VZCZCXRO6246
RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #3311/01 3271818
ZNR UUUUU ZZH
R 231818Z NOV 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 9130
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
UNCLAS SECTION 01 OF 05 MEXICO 003311
SIPDIS
SENSITIVE
STATE FOR WHA/MEX, WHA/EPSC
STATE FOR EEB
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GWORD
TREASURY FOR IA
ENERGY FOR WARD, LOCKWOOD AND DAVIS
E.O. 12958: N/A
TAGS: ECON EFIN ETRD ENRG ELTN EAIR PGOV SENV MX
SUBJECT: Mexico Economic Weekly - November 20
1. (U) The Mexico Economic Weekly supplements reporting
from Mission Mexico Consulates and the Embassy Mexico
Economic Section to provide a sense of ongoing trends.
Please contact Adam Shub (shubam@state.gov) or Sigrid
Emrich (emrichs@state.gov) for questions or comments
about this report.
2. (U) Table of Contents:
ECONOMY AND FINANCE:
--------------------
INFONAVIT MORTGAGE ORIGINATION DOWN 20 PERCENT IN 2009 -
Ciudad Juarez
PROPOSED 2010 JALISCO BUDGET: MORE FEDERAL MONEY, PUBLIC
TRANSPORTATION INVESTMENT - Guadalajara
THOUSANDS ATTEND MONTERREY JOB FAIR - Monterrey
REAL ESTATE AND CONSTRUCTION MARKET IN YUCATAN REMAINS
WEAK - Merida
JALISCO CREATES JOBS IN OCTOBER - Guadalajara
TRADE AND INVESTMENT:
---------------------
MATAMOROS MAQUILA MEMBERSHIP HOLDING STEADY; EMPLOYMENT
NUMBERS UP IN LAST QUARTER - Matamoros
JOHNSON CONTROLS EYES NEUVO LEON FOR HYBRID BATTERY PLANT
- Monterrey
DEMAND DOWN, PRICES UP AS CHRISTMAS TREE SALES BEGIN -
Monterrey
TEQUILA INDUSTRY PURSUES FURTHER PROTECTIONS -
Guadalajara
ENERGY:
-------
TORREON ANNOUNCES US INVESTMENT IN BIOENERGY PLANT -
Monterrey
PEMEX: PETROLEUM PRODUCTION TO STABILIZE AT 2.5 MILLION
BARRELS A DAY - Mexico City
LABOR:
------
SME ACTIVITIES - AFTER THE NATIONAL PROTEST - Mexico City
ENVIRONMENT, SCIENCE TECHNOLOGY AND HEALTH:
-------------------------------------------
2ND MEETING OF GLOBE STUDENTS AND TEACHERS IN MEXICO CITY
- Mexico City
NEW TECHNOLOGY AND SCIENCE PARK OPENS IN CIUDAD VICTORIA
- Matamoros
-------------------
ECONOMY AND FINANCE
-------------------
3. (U) INFONAVIT MORTGAGE ORIGINATION DOWN 20 PERCENT IN
2009: Mexico's largest mortgage lender, Infonavit,
reported a 20 percent year-over-year decrease in mortgage
originations in Chihuahua this year to November (24,000
loans Jan-Nov 2009; 31,000 loans Jan-Nov 2008).
Infonavit's Chihuahua state delegate attributed the
decline to the state's high unemployment rate, which at
9.7 percent is the highest of any Mexican state.
MEXICO 00003311 002 OF 005
Infonavit specializes in lending to lower-income segments
of the population employed in the formal sector of the
economy. Workers in the hard-hit maquila sector in
Ciudad Juarez comprise the largest percentage of the
state's 216,000 borrowers. Infonavit said non-performing
loans in the state were equivalent to 5.45 percent of its
portfolio as of the end of October (11,000 non-performing
loans), compared to 4.9 percent nationally. (Ciudad
Juarez)
4. (U) PROPOSED 2010 JALISCO BUDGET: MORE FEDERAL MONEY,
PUBLIC TRANSPORTATION INVESTMENT: Last minute
negotiations from Jalisco federal legislators earmarked
USD $770 million to the state. Over a quarter of the
federal earmarks heading to the University of
Guadalajara, but much of the rest is headed to specific
infrastructure programs including a major dam and water
project as well as highway improvements. Of note, the
state government is moving ahead with its larger public
transportation projects. The second line of
Guadalajara's rapid-transit bus system Macrobus, started
earlier this fall, will receive USD $21 million from
state funds and received the Secretary of the
Environment's authorization earlier this week to continue
with its construction. The project will also replace a
main thoroughfare through the historic center with the
bus line and an enlarged pedestrian plaza. In addition,
USD $11.5 million from the federal budget is earmarked
for a third line of the light-rail Tren Ligero.
Theoretically destined towards a feasibility project, its
ultimate use and the fate of the project rest on debates
between a PAN state government administration that
supports Macrob#s and incoming PRI mayors that prefer
Tren Ligero. (Guadalajara)
5. (U) THOUSANDS ATTEND MONTERREY JOB FAIR: Over 7,000
people attended the first state government organized job
fair in Monterrey, where over 150 companies accepted
applications for nearly 6,000 open positions. Although
Neuvo Leon generated more jobs than any other Mexican
state in the two most recent quarters, the state still
has a deficit of over 52,000 jobs compared to 2008.
Positions advertised at the fair included 900
professional positions and 100 for disabled people.
(Monterrey)
6. (U) REAL ESTATE AND CONSTRUCTION MARKET IN YUCATAN
REMAINS WEAK: While the tourist industry remains
optimistic based on reservation numbers for the upcoming
holiday season, real estate and construction continue to
lag. In Yucatan, both of these sectors have had a strong
influence from American buyers. One contact in the real
estate business in Merida reported that his twenty-agent
firm, which largely concentrates on American buyers, has
not closed a contract in four months. Contacts here
attribute the continued slowdown to the fact that most
U.S. buyers borrow against other real estate assets in
order to purchase in Mexico, and U.S. banks are still
reluctant to make those loans. (Merida)
7. (U) JALISCO CREATES JOBS IN OCTOBER: Jalisco's
Secretary of Economic Promotion announced that Jalisco
created 12,437 jobs in October, the strongest such job
creation of any Mexican state. While rural jobs have
historically led Jalisco to job growth in October, prior
to last month only 8,409 jobs had been created for the
entire year. The Secretary took the opportunity to
announce that the government's efforts had succeeded in
its economic promotion packages and that the statistics
signal that Jalisco is emerging from recession.
(Guadalajara)
--------------------
TRADE AND INVESTMENT
---------------------
8. (U) MATAMOROS MAQUILA MEMBERSHIP HOLDING STEADY;
EMPLOYMENT NUMBERS UP IN LAST QUARTER: The Matamoros
Maquila association membership has remained steady with
97 maquilas in the last year according to Roberto Mattus,
director of the association. However, member companies
MEXICO 00003311 003 OF 005
reported a decrease of 12,209 employees (from 47,829
employees to 35,620) between March 31, 2008, and June 30,
2009. For the quarter ending September 30, members
reported an increase in hiring for a total of 1,452 new
positions across all 97 members. (Matamoros)
9. (U) JOHNSON CONTROLS EYES NEUVO LEON FOR HYBRID
BATTERY PLANT: Johnson Controls, the Milwaukee-based
manufacturer of automotive interiors and batteries, is
viewing Nuevo Leon as a potential site for a hybrid
battery manufacturing facility. Vice President Mauricio
Leon, head of the company's Building Efficiency unit in
Mexico, told media that as the company continues to
recover from the economic crisis and looks to position
itself for expected growth in global demand for hybrid
batteries, it is exploring further investment
opportunities in Nuevo Leon. Johnson Controls recently
opened a conventional battery plant in the Monterrey
suburb of Garcia. (Monterrey)
10. (U) DEMAND DOWN, PRICES UP AS CHRISTMAS TREE SALES
BEGIN: Christmas tree importer Cesar Marroquin estimated
that tree imports from the U. S. and Canada are down
about 50% from last year. He blames lower demand on the
economic crisis and a 20% increase in the customs duty on
pine trees. (Monterrey)
11. (U) TEQUILA INDUSTRY PURSUES FURTHER PROTECTIONS:
To celebrate its 15th anniversary the Tequila Regulatory
Authority (CRT for its Spanish acronym) hosted an
international summit for greater cooperation among
products derived from specific regions of origin.
Signing bilateral agreements with regulators of brandy,
red wine and coffee, among others, the CRT worked towards
creating globalized standards to protect the quality and
origin of such products through collaboration and
training. The CRT proposed creating a regulatory body to
protect "typical" products in Latin America such as
Peruvian pisco, Colombian coffee, and Panamanian hats by
referring to Geneva-based NGO, OriGIn, that covers 85
products including European wines. In addition, the CRT
signed an accord with the Public Health Laboratory of
Madrid to verify the authenticity of suspected false
tequila in Europe. (Guadalajara)
------
ENERGY
------
12. (U) TORREON ANNOUNCES US INVESTMENT IN BIOENERGY
PLANT: Pedro Vazquez Rodriguez, Vice President of the
Chamber of Farming and Agriculture of Torreon, Coahuila
(est population 1 million), announced that an unnamed
American company, backed by investment from the
Netherlands and Colombia, would be building a bioenergy
plant in the city, which will eventually provide 600 new
jobs. The local partner will be Mexico City based Ferro
Fuls S.A. de C.V. The US$ 200 million facility, which
should open within a year, will generate 30 MW/day of
electricity from sorghum, corn and cow manure and also
produce around 387 million liters of ethanol annually.
Upon reaching full production capacity, the plant will
consume about 50 percent of the manure produced annually
in Torreon, about 4 million tons. The site for the
facility contains space for construction of three more
plants should the initial one prove successful.
(Monterrey)
13. (U) PEMEX: PETROLEUM PRODUCTION TO STABILIZE AT 2.5
MILLION BARRELS A DAY: The Exploration and Production
Division (PEP) of PEMEX estimates that Mexico's petroleum
production will stabilize at 2.5 million barrels a day
for the next five years. In the medium to long term,
production forecasts vary significantly. A key factor
according to energy experts is how quickly PEMEX and the
Energy Secretariat can implement the new contract models
foreseen under the 2008 energy reform, and how successful
these models will be in attracting international oil
companies to participate in Mexico. According to the
production forecast provided to the Finance Secretariat,
production could fall to 2.4 million barrels or reach 2.9
MEXICO 00003311 004 OF 005
billion barrels a day by 2015. (Mexico City)
-----
LABOR
-----
14. (U) SME ACTIVITIES - AFTER THE NATIONAL PROTEST:
Martin Esparza and the remaining ex-workers of the
Sindicato Mexicano de Electricistas (SME) continue to
struggle against the Mexican government shut-down of Luz
y Fuerza del Centro (LFC). After the November 11
national protest, the rate of people accepting severance
picked up so dramatically that the GOM decided to open
the centers on Saturday, November 14, to accommodate all
the workers. By the close of business, slightly more
than 60% of workers had been processed. Esparza denies
the numbers the GOM is claiming and insists that the
workers are standing strong. On November 17, five full
weeks after the shut-down, the SME published information
on what it claims various GOM secretariats owe in unpaid
electrical utility bills; the GOM has denied any debts to
LFC and has published its latest bill receipts. On
November 19 the SME announced that it would begin hunger
strikes between November 20 and November 23 in five
locations around Mexico City: in the Zocalo, outside the
Chamber of Deputies and the Supreme Court, in front of
the Comision Federal de Electricidad museum, and at the
intersection of Paseo de la Reforma and Boulevar de
Insurgentes, two very important arteries in the capital.
There will be around ten people fasting in each location,
and they will be regularly attended by doctors. At this
point, SME leadership will not join the fast. As
predicted by many Laboff contacts and other observers,
the SME protests will likely continue to shrink and
become simultaneously more dramatic and disruptive.
(Mexico City)
------------------------------------------
ENVIRONMENT, SCIENCE TECHNOLOGY AND HEALTH
------------------------------------------
15. (U) 2ND MEETING OF GLOBE STUDENTS AND TEACHERS IN
MEXICO CITY: Mexico City's Technical Secondary Schools
System (DGEST) celebrated their second GLOBE meeting
November 18-19 with the participation of 250 students
from 13 public secondary schools. Mexico joined the
GLOBE program in 1996 and DGEST celebrated ten years of
participation in the GLOBE program. The GLOBE program is
U.S.-developed and disseminated globally and engages
students to do practical scientific fieldwork, including
taking measurements of climate indicators, and send their
measurements in to a central database for inclusion with
other statistics from other countries that are available
to environmental scientists around the world. Students
presented their GLOBE activities and took advantage of
this opportunity to discuss climate change and other
environmental challenges in their surroundings.
Officials from the Secretariat of Environment and Natural
Resources (SEMARNAT), the Secretariat of Public Education
and the US Embassy enjoyed GLOBE students' presentations
and witnessed the positive impact of GLOBE in student
education. (Mexico City)
16. (U) NEW TECHNOLOGY AND SCIENCE PARK OPENS IN CIUDAD
VICTORIA: TECNOTAM Science and Technology Park, which
seeks to bring together the private, public, and academic
sectors in order to develop a competitive workforce with
capabilities in engineering and information technologies
(IT), opened November 11th. Park tenants include:
CINVESTAV, a center for research and advanced studies
specializing in IT and computer science, granting
Master's and PhD's; the Universidad Autonoma de
Tamaulipas, specializing in technology education to
support the IT sector; TiT@M, the Tamaulipas Information
Technology cluster; an IT business incubator; and SVAM
International, a global IT services provider with offices
in the U.S., India, and Mexico. Academic institutions on
site are already working with companies such as SVAM to
tailor their academic offerings, and will offer
internships on site. (Matamoros)
MEXICO 00003311 005 OF 005
PASCUAL