Saturday, December 03, 2011

Is the PRI ready to privatize PEMEX?

We've been looking for a "sign" like this for years.  It looks like Mexico is finally ready to "reform" PEMEX and get serious about leaving 1938 behind.

This week, Mary Anastasia O'Grady of The Wall Street Journal reported a rather amazing meeting between Mr Pena-Nieto and WSJ editoral board:

"PRI presidential candidate Enrique Peña Nieto proposes a constitutional amendment to allow private investment in Pemex, the national oil monopoly." 

Why did Mr Pena-Nieto make a statement like that?  

First, Mr Pena-Nieto is clearly trying to introduce himself to the business community.   He needs to send the world's money markets a signal that Mexico is open to foreign investment.  Unfortunately, too much of the news from Mexico these days is about violence!

Second, he is trying to set the table for the obvious.  

PEMEX has to be reformed.  PEMEX is something out of the 1930's and has no utility in the 21st century.

Last, but not least, PEMEX has institutionalize "corruption" in Mexico. 

Mr Pena-Nieto is simply stating the obvious.  Mexico can not turn into a first world economy as long as PEMEX is run by politicians rather than oil men.

Click here for our discussion with Patrick Corcoran:

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