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Cabinet Changes in Mexico Bring Hope for Improving Investment Conditions
President Andrés Manuel López Obrador of Mexico reshuffled his cabinet early in December in what several analysts consider a move that will improve relations with the private sector and potential foreign investors.
The new officials, the analysts suggested, are likely also to work more closely with their U.S. counterparts in the upcoming administration of President Biden.
The key change in the reshuffle was the removal of Alfonso “Poncho” Romo, a prominent member of the elite from Monterrey, the nation’s private-sector stronghold.
Two years ago, Romo was appointed to head the Office of the Presidency as a private sector go-between. His tenure got off on the wrong foot with the cancellation of the under-construction airport in Mexico City and never fully recovered. This year, the pandemic has slammed the country’s economy and trust between the public and private sectors has fallen to its worst in years.
After a farewell meeting with López Obrador, the president praised “Poncho” and said that the door at the National Palace would always be open to him.
From Romo, the hot potato of investment czar now shifts to the new Economy Minister, Tatiana Clouthier, who was the head of López Obrador’s campaign and was key to his being elected.
A few days after Romo’s resigning, Clouthier replaced Graciela Marquez as head of the ministry. Clouthier is well regarded in Mexico and is part of a well-known political family. In 1988, her late father ran for president with the center-right and business-friendly Partido Acción Nacional.
Valeria Moy, a well-informed commentator for daily El Universal, said the ministry needed changes and “required a profile with more knowledge of trade issues, industrial matters and the development of markets.”
Moy takes a “wait and see” approach to the appointment of Clouthier, but noted that she clearly has political acumen.
“The president is moving the pieces in what amounts to be a chess game,” she added.
The legendary figure of her father should help to break the ice in the ministry’s meetings with the private sector. In the upper echelons of Mexico’s corporate world, family lineage is revered.
Roberto González Amador, business editor of La Jornada, told NGI’s Mexico GPI that “we haven’t seen such a huge economic collapse in most people’s lifetimes. In all, Clouthier has been handed a burden without precedent. In a very different context, of course, she resolved what appeared to be major conflicts of interest in what turned out to be the hugely successful López Obrador election campaign. And her father was revered by millions of people in the country’s small business community.”
But what about the energy sector within the business community? The energy minister, Rocío Nahle, has held an iron grip on policy, analyst Arturo Carranza told NGI’s Mexico GPI. But the relationship between the president and Clouthier could possibly lead to proposals for change, he added. “The president had some very dyed-in-the-wool ideas during the campaign. But in open discussions with Tatiana he reversed the direction that was taken. The result, of course, was extremely successful.”
The announcement of a second public-private infrastructure plan in Mexico will also buoy the spirits of investors. Energy projects fueled by natural gas dominated the list of projects.
Worth a total of 228 billion pesos, or around $11 billion, the second package includes 29 projects in energy, telecommunications, roads and water. It is part of a broader infrastructure plan aimed at jumpstarting the sinking economy.
“It’s very important that the public and private sectors and civil society are coming together to push economic growth in our country, creating jobs and wellbeing,” President López Obrador said when announcing the plan. “This will help us get out of the economic crisis soon.”
Mexico should return to pre-pandemic economic levels in the first quarter of 2021, the president boasted.
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