A Little Crude, A Little Political

Well, after hitting peak oil production 40 years ahead of schedule, and falling into a rapid decline over the past six months, there is talk amongst the jefes de Mexico about the necessity of privatization for survival. The time span? Word on the street is two months, mas o menos, and then adios PEMEX (world's tenth largest oil producer) as we know it.

Technically, what has been polished off is the easily-accessible crude oil closest to the earth’s surface. Digging deeper, however, is expensive, so the most obvious, if not the most palatable recourse for the state, is to open up the bidding to foreign investors. Alas, as with anything in Mexico, there are two sides to the coin. In this case, the views of two presidents; yes, two. Like America’s Bush/Gore debacle of 2000, the Mexicans had their own almost equal split between Felipe Calderón, of the conservative PAN (Partido Acción Nacional) in the north and Andrés Manuel López Obrador of the uh, not so conservative Partido de la Revolución Democrática, or PRD in the south (Oaxaca, Chiapas, etc., read ‘the poorer states’). Rather than send one of them packing, it has worked out that Obrador essentially controls and governs the southern states. Needless to say, "las adelitas" (a group of woman who follow Obrador and carry a great deal of influence . . . named for las cucarachas de Poncho Villa—yes, our hero was quite the ladies' man and had many women supporters back cerca de 1810) are very strongly against the privatization of oil, seeing that the people of Mexico who need it the most will get even less of anything once control of the invaluable resource shifts to foreign hands. The PRD, painfully leftist, are said to be a little less corrupt and a little harder working than PAN, so they fight the good fight, but lack, of course, any real influence in congress.

Now, if one really wants to talk money and power in Mexico today, the only words to know are “Carlos Slim”. Carlos "Slim" Helu, originally from Lebanon, controls all telecommunication in Mexico, including Telmex and Movistar. In addition, he controls Banamex (banks) and the concessions for every Wal-mart in the country. On top of the telecom, the banks, the Wal-marts, and the other American stores, he also has his hand in the pharma industry and other consumables. If you drink a cup of coffee here, you are putting money straight into his pocket. Like Proctor and Gamble products around the world, practically everything one touches here in Mexico is somehow tied to Slim. He is reported to be the richest man in the world, making Bill Gates and Warren Buffet look like untouchables. His competition? Nada. Any student of economics need only to hop on a plane to see a big, thriving monopoly in front of their very eyes.

The best bit is that the people think he's great . . . a real philanthropist because he lives in Mexico City and pays taxes like a Mexican. Es muy loco, no?

Maybe if AT&T had been left to its own devices for a little while longer, the situation might have looked something like this? I just hope Slim decides that modern plumbing for all of Mexico is a viable investment. That space could be worth watching.