Right now on Friday, December 21, 2012 it seems like we must be the last people in Mexico City still at our desks, as the sounds of holiday merry-making rise up from the cantinas outside our window in Colonia Condesa. But before we pull down the shades and make a beeline for the punch bowls, we’d just like to make a few comments about the year coming to a close and the new year fast approaching.
We’re not going to dwell on the bad things that happened in Mexico this year, because the mainstream International media, principally in the United States, already covers that beat with ravenous enthusiasm. We will mention a few things though, because this stuff really makes our ass want to dip snuff: Ongoing slaughter and disappearances related to drug trafficking; wholesale corruption making a mockery of society, such as Humberto Moreira’s loan racket in Coahuila and the Wal-Mart bribery scandal; and old fashioned electoral manipulation by the PRI in the run-up to the presidential election, to name a few.
We would like to mention a couple of things though that piqued our interest this year in a more positive way. First, somewhere around mid-summer, it suddenly appeared that the international business media had abandoned its “All-Brazil-All-The-Time” policy and inexplicably latched onto Mexico as the new hot topic. After the past few years of begging Brazil for its autograph and an 8×10 glossy with lipstick in the shape of a kiss on it, the media in the ficklest of fashions turned on a dime and began churning out stories on Mexico’s burgeoning competitiveness with China for manufacturing, booming automotive and aerospace industries, selfless commitment to free trade and even its prudent and responsible macroeconomic policies. Prudent and responsible! We have been called many things over the years, but these are not traditionally among them. And as the year ends, our time in the limelight does not appear to be over yet. So we will take our 15 minutes of fame and the accompanying manufacturing and portfolio investment, and hopefully this time we will spend it wisely and not blow it on hookers and rails like we did with the oil money during the Lopez Portillo administration.
The second item of note is not necessarily so great but we will try to make lemonade out of it and see what happens: Enrique Peña Nieto took office as Mexico’s new president on December 1. Many concerns have been raised about Peña bringing back the authoritarian and corrupt practices that characterized the PRI during their 70-year run in power, and the violence and vandalism that occurred on inauguration day reinforce these suspicions. But Peña came in charging with a slew of reform initiatives that are speeding through a suddenly cooperative Congress, and in fact we support the spirit of most of the new government’s reform proposals. Most prominent of these at this moment is the education reform, which is the first in memory that appears aimed at breaking the stranglehold of the nefarious teachers union, SNTE, and its Darth Vader-like leader Elba Esther Gordillo over the national public education system. The SNTE sits atop a long list of national disgraces in Mexico and the sooner the education system is wrested from its gnarled talons the quicker we can begin actually educating children rather than plundering the public coffers for the personal gain of corrupt union leaders. The proposed education reform is rapidly being watered down in Congress and is opposed vehemently by Gordillo and the SNTE, so this may not be the arrow that slays the dragon, but the very idea that the new government is daring to take a whack at the entrenched system is more than welcome in our book.
Another item on the new government’s agenda that we favor is the proposed fast passenger train between Mexico City and Queretaro. This idea has been bandied about for a while and certainly runs the risk of falling by the wayside, but we strongly favor the return of an inter-city passenger rail system and feel that this route is a perfect place to start. Queretaro is a booming industrial city offering strong tourist attractions as well, and the movement of people and goods between the two cities is enormous. Currently most of the passenger transport is by private auto or inter-city bus, and the traffic getting into and out of the capital can be soul-crushing. The idea of a functional commuter rail line – like the kind other countries have! – between these two cities would be a dream come true. And then, dare we dream of similar service between Mexico City and Guadalajara? This would be fantastic. We just hope the Peña administration’s current push for the new rail line doesn’t end up like former President Vicente Fox’s proposal for a new airport in Texcoco, which ended up with no airport but much shameful state-sanctioned violence and repression, presided over by *ahem* Enrique Peña Nieto. Oh well.
So what’s ahead for 2013? The pieces seem to be in place in Mexico for guardedly optimistic expectations for the economy. Much, of course, will depend on the performance of the United States, by far Mexico’s largest trading partner. If U.S. political leaders can pull a rabbit out of their hat and prevent the “fiscal cliff” from sending the country spiraling back into recession, Mexico stands to gain from even moderate performance north of the border. The manufacturing base is expanding, inflation is under control, export markets are gradually diversifying, and proposed energy, fiscal and regulatory reforms offer at least the prospect of some juice for the GDP. This morning we spied a report on some bank projecting Mexico’s 2013 GDP growth at 4.1%. These guys may have hit the punch bowl a little early that day, but hey, it doesn’t hurt to dream. This holiday season and for the coming year, then, may all our collective dreams come true.
Have a happy and safe holiday.