From Latin American Regional Report: Mexico & Nafta

Colima thrust under a spotlight

LatinNews 29 October 2015 Hits: 2

Mexico’s small western Pacific state of Colima has become the focus of national attention for all the wrong reasons. An armed attack targeting a former governor has raised serious concerns about a deterioration in public security in the state, accompanied by an increase in organised criminal activity. Meanwhile, in a striking move, the federal electoral tribunal (Tribunal Electoral del Poder Judicial de la Federación, TEPJF) has annulled the state’s recent (7 June) gubernatorial elections, having found that local government officials interfered in the electoral process.

Colima, Mexico’s fourth smallest state by surface area and population, made national headlines following an armed attack targeting a former governor, Fernando Moreno Peña (1997-2003). Moreno, a member of the federally ruling Partido Revolucionario Institucional (PRI), was attacked by two unidentified armed men on 12 October, whilst eating breakfast in a restaurant in the eponymous state capital. CCTV footage from the restaurant shows that after exchanging a few words with Moreno, the gunmen shot him six times, before fleeing on a motorcycle. Moreno was rushed to hospital, where doctors managed to save his life.

Immediately after the attack, Colima’s incumbent governor, Mario Anguiano Moreno (also of the PRI), ordered the deployment of federal police (PF) units to reinforce security in the state capital. Anguiano said that he had contacted the federal interior minister, Miguel Angel Osorio Chong, and the federal navy minister, Vidal Francisco Soberón, to “ask for the support of the federal government to coordinate the various security forces and clear up this incident”. “We will not spare any efforts to find those responsible… we will not allow this to go unpunished”, he declared. The federal ministers agreed to a meeting to discuss implementation of a new security protocol for Colima.

Colima is sandwiched between the violent states of Jalisco and Michoacán, where many of Mexico’s largest drug trafficking organisations have a strong presence. Both Jalisco and Michoacán have had federal security interventions in recent years, allowing the security forces to land some heavy blows on leading criminal organisations. However, the concern now is that these criminal elements have moved their operations to Colima. While Colima has not seen a huge increase in violence against ordinary citizens, it is considered a major drugs transhipment point and some of Mexico’s largest drug gangs have long been known to operate there.

Anguiano’s strong reaction to the attack, for which the authorities have yet to identify intellectual authors or motives, may indicate that the state government suspects a link to organised crime. Several local security analysts have suggested that the incident could be sign that criminal groups are trying more actively to infiltrate the local political establishment. One analyst, José Reveles, noted that Moreno remains a prominent figure in the PRI’s regional political structure; for instance he was the party’s special representative in the gubernatorial elections in neighbouring Michoacán, also held on 7 June. Others have noted that in 2010 Moreno was accused of masterminding the murder of his PRI gubernatorial successor, Jesús Silverio Cavazos (2005-2009) (see sidebar).

Political uncertainty

While the security situation in Colima is a growing concern, so too is the internal political situation. The attack on Moreno was condemned by the national right-wing opposition Partido Acción Nacional (PAN). The PAN senator Jorge Luis Preciado, who narrowly lost the Colima gubernatorial election to Anguiano Moreno, said he hoped the case would focus public attention on the situation in Colima. Preciado said that the attack on Moreno, like the Cavazos murder, evidenced the “level of decomposition in the state”. Noting that Colima is one of the many Mexican states that have never been ruled by any party other the PRI, he suggested that longstanding local authorities are more prone to corruption and have thus become an easier target for organised crime.

Just a week later, the TEPFJ annulled the Colima gubernatorial elections. After losing the gubernatorial race by just 506 votes to the PRI’s José Ignacio Peralta Sánchez, Preciado had denounced irregularities in the campaign, which he argued resulted in an unfair victory for Peralta. In particular, Preciado accused state government officials of actively campaigning in favour of the PRI candidate, in violation of electoral law. Peralta and the PAN formally impugned the elections on these grounds. Following a lengthy judicial review process, on 22 October the TEPJF agreed with the PAN. The ruling came just days before Peralta Sánchez was due to take office, on 1 November, for a term running to 31 October 2021.

In a split 4-2 decision, the court found that Colima state government officials had “unlawfully intervened” in the electoral process, “violating the guiding principles of equity and neutrality”. The evidence presented by the PAN included a video recording of a session in the Colima state congress in which the state’s social development minister, Rigoberto Salazar Velasco, admitted to deputies that he had asked voters to back the PRI gubernatorial candidate in exchange for the continuation of some social development programmes.

Noting that Art. 134 of the constitution stipulates that government intervention in an electoral process constitutes grounds for annulment, the TEPJF declared the results void. The court ordered the state congress to call new extraordinary gubernatorial elections, to be organised by the national electoral institute (INE). It is worth noting that the TEPJF ruling does not prevent either Peralta or Preciado from running again. Meanwhile, the state congress will also have to elect an interim governor to take over from Anguiano once his term ends on 31 October.

The TEPJF also called for Salazar to face investigation and for the special prosecutor for electoral crimes, Fiscalía Especializada para la Atención de Delitos Electorales (Fepade), to fully investigate the evidence provided by the PAN in support of its allegations (some of which had been denounced as “fabricated” by the PRI).

The ruling should help reaffirm the TEPJF’s image as an independent body. Significantly, the PRI national party leadership has announced that while it disagrees with the ruling, it will abide by it.

Questions over the INE

However, the TEPJF’s ruling raises some serious questions about the INE, created last year as part of the federal government’s political-electoral reform package, which among other things sought to ensure that federal and local officials could no longer influence elections. While the TEPFJ’s ruling was celebrated by the PAN and the leftist opposition Partido de la Revolución Democrática (PRD) as a “victory for democracy”, the two opposition parties also expressed concerns about the INE’s ability to organise fair elections.

The PRD noted that the fresh elections in Colima “provide the INE with a [new] opportunity to show its commitment to upholding the principles of legality, independence, impartiality and objectivity”. With 12 states scheduled to hold gubernatorial elections next year, the INE will remain under close scrutiny.

Cavazos case

Cavazos, who became interim governor following the death of the elected PRI governor Gustavo Vázquez, killed in a plane crash in 2005, was shot dead by unidentified gunmen outside his house in the city of Colima on 21 November 2010. While the case remains unresolved, Cavazos’s widow publicly accused her husband’s long time party rival, Fernando Moreno Peña, of orchestrating the murder. Moreno’s nephew, Samuel Rodríguez Moreno, was arrested by the authorities in relation to the case in 2013, after two of the three men identified as material authors of the crime said that they had been contracted by Rodríguez Moreno to kill Cavazos. The perpetrators were members of the La Familia Michoacana drug gang.

Politics: Independent streak threatens traditional parties

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Jaime ‘El Bronco’ Rodríguez Calderón was by far the most prominent of the independent candidates to win election last June, but it is the work of another successful independent that could have the most-lasting impact on Mexican politics. Days before Rodríguez was sworn in as Mexico’s first independent state governor in Nuevo León on 4 October, the first independent candidate to win a seat in the federal lower chamber of congress in June’s concurrent congressional elections tabled a proposal to deepen the 2014 electoral law that allowed independents to run for office. Manuel Clouthier, who was elected in Culiacán, the state capital of Sinaloa, has won the support of some high-profile politicians and academics for his proposal.

Clouthier has some similarities with Rodríguez. Clouthier was a federal deputy for the right-of-centre opposition Partido Acción Nacional (PAN) until 2012. He left the party after he was refused a federal senate pre-candidacy because of his criticism of then-president Felipe Calderón (2006-2012) for his government’s ‘war’ against drug-trafficking and organised crime. ‘El Bronco’ also previously served in office for the country’s main traditional party, the Partido Revolucionario Institucional (PRI), to which he belonged for 33 years, serving as a federal deputy in 1992, local deputy in 1997 and mayor of García, part of the metropolitan area of the state capital of Monterrey, from 2009 to 2012.

But that is where the similarities end. While ‘El Bronco’ comes from a humble background and prides himself on being the salt of the earth, Clouthier is the scion of a wealthy family and political dynasty. The son of Manuel ‘Maquío’ Clouthier, the PAN presidential candidate in 1998, Clouthier personally declared assets of M$63.7m [US$3.76m], 75% of it in the form of shares, during the recent electoral campaign.

Independent candidates took 13% of the vote in the federal congressional elections last June and 42% of these were won by Clouthier in Culiacán. Clouthier hit the ground running upon taking his seat at the start of September. Determined to shake up the status quo, Clouthier had presented an initiative in the federal lower chamber by mid-September which would make it a primordial and inalienable human right for any Mexican citizen to be entitled to become a candidate for an elected post in the country without having ever registered for a political party.

Clouthier insisted that it would not undermine traditional political parties if this change were made to the benefit of independent candidates but rather provide “another option” that ultimately could strengthen parties if they responded to the competition appropriately. It is not at all clear that the established parties will see it in the same light. While the country’s largest and most influential parties have publicly welcomed independent candidates, privately they are well aware of the threat they could pose.

Established parties accepted independents not to provide “another option” so much as to placate the public. Traditional parties are mindful of the groundswell of public disenchantment with them, but they will not want to confer on independent candidates all of the privileges that they enjoy with none of the responsibilities.

It was noteworthy that Andrés Manuel López Obrador, a maverick but one of the canniest political operators in Mexico, immediately detected the threat independents posed. López Obrador, a twice former presidential candidate for the left-wing Partido de la Revolución Democrática (PRD) before, estranged, he set up his own party, Movimiento Regeneración Nacional (Morena), upbraided Rodríguez. López Obrador said Rodríguez was an imposter and part of a cunning new ploy by the PRI to regain its former political hegemony and to block his third bid for the presidency in 2018.

Rodríguez wasted no time in replying to López Obrador. “The presidency is not his, nobody stole it from him,” Rodríguez said. “He wasn’t capable of winning it… he is the mafia of power [throwing back at López Obrador his pejorative term for all Mexico’s established political parties]”. But irrespective of whether there is an ounce of truth in López Obrador’s allegation, he was paying an indirect compliment of the highest order to Rodríguez by implying that he could be a genuine contender for the presidency.

Nuevo León prepares for new style of politics
Whether Rodríguez is cut from presidential cloth will become apparent over the coming couple of years. He will need to demonstrate real political nous and a talent for horse trading, not simply horse riding: Rodríguez arrived at his swearing-in ceremony as governor of Nuevo León at the head of a cavalcade of some 1,500 riders on 4 October, and promptly thanked his horse, ‘Tornado’, in his public address. He will need the ability to horse-trade because the state congress is controlled by the PRI and the PAN, which between them won 37 of the 42 seats in June’s elections.

Rodríguez insists that he will govern for the people and not behind their backs (by striking covert deals with established political parties). He has also publicly stated that he does not want any public sector employee to belong to any political party. “If they don’t want to serve the community they can go,” he said, adding that he would go on to conduct “a purge” of the 86,000-strong government workforce, denouncing widespread sinecures. He also reiterated his promise of a probe into the administration of his (PRI) predecessor Rodrigo Medina, under whom the state debt more than doubled to M$61bn (US$3.6bn), the second largest in Mexico after the Distrito Federal (DF). “Some are going to go to hell to pay for their sins,” he said.

But there are signs that Rodríguez could be prepared to reach an accommodation in order to ensure that his social initiatives prosper. The independent governor of Nuevo León is a Jekyll and Hyde character; ‘El Bronco’ might be a firebrand but Rodríguez is more respectful of tradition.

‘El Bronco’ might have arrived at his swearing-in on his horse, wearing denim jeans, a leather jacket, boots and a cowboy hat but Rodríguez was wearing an elegant suit by the time the ceremony took place in the state congress. ‘El Bronco’ the demagogue might talk about ending old politics, but Rodríguez, a resourceful politician with 33 years of experience within the PRI, invited former and current governors to his investiture. Some 14 governors attended, including Eruviel Ávila (Estado de México) and Manuel Velasco (Chiapas), as well as Miguel Ángel Mancera (the mayor of the DF). Neither was there anything ‘new’ about the style of politics, which saw the Rodríguez team reward those who turned up for the ceremony by handing out food and charcoal to make their own asado.

Rodríguez insists that his priority will be combating poverty. “It is not acceptable that we have Norway in the municipality of San Pedro and Africa in San Bernabé just eight kilometres apart,” he said during his inaugural speech. “In my government I am going to construct the biggest bridge in the world, between the poor and the rich, which will be communication,” he said (see sidebar). He said that wealthy areas, cement and glass transnationals and bottling plants were juxtaposed with impoverished neighbourhoods with 140,000 people living in extreme poverty in Nuevo León, an industrial powerhouse with 4.6m inhabitants.

Castañeda backing Clouthier

Manuel Clouthier is being backed by various politicians and intellectual luminaries, such as Jorge Castañeda, the renowned academic, political commentator and former foreign minister. Castañeda tried unsuccessfully to stand as an independent presidential candidate in 2006.

Poverty

Jaime ‘El Bronco’ Rodríguez has been very vague about how he intends to “bridge” the gap between rich and poor in Nuevo León. He said that his government would not commission any new public works for six months in the state and that this period would be “100% about social works”. He said the priority would be meeting teachers to find out what they felt was necessary to rebuild the social fabric of the state rather than simply sticking a plaque on a monument.

Politics: New analysis of the proposed anti-corruption system

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Reducing corruption remains one of Mexico’s most serious and daunting challenges. In April, the federal congress passed a law creating a new anti-corruption system, known as Sistema Nacional Anticorrupción. Further legislation will be required, together with the creation of new institutions, before the system becomes operational. The Mexico Institute, part of the US-based Wilson Centre, in September published a research paper entitled ‘Mexico: The Fight against Corruption’. Written by Mauricio Merino, the value of the paper is that it gives a sympathetic, insider’s account of negotiations on the issue.

Merino’s starting point is that a unique opportunity arose in 2014-15 to do something about corruption in Mexico. As he put it, President Enrique Peña Nieto’s administration, which took office in December 2012, was already committed to introducing reforms. Through a complex series of negotiations with a range of civil society groups, together with public and private institutions, Mexico already had seen the creation of a so-called accountability network (Red por la Rendición de Cuentas), which played an instrumental role in negotiating with senators and helping to draft a new transparency law, approved in February 2014.

Then, later in 2014, came two events that deeply shook the Peña Nieto administration: the complicity of local authorities in the abduction and presumed murder of 43 student teachers in Iguala, Guerrero, and the ‘Casa Blanca’ scandal, the revelation that First Lady Angélica Rivera had acquired a luxurious residence from a government contractor under potentially dubious circumstances. Both incidents appeared emblematic of corruption in Mexican public life; both increased the government’s interest in acting on earlier, rather vague promises to tackle the issue.

The paper notes that as a result of these scandals, corruption and impunity moved right up the Mexican political agenda and created a ‘protest movement’ demanding action. Merino accepts however that it was, and is, a rather diffuse phenomenon. As he puts it “public resistance towards the scandals has not responded to a defined political organisation, has no visible leadership, has not been reflected in party competition, has not sought representation, and has not orchestrated a common agenda.” Nevertheless “people have taken to the streets”, creating a window of opportunity for reform.

Merino also offers his sobering view of the nature of the problem. He argues that corruption and impunity is deeply rooted in Mexico’s institutional architecture, and that simply prosecuting corrupt individuals will never be enough. Mexican democracy is described as a system where voters have real but limited choices; much of the working of the system is based on spending public money and distributing positions so that “proximity, friendship, loyalty and favours take precedence over merit and competence”. As much as two-thirds of public spending is not properly controlled or audited. Choices made by public entities are “usually jumbled, obscure and confusing”, a situation which favours dishonesty.

Efforts to reach agreement on an anti-corruption initiative were torturous. Two opposition parties – the right wing Partido Acción Nacional (PAN) and the left-wing Partido de la Revolución Democrática (PRD) – had favoured the idea of an anti-corruption system, but the ruling PRI’s initial counter-proposal was the creation of a top-down Public Integrity Council, implying that “state governors could simply sit down with the President and five notable citizens and put a stop to Mexico’s systemic corruption problem”. Instead, with the help of María Elena Morera of the Causa en Común lobby, and in negotiations with Aurelio Nuño (then head of the office of the president – he has since been appointed education minister), a new version of the anti-corruption system proposals was hammered out, and used as the basis for political negotiations in congress leading up to eventual approval in April of this year. Merino details the ebb and flow of negotiations, including the reluctance of political parties to give up the “fueros” (a form of constitutional immunity enjoyed by some public officials).

What emerged is a proposed system where four main bodies work together, and simultaneously provide checks and balances between themselves. According to Merino, this “mutual vigilance system” is better than having any single anti-corruption agency. The four bodies are the ministry of public service (Secretaría de la Función Pública, SFP), the federal audit office (Auditoría Superior de la Federación. ASF), the Special Prosecutor’s office for Corruption, and a Court of Administrative Justice. The SFP and the ASF already exist, but the law modifies and strengthens their role. The special prosecutor and the court of administrative justice have yet to be created. The system has been designed so the bodies that make it up represent different powers of state: the SFP reports to the presidency, the ASF to Congress, the Special Prosecutor to the attorney general, and the court of administrative justice is under the authority of the Supreme Court.

Merino defends reforms as paving the way “to change Mexico’s system for corruption-related administrative and criminal proceedings – the Achilles heel of Mexico’s political regime.” But he seems to have few illusions about the scale of the challenge. He suggests that to work they will also require the re-engineering of the way many Mexican institutions function. His estimate is that the reform could “in the best of cases, take at least half a decade to show any tangible results – even though some of us believe it will require the work of a full generation”.

US cargo accord

Mexico’s finance minister, Luis Videgaray, signed an accord with the US secretary of homeland security, Jeh Johnson, in mid October formalising a cargo pre-inspection programme to help speed up the flow of goods across the shared border.

Under this scheme, Mexican and US customs officials will carry out joint inspections to help expedite the passage of trucks across the shared border, which is notorious for long delays, with a knock-on effect for economic competitiveness.

The cargo pre-inspection programme has been in place in Laredo international airport in Texas since late last year. It will now begin in the Mesa de Otay customs in Tijuana, Baja California state, for the processing of agricultural goods, and will later be extended to the San Jerónimo border crossing in Chihuahua state. Its introduction in Mexico had been held up because of a domestic political debate over whether US agents should be allowed to carry arms in Mexico, but last April Mexico’s federal congress approved a law removing this impediment.

New Mint

On 14 October the central bank (Banxico) announced plans to build a new US$180m banknote printing mint. The new mint, to be located in the municipality of El Salto, Jalisco state, will be Banxico’s second and should help satisfy the country’s demand for banknotes for years to come once it begins operations stream in 2017. President Enrique Peña Nieto, who attended a groundbreaking ceremony in El Salto, which also marked the 90th anniversary of Banxico’s foundation, said that the new mint would ensure “the long-term provision of national currency, mitigating the risks associated with concentrating banknote printing in just one place”.

Judiciary: Sonora implements judicial reform

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Sonora has become the last state to adopt Mexico’s new judicial reform after its new governor, Claudia Pavlovich Arellano, in September signed a declaration calling for its implementation. This is a critical step towards full implementation of a constitutional reform dating to 2008 that all 32 of Mexico’s federal entities (31 states plus the Mexico City federal district) must have in place by a June 2016 deadline.

As explained by Shannon K. O’ Neill, senior fellow for Latin America Studies at the Council on Foreign Relations, the 2008 reform "moves Mexico’s courts from a system of written evidence to one of oral trials, and bolsters due process rights for the defendant by ensuring the presumption of innocence and better access to an adequate defence. Law enforcement agencies will also see changes, as the reforms give police a larger role in criminal investigations and stronger tools to take on organized crime such as the arraigo, which allows authorities to hold suspects for up to eighty days."

In a May 2010 paper for the Justice in Mexico Project (based at the Trans-Border Institute at the University of San Diego), David A. Shirk identified the main reforms as follows: changes to criminal procedure through the introduction of new oral, adversarial procedures, alternative sentencing, and alternative dispute resolution (ADR) mechanisms; a greater emphasis on the due process rights of the accused (i.e., the presumption of innocence and an adequate legal defence); 3) modifications to police agencies and their role in criminal investigations; and 4) tougher measures for combating organized crime.

The federal government led by President Enrique Peña Nieto, as well as international organisations, believe that the reform is key to improving the country’s archaic and deficient system. Given that Sonora is the last state to take this step, there is now renewed optimism that the reform will be fully in place by the deadline.

Sonora was the state in which implementation of the reform, which also includes things like the standardisation of state penal codes into a single federal code, had been delayed the most. The previous state government, controlled by the right-wing national opposition Partido Acción Nacional (PAN), was accused of foot-dragging. Some critics laid responsibility directly at the feet of the former governor, Guillermo Padrés Elías (2009-September 2015), who was involved in a number of controversies with the federal government during his term.

By contrast, Governor Pavlovich, who won election in the 7 June state elections for the federally-ruling Partido Revolucionario Institucional (PRI), made implementation of the reform an immediate priority. Less than a month after assuming office on 13 September, Pavlovich signed a declaration implementing the reform in a ceremony in Sonora’s state capital, Hermosillo. The ceremony was attended by María de los Angeles Fromow Rangel, the head of the federal government’s Technical Secretariat for Justice Sector Reform (Setec).

“Sonora assumes the challenge of improving the functioning of its various public security, law enforcement and judicial institutions”, Governor Pavlovich declared. Fromow noted that while Sonora had lagged other states, this “historic boost” by the new government would now ensure that the state met the reform deadline. In support of this, the state and federal governments will jointly invest M$256m (US$15.5m) to purchase necessary new equipment and train Sonora judicial staff so that they can begin adopting the new oral trial system from 15 December next.

In a first stage in Sonora, extending to March 2016, the new judicial system will be used only for common crimes such as fraud, breach of trust, tort cases and domestic violence. High impact crimes such as homicide, rape, and violent robbery will continue to be processed under the existing system so as to give authorities time to adjust. By May 2016 all crimes must be processed under the new system, so that Sonora meets the June deadline.

Politics: Mérida Initiative cut meant to send a message

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Since 2008, under the terms of the Mérida Initiative, the US Congress has channelled around US$2.3bn into Mexico to fund efforts to crack down on the drug running business – money that goes towards buying helicopter gunships, funding tighter border controls, and training members of the security services. This year US$148m is being sent – down by a symbolic US$5m on the amount that would otherwise be due, as a sign of Washington’s concern over the poor observation of human rights in the country.

Under current US rules, Congress should release the full amount of Mérida Initiative funds every year, providing it receives a report from the State Department confirming that Mexico has met human rights goals. Up to 15% of total funding is subject to this confirmation. This year the report was not submitted.

The State Department had already expressed concern over the abduction and presumed murder of 43 student teachers in Iguala, Guerrero in September last year; over the apparent extra-judicial execution of 22 people by the army in Tlatlaya, Estado de México, in June 2014, and over various other incidents. The State Department has also spoken of Mexican security force involvement in torture and disappearances.

US$5m question

Now a decision has been taken to hold back US$5m. Off the record, US analysts and officials have described it as “an attempt to send a subtle message to the Mexican government without making a big deal about it through public pronouncements”. Another source said it was a signal of displeasure but “without any public criticism”, and as such, was designed to maintain Mexico and the US as “willing partners in the war on drugs”.

It is hard to say whether this US$5m hint will work. In an attempt to give a balanced response, the Mexican foreign ministry issued a statement saying it “observed with respect” the way the US State Department managed its relationship with the US Congress, but that it could not accept “unilateral practices to judge the human rights situation in any country”. However, it too tried to downplay the matter, adding that the two countries have a “mature and deep” bilateral relationship and a “solid dialogue” over how best to take forward the campaign against organised crime.

Weak position

Mexico’s position is clearly weak. While the government says it is committed to the observation of human rights in principle, there is a big gap between this and everyday realities. Iguala, Tlatlaya, and many other incidents show that the security forces have been infiltrated by criminal organisations and weakened by corruption. Reforms of the police and criminal justice system – some also partly funded by the US – have been dragging on for years with at best mixed results. Some other reform initiatives – such as the creation of unified state police forces – remain stuck in congress.

While the government’s reluctance to be judged unilaterally on human rights matters by its powerful northern neighbour is understandable, the fact is that multilateral organisations have also had serious criticism to make (see sidebar). Ultimately, tackling some of the worst cases will involve the federal government admitting that some of its own institutions are complicit or even directly responsible for major human rights violations. That implies a root-and-branch shake-up that, to date, the authorities seem to lack the political will to set in motion.

International criticism

The Inter-American Commission on Human Rights (IACHR) and the United Nations Human Rights Council (UNHRC) have both recently criticised Mexico’s record on human rights. An international committee of experts appointed by the IACHR to look into the handling of the Iguala case has been devastatingly critical of the poor quality of the official investigation. And during a visit to Mexico this month Zeid Ra’ad Zeid al-Hussein, the UN high commissioner for human rights, described the death toll from violence in the country between 2006 and 2015 as “simply staggering” (on the UN’s count a total of 151,233 people were killed in that period).

Politics: Peña Nieto touts progress in social development goals

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On 15 October President Enrique Peña Nieto presented the latest results from his government’s ‘national crusade against hunger,’ a social development programme that aims to alleviate poverty. Speaking during a public event held in the Estado de México (Edomex) to mark Global Food Day (16 October), Peña Nieto said that since its launch in 2013 the programme has helped feed 4.5m poor Mexicans.

Citing figures from the national social development policy evaluation council (Coneval) on the preliminary results of the national crusade against hunger, Peña Nieto said that the programme had helped to reduce food insecurity in Edomex, which was down by 6% (and extreme poverty by 19%) in 2014 on 2010 levels. “We are working on various fronts to tackle poverty and food insecurity in order to get the necessary results,” the president said.

Fernando Soto Barquero, Mexico’s representative at the United Nations Food and Agriculture Organization (FAO), said that while Mexico has made significant progress in reducing food insecurity in recent decades, much more remained to be done. Soto pointed out that the incidence of malnourishment in Mexico had fallen from 6.9% of the population in 1992 to less than 5% last year, putting Mexico among the seven Latin American countries that currently are below the target threshold set by the FAO.

In fact, Soto pointed out that Mexico’s ‘Prospera’ conditional cash transfer programme for the poor has been singled out for praise in the FAO’s State of Food and Agriculture (Sofa) 2015 report. Prospera currently benefits 26m people, making it the world’s third largest conditional transfer poverty alleviation programme behind India’s ‘Janani Suraksha Yojana’ (which benefits 78m people) and Brazil’s ‘Bolsa Família’ (49m people).

However, on a less positive note, the latest Organisation for Economic Cooperation and Development (OECD) report on social development indicators, released on 14 October, found that Mexico’s social development indicators are “mediocre” in areas such as education, poverty reduction, and quality of employment; and that these vary greatly across the country’s states. For example, the OECD report points out that according to its multidimensional poverty indicator (which takes into consideration 12 different factors such as income, employment quality, and access to education), 76% of the population in the state of Chiapas was classified as poor last year, compared to 20% of the population in the state of Nuevo León.

Economy: Changing direction on soft drinks tax?

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Tacked on unobtrusively to a miscellaneous finance bill approved on 19 October by a 423-33 vote in the federal chamber of deputies was a significant reduction in the tax on high-sugar soft drinks. The tax, set at one peso (US$0.06) per litre, was first introduced at the beginning of 2014, and at the time was hailed as a precedent-setting innovation by a wide range of food and health campaigners, both in Mexico and abroad.

Mexico has one of the highest obesity and diabetes rates in the world, so reducing the amount of sugar consumed by the population is seen as desirable. But now legislators from the ruling Partido Revolucionario Institucional (PRI) and one of the opposition parties, the Partido Acción Nacional (PAN) are seeking to reduce the tax. Some have interpreted the change as a U-turn by the government and a victory for the soft-drinks lobby: others point out the legislative battle is still far from over.

The proposed change is that the tax should be reduced by half - from 10% to 5% - on soft drinks containing less than 5 grammes of added sugar per 100 millilitres. Because the change was part of a wide-ranging miscellaneous finance bill, it appears to have been approved without its proponents spelling out why it was necessary in the first place, or what it sought to achieve. It was only when a coalition of food and health lobbies, the Alianza por la Salud Alimentaria (ASA), denounced the change as “regressive” from a public health point of view that those who voted for it began to explain their position.

Marko Cortés, coordinator of the PAN bench in the lower chamber, said the reduction in the soft drinks tax, – formally the Impuesto Especial sobre Producción y Servicios (IEPES) was designed to apply only to lower calorie drinks: “what we are trying to achieve is a shift in the range of drinks produced by the bottling companies, so they concentrate more on low-energy drinks”, Cortés said.

But campaigners see things differently. The lower-calorie drinks are frequently marketed to children, and the fear is that the tax reduction could end up boosting consumption in that specific market sector. “The deputies have allied with the soft drinks industry to lower the tax, threatening especially the health of the children of Mexico, a country whose children suffer one of the highest rates of obesity in the world” said Alejandro Calvillo, of lobby group El Poder del Consumidor. Calvillo added that the bottling companies in any case might not pass on the tax reduction in lower prices to consumers. “It’s still not clear”, he said, adding, “but what’s sure is that it will help with their advertising and promotion.”

The proposed change comes at a time when the debate over soft drinks and public health continues to rage. Mexicans are estimated to have one of the world’s highest soft drinks consumption rates, at 163 litres per capita per annum. Bottling companies such as Mexico-based Coca-Cola Femsa – the largest soft-drinks producer in Latin America – along with Nestle, Danone and Pepsico, are politically influential.

A study by Mexico’s National Institute of Public Health (INSP) suggests that soft drinks consumption rose by a massive 60% over the eight years to 2014, but fell by 6% soon after the new tax was introduced (as of 1 January 2014). Separate research by the University of North Carolina suggests that consumption went on to fall by a steeper 12% by the end of 2014.

Campaigners, encouraged by signs that the tax was having an effect, argued that the next step would be to increase it further, perhaps to 20% or 30%. A report by the Centro de Estudios de las Finanzas Públicas – a unit attached to the lower house of congress – said that taxing soft drinks was the correct approach, but that more public policies were needed to combat obesity and diabetes. Against this, one of the country’s main business lobbies, the Confederación de Cámaras Industrialises (Concamin), in August called on the government not to raise the IEPES rate on soft drinks, saying that there was “no scientific evidence” linking higher taxes with lower obesity and diabetes.

The story is not yet over. The finance bill now moves to the senate, where the voting may be different. PAN Senator Héctor Larios Córdova has already indicated that he will break ranks with his lower house colleagues and call for the soft drinks tax to be held at its existing level. Another PAN senator, Jorge Luis Lavalle Maury, has added that it would be better to leave the tax untouched and put more resources into raising public awareness and campaigning against obesity, hypertension and diabetes.

Economy: Government pressing on with oil licensing

LatinNews 29 October 2015 Hits: 2

Mexico’s historic Round One oil and gas licensing auctions – the first in over seven decades – opened this year to what was widely seen as a bucket of cold water: the steep slump in international oil and gas prices. But Energy Minister Joaquín Coldwell is insisting that the country is playing the long game: on 21 October he announced that the government will pursue a 5-year licensing programme running between 2015 and 2019.

Coldwell said that in the next five years Mexico will offer 96 exploration blocks and 237 production fields, over a total are of 235,000 square kilometres. This is an update on the original plan announced by the regulator, Comisión Nacional de Hidrocarburos (CNH), in June. Significantly, the area now being offered for auctions over the next five years is 32% greater than the June offer. The authorities say they have consulted with state governments and oil companies. A total of 12 companies made suggestions for the inclusion of specific areas in the auction. Coldwell said that in order to maintain competitive bidding, specific blocks had been incorporated only when suggested by three or more companies.

The minister said that the phasing of licensing rounds had also been adjusted to reflect factors such as the state of the international oil and gas market, companies’ investment capacity, and the quality of seismic data.

From next year’s Round 2 onwards, offshore areas closest to the Mexican coast will be offered first, followed by more distant and deepwater blocks coming later. This is clearly designed to push back the more technically challenging and costly deepwater blocks until a time at which international oil prices have recovered from their current lows. The auction plan is to be reviewed and updated in the third quarter of each year.

The minister did not refer to one of the key political issues facing the current government. When the energy reform was first announced, the timetable suggested that it could reverse the drop in Mexican crude oil production and add one or two percentage points to the country’s GDP growth rate by 2018, which is President Enrique Peña Nieto’s last year in office. Strong growth in an election year clearly would help the ruling Partido Revolucionario Institucional (PRI) in its bid to remain in office. The slump in international oil prices clearly means Mexico and the PRI will get less of a boost by the time of the next presidential vote: but Peña Nieto’s would-be successors will hope that by that then the energy reform will be making some kind of a positive contribution.

Politics: Restoring ties with Cuba

LatinNews 29 October 2015 Hits: 4

Mexico’s newly appointed foreign minister, Claudia Ruiz Massieu [RM-15-08], went to Cuba on 19 October for her first official trip abroad. Upon taking office in December 2012 at the helm of the traditional Partido Revolucionario Institucional (PRI), one of President Enrique Peña Nieto’s declared foreign policy objectives was to restore Mexico’s historically close relationship with Cuba. Ties had deteriorated dramatically in the two preceding administrations (2000-2012) led by the conservative Partido Acción Nacional (PAN).

During her one-day visit, Ruiz met with her Cuban counterpart, Bruno Rodríguez, and Cuba’s first vice-president, Miguel Díaz-Canel. According to a statement by the Mexican foreign ministry (SRE), Ruiz and her Cuban hosts discussed the strengthening of “historical ties between the two countries”. The talks covered areas including bilateral trade, technical and scientific cooperation, cultural affairs and the promotion of Mexican investments in Cuba. They also discussed the process of updating the Cuban economic model and the renewed interest of Mexican companies in participating in the business opportunities on the island.

The SRE noted that nine Mexican investment proposals had been submitted for Cuba’s new Special Economic Development Zone of Mariel (ZEDM), located at the revamped deepwater port of Mariel, 40kms west of Havana. In February the Cuban government gave one of these approval (Richmeat, a food processing company), followed by another in June (paint manufacturer Devox General Paint).

Mexico is Cuba’s sixth largest trade partner. Bilateral trade is worth about US$500m a year, with the balance favouring Mexico. In 2013, the Peña Nieto government wrote off 70% of Cuba’s outstanding debt with Mexico and re-profiled the rest on favourable conditions. Much like their US counterparts, Mexican businesses are interested in securing market access to Cuba (pop 11m) as the government led by President Raúl Castro gradually opens up the state-run economy to private and foreign participation.

In exchange for such access, Mexico has offered political support for Cuba’s rapprochement with the US and appears willing to come out more strongly in support of Cuba’s calls for the removal of the US economic embargo on Cuba, now a half-century old. On 20 October, after Ruiz’s visit, the Mexican federal senate took the unusual step of issuing a “respectful” call on its US counterpart on Capitol Hill to lift the embargo, and called on the Peña Nieto government to launch an international campaign in support of this. In a statement, the senate urged the federal government to “deploy all convenient diplomatic actions to convince the international community….to demand the immediate removal of the embargo”. As per its usual stance, Mexico on 27 October voted in favour of the United Nations’ annual resolution demanding an end to the embargo.

Castro visit confirmed

The SRE also said that President Raúl Castro will conduct a brief official visit to Mexico before year-end, most likely in November. This will be the first visit by a Cuban head of state to Mexico since former president Fidel Castro attended the Special Summit of the Americas held in Monterrey, Nuevo León on 12-13 January 2004.

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