The power of national symbols
Petroleos Mexicanos (Pemex) is an important bit of national pride and a symbol of Mexico's revolution and independence. However, like many parastatals and huge corporations, it's not as "agile" as smaller businesses in adapting to changing economic, technological, and environmental conditions. Presidents Fox and Calderón have urged constitutional changes to allow private and even foreign companies to enter the oil industry in Mexico. Reactions of most Mexican politicians have not been kind to those proposals. (Tinkering with national symbols isn't easy. In the USA, think about reactions to proposals that the Star Spangled Banner be replaced with something less militaristic.) Besides there are all those jobs to "hand out."
Business Week magazine puts a good face on the presidential proposals, but acknowledges that the issue is far from resolved.
Mexico may let foreign cos. extract oil
"Mexico's ruling party wants to allow the state oil monopoly to contract with private and foreign companies to extract reserves from the Gulf of Mexico...
"The proposal comes amid a fierce debate over how to reform the country's energy sector and boost Pemex's production.
"Mexico's constitution bans most private and foreign involvement in the sector, but in practice, the government has eased the restrictions slightly in the past 15 years...
"Pemex lacks the equipment and expertise to develop deep-water oil fields...
"Pemex's production has been steadily falling, dropping 5.3 percent to an average 3.1 million barrels a day in 2007 -- primarily due to plunging output at its biggest-yielding field, Cantarell.
"But opponents say the government is manipulating figures to create a false sense of crisis.
"Former presidential candidate Andres Manuel Lopez Obrador of the leftist Democratic Revolution Party has said that opening Pemex to private investment would threaten national sovereignty, and he has accused Calderón's administration of seeking to privatize the entire oil industry -- a charge the president denies..."
See also: Celebrations, protests, and questions
Labels: economics, Mexico, political culture, politics
posted by Ken Wedding @ 8:25 AM
1 Comments:
Update
State Oil Industry’s Future Sets Off Tussle in Mexico
"A bitter debate over what to do about Mexico’s ailing state oil monopoly has dominated national politics here in recent weeks, tapping strong emotions on both sides and resurrecting the political fortunes of the leftist leader who narrowly lost the 2006 presidential election...
"For decades Pemex has been a cash cow for the government. It has milked the company’s profits to pay for social programs, operating expenses and government salaries, allowing it to keep taxes low and providing presidents with enough largess to keep the political peace. About 40 percent of the federal budget comes from the oil company..."
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