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08/16/2013

Changes to Mexico's oil industry

This is a quite good video from The Economist on President Enrique Pena Nieto's plan to open up the energy industry to foreign investment. The piece captures some of the nuance of the proposal, though perhaps not the theatricality of the presentation on Monday and Tuesday, in which Pena Nieto constantly mentioned former President Lazaro Cardenas, who nationalized the oil industry in Mexico in 1938.

I was speaking yesterday to Juan Pardinas, the director of the Mexican Institute for Competitiveness, and the matter of how Pena Nieto invoked Cardenas repeatedly came up. Pena Nieto has said he simply wants to readopt language that Cardenas approved to article 27 of the constitution, which his government claims would allow private companies to develop the energy sector if it was deemed in the national interest.

Let me transcribe a bit of what Pardinas said:

"They have done an interesting strategy given that they used the figure of Lazaro Cardenas, which is one of the founding fathers of national identity, national sovereignty, national pride through the nationalization of oil. I found it quite paradoxical that we are looking back to a legal framework of 1940 in order to modernize the energy sector of Mexico in the 21st century.

"It doesn't appeal too much to common sense but if we see the limits of political possibility in Mexico, we have learned -- all Mexicans through our textbooks -- how Lazaro Cardenas (took) the Mexican oil from the interests of international capitalists. The government is using the legal framework that Cardenas proposed, which was much more flexible than the one we have now, and (using) it as leverage to pull the reform...

"It was the only way that they could announce it without facing a riot from certain parts of the (political) left..."

"I was telling a joke to a friend. It's like you're going to start an internet business and you ask advice from your great, great, great grandfather. You know, 'what should I do?' Now, with the competitiveness of the 21st century and you are asking someone born in the 19th century. That's how we resolve the challenges we have."

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pink schnoid

still hard to look at PN and take him seriously and this is a great example....Pemex is a boondoggle, a cradle of absolute corruption...

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Tim

This blog is written by Tim Johnson, the Mexico bureau chief for McClatchy Newspapers.

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