The past few months have been a difficult time for Mexico. In a recent article for the World Politics Review I explained, “Autumn has been a difficult season for Mexican President Enrique Pena Nieto. Public furor has erupted into sustained and sometimes violent protests over the disappearance of 43 students in the rural southwestern state of Guerrero. Long one of Mexico’s poorest, most crime-ridden and isolated states, Guerrero had not been a priority for Pena Nieto’s administration, which has focused tirelessly on promoting the image of a modern and efficient Mexico to foreign investors.” Although 2014 has marked a number of successful economic reforms and an uptick in economic growth, Mexico’s autumn has been sullied by scandals.
In a recent article for the International Peace Institute's Global Observatory I explained, “For nearly two years, Peña Nieto has trumpeted a series of ambitious reforms and also studiously worked to avoid discussing security issues. His entrance into office was heralded both by the signing of the Pacto for Mexico, a historic three-party agreement on his reform agenda, and also by the emergence of armed, masked ‘autodefensa’ citizen militia members in Guerrero. The disparity between the celebration of Mexico’s new era of reform in Mexico City and the actions taken by locals frustrated with government inaction in Guerrero has finally come to a head.”
On November 20 thousands of protesters marched through Mexico City demanding the resignation of... [+]
Two months after police in the town of Iguala detained and allegedly turned over a group of four dozen teachers-in-training to cartel henchmen, Mexico is still hearing the protests from angry protesters who have used the incident in Iguala as a catalyst for a broader movement against crime, corruption, and impunity in Mexico. At the same time, Peña Nieto is also facing criticism for abruptly canceling a multi-billion dollar railway contract and working to downplay a report that the house he shares with his wife and children is owned by a company that backed his campaign for the presidency.
In my World Politics Review article I explain, “The political crisis from Iguala highlights familiar problems with rule of law and local security in Mexico, and the canceled railway contract and mansion scandal provides another example of possible political corruption. Combined, these scandals could discourage the foreign investment that is so key to Pena Nieto’s so-called Pact for Mexico.”
Tony Payan, the director of the Mexico Center at Rice University, told me that when it comes to such U.S. companies considering building or expanding operations south of the Rio Grande, “there’s going to be some lost investment.”
In my World Politics Review article I explain, “while major corporations have the experience and expertise necessary to do business all over the globe, small- and medium-sized companies in Texas and California, for example, have to take a leap of faith if they are going to invest in Mexico.”
As Mexico works to attract investment in its energy and telecom sectors, perceptions of the bidding process companies go through to win contracts will be important. Duncan Wood, a Mexico researcher from the Woodrow Wilson Center in Washington D.C., told me “If there are any doubts about the process being open and transparent, it’s going to diminish the appetite for investment in the energy sector.”
Protesters in Mexico continue to march and demand improvements in the areas of education and public... [+]
In my article for the International Peace Institute I explain, “The lesson for Peña Nieto (who has been criticized for leaving Mexico to visit China) is that security policy cannot be divorced from economic and social policy. Although behind the scenes, his government has worked to create a new division of the Federal Police, the Gendarmeria, and also detained several high profile organized crime leaders, Peña Nieto has shied away from talking about security issues and explaining how crime fighting efforts are linked to his economic and social development initiatives.”
Mexico is home to major production facilities operated by Coca-Cola, Ford, GM, HP, and IBM and continues to attract the attention of multinational companies looking to benefit from skilled labor, competitive production costs, and easy access to the export market in the U.S.
In my International Peace Institute article I explain, “Modern Mexico has built up manufacturing sectors and high tech exporting hubs in cities in the north, but the benefits of ‘Mexico’s Moment’ have yet to trickle down to Guerrero, the state that has Mexico’s lowest rate of formal sector employment. (Only 1 in every 10 workers is employed in the formal sector.)”
Wal-Mart has had well-documented problems with local-level corruption in Mexico. If Mexico is going to attract a new round of investment, foreign companies need to be assured that the process of establishing operations and winning bids is transparent and straightforward. Tony Payan told me, “if [investors fear] that you have to be willing to engage in the corruption game to win contracts, that is not acceptable for U.S. companies.”
