Posts Tagged Economy
Analysts following Mexico’s economy slightly raised their expectations for the 2011 inflation rate and also increased their outlook for growth. The report, however, did not ask the central bank Banco de Mexico to raise interest rates soon due to the bank’s statement that the expected inflation rate remains within the range it can tolerate. Banco de Mexico Governor Agustin Carstens recently said crop failures from bad weather in Mexico are worrying policymakers, saying they might have to raise interest rates if this poisons inflation expectations. Northern Mexico recently suffered its coldest weather in two decades, wiping out a significant portion of the region’s corn and vegetable crops. The situation complicates the country’s enviable outlook of strong growth and low inflation, and investors increased bets the central bank will hike interest rates over the next year.
Carstens said he still expects inflation will stay “under control” in 2011 and that the bad weather would only have “a one-time effect and then fade,” meaning that higher prices caused by crop failures on their own are not the central concern. The danger is that higher food prices could lead workers, companies and economists to expect faster inflation rates down the road, Carstens said. That would be bad because higher inflation expectations tend to be self-fulfilling prophecies. Even with the inflation outlook relatively tame, growth forecasts have been steadily rising in recent months, largely because a tax plan in the United States has improved the outlook for growth in America, Mexico’s main trading partner.
Setting his legacy on the recovery of the Mexican economy, President Felipe Calderón’s new goal is to make Mexico one of the top five tourist destinations in the world by 2018. The tourist destination is highly profitable for the Latin country and is an industry that is worth 40 billion pesos a year and employs both directly and indirectly about 16 million people a year. Today, Calderón signed the Acuerdo Nacional del Turismo which provided the agenda for the various states to set the foundation Calderón’s goal in 2011.
The president declared 2011 as the Year of Tourism. Calderón wishes to diversify the Mexican tourist destinations by encouraging local governments and private investors to investigate ways to create new spots for tourism in addition to Mexico’s favorite beaches and archaeological sites. Calderón also wishes to create easier ways to provide access to visa services so that visiting Mexico is more accessible and secure.
San Diego Union Tribune: ATF, ICE catch heat on gunrunning – Report faults agencies for lack of coordination
A Government Accountability Office report yesterday criticized Immigration and Customs Enforcement and the Bureau of Alcohol, Tobacco, Firearms and Explosives for not working together to stop the flow of guns into Mexico.
In testimony prepared for a House subcommittee hearing, the GAO noted that the two agencies only recently stepped up their coordination with each other and with their Mexican counterparts to stop gunrunning along the border.
Rep. Eliot Engel, who chairs the subcommittee, said there should have been an anti-gunrunning strategy in place since October 2007, when the United States and Mexico agreed to the joint cartel-fighting Merida Initiative. The Merida Initiative aims to help Mexico acquire equipment for the drug battle and improve its police and judicial institutions.
Engel, D-N.Y., said in a statement that the firearms flowing illegally from the United States into Mexico have made the drug cartels’ jobs easier.
Michael Hoffman, spokesman for the ATF’s Los Angeles field division, which includes the California-Mexico border, said: “We are working on a daily basis with ICE. . . . Not only do we conduct joint investigations, but we share intelligence.”
Lauren Mack, a spokeswoman for ICE in San Diego, referred questions about the report to Department of Homeland Security headquarters in Washington. She said the ATF and ICE have been working together to combat smuggling and violence through the Border Security Task Force.
ICE spokeswoman Kelly Nantel said the two agencies pride themselves “on the strength of our relationships with law enforcement partners at every level and throughout the country.”
The GAO report released yesterday cited several examples of miscommunication between ICE and the ATF. The ATF did not tell ICE about a covert operation in which ATF agents delivered weapons across the border in an attempt to ferret out the Mexican organizations receiving illegal arms, the report said.
During another operation, an ICE agent unknowingly kept covert watch on the activities of an undercover ATF agent investigating a suspected trafficker, the report said.
TIJUANA, Mexico — On a recent weekday morning, Mexican soldiers carrying automatic weapons stood in a thin line along a vehicle checkpoint at the busy border crossing from this Baja California city into Otay Mesa, Calif.
While the military presence partly reflects the highly publicized drug violence in Tijuana and other Mexican border cities, it is commerce and the development of commercial real estate that has become a chief focus for business interests in the southernmost area of California.
In the last year, economic development officials and local elected leaders in San Diego County, Baja cities in Mexico and the sprawling Imperial Valley about 90 miles to the east have used a grant of $220,000 of government and private seed money for an initiative aimed at turning this area into a global powerhouse for commercial growth.
The idea is that a concerted effort will produce more manufacturing in Mexico, more research and development in San Diego and more alternative energy in Imperial County.
The area is formally known as the Cali Baja Bi-National Mega-Region, covering roughly 27,000 square miles. Late last month, Mayor Jerry Sanders of San Diego, Mayor Jorge Ramos of Tijuana and economic development leaders from both sides of the border announced a marketing effort that, so far, is aiming to attract companies from China and the Pacific Rim.
Central to the effort is a planned new border crossing, which may be completed as early as 2012, about two miles from the current Otay Mesa port of entry. To be known as Otay Mesa East, it is expected to become the most technologically advanced crossing in the region, with waits for commercial truck traffic of 20 minutes or less, compared with the current three or four hours.
Christina Luhn, director of the Cali Baja initiative for the San Diego Regional Economic Development Corporation, was at the border recently to meet representatives of Kyocera Mexicana in Tijuana, a unit of the Japanese company Kyocera, which manufactures solar panels and other clean-tech products that are shipped into the United States through Otay Mesa.
Dr. Luhn says she is hopeful that new cooperation between Mexico and the United States under the Obama administration will help to bring the drug cartels to heel and ease the task of convincing global companies that the region is right for them as a gateway to United States markets. “I tend to be more optimistic about this than I was even six months ago,” Dr. Luhn said.
John V. Bragg, vice president of Kearny Real Estate in the city of Otay Mesa, is also hopeful that development will help address problems that include an aging industrial base, the underuse of strategically located land, and environmental challenges.
His optimism is more than theoretical, he said. His company recently purchased 311 acres of land in the United States near where the new Otay Mesa East crossing is expected to be built.
Besides constructing the new crossing, which is now the subject of environmental impact studies, the California transportation department is preparing to build state highways to accommodate increased truck freight, Mr. Bragg noted.
That will give rise, he said, to the construction of several million square feet of warehousing and distribution facilities to handle goods made with low-cost labor in Mexico. In turn, retail stores and hotels are expected to be built nearby, as happened near the current Otay Mesa crossing.
“What we want to see now, as a developer and land owner, is infrastructure so that people can move better,” Mr. Bragg said. “We want to see the two countries get together to improve the border crossing and to build then whatever is appropriate.” He added that Kearny hoped to build two million to three million square feet of logistics-related facilities on its newly acquired property.
Mr. Bragg conceded that vacancy rates for existing warehouses in Otay Mesa were 17 to 20 percent, but he said that occupancy would increase as the transportation services are improved and more modern technology was introduced.
Ninety minutes to the east, just over the border from Calexico, Calif., at Mexicali, the capital of Baja California, infrastructure is already in place for the new 10,000-acre Silicon Border Science Park. Silicon Border announced last year that Q-Cells of Germany, a leading maker of solar panels, would build a new manufacturing facility there.
Mike Oliver, executive vice president for business development at Silicon Border, said Phase 1 infrastructure like roads, sewers, water treatment and recycling, lighting and fiber optic cables had been completed, with “tens of millions in initial financing from ING Clarion,” a division of ING, the Dutch bank. “By the time we are finished, we will have had investment of hundreds of millions of dollars,” he said. “We have room for about two dozen Q-Cells type facilities.”
Other new commercial developments are also on the drawing board in Calexico, said Danny Fitzgerald, director of the city’s enterprise zone. Projects under way include Calexico Mega Park, a 157-acre mixed-use retail, business and residential development by Westmount Properties; Calexico 111 Center, with more than 65 acres of commercial and 58 acres of industrial development; and Los Legos, some 500 acres that will include residential and commercial components.
Tim Kelley, president of the Imperial Valley Economic Development Corporation, said cooperative work between his organization, the San Diego County Economic Development Corporation and the city of Mexicali on the Silicon Border development helped the Cali Baja initiative.
Despite the economy, Mr. Kelley said, “we’re getting more expressions of interest than we have ever gotten before. The phone is ringing constantly.”