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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

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

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 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

Drinks Business Review

Coca-Cola intends to pump in around $1 billion in Mexico in 2012, as part of the company's $5 billion investment plan.

Speaking at the World Economic Forum in Davos, CEO Muhtar Kent said the company will soon directly employ more than 1 million people in Mexico.

The company currently employs 93,000 people directly and another 800,000 indirectly in Mexico, which makes it one of the largest employers in the country.

The Atlanta-based company has doubled the size of its product range in the country over the past six years and now offers 60 brands and 400 products.

Mexico president Felipe Calderon said the US beverage giant's decision to expand its investments in Mexico 'will give a strong boost to the economy' and provide 'more and better jobs for Mexicans.'

The Coca-Cola offers nearly 500 sparkling and still brands. The company's portfolio includes 12 other billion dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply and Georgia Coffee.

softdrinks.drinks-business-review.com/news/coca-cola-to-invest-1bn-in-mexico-in-2012-300112

By Erik Vance
Christian Science Monitor

The Isthmus of Tehuantapec, Mexico's narrowest point, is a powerful wind tunnel of air currents whipping through the mountains that separate the Pacific and Atlantic oceans.

And because wind is a valuable commodity in a world seeking alternative energy, a "wind rush" – reminiscent of the gold and oil rushes of other eras – has swept into the isthmus.

Wind energy companies have swarmed to the area with big plans for wind farms and a push to acquire huge tracts of land to do so. The "rush" for land farmed by locals since ancient times has divided the impoverished indigenous population over money, land rights, and changing values.

Villagers' distrust of outsiders has led to increasing unrest throughout the Pacific edge of the isthmus for several years. Most recently, around the Laguna Superior, it has included a paralyzing blockade of one village by another and, in October, a deadly shooting at a demonstration.

"Oaxaca is the center of communal landownership. There is probably no worse place to make a land deal in Mexico," says Ben Cokelet, founder of the Project on Organizing, Development, Education, and Research.

And yet, with such an overwhelming wind resource, it was bound to attract development.

By James Young
Variety

Mexico's federal communications watchdog Cofetel nixed plans for a third national terrestrial network this week, a blow to those hoping to break the Televisa-Azteca duopoly.

The 4-1 ruling stated obliquely that regulators would not move ahead with a third broadcaster until "questions beyond the scope of the commission have been resolved."

Speaking on Mexican public radio Thursday, Cofetel commissioner Jose Luis Peralta said one question concerned multiplexing and that there were many voices vying to be heard on this and other issues.

That said, Peralta insisted the issue wasn't dead: "I hope by February we will have the clarity for all the members to vote."

Mexico holds presidential elections in July and many observers doubt the issue will be resolved before then because pols fear the influence on auds held by the two webs, which command a combined market share of 90 percent to 95 percent.

The decision comes on the heels of a market study carried out by Cofetel last fall that showed just over 90 percent of Mexicans want an extra web.

www.variety.com/article/VR1118049313

By Alan Ohnsman and Adriana Lopez Caraveo
Bloomberg

Nissan Motor Co., the Asian carmaker with the biggest production capacity in Mexico, will spend as much as $2 billion on a third factory in the country as the yen’s strength drives the company out of Japan.

The plant will open late next year in Aguascalientes, near one of Nissan’s two current Mexico factories, the Yokohama, Japan-based company said yesterday. The plant, intended to produce vehicles for the Americas, will initially make 175,000 small cars a year before capacity gradually expands, the company said.

Nissan’s current Mexican plants, able to build more than 700,000 vehicles a year, are at their operating limit, Bill Krueger, vice chairman of the company’s operations in the Americas, said in a conference call. “We’ve got more capacity and growth to be developed across the Americas.”

Japan’s second-largest automaker shifted production of low-cost cars to Thailand and Mexico in recent years to counter losses from making vehicles in its home market as the yen appreciated more than any major currency since 2010. The shift resulted in the company becoming the second-biggest importer of autos into Japan last year.

“Relative to what have been low-cost Asian production sources, Mexico is looking more attractive,” said Alan Baum, principal of Baum & Associates, a provider of automobile-industry analysis in Michigan.

www.businessweek.com/news/2012-01-26/nissan-plans-2-billion-plant-in-mexico-to-avoid-losses-from-yen.html

By Ivan Castano
Forbes

The world’s richest man wants to make sure his cell-phone company America Movil, the largest in Latin America, remains that way. To do so, Mexican billionaire Carlos Slim Helu might invest at least $13.9 billion to grow the network in Brazil and Mexico this year, analysts said.

Their estimates follow America Movil’s announcement last week that it plans to issue $2.5 billion of bonds in the next few years. The notes will be issued in Mexican pesos and will carry maturities from 1 to 40 years, the company said in a regulatory statement.

Spokespeople at America Movil would not say when the first bond sale will take place. One banker at Slim-owned investment bank Inbursa would only say the funds will be used for “general corporate purposes.”

America Movil analysts, however, said the funds will be used to bankroll America Movil’s aggressive plan to grow its smartphone data business in Latin America, particularly in the largest markets: Mexico and Brazil.

“Smartphone data usage is growing 30-40 percent a year [around the world] but in Mexico, it’s just at 10 percent,” said Julio Zetina, an analyst with Vector Casa de Bolsa in Mexico City.

www.forbes.com/sites/ivancastano/2012/01/24/carlos-slim-may-pour-14-billion-to-strengthen-latin-american-cell-phone-empire/

TrustLaw

Mexico recently received a poor bill of health with respect to fighting foreign bribery.

A recent OECD Working Group report assessed the implementation of Mexico’s commitments under the OECD Anti-Bribery Convention and highlighted “deficiencies” and “shortcomings” in implementing the Convention’s requirements.

While it acknowledged “some improvements to [Mexico’s] legislative framework for fighting bribery” and Mexico’s “efforts to promote awareness, prevention and detection of foreign bribery within the private sector,” it paints overall a picture of delay.

This was the OECD’s third such report for Mexico.

These results are significant as OECD Working Groups do not conduct such country reviews very often – only once every several years for each country. Moreover, Mexico’s results are in direct contrast to the progress that other countries such as Brazil and Turkey are currently making.

Mexico has significant influence in the regional and global economy, including in countries known for corruption risk. A more robust effort by Mexico to confront foreign bribery could have a significant and positive impact.

www.trust.org/trustlaw/blogs/anti-corruption-views/the-maana-syndrome-mexico-delays-implementing-the-oecd-anti-bribery-convention