You don’t have to bite my head off

At least Mexican politicians have their priorities straight.  As the news out of Mexico gets increasingly worse, the leaders of the three main political parties are spending time thinking of creepy gifts for senators.  What do you get the senator who has everything?  A piece of white chocolate with his or her face on it, of course.  Who wouldn’t want to bite into their own head this holiday season (although it could be fun to bite the head of your senatorial nemesis).

The gift givers assured the public that this lovely gift was paid for with personal funds, although I still don’t think that makes the story any more reassuring.  Here are some photos of this wonderful gift:

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Another Latin American President digs himself a hole

The Mexican government was not amused by the Uruguayan President’s recent remarks.  In the Latin American edition of Foreign Affairs magazine, President Mujica said of Mexico: “It gives one the sense, seen from a distance, that this is a kind of failed state, in which public authorities have completely lost control.” In case there was any doubt, he went on to say that Mexico was infested or rotten with corruption.  Yikes, those are the kind of sentiments that should probably not be expressed publicly.  It seems like in this instance at least, Mujica hired the same PR people as EPN.

Mexico asked the Uruguayan ambassador for an explanation of this insult, and Mujica went into damage control.  His explanation is ironically so over the top though that it is not very convincing. The President said:

“The crude news that reaches us about the consequences of drug trafficking in countries like Guatemala, Honduras and now Mexico shout to us a lesson of true pain that could show us our own futures. They are not, nor will be, these nations, innocuous or failed states…” [note: the word innocuous seems comically odd in this context; I checked the original and it doesn’t seem to just be a translation error]

The Mexicans should tell the Uruguayans to butt out, that “when it comes to hole digging, we got this.”

Mexican news round-up

Sadly, Mexico went from making headlines for its bold economic reforms to making the news for horrific violence and corruption.  Here’s a round up of some good recent articles on the situation:

1. Lingering Question from Mexico Student Massacre: Why?

2. The Disappeared of Iguala, Mexico: A Crime Foretold

3. There Are More than 43 Missing People in Guerrero and Mexico’s Military May Have a Role

4. Mexico’s first lady to sell her stake in mansion at centre of scandal

5. EPN warns that protests may destabilize the country (in Spanish)

6. México malo, México bueno

The Great and Powerful Oz, starring EPN

Francisco Goldman’s recent articles in the New Yorker have had the best, most nuanced, coverage of Mexico in the English language. In the latest, he highlights the words of Alejandro Solalinde, a Catholic priest and human-rights activist.  He notes that the Father “first came to national and international attention about a decade ago when he was running a shelter in a part of Oaxaca on the Central American migrants’ trail, waging what was at first nearly a one-man battle to draw attention to the migrants’ plight: the murders, kidnappings, extortions, and rapes they suffer at the hands of cartels, corrupt police, treacherous coyotes and so many others on their treks across Mexico to the U.S. border.”

He goes on to argue that “Few are better informed than Father Solalinde about what is going on among the various civic, human-rights, local-autonomy, and self-defense groups throughout Mexico. He has become a rare, inspirational figure in the ongoing scandal.”

I would second that.  EPN and his crew seem callously tone-deaf to the situation, and Solalinde’s words speak to the heart of the matter.  Goldman writes:

“The United States has been relating to a mask. The government is a monster with a mask, and behind the mask is this little man. You’ve been negotiating with a mask, that’s what I told the U.S. Ambassador when he phoned me.”

“These were Mexico’s poorest people, who were used to imagining the President as someone unimaginably great. They discovered that our President is small. The little man of Los Pinos, small and weak. The myth of the strong government is falling. People see that our system is corrupt, decadent, weak. People are losing their fear of describing things as they are.”

Well said, Father, well said.

Sittin’ on top of the PRI

Man oh man, Mexico has not changed much in the 15 years since me and Mrs. Angus lived there. The PRI is back in power and the PRI is still the PRI.

Pretty-boy EPN’s telecom reforms went through way too easily for there not to have been a deal with Slim Shady, and indeed, we can see that deal starting to take shape in the amorphous form of a huge infrastructure boondoggle, namely a multi-billion dollar airport project.

As we noted last week, Slim’s yerno won the design contract, and now word comes that Slim will be bidding on the construction contract as well.

“Slim’s interest in the project was addressed on Tuesday by Luís Zarate, the President of Mexico’s Chamber of the Construction Industry. Zarate said that nine Mexican construction firms, including Grupo Ica, a private Mexican infrastructure construction company, and Grupo Carso, a global conglomerate company owned by Slim, have formed a committee to bid for the airport, according to Reuters.”

This is classic Mexican style “competition”. Get all interested parties in a room, divide up the spoils, and present a single bid. Meet the new boss, same as the old boss.

The airport design sounds interesting to say the least. Here’s Sir Norman Foster describing it:

“It doesn’t have a conventional roof. It doesn’t have vertical walls. It doesn’t have columns in the normal sense.”

No roof? Crooked walls? “unconventional” columns? Hell, maybe I should bid!

Is that the PRI in your pocket or are you just happy to see me?

For those of you wondering why Carlos Slim didn’t fight harder about EPN’s telecom reforms, here’s some tantalizing information.

Slim’s yerno, (Slim Shady Jr.?) has won the design contract for a $9.5 billion airport project from the Mexican government.

Thats dollars, not pesos, people.

Now sure, Slim’s not getting the whole $9.5 billion (yet). Design costs are like 5-10 percent so it’s a mere $425-$950 million. And they have a beard as well, Sir Norman Fraser, who’ll need paid off.

Still it’s a pretty good start for the ever resourceful Slim, who has had the PRI in his pocket since the early 1990s.

 

“You must be this tall to ride this ride” – Mexican edition

Tom Vogl has an interesting piece coming out in the Journal of Development Economics entitled “Height, Skills, and Labor Market Outcomes in Mexico.” Click here for the NBER working paper version.

Vogl studies about 4,000 men* in Mexico aged 25-65 and finds that “each centimeter of height earns these men 2 percent higher wages, a premium similar to those observed in other devel- oping countries but more than twice those observed in most wealthy countries.”

So what accounts for such a large height premium?
1. He shows that cognitive ability (as measured by test scores) can only explain a limited amount of the height premium.
2. About one half of the premium is due to the education level and occupational choices of taller men.  Said men tend to specialize more in jobs that require cognitive ability and less in ones that rely on physical strength.

He also has some interesting results on indigenous populations, which tend to be shorter and have lower wages on average in Mexico.  If you are interested in the subject or in Mexico, it’s definitely worth checking out the whole article.

*Note that he doesn’t report the results for women but writes that they are broadly similar.

 

Political Business Cycles in Mexico

Kevin and I have long been interested in political business cycles in developing countries.  We have a 2000 JLE piece called Political Cycles in Non-Traditional Settings, Theory and Evidence for Mexico, where we find a significant postelection economic collapse but no preelection boom, and that elections create, rather than resolve, inflation uncertainty.

So it was interesting to see the WSJ yesterday remarking on the same phenomena in Mexico in an article called “Mexico’s Curse of Economic Slowdown.” Anthony Harrup puts Mexico’s weak economic growth in 2013 in political context, noting that the first year of a new presidency often brings with it disappointing economic performances.

He lists GDP growth rates in the first and last years of presidential terms.  Presidents can only serve one term in Mexico so a transition always involves a change of leadership.

1994, last year of Carlos Salinas de Gortari 4.7%
1995, first year of Ernesto Zedillo -5.8%

2000, last year of Ernesto Zedillo 5.3%
2001, first Year of Vicente Fox -0.6%

2006, last year of Vicente Fox 5.0%
2007, first year of Felipe Calderón 3.1%

2012, last year of Felipe Calderón 3.8%
2013, first year of Enrique Peña Nieto 1.2%*

* Private consensus estimate from Bank of Mexico survey
Source: Inegi, Bank of Mexico

I didn’t know there was a term for this phenomena, but apparently the economist Jonathan Heath has named it the “sexenio curse” (presidents serve a 6 year term, or sexenio).  It was curious to find such a pronounced political business cycle in a one-party system, but the Mexican political system was unique in creating the incentives for one.  It’s interesting that the phenomena lives on in a democratic Mexico.  Perhaps we should update our paper and see if this new PBC is statistically significant…

 

 

 

Take a walk on the wild side

San Diego is giving new meaning to the idea of cross-border cooperation.  After 20 years of discussion and planning, the airport in SD is now constructing a 525 foot pedestrian bridge to the Tijuana airport, allowing ticketed passengers to pay a small fee and clear customs directly in the airport rather than the usual route of hiring a taxi to take you to the usual border crossing (note: taxi drivers are not happy with this project).

The idea first came about when the South County Economic Development Council surveyed the Tijuana airport parking lot and found that many US citizens were using the Tijuana airport as a cross-border commuter lot.  The council originally proposed a terminal where planes could taxi on both sides of the border, but that apparently was too problematic. The pedestrian bridge project is being funded by private investors from both the US and Mexico, although they still need to figure out how to cover costs like paying for customs agents.

The benefits to Mexico are debatable.  The mayor is actually on record saying that travelers can now bypass Tijuana completely and go direct to San Diego (it seems the opposite argument would also be true, but perhaps that’s not what most travelers are looking for).

The director of the Tijuana airport, Guillermo Villalba, disagrees, arguing that there are numerous benefits to the plan, namely that it will send “a message that the border region is prosperous and safe, will attract more business to the border region, will put Tijuana on the world map, attracting investment, tourism and economic development that will benefit not only Tijuana but the state and the entire border region.”  

I’m not sure I agree with the director about the message this project is sending with regards to TJ, but I do agree that it will give the city a lot of publicity given the uniqueness of the plan.  It will be interesting to see how well the bridge works and what kind of effects it will have on both cities.

US concerns about Mexican migration & security

Alfredo Corchado has a good article in the Dallas Morning News about newly declassified US government documents about the security and migration situation in Mexico.  Here are a couple of the most interesting tidbits:

“US officials expressed concern that the Calderón government’s actions were leading to “unintended consequences,” noting that the capture or killing of several top cartel leaders “has allowed less experienced and undisciplined personnel to fill the leadership vacuum, contributing to the spike of drug-related murders.”

The documents provide some new information and raise troubling questions of why more was not done then by either government to take preemptive action that might have prevented the killing of vulnerable migrants, whose only fault was traveling through a perilous region in hopes for a better life in the U.S. In fact, far from trying to help migrants, authorities, especially immigration officials, tried to cover up the extent of the carnage.”