S&P lowers Mexico’s sovereign credit outlook to negative

Highrises dominate Mexico City’s downtown landscape. (Ronaldo Schemidt/AFP/Getty Images)
Highrises dominate Mexico City’s downtown landscape. (Ronaldo Schemidt/AFP/Getty Images)


Standard & Poor’s on Tuesday lowered Mexico’s sovereign credit outlook to negative from stable, adding that a downgrade could happen in the next two years if the government’s debt or interest burden deteriorated.

Mexico’s peso slumped on the news, to trade nearly 1 percent lower against the dollar, while the IPC stock index fell more than 1 percent.

Standard & Poor’s said in a statement it affirmed Mexico’s ‘BBB+/A2’ foreign currency and ‘A/A1’ local currency sovereign credit ratings but added it saw “an at least one-in-three possibility of a downgrade over the next 24 months.”

The ratings agency said it expects government debt to rise to an average of 4 percent of gross domestic product per year over the next three years.

It expects GDP to expand by just over 2 percent in 2016, and roughly 3 percent between 2017 and 2019, if growth in the neighboring United States remains stable.

“Low GDP growth will make it difficult for the government to meet its ambitious target of stabilizing and gradually reducing its debt as a share of GDP over the next three years,” it said.


Mexico taking control of “La Bestia” migrant train

AP – The Mexican government says it is taking control of a battered rail line long used by Central American migrants heading north toward the United States. Fewer migrants have been hopping the freight cars on the line since government agents began raiding the trains in 2014.


Bidding for 12 exploration blocks approved

WSJ – Mexican oil regulators on Tuesday approved a bidding process for a dozen exploration and production areas containing mostly natural gas, the sixth auction since the country opened the industry to private and foreign investment. The auction includes 12 onshore blocks, nine in the Burgos basin of northern Mexico and three in the south of the country.


Mexico to offer four road maintenance tenders

World Highways – Mexico will set up four road maintenance tenders worth nearly US$827 million in total as public-private partnerships in 2017. Contracts will cover the road projects Piramides-Tulancingo-Puebla, Matehuala-Saltillo, Saltillo-Monterrey-Nuevo Laredo and Texcoco-Zacatepec.


Despite fears, Mexico’s manufacturing boom is lifting U.S. workers

Workers assemble the Forte sedan on the floor of a Kia plant in Nuevo Leon, which began production in May. (Natalie Kitroeff / Los Angeles Times)
Workers assemble the Forte sedan on the floor of a Kia plant in Nuevo Leon, which began production in May. (Natalie Kitroeff / Los Angeles Times)

By Natalie Kitroeff / Wall Street Journal

Enrique Zarate, 19, had spent just a year in college when he landed an apprenticeship at a new BMW facility in San Luis Potosí, Mexico. If he performs well, in a year he’ll win a well-paid position, with benefits, working with robots at the company’s newest plant.

“When you start with such little experience, and get such a big salary, it’s unbelievable,” says Zarate, whose father is a taxi driver and whose mother is a housewife.

That sounds like an exported version of the American dream, circa 1965, in places such as Dearborn, Mich., or Marysville, Ohio. Indeed, the influx of those types of jobs to Mexico has enraged Ford employees in Wayne, Mich., and the makers of furnaces in Indianapolis.

But Mexico’s manufacturing surge has not been an unalloyed disaster for American workers.

U.S. manufacturing production, it turns out, is rising as well. Factory output has nearly reached its all-time high this year, and is up more than 30% since 2009.

The bottom line, say economists and company executives, is that what’s good for Mexico’s factory workers is good for some U.S. workers too.


Child labor is widespread in Mexico

Child labor 2Al Jazeera – “Education for everyone” has been a popular slogan since the Mexican revolution over 100 years ago. But according to the Organisation for Economic Co-operation and Development, eight out of 100 Mexican children who enroll in elementary school, do not show up for classes.

A study released by UNESCO last year says the children who don’t attend school are mostly working. The report reveals that at least 21 percent of all Mexican youth between the ages of seven and 14 drop out of school – that’s around 651,000 children.


Mexico-U.S. air deal could boost competition

Reuters – An air transport deal between Mexico and the United States that aims to boost competition in the passenger and freight sectors came into force on Sunday. The deal would open new passenger routes for airlines to fly between the countries and allow for an unlimited number of flights. It also opens up the air freight market to more competition.


What anti-corruption law means for business

WSJ – A series of anti-corruption measures approved by Mexico will require companies to show what policies and procedures they had in place at the time alleged wrongdoing occurred, and those controls could be considered when penalties are being weighed against businesses that break the rules, said an attorney. The revised laws will bring Mexico into line with anti-corruption laws in other countries, said Luis Enrique Graham, a partner in the Mexico City office of law firm Hogan Lovells.


Report says Pena Nieto plagiarized part of thesis

TeleSur – Mexican President Enrique Peña Nieto plagiarized nearly a third of his 1991 undergraduate law thesis, according to a report published Sunday by one of Mexico’s leading investigative journalists, Carmen Aristegui.

Published on the website Aristegui Noticias, the report titled, “From Plagiarist to President,” details how 197 of the 682 paragraphs in the dissertation were found to be plagiarized—an overall 28.9 percent of the 200-page thesis.