Summer Doldrums. Not Quite.

Antonio O. Garza (Ambassador to Mexico, 2002-2009)

Cross-posted from Ambassador Garza’s August 2016 newsletter.

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It should be the summer doldrums, but the news out of Mexico hasn’t quite slowed down.

One of Mexico’s biggest stories was the debate, passage, veto, and then re-passage of the country’s anti-corruption package. These seven bills were designed to put legislative meat on the bones of the 2015 anti-corruption reform, and will greatly assist in coordinating corruption fighting across government institutions. The final package stopped short of embracing every part of the civil society written and backed Ley 3de3 (which would have forced government officials to publicly declare their assets, conflicts of interest, and tax records), but it did create what has been called “the most encompassing system to identify and sanction corruption that the country has ever had.”

In more welcome anti-corruption news, the Peña Nieto administration filed legal challenges this month against the governments of Veracruz, Quintana Roo, and Chihuahua for reforms that would have shielded outgoing governors from corruption investigations. These states are facing federal inquiries over financial irregularities under the governors’ tenures. And in the case of Veracruz, for at least twenty-six phantom companies that received some US$1 billion in unaccounted funds.

Yet despite these positive achievements, perhaps the most covered anti-corruption news story was not the president’s actions but his words. During President Peña Nieto’s introductory speech, he offered a belated apology for the November 2014 Casa Blanca scandal, which linked his wife’s house to a prominent government contractor. And while apologies are always better late than never, the jury is out on to what extent the Mexican public and political elite will fully accept his remorse, with opposition parties already asking for the case to be reopened.

The reform agenda’s other rough spot is with the education reform, as teacher union unrest continues across Michoacán, Guerrero, Chiapas, Oaxaca, and Mexico City. While the protests are largely contained to a few states, they have also erupted on a smaller scale in cities across the country. The protests, which have focused on blocking main roads, have directly affected commercial traffic and tourism in the country’s southern states, with losses estimated at near US$400,000 a day.

Mexico’s other big news is coming from the energy front, with two oil and gas exploration and production tenders on the horizon. Up first are ten deep-water fields—that are being eyed by global energy companies such as Exxon Mobil, BP Exploration, Hess, Chevron, and Royal Dutch Shell—with the final bids opened in December. Then up next will be fifteen shallow water fields, with winners announced mid-March. The government has estimated that these latter fields could have production up and running by 2020 and rake in over $11 billion in investment over their lifetime.

The country’s 2013 telecommunication reform—aimed at diversifying the sector beyond a few dominant players and expanding Mexico’s cell phone network—is also continuing, but with a few delays. The bidding process for a wholesale telecommunications network was recently rescheduled for October 20th, with the winner building a 4G network through a twenty-year public private partnership. The country’s telecoms regulator also set price ceilings for the big players in a bid to lower what are currently near-monopoly level prices.

Yet, even if Mexico and its reform implementation aren’t slowing down, it is still a perfect destination if you are looking to relax. For those of you haven’t been able to get away this summer, I highly recommend heading south for a quick vacation. Of course, Mexico City can’t be beat, and if you need a travel itinerary just check out this recent Vogue article on a perfect day in Polanco or this New York Times travel article about how to see it all in just thirty-six hours.

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