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Pastimes : Mexico -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (61)	4/13/2002 4:40:05 AM
From: CIMA	Respond to of 143

Mexico Poised for Growth - April 10, 2002 by Stephen S. Poloz, Vice-President and Chief Economist Canadians and Mexicans have a lot in common. Both eagerly wait for the U.S. rebound to trickle down to them. Both are preoccupied with their exchange rate against the U.S. dollar. And both have waiters that are reluctant to recommend the local wines, which are surprisingly good. In Mexico, there is widespread agreement that tremendous progress has been made in structural reform, but disagreement on the outlook. The optimists see an economy whose increased openness, strengthened financial system and credible policies have increased Mexico’s resilience and will lead to an immediate recovery in the wake of the U.S. upturn. The pessimists see an overvalued currency and a litany of structural impediments to economic growth – including weak infrastructure, cautious banks and rigid labour markets. Mexico’s broad policy parameters are almost ideal. The central bank is following an inflation target of 4.5% this year, 3% next year, and convergence with U.S. inflation after that. They have a floating exchange rate, which is crucial for achieving the inflation goal. Meanwhile, the fiscal authorities are demonstrating a level of commitment to deficit control that borders on religion. Increased policy credibility has produced an investment grade rating, boosting foreign investment and the value of the peso. The strong peso is fuelling concerns that Mexican competitiveness will erode and nip the upturn in the bud. But a strong currency has always been a symptom of economic success – foreign investment will give Mexico the capital it needs to keep increasing output, productivity, wages and exports all while moving to a higher-value economic mix. If a strong currency was the death knell for manufacturing companies, U.S. manufacturers would have disappeared long ago, and Canada’s manufacturers would have taken over the world. Mexico is headed for 2-2½% growth this year, and could double that next year. But the pessimists have a point – there are some headwinds to growth that need to be addressed to pave the way. Mexico needs a lot of infrastructure investment – roads, airports, energy capacity, electricity grids – to support its future growth process. More gas-fired power plants are planned, but much of the new gas will need to be imported until the energy sector is reformed. The legal system remains a big question mark for lenders, making banks reluctant to support small companies. Indeed, much of the growth in credit is coming from suppliers and retailers. And, Mexico’s labour market remains among the most rigid in the world. These are tough issues, resolution of which may have to wait until after next year’s congressional elections, because the main political parties are finding it difficult to develop a consensus on the needed reforms. The bottom line? Like all economies, Mexico’s shortcomings appear more compelling the closer one looks. But, from a global perspective, Mexico’s strengths clearly outweigh its weaknesses. Mexico will become a much bigger trading partner for Canada over the next couple of years. Stephen S. Poloz Vice-President and Chief Economist Export Development Canada spoloz@edc.ca The views expressed here are those of the author, and not necessarily of the Export Development Canada.

To: marcos who wrote (61)	5/7/2002 3:55:18 PM
From: CIMA	Read Replies (1) \| Respond to of 143

MEXICO CITY BRIEFING May 2002 News this month A widening gulf It was not so long ago that Cuba and Mexico were the best of friends. After the 1959 revolution that swept Fidel Castro to power in Cuba, Mexico was the only country in the region to support the new regime. For 43 years, both countries shared a common interest in gringo-bashing and one-party politics. But things have changed. The two governments are locked in a downward spiral of mutual recriminations that began at a United Nations development conference in Monterrey, Mexico in March. Mr Castro accuses President Vincente Fox of conspiring with America to deny him a platform at the meeting. And in April, Mr Fox announced that Mexico would back a resolution criticising Cuba at the annual meeting of the UN Human Rights Commission. See article: The Cuba test, April 18th 2002 Licensed madness No one could have predicted that issuing license plates to cars in Mexico city would cause such a fuss. Last July the Federal District Government decided to regulate city cars by requiring owners to get new number plates. But what seemed like a good idea has been foiled by the usual suspects: insufficient resources and limited funding. The deadline of April 30th came and went. One of the main problems is that only around 300,000 of the 1.5m applicants have received their new license plates (government officials are keeping actual figures under wraps). Postal workers are particularly unhappy about handling the plates, which weigh 7 kilos each. No wonder, then, that it can take several minutes on a busy street before spotting a car bearing the new plates. Take it to the bank Following on the heels of a bungled assault on a Federal District bank, which left two police officers dead, Marcelo Ebrard, Mexico city's police chief, has decided to close the nearly 20% of the city's estimated 1,300 banks that do not meet security standards. This move coincides with the 65th Annual Banking Convention. Mr Ebrard accuses the Mexican Bankers’ Association (ABM) of security negligence, while the ABM says that the government hasn't fulfilled its responsibilities (the policing of banks currently falls under the government's jurisdiction). In a move backed by Mayor Lopez Obrador, Mr Ebrard is trying to push through legislation that would make banks, rather than the police force, responsible for bank security. Goodbye to a diva Known as la Doña (“the Lady”), Maria Felix, a legendary screen siren, died in April in her Mexico city home. It was her 88th birthday. Notorious for her beauty and her stream of famous ex-husbands (such as Agustin Lara, a composer, and Alex Berger, a French magnate, to name a few), Felix was a shining star in Mexican cinema. Her appeal spread to Latin America and Europe, though she always kept her distance from Hollywood. A procession brought her remains directly to the National Arts Palace, where friends, loved ones and leaders of state came to pay tribute (President Vicente Fox even praised her for aiding Mexico’s democratisation process). She was later buried in the Capitol’s French Pantheon cemetery, beside her only son, Enrique Alvarez Felix, who died without children in 1996. Most of Felix's fortune (including the rights to nearly fifty films) was bequeathed to the Mexican public. Cultural Calendar May 2002 Kirov Ballet May 8th-12th 2002 For the second year running, St Petersburg’s renowned Kirov Ballet troupe will grace Mexico city with full length performances of both “Swan Lake” and “Don Quixote”. The Kirov company dancers are known for their elegant interpretations of classic works. In 2001, more than 45,000 ballet fans descended on the Kirov’s seven functions here. In a country with nearly 500 ballet academies, 150 of which are in the capital, this company's popularity is hardly surprising. Expect tickets to sell out quickly. Auditorio Nacional, Paseo de la Reforma 50. Tel: +52 (55) 5280-9250. More from the Mexico city cultural calendar