Joho the Blog » mexico

June 28, 2012

[aspen] US- Mexico relations

Walter Isaacson is interviewing Ricardo Salinas (Mexicon media billionaire) and Richard Haass (president of the Council on Foreign Relations) about our relationship with Mexico.

NOTE: Live-blogging. Getting things wrong. Missing points. Omitting key information. Introducing artificial choppiness. Over-emphasizing small matters. Paraphrasing badly. Not running a spellpchecker. Mangling other people’s ideas and words. You are warned, people.

Richard H. says that the media only covers drugs and guns when it comes to Mexico, but that’s a very small part of the problem. In fact, Mexico is a major economic success story. Indeed, he says, the Americas are an amazing success story: growing economies, democratic, at peace, overall. Ricardo says that his Mexican company employs 75,000, but they have 15,000 unfilled positions; Americans may emigrate to Mexico to get jobs.

Ricardo says that demand is driving the Mexican drug trade. It has become violent in Mexico, he says, because the president has said, as a policy, “Get them all.” The victims are cartel members — over 50,000 dead. Richard H. says the drug trade is more peaceful in the US because the police aren’t as corrupt. Ricardo says Mexico should adopt the US policy: raise the professionalism of the police, and focus on the violence; let the rest slip for now.

Richard H. asks if MExico will open itself up to foreign oil investors, because Mexico is an under-producer. Ricardo says the national govt gets about 30% of its revenues from oil. There will be foreign investment in extracting the oil, he says, but not in the oil territories themselves. There’s also solar, wind, and geothermal energy in Mexico.

The student movement, inspired by left wing leaders, says the media are closed to them, but that’s untrue, says Ricardo (media mogul). The media are balanced. Calderon’s electoral reform of 2007 gave political parties 3 mins of air time every hour of radio and TV for free. That’s “theft,” Ricardo says.

After the upcoming election, it’s 5 months of waiting. Also, presidents are limited to one 6-year term. Might either of these change? Ricardo says that the five month waiting period should be changed. But there’s no political possibility of changing the one-term rule.

Nicholas Burns: Presidents Bush and Obama have put a lot of their eggs into Brazil as the primary political partner in the Americas. Does that underestimate Mexico? Mexico is a regional power.

Ricardo: Mexico is such a friend that they don’t even take us into consideration. The relationship with Mexico is really good. Huge amounts of investment. The traffic in goods and services is huge. Everything is working fine. Richard H. says US-Mexican trade is 5x US-Brazilian trade. Brazil will probably double its oil output over the next few years, but they have problems with corruption. Ricardo says that Mexico has not been active in external affairs because it’s been distracted by its drug mafia. Richard H.: Our lack of a regional trade policy has been a mistake. We haven’t gone beyond NAFTA the ways that we should. NAFTA is one of the reasons Mexico’s economy survived the meltdown. And the next strategic area of partnership will be energy. Put together Canada, US, and Mexico and you get 18M barrels of oil a day.

Cuba? Ricardo: the poor people there are in a terrible situation. And the American blockade — an absurd thing — is the main reason. Castro would have been out a long time ago.

Q: What was your prior election — so close — like for osmeone in the private sector?

Ricardo: The election was so close because the PRI put forward a terrible candidate. Andres Manuel Lopez Obrador, the Democratic REvolution Party candidate, did a good job as mayor of Mexico City, and would do fine as president.

Q: Landscape for emerging entrepreneurs?

Ricardo: A year ago we started a project for women entrepreneurs. In one year, we’re up to 900,000 women. Entrepreneurs tend to go underground because it’s too hard to be legal and pay taxes and social security. It’s complicated to set up a new business. Forms, taxes. We should simplify business for small corporations. Richard H. adds that it’s become simpler over the past few years.

Ricardo: People say we charge too much. But it’s for small amounts. 80% of $100 is only $80.

WI: That’s a lot.

Ricardo: For small loans, the transaction costs are high.

WI: ou need to fix that to get more entrepreneurship.

Ricardo: You fix it by making more credit available.

Ricardo: The govt has not made a level playing field for telecom companies. And how are we going to bridge the digital divide except via mobile?

Q: How’s the tourism business been affected?

Ricardo: You’re missing something good and you should go. Nothing bad will happen to you. They’re not going after tourists. Best golf in the world.

Q: Why is it still under travel advisory from the State Dept?

Haas: Some areas are more dangerous, e.g. Monterey. The State Dept. is conservative.

Ricardo: Mexico is a very large country. It’s totally different in different places.

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