It started out as a very bad week for US-Mexico relations when Rafael Caro-Quintero was released from prison early.
We were clearly blindsided by that. I'm not even sure how much
President Pena-Nieto knew of this release. It's not helpful as they
say. We hope that this is not an example that Mexico is going backwards
on prosecuting the other "Caro-Quinteros" sitting in jail.
I think that there is an ObamaCare lesson in what we are watching with Mexico & PEMEX.
The other news is indeed good, frankly excellent. It looks like Mexico is finally going to take a serious look at modernizing PEMEX.
The
#1 problem is that PEMEX is an institution of the past. It has done
"muy poco" (very little) to find oil or distribute gasoline in Mexico.
PEMEX's headquarters
are located in a very tall building in Mexico City. It is a statue to
corruption, one-party rule and the arbitrary nature of a large
bureaucracy that can make or break your business. Just ask any Mexican
who is not on PEMEX's payroll!
I've had a few Mexican friends use other words to speak of PEMEX but they are not suitable for a PG post.
The
change has been coming for years and glad to see that President
Pena-Nieto is willing to reform one of his party's sacred cows. He is
shaking up a "sacred cow" created by President Cardenas, one of the
PRI's legendary figures.
How
significant is this change? Imagine President Obama calling for
"privatizing Social Security" or blowing up the teachers' unions with
school choice.
This
is a huge step by President Pena-Nieto and many in his party will
scream "traidor" (traitor) and accuse him of selling out to foreign
investment.
However, Mexico had little choice. The motivation behind the move is reality:
"Mr.
Pena Nieto's goal, like those of presidents before him, is to recharge
Mexico's economy by tackling areas that analysts agree hinder its
expansion, which has averaged just 2.2 percent a year since 2001,
according to the Organization for Economic Cooperation and Development. Perhaps
the worst of those is the creaky energy sector. Demand for energy in
the country is growing so fast that Mexico could turn from an energy
exporter to an energy importer by 2020, the government says. Already,
Mexico must import almost half its gasoline, mostly from the United
States. Mexican companies pay 25 percent more for electricity than
competitors in other countries, the government says. Although Mexico has
some of the world's largest reserves of shale gas, it imports one-third
of its natural gas."
PEMEX
has failed as an energy company, as any serious Mexican will tell you
off the record. I recall speaking to some Mexican politicians who
attended a US-Mexico trade show in Dallas. We sat down for coffee and
all 3 of my Mexican friends, elected politicians, told me that PEMEX had
to be reformed.
We repeat that this good news from Mexico.
It will bring foreign investment to Mexico, i.e. more jobs!
It
will create more demand for engineers and technical people in Mexico.
This is going to be huge for US universities like our Texas A&M and
other engineering schools that already have close relationships with
Mexican schools.
Best of all, it's good news because it proves once again that government can not run natural resources or anything else.
I think that there is an ObamaCare lesson in what we are watching with Mexico & PEMEX.
Click here for Tuesday's show:
Current Politics Podcasts at Blog Talk Radio with Silvio Canto Jr on BlogTalkRadio
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