The world is now 18 months into the Donald Trump era, and there is no doubt the U.S. president is making an impact, not only on the United States but on its trade partners as well. The U.S. media depict in alarming terms a country in a deepening state of social conflict, with polarized liberals and conservatives abusing one another in public and political candidates risking their careers by opposing the strongman in the White House. We’ll save the 1930s-Nazi-Germany parallels for the cantina but from our vantage point here in Mexico, the ongoing state of uncertainty in U.S. public policy is a real nuisance for North America across the board. Continue reading Uncertainty prevails as Mexico election looms
One morning not long ago we were on our way to work at the Mexico Business Blog Global Campus when we strolled by the Pemex station and immediately did a cartoon double-take: The Pemex gas station was no longer Pemex! It was still a gas station, yes, but the grungy, dinged up Pemex livery had now been replaced by sparkling new green and yellow Hidrosina logos and signs. We could not help but to stop and gawk. All our lives, all gas stations (or petrol stations, if you prefer) in Mexico were Pemex stations. The Pemex station has long ranked among the most recognizable icons of Mexican popular culture – the place where you can fill up your tank, and go to the bathroom if you dare. At that seminal moment, on the corner of Insurgentes and Av. Yucatán, a piece of our childhood died, and we were nearly brought to tears. Those tears, however, would have been tears of joy, since the demise of the Pemex monopoly may be the most thrilling public policy to hit Mexico since, well, maybe since the energy industry was nationalized in 1938. Continue reading The new gas stations are here
Following marathon legislative sessions last week, the Mexican Congress finally approved the long awaited secondary laws associated with President Enrique Peña Nieto’s energy reform, clearing the way for implementation of the reform. Once President Peña signs the laws into effect today, August 11, 2014, we may become a monkey’s uncle, since that is what we have always said would happen if Mexico’s energy industry was opened to the private sector. We are astonished this is occurring in our lifetime.
Of course, no one, starting with Mr. Peña himself, knows exactly what will happen now. One thing we do know will not happen, however, is that national oil company Pemex will be “privatized,” as professional tear-factories and guardians of the national mythology such as Andrés Manuel López Obrador and his allies on the far left customarily wail. Pemex won’t be privatized, not because Peña and his allies in the right-wing opposition PAN wouldn’t do it if they could, but because no for-profit, private-sector oil company would want to buy Pemex. The value is in the oil and gas, not in the shamefully dysfunctional national oil company, and if you can drink the milk without buying the cow, well, you know. And Pemex is one hideous, bloated, corrupt and inedible cow.
So there is the challenge to the stewards or our national development and prosperity, and in this, the left may yet be proven right. The Mexican government must permit incentive-based contracts, concessions, partnerships or whatever they will be called to obtain the private sector capital and technology that will allow for the explotiation of the country’s energy resources. We are hoping this will result in a new Scandanavian-model dawn that will bring us cheaper energy and greater revenue for the national coffers while foreign oil companies receive a profitable return on their investments. If the foreign oil companies pollute the environment and make sweetheart deals with corrupt politicians, well, then nothing really will have changed. But if the nefarious foreign capitalists make a fortune off our oil in exchange for increased national oil revenues, updated technology and infrastructure development, then at least the nation will be receiving some benefit from our national resources. At present, all we have is the indignity of being the laughing stock of the Petroleum Workers Union and the political parties as they gorge themselves at the trough that is Pemex.