...The Energy Reform Background: 2006. PEMEX becomes the largest company in Mexico and one of the world's largest oil companies, both in terms of assets and income. Gasoline launches Premium Ultra Low Sulfur. 2007. On July 10 a terrorist attack occurs in Queretaro and Guanajuato pipelines attributed to the Popular Revolutionary Army. On September 10 another attack occurs in Veracruz. No one claimed responsibility. In October, there was an accident on the Kab-121 platform in which killed 18 offshore oil workers due to the failure of the life safety systems, on entering a cold front with winds of 130 kilometers per hour. The accident spilled 422 barrels of light oil and natural gas. Working on the reconfiguration of the Lazaro Cardenas refinery, the oldest national system. It promotes the recovery of the domestic petrochemical industry and aims to increase gas production to meet domestic market demand and thus reduce imports. 2008. The Congress discussed the issue of energy reform, not so far been submitted officially some initiative. -Privatization Debate: The debate on reforming energy (electricity and oil) was restarted because the PRI, in its national convention resumed on energy issues. What is important for large companies is to be able to enter the business of finding oil, exploration and replace reserves produced. Looking for this business because service contracts do not allow them to manage these reserves in their portfolios. But this will never happen...
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...presidency is the paramount institution of the entire Mexican political system. The presidency has been labeled as the “six year monarchy” because of the unchecked power that has stayed in office. Much of the presidential power derives from the president’s direct and unchallenged control over both the state apparatus and the ruling political party, the PRI. Presidents are directly elected by a simple majority of registered voters in the thirty-one states and the Federal District. Like in the United States, Mexico holds the titles of Chief of State, Head of Government, and Commander in Chief of the armed forces. The presidential candidates must be at least thirty-five years of age on Election Day and must be Mexican citizens by birth including the offspring. This clause was amended in 1994 to make the children of naturalized citizens eligible for the presidency. Effective in the year of 1999, In order to become eligible for the presidency, a candidate must reside legally in Mexico during the year prior to the election. The candidate cannot have held a cabinet post or a governorship, nor have been on active military duty during the six months prior to the election. Priests and ministers of religious denominations are barred from holding public office also. Legislative The legislative branch of the Mexican government consists of a bicameral congress, which is divided into an upper chamber, or Senate, and lower chamber, of Chamber of Deputies. Like it is in the United States, both...
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...Mexico -"Patria, Libertad, Trabajo y Cultura" -"Patria, Libertad, Trabajo y Cultura", this translates to "Country, Liberty, Work and Culture" and is the motto found on the country's official seal. Mexico is a country where opportunities are being developed. The country is located at the most southern tip of North America, and is well known around the world for its neighbors to the north, the United States. The country has a rich history of ancient pre Colombian civilizations and many distinctive cultural traditions. The Mayas, Olmec’s, and the Toltec’s all came before the great Aztec empire, who was a nation of great wealth. In 1519 thru 1521 Mexico was conquered and ruled by the Spanish conquistador Hernando Cortes. Mexico was the colonized by Spain for the next three hundred years. Mexico won their independence from Spain in 1821 after many bloody revolts and uprisings. Mexico has a population of (2010 est.) 112,468,855 (growth rate: 1.1%); birth rate: 19. /1000; infant mortality rate17.8/1000; life expectancy rate. Solar Photovoltaic Solutions is an American company based in Atlanta Georgia. The proposition of this report will be to export our industry leading solar panels into the Mexican market. This report will provide evidence that there is a business opportunity for our company to assist Mexico with viable alternative energy solutions that are being underserved...
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...Mexico Nowadays, there are several companies from USA that consider Mexico as one of the best places to invest Latin America, not only for being near USA, but also because the Mexican government has made major changes in order to keep the economy stable in the last years. Also, If we add that Mexico offers other advantages such as; the free trade agreements with USA, low labor cost (compared with USA), and the increase in the number of middle class, we might think that Mexico is one of the best countries to install this company. However, we have to consider that the corruption is still an issue, several companies take a long time to initiate activities due to bureaucracy, and the toll roads are expensive. From the economic point of view, we can consider that Mexico has grown steadily in recent years (around 3-4% per year), with a similar growth projection for the following year. Even though, Mexico has a moderately consolidate political party systems, and a low political consensus (this could not allow a successful prospects for economic reforms from Packenham model), it is projected that Mexico continues its economic growth, led by its president Enrique Peña Nieto. We must also consider that Mexico has a low probability of currency devaluation, because it has an autonomous central bank, flexible interest rate, among other factors, allowing considering Mexico as a business platform. Second, the power bargaining acquires relevant importance in the negotiation between this company...
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...Mexico Needed Strategies to Retain & Attract Maquiladoras In the past, challenges on the Mexican side for competitiveness in retaining the maquiladoras in the country have included high business taxes, pricey highway tolls and the need for energy reforms (Canas, Coronado & Gilmer, 2004). Also, the cost of labor and services and international competition have thwarted the ability of Mexico to retain maquilas. In this paper we see how Mexico’s ways of doing business, how the government and other factors influence the retention or attractiveness of maquilas and what Mexico, as a country, could do/continue to do in order to place itself in a more competitive place. In the early 2000s, the Mexican maquiladora industry slowed, losing in about sixteen months almost 278,000 jobs. Being that maquilas make up a major part of trade between Mexico and the United States, this was a huge hinder for the Mexican economy. According to a speaker at a 2003 conference pertaining to the downturn of maquilas in Mexico, there ae about 26,000 United States companies that “supply maquiladoras with machinery, raw materials and components” (Canas, Coronado & Gilmer, 2004). The effect that maquiladoras have had on areas such as the border have been positive, as laborers from the interior of Mexico migrate to areas in search of these job opportunities (Beck, 2012). However, as I mention below, violence in the northern area of Mexico has also hurt the availability of skilled workers, as they seek safety...
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...Michael Crowley argues that Mexico is the most “under-appreciated problem facing the new US administration” under Obama’s second term since it has been compared to Pakistan of being at risk of “rapid and sudden collapse”. However, he assumes that it has been always this way and the United States has done nothing to help the Mexican authorities on the drug-related issue. In fact, the casualties in this war rose by 100,000 deaths but it was President Obama who introduced to US Congress the Merida Initiative, in which the US government provides financial and technical aid to the Mexican government. The results of this program can be perceived in the amount of criminals and in how the Mexican armed forces have improved their weapons and intelligence services. That said, America is concerned about Mexico but they also know that their neighbor is not as worrying as Pakistan, or even Iraq and Afghanistan. However, he applauses the recent achieved reforms of President Peña Nieto and finds him a promising leader to change the current narrative of Mexico by opening the oil and telecommunications sectors, improving the education and labor system, and modifying the tax and criminal code in just the first two years under his administration. In fact, this has made of Mexico the “favorite nation” to invest for the Wall Street community and even their government bonds were rated as A- by Moody’s, making Mexico the only Latin American economy with such grade. Unquestionably, this is...
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...a diversified and growing economy that plays a significant role in the global economy. Brazil is the largest economic power in Latin America and the world’s 10thlargest economy. * The country is open to and encourages foreign investment by implementing investor-friendly policies. The country is one of the world’s leading destinations for foreign direct investment. * Brazil is the fourth biggest producer of gold in the world. It has abundant reserves of natural resources and many regions are still unexplored which make the country an attractive location for mine development. * Brazil has an established Civil Law system and a modern mining legislation. * The country is a green energy leader, renewable energy supplying nearly 45% of the country’s energy needs. * Expanding into Brazil will allow Newmont to reinforce its presence in South America where its competitors are already well established. PESTEL Analysis Political Type: Federative republic (with 26 states and a federal district) Independence: September 7, 1822. Constitution: Promulgated October 5, 1988. Branches: Executive–president (chief of state and head of government popularly elected to no more than two 4-year terms). Legislative–Senate (81 members popularly elected to staggered 8-year terms), Chamber of Deputies (513 members popularly elected to 4-year terms). Judicial–Supreme Federal Tribunal (11 lifetime positions appointed by the president). Political parties: Workers’...
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...relationship with the United States (the key foreign element in modern Mexican life); and the persistence of regional issues of great influence on national progress. * The most important trend in recent years, and one seemingly well set to continue, is the anchoring of democracy in Mexico. While Mexico has been a formal democracy since Independence, in reality the nation has been plagued by essentially a series of caudillos, representatives of local and regional power arrangements that have been successful at reaching national levels. * As the PRI’s dominance waned in the wake of growing calls for real democracy and an opening of the nation to the world in the 1970s, eighties and nineties, there was a true awakening of democratic forces in the country. New political forces such as the PAN (Partido Acción Nacional or National Action Party – centre-right) and the PDR (Partido de la Revolución Democrática or Party of the Democratic Revolution – centre-left) increasingly challenged the PRI and eventually, in 2000, this led to the electoral victory of the PAN under President Vicente Fox. This was the first time a non-PRI candidate had won a presidential election since 1929. * The trend in Mexico has been an opening of the state and the political system, undeniable improvements in the respect for the human rights of the population at large, and improved transparency and accountability. But those improvements, almost all observers would agree, have a long way to go before...
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...Noble Energy Inc. (NYSE: NBL) is an independent energy company engaged in worldwide oil and gas exploration and was one of the first independent producers to explore in the Gulf of Mexico which has helped form the industry and its own success. Noble Energy was founded by Llyod Noble after he purchased a drilling rig with Arthur Olson in 1921 when oil was struck on his family farm. After acquiring 38 rigs in 1930 Noble and Olson decided to dissolve their partnership and form separate companies. In 1932, Lloyd Noble formed another company, naming it Samedan Oil Corporation in tribute to his three children Sam, Ed and Ann to expand into oil production to go hand and hand the drilling side of the industry. That company is known today as Noble Energy Inc. Upon Lloyd Noble’s death in 1950 the companies interest was transferred to a charitable foundation he had formed several years before his death, the Samuel Roberts Noble Foundation, where both companies operated as wholly owned subsidiaries. The relationship between Noble Drilling and Samedan strengthened when the Noble Foundation purchased an oil field trucking company named B.F. Walker, Inc., this provided Noble Foundation with a fleet of vehicles to move the drilling and production equipment utilized by Noble Drilling and Samedan. In 1969, the U.S. congress passed a tax reform provision that stipulated that charitable foundation could no longer own more than 20 percent of any corporation or commercial enterprise. This led to the...
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...mentioned , the euro zone was in recession DUE queue persist in some countries of the ESA region's sovereign debt problems and the fragility of their financial systems. : In addition , US economic growth was moderate , while the productive activity of various Emerging economies slowed , BECAUSE of both the slowdown in the industrialized countries and the slowdown in their internal demands. Mexico has a 2.2 percent average tariff rate. It has reduced tariff and non-tariff barriers unilaterally and through trade agreements like the Pacific Alliance. A law passed in December 2013 will partially open the energy sector to foreign investment. The financial sector is relatively small and lacks dynamism. Mexico needs to build a deeper and more accessible banking system. The OECD bemoaned Mexico’s record: it is alone among big emerging markets in suffering from sustained declines in the broadest measure of productivity during the past decade. In order for GDP growth to rise from its current potential of about 3% to a healthier 4%, the productivity trend must be reversed through structural reforms, it said. Mexico’s three main political parties, which have created a pact to promote more than 100 such changes, are aiming for 5%. How much is our country´s external debt? In which way does affect us and our economy? Our external debt is nearly of 443,012,459,000 At more than $14 trillion, America's debt might seem abstract, a number so large it's difficult to conceptualize. But if left...
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...Economics Final Graded Project The foreign currency chosen in the comparison against the U.S. Dollar is Mexican Peso (MXN). Introduction Mexico maintained a fixed exchange system of Peso to Dollar, since 1954. Mexico continued the use of such system even after collapse of Bretton Woods system in 1971 and world price shock in 1973. But due to escalating accumulated foreign debt, high inflation, large capital flight, and consequences of import substitution policy, the Peso has lost its value in 1976. After exploring with two rates – preferential rate and free market rate, Mexico established a floating rate policy in 1994. (Source: cuhk.edu.hk, 2013) In this new system, exchange rate is dictated by forces of demand and supply. The New system allows for little or no government involvement in fixing exchange rate. The exchange rate is impacted by macroeconomic aspects such as inflation, interest rate, GDP growth rate, budget deficit, general business environment, political stability etc. Mexico is one of the rapidly developing economies who has been able to keep inflation rates low. In 2012, average rate of inflation was just 3.6%, which is low as compared to other emerging markets. Real GDP growth in 2012 was 4%. Towards the end of 2012, Mexico had foreign currency and hold reserve of $163.6 billion, which was 18th highest in world. (CIA World Factbook, 2013). Foreign investment has played an important part on Mexico’s growing economy. The study of MXN against USD for a...
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...1. Mexico has always portrayed itself as one of the most pro-trade countries in the world. For instance, we have a free trade agreement with the United States and Canada, and another one with the European Union. We are active members of the WTO, the OECD, the APEC, the Pacific Alliance, and have also signed multiple bilateral agreements with many nations, most of them deemed “strategic”. Answer the next two questions in your own words: a. What are the potential costs and benefits of adopting such a free-trade strategy? The benefits when a country trades freely with other nations, consumers in that country have access to a wider variety of products. Some of these products may not otherwise be available if the consumers were limited to domestically manufactured goods. Or these products may be prohibitively expensive without a free trade arrangement. Also can boost the quality of life along the countries' shared border. This is the case with the Texas-Mexico border. After the creation of NAFTA, the area servicing the transfer of goods between the U.S. and Mexico experienced an economic boom. Five years after the free trade agreement, John Adams Jr., vice chairman of the Industry Sector Advisory Council, noted that this border area was growing economically at a faster rate than any other region on the planet. And the potential costs U.S. exports tend to create jobs in this country, but increases in imports tend to reduce jobs because the imports displace goods that...
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...Country Report; Mexico Eric D. Crivello 09/11/2011 City University of Seattle Abstract This paper is examining the decision of Guitar Center to begin opening franchises in the country of Mexico. The following pages examine the cultural, legal and economic issues that are associated with such a decision, detailing the current situation in Mexico and considerations that an organization such a Guitar Center must be aware of. Overall, the purpose of this paper is to provide the reader with some insight into the specific details that a firm like Guitar Center must take into consideration when deciding whether to move into Mexico or some other emerging market nation when planning on internationalizing their business operations. Country Report; Mexico The country of Mexico seems like a convenient choice for any firm considering nationalization. The United States shares a border with Mexico, so they are a lot closer than most other countries that could be considered. They are bound to the North American free trade agreement (NAFTA), which allows U.S. firms to export to Mexico or set up operations within their borders without penalty of high tariffs or other forms of import taxes when bringing products back to the U.S. They are also a democratic country and they have a stable government with a fairly strong economy. Yes, there are a lot of positives when considering expanding operations to Mexico, however there are also some negatives that firms must take into consideration...
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...Economics: * Increased intra-regional economic integration—ALBA, UNOSUR * Expanding economic partners outside the hemisphere—China * Security: * States worry about subordination to the “gringos.” Address problems themselves or with immediate neighbors, rely less on US— * LatinAmerican presidents joined together to defuse tension between Colombia and Ecuador/Venezuela after Colombia’s March 2008 raid inside Ecuador * South American Defense Council (2008)—aimed at institutionalizing and coordinating “defense and security policies in the region while preventing and mediating conflicts within South America * United States: * Economic dependence on the region on the rise— * 50% of US energy imports (largest share accounted for by any region) * 32% of all US FDI * Environment, illegal drug trade, and immigration have intensified interdependence * Economic stronghold at risk * China—offers a path independent of US and liberal economic orthodoxy * #1 trading partner for Brazil, Chile, and Peru * #2 trading partner for Argentina, Venezuela, and Cuba * 2000-2009—imports increased from $5 billion...
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...Emerging Market Economy: Mexico Introduction The success of any business will be greatly determined by the environment in which the operations are carried out. The legal, political and economic conditions of a given country are some of these determining factors, especially for emerging markets (Lassar, Haar, Montalvo and Hulser 135). Consequently, the management of any multinational corporation that intends to expand its operations into a given country must have an understanding of the economic and political factors in the country. While there are countries that have undergone industrialization and have developed markets, there are those that have not attained that state, but can be considered as emerging market economies. Mexico is one of these emerging markets given the economic stability that has been recorded since the late 1990s (Heyman 31). Mexico is a federal constitutional democracy in the continent of North America. The country contains thirty-one states and the federal district that houses the national government offices. The office of the president is currently held by Enrique Pena Nieto who came into power on December 1, 2012 as the 57th president. The country was colonized by Spain and gained her independence on September 27, 1821 after eleven years of war for independence. The Mexicans had affirmed themselves sovereign towards the end of 1810. This colonization made Spanish the most spoken language in the country and still remains at the top. Political...
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