costs would be much lower and BYD could also benefit from the United States-Mexico-Canada agreement, the free trade pact that replaced NAFTA in 2020.

In addition, the company could benefit from competitive labor costs and the presence of a highly-trained and experienced automotive workforce in Mexico, where numerous carmakers already have plants.

Nikkei’s report noted that “requirements for U.S. tax breaks on EV purchases include assembly of the vehicles in North America, along with restrictions on where batteries can originate.”

“Chinese EV companies that lack a manufacturing hub in North America likely would be at a disadvantage,” the newspaper added.

As part of the growing nearshoring phenomenon, Chinese investment in Mexico has grown in recent years, triggering concern from some United States lawmakers.

A bipartisan group of representatives wrote to U.S. Trade Representative (USTR) Katherine Tai late last year in part to request that the U.S. government be ready to “address the coming wave of [Chinese] vehicles that will be exported from our other trading partners, such as Mexico, as [Chinese] automakers look to strategically establish operations outside of [China] to take advantage of preferential access to the U.S. market through our free trade agreements and circumvent any [China]-specific tariffs.”

Katherine Tai in front of a Mexican flag
U.S. Trade Representative Katherine Tai told concerned U.S. lawmakers in January that Chinese efforts to dominate the global EV market are a “priority” for the Biden administration. (Office of the United States Trade Representative)

The four members of the Select Committee on the Chinese Communist Party including chairman Mike Gallagher also said in their letter that they were “concerned by how the People’s Republic of China (PRC) is preparing to flood the United States and global markets with automobiles, particularly electric vehicles, propped up by massive subsidies and long-standing localization and other discriminatory policies employed by the PRC.”

Tai responded in a letter in January, saying that the issues the lawmakers mentioned were “a priority to the Administration, and we are clear-eyed that China has developed and implemented a plan to target the EV sector for dominance through a wide and evolving range of non-market based policies and practices.”

She said the U.S. government was looking at ways to make existing tariffs “more strategic.”

In December, Mexico and the United States agreed to cooperate on foreign investment screening as a measure to better protect the national security of both countries. That move appeared to be motivated to a large degree by a desire to stop problematic Chinese investment in Mexico. It remains to be seen whether any proposed Chinese investment in Mexico is halted as a result of the bilateral cooperation.

Tesla chief Elon Musk has also expressed concerns about Chinese automakers’ access to the United States and other markets, saying in January that “if there are no trade barriers established, they will pretty much demolish most other car companies in the world.”

With reports from Nikkei and Reuters 

Mexico Open at Vidanta 2024 brings PGA golf to Puerto Vallarta

By
MND Staff
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0
Mexico Open at Vidanta 2024
The Mexico Open will take place in Puerto Vallarta from Feb. 22 to 25. (Mexico Open at Vidanta/Facebook)

Puerto Vallarta is gearing up for the México Open, a PGA Tour event that will be played on the Vidanta Vallarta Course from Feb. 22 to 25.

A purse of US $8.1 million will be paid out, and the winner will receive 500 FedEx Cup points in addition to the top prize of $1.5 million. Next week’s field is expected to include 144 players from around the world.

The course at the Vidanta Nuevo Vallarta resort was designed by all-time great Greg Norman. (Mexico Open at Vidanta/Facebook)

While the tournament isn’t a marquee event on the PGA Tour, it is the only PGA tournament of the week, so it will draw the interest of golf fans around the world. Broadcast coverage in the U.S. will be on NBC, ESPN+ and the Golf Channel.

The México Open, now in its third edition, is known for giving opportunities to Latin American players. A total of 31 golfers from the region, including six amateurs, have competed in the tournament since it began in 2022.

This year’s México Open will have at least eight Mexican golfers participating including Rodolfo Cazaubón, 34, from Tampico, Tamaulipas and Sebastián Vázquez, 33, from Mexico City. Though there are zero PGA Tour wins among them, Cazaubón has won four PGA Tour Latinoamérica events and was the PGA Tour Latinoamérica Player of the Year in 2015.

Vázquez, who finished in a tie for 55th and shot two rounds of 67, was the Mexican Amateur Champion in 2011 and 2012.

“It was a magical week, knowing that I can be among the best,” Vázquez said in an interview with the newspaper Crónica this week. As for this year, “I hope we celebrate on Sunday [Feb. 25] and it will be a tournament that changes my life … I have been fortunate to be the best in our country, but it is not enough. I always want to be better.”

Last year’s champion Tony Finau. (Mexico Open at Vidanta/Facebook)

Last year’s Mexico Open was won by American Tony Finau, who shot 66 or less each round to earn the $1.39 million championship check.

In the 2022 event, Spaniard Jon Rahm beat Finau by one stroke to pocket $1.31 million. Rahm is one of the sport’s best players, with two titles in two majors (2021 U.S. Open and 2023 Master’s) to his name.

Rahm is now part of the Saudi-backed LIV Golf tour, which opened its 2024 season in Mexico earlier this month.

The course at the Vidanta Nuevo Vallarta resort is a par 71 and it was designed by all-time great Greg Norman. The Mexico Open is not to be confused with the Mexican Open, a professional men’s tennis tournament that will return to Acapulco next week despite major damage caused to the stadium by Hurricane Otis.

With reports from Crónica, Esto and Travel Dreams

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