Blogs

By Justin Lahart and Tom Orlik / Dow Jones

Buying stuff from China isn't such a bargain anymore. One consequence of that: Companies that move freight from Mexico are getting busier.

China has long been the destination for companies looking to cut costs. A huge population of untapped workers, along with a leadership keen to build out the country's manufacturing infrastructure, made it the world's best place to make things cheaply. But nothing lasts forever.

The pool of Chinese workers is getting shallower. China's one-child policy and cultural preference for boys have led to a shrinking population of young people, particularly the women who work the floors of the apparel and electronics firms. Add rising affluence, and labor costs are going up faster than productivity increases at Chinese firms can offset them.

http://By Justin Lahart and Tom Orlik / Dow Jones Buying stuff from China isn't such a bargain anymore. One consequence of that: Companies that move freight from Mexico are getting busier. China has long been the destination for companies looking to cut costs. A huge population of untapped workers, along with a leadership keen to build out the country's manufacturing infrastructure, made it the world's best place to make things cheaply. But nothing lasts forever. The pool of Chinese workers is getting shallower. China's one-child policy and cultural preference for boys have led to a shrinking population of young people, particularly the women who work the floors of the apparel and electronics firms. Add rising affluence, and labor costs are going up faster than productivity increases at Chinese firms can offset them.

Los Angeles Times

Members of Mexico’s ruling party on Sunday chose former Congresswoman Josefina Vazquez Mota as their long-shot candidate for president -- the first time a woman will vie for the country’s top job on behalf of a major political faction.

Final results gave Vazquez Mota, 51, a wide lead over her nearest rival, former Finance Minister Ernesto Cordero -- the favored candidate of incumbent President Felipe Calderon. She tallied well over half the ballots cast; Cordero reportedly conceded defeat via Twitter.

With Sunday’s primary vote by the conservative National Action Party, or PAN, the slate for July’s presidential race is all but complete. Minor-party aspirants might yet come forward, but the three major parties now have their candidates.

“Josefina Vazquez Mota will be the first female president of Mexico,” PAN national chairman Gustavo Madero declared at party headquarters as he announced the official results. The ticket, he said, “is historic.”

But Vazquez Mota and the PAN face an uphill battle. All polls for the general election give a substantial lead to Enrique Peña Nieto of the Institutional Revolutionary Party, or PRI, which ruled Mexico with a heavy hand for seven decades until losing the presidency in 2000 to the PAN.

The PRI hopes to return to power, capitalizing on widespread discontent over brutal violence gripping the country as part of the Calderon government’s battle with powerful drug-trafficking cartels.

atimesblogs.latimes.com/world_now/2012/02/mexicos-incumbent-party-picks-woman-as-its-presidential-candidate-a-first.html

By Guy Taylor / The Washington Times

The front-runner in Mexico’s presidential race represents a party known for allowing drug-trafficking cartels semiautonomous control of certain regions during its rule in the previous century.

The prospect of a victory by Enrique Pena Nieto of the Institutional Revolutionary Party (PRI) in the July 1 presidential election is troubling U.S. policymakers about future drug-control efforts with Mexico.

Noting that law enforcement and intelligence collaboration between the U.S. and Mexico has advanced at an unrecedented rate under President Felipe Calderon, a high-ranking Mexican official said, “A lot of policymakers in Washington would be concerned to see that evaporate.”

www.washingtontimes.com/news/2012/feb/3/resurgent-party-clouds-future-mexico-drug-war/

The Economist

In a futuristic art gallery which Carlos Slim opened last year in Mexico City, visitors can enjoy, among other things, a hall of rare coins and share certificates. Sometimes art speaks louder than words.

Slim is the richest man in the world. According to Forbes, he and his family have amassed a comfortable nest egg of $63 billion. (Bill Gates would be richer had he given away less of his stash, or Slim more of his.) In Mexico Slim is a giant: his companies account for more than a third of the stockmarket.

The Slim fortune was made in telephony. After growing moderately rich from property, mining and other businesses, Slim, the son of a Lebanese immigrant named Salim, bought Telmex, Mexico’s state-run telephone monopoly, in 1990.

Telmex still has 80 percent of Mexico’s landlines, and about 75 percent of its broadband connections. Telcel, its sister company, has 70 percent of the mobile market.

Both now belong to América Móvil, a Slim venture which has spread across 18 countries in the Americas and is the biggest or second-biggest player in all but three. With nearly 250 million subscribers, it is the world’s third-biggest mobile-phone company, and accounts for about 60 percent of Slim’s wealth, according to Forbes. Much the biggest market for América Móvil is Mexico, where profit margins in the stifled mobile sector are among the highest in the world.
 

www.economist.com/node/21546028

Fox News Latino

Researchers have developed "environmentally friendly tortillas" that are more nutritious, help prevent osteoporosis, slow the aging process and help fight obesity, Mexico's Center for Advanced Research and Studies, or Cinvestav, said.

A team led by Juan de Dios Figueroa Cardenas, of Cinvestav's unit in Queretaro, developed an environmentally friendly method for producing tortillas from gourmet corn that have a high nutritional content and double the shelf life without increasing the price of the final product, the center said.

Mexicans eat about 14 million tons annually of tortillas, which are one of the main sources of calcium for the population.

latino.foxnews.com/latino/lifestyle/2012/02/01/environmentally-friendly-tortillas-new-hit-in-mexico/

By Jose de Cordoba
Wall Street Journal

Mexico's antitrust commission on Wednesday scuttled an attempt by the country's two major broadcasters to join forces in a mobile-phone company and challenge telecommunications mogul Carlos Slim, according to broadcaster Grupo Televisa and phone company Grupo Iusacell.

Mexico's Federal Competition Commission, or CFC, turned down Televisa's proposal to acquire a 50 percent stake for $1.6 billion in Iusacell, both companies said in statements. Iusacell is a small mobile-phone company owned by Ricardo Salinas, who also controls TV Azteca, the country's second largest broadcaster.

The agency, in a 3-2 vote, based its decision on the danger of collusion between Televisa and Azteca, said a Televisa executive. For instance, the agency was worried the two companies could work together to fix television advertising rates, the executive said, though he strongly denied that would be the case.

Iusacell and Televisa said they would appeal the decision. A spokesman for the CFC said he couldn't comment on the decision, which hadn't officially been made public yet.

The CFC decision is a setback for the two broadcasters as they take on Slim, the world's richest man, in the battle to offer "triple play services" —- television, Internet and telecommunications —- to Mexican consumers. Mexico's telecommunications market is worth some $26 billion a year, according to the Organization for Economic Cooperation and Development.

online.wsj.com/article/SB10001424052970204740904577197702865573034.html

Fox News Latino

Months before Mexico's presidential elections, political rivals are trading accusations over $1.9 million in cash found stuffed into a state official's luggage at a Mexico airport, a find that has inflamed rampant speculation about the possibility of organized crime or illegal campaign money influencing the July 1 presidential election.

The wads of cash, many of them bank-fresh 1,000-peso bills, were found when police decided to search passengers arriving on a private flight to Toluca, the capital of the home state of leading presidential candidate Enrique Peña Nieto.

The money came from Veracruz, a Gulf coast state governed by Peña Nieto's Institutional Revolutionary Party, known as the PRI. The state official carrying the cash said he was making a hurried payment to a legitimate company for consulting services.

latino.foxnews.com/latino/news/2012/02/01/mexicos-politicians-battle-over-1-m-found-in-bags/

By C.M. Matthews
Wall Street Journal

Mexico lost $872 billion to corruption, crime and tax evasion over the last 40 years, according to a new study from Global Financial Integrity.

The massive sum was leaked out of the country in illicit financial outflows between 1970 and 2010. It represented, on average, 5.2 percent of the country’s annual GDP.

“This is a devastatingly large amount of money for any developing country to lose,” GFI Director Raymond W. Baker said. “$872 billion is gone, which could have been used to develop the Mexican economy, to invest in education, to build roads, or to fight the drug cartels. The negative ramifications are huge for everyday Mexicans.”

The study, titled “Illicit Financial Flows from Developing Countries over the Decade Ending 2009,” found that illicit outflows from Mexico exploded from an annual average of $3 billion in the 1970s to $49.6 billion in the 2000s. It also found that the outflows drove Mexico’s underground economy, spurring drug smuggling and arms trafficking, among other things.

Global Financial Integrity, a Washington, D.C.-based advocacy group, drew on data from the World Bank and the International Monetary Fund on external debt and trade mispricing to calculate illicit capital leakage. The study measures the illicit financial flows out of 160 different developing nations. In total, the group estimates the developing world lost $8.44 trillion from 2000 to 2010.

blogs.wsj.com/corruption-currents/2012/01/31/mexico-lost-872-billion-in-illicit-outflows-over-last-40-years-study-says/

By Karla Zabludovsky / New York Times

A drought that a government official called the most severe Mexico had ever faced has left two million people without access to water and, coupled with a cold snap, has devastated cropland in nearly half of the country.

The government in the past week has authorized $2.63 billion in aid, including potable water, food and temporary jobs for the most affected areas, rural communities in 19 of Mexico’s 31 states. But officials warned that no serious relief was expected for at least another five months, when the rainy season typically begins in earnest.

Nearly 7 percent of the country’s agricultural land, mostly in the north and center, has suffered total loss.
 

www.nytimes.com/2012/01/31/world/americas/drought-and-cold-snap-cause-food-crisis-in-northern-mexico.html

By Crayton Harrison
Bloomberg

Mexico’s phone industry, dominated by billionaire Carlos Slim’s carriers, overcharged customers $13.4 billion a year from 2005 to 2009, hurting the nation’s economy, according to a new report.

The overcharging combined with the potential loss of business caused by high prices equaled 1.8 percent of the nation’s gross domestic product, the Organization for Economic Cooperation & Development said in its report.

Latin America’s second-biggest economy should eliminate restrictions on foreign investment in telecommunications and should strengthen the powers of its phone regulator, the OECD said. The 70 percent market share of Slim’s America Movil in the mobile-phone business is “extremely high,” the OECD said.

Mexico “needs the socioeconomic boost provided by greater access to more efficient communication services, in particular high-speed broadband,” the OECD said.

Mexico had 10.5 high- speed Internet subscriptions per 100 habitants at the end of 2010, placing it 32nd among the 34 OECD member countries and less than half the average of about 25, the report showed.

America Movil is reviewing the documents, said an official who can’t be named under company policy. An official at the company’s Telefonos de Mexico fixed-line unit declined to comment.www.bloomberg.com/news/2012-01-30/slim-led-phone-industry-overcharged-mexicans-by-13-4-billion-oecd-says.html