Pemex Loses Ground

As its steady decline continues, Mexico’s state-owned oil monopoly, Pemex, last year lost its position as the third largest crude producer in the world with an average daily output drop to 2.9 million barrels, from 3.7 million in 2007. Acording to a study undertaken by El Economista, Pemex is the only Top 10 state-owned or private oil company in the world that still needs to issue debt in the international markets to pay for taxes and fees the government changes for oil exports. Further, in the study that includes such state-owned companies as Venezuela’s PDVSA, Petrobras of Brazil and StatoilHydro, and private firms like BP, Shell, Chevron, ExxonMobil, Repsol and Marathon, Pemex was the only one in 2009 that paid out more taxes, 546.6 billion pesos, than its revenues, which totaled 500.5 billion, for a net shortfall of 46.1 billion pesos. The study evaluates some of the most relevant growth and development strategies implemented by the top oil companies, and explains how the failure to adopt some of those strategies has signified the continued Pemex downward spiral.

Government Cuts Spending

The secretariats of the Interior (Gobernación), Education and Foreign Relations will be the federal agencies most affected by the spending cuts approved by Congress March 16, under the National Spending Reduction Program that aims to slash 6% of this year’s federal budget to face the economic crisis. Some of the line items that will be most affected by the spending cuts include personal services (the hiring of outside consultants), transportation costs and food products (meals).

Central Bank Transparency Urged

Banco de México, the nation’s central bank, has been resisting an all-out transparency of its crucial monetary policy, but it may soon be forced to do so. This transparency could be achieved by the simple expedient of making public the minutes of the bank’s regular monthly board meetings, much like the Federal Reserve in Washington and other central banks have been doing for years. The Senate is analyzing the possibility of revamping the central bank’s organic law to publish those minutes regularly, to comply with a recent recommendation by the Bank of International Settlements. Banco de México chief Agustín Carstens could avoid the congressional hassle if he persuades the bank’s board to adopt the transparency measure on its own. Analysts have been saying for years that knowing the details of the bank’s internal meetings would help spur growth in the securities and money markets because there would less speculation on monetary policy issues.

More Latam Productivity Sought

Latin America as a region needs to dramatically change its support of micro-, small- and medium-sized companies so that the focus is not so much on job creation but on an increase in productivity, that is, doing more with less, according to Inter-American Development Bank economist Carmen Pagés-Serra. “What we’ve had in the past is an array of good intentions that have not delivered good results. Jobs have been created, but they have been low-quality jobs. We could double the region’s average per-capita income if we could propel the productivity of small companies to the same level as those in the medium range”, she said. In Latin America, she emphasized, there are no programs that support good ideas that lack capital or assets. Pagés-Serra presented her book, “The Age of Productivity”.

Broadband Network Auction Looms

As the nation forges ahead with plans to develop a high-speed broadband network, the Federal Competition Commission (CFC) will determine in the next several days if it approves the proposed partnership of operators Telefónica, Televisa and Megacable and its participation in the upcoming public auction to build a US$1 billion optic fiber network. According to the auction rules issued by the Communications and Transport Secretariat, any company or alliance that participates in the public auction must be sanction by the CFC.

Travel Promotion Effort Launched

In the face of an unprecedented fall in the travel industry’s numbers, attributed to last year’s influenza scare, the economic crisis, and the prevailing insecurity throughout the country, newly designated Tourism Secretary Gloria Guevara last Friday launched a new strategy to promote both foreign and domestic travel. In a work meeting with top industry representatives, Guevara said the strategy comprises three major target areas – achieve greater destination competitiveness, facilitate foreign and domestic investments in the travel sector, and more support to sustainable travel destinations. The secretary, however, did not give details on how media promotion efforts in other countries, suspended almost a year ago in the wake of the influenza crisis, are to be renewed.

Contact the editor: rmena@eleconomista.com.mx