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Tuesday, March 17, 2015

Forbes- Mexican Crisis


Nathaniel Parish FlanneryContributor
I write about Latin American companies and political risk.full bio →
Opinions expressed by Forbes Contributors are their own.
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Firing Of Dissident Journalist Carmen Aristegui Bad News For Mexico

Mexican radio station MVS fired popular journalist and talk show host Carmen Aristegui and her assistants Daniel Lizarraga and Irving Huerta, the reporting team responsible for exposing scandals that hurt the reputation of Mexico’s president Enrique Peña Nieto. The exposure of the “casa blanca” scandal relating to the purchase of a multimillion dollar home from a contractor connected to a billion dollar infrastructure project became one of the major news stories of 2014. Now, with the firings at MVS, Aristegui has become the story. The station claims that Aristegui violated is code of ethics by using its logo in connection to her scandal-exposing platform MexicoLeaks. In a statement, the company explained “ we sincerely regret the termination of our working relationship with Carmen Aristegui” and added that the decision was made because Aristegui had “comprised the name of the business” with her actions relating to MexicoLeaks.
The reaction on Twitter has been swift. Political analyst Alejandro Hope tweeted “I don’t listen to Carmen Aristegui. Her style can irritate. But we have to defend her presence on the radio. Without plurality we all lose.” Mexican political activist Denise Dresser tweeted that “the crime of Carmen Aristegui was to try to give Mexican citizens through #MexicoLeaks a platform to denounce corruption anonymously. Since she was going to receive tons of complaints they shut her up.” From a business perspective, the decision is difficult to understand. Over the last two decades Aristegui has turned herself into one of Mexico’s most famous journalists and has used her radio show to amass a huge following. Mexican journalist Enrique Acevedo tweeted “Firing Carmen Aristegui to protect the brand means they don’t understand the client…unless the client lives in Los Pinos [Mexico's presidential residence.]” Journalist Jan-Albert Hootsentweeted “Many Mexican Twitter media users are now tweeting that they will stop listening to  due to firing of Carmen .”
Mexican journalist Carmen Aristegui was fired shortly after exposing a major corruption scandal in Mexico. Photo by N. Parish Flannery. Instagram: @nathanielparish
Mexican journalist Carmen Aristegui was fired shortly after exposing a major corruption scandal in Mexico. Photo by N. Parish Flannery. Instagram: @nathanielparish
Although Cablevision does have a presence in Mexico, Mexican broadcast TV is dominated by Televisa and TV Azteca. Aristegui is a unique voice within the world of Mexican media. Roberto Remes, the director of the Fundacion Ciudad Humana tweeted “apart from the journalistic work of Carmen Aristegui, it’s terrible that in Mexico liberty of expression is so vulnerable.”

Nathaniel Parish FlanneryContributor
I write about Latin American companies and political risk.full bio →
Opinions expressed by Forbes Contributors are their own.
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Can Mexico Stamp Out Corruption?

Over the past few months Mexico has seen its reputation suffer due to a string of scandals relating to corruption, insider politics, and state-involvement in human rights abuses. In a recent article for the World Politics Review I explained, “The latest examples of graft and perceived conflicts of interest help explain why Mexico still lags behind Chile, Colombia and Brazil, three of Latin America’s most developed economies, in Transparency International’s 2014 Corruption Perception index, and ranks 79th out of 99 in the World Justice Project’s international rule of law index.” 
Mexico’s President Enrique Peña Nieto has even acknowledged, “Today there is, without doubt, a sensation of incredulity and distrust . . . there has been a loss of confidence and this has sown suspicion and doubt.”
In my World Politics Review article I explained, “On paper, Mexico has a well-established track record of dedication to the rule of law and law and order. In practice, though, many observers say that Mexican elites have long consolidated political power into a nominally democratic system that preserves space for serious conflicts of interest. Political dissidents have for decades accused the PRI of abandoning its original progressive agenda and allowing cozy relationships between business and political elites to define the unofficial rules of civic life.” 
Mexico is home to 16 billionaires including Carlos Slim and German Larrea Mota but more than 10 million of the country’s residents live in extreme poverty.
A young women yells  at police at a protest in Mexico City during a march on December 1, 2014. Photo by N. Parish Flannery. Instagram: @nathanielparish
A young women yells at police at a protest in Mexico City during a march on December 1, 2014. Photo by N. Parish Flannery. Instagram: @nathanielparish
With high levels of poverty and inequality and disappointing economic growth in 2013 and 2014, Mexico’s public is growing impatient with ongoing revelations about political corruption and insider deals. After reports emerged that Peña Nieto and his wife live in a house built by a contracter who has done multi-millionaire dollar deals with the government, Mexico’s president moved to establish an internal review board to assess potential conflicts of interest. Critics say that a corruption watchdog that is part of the presidencial administration will never be effective.
Alexandra Zapata, a public policy expert from the Mexican Institute for Competitiveness, a think tank, told me that she thinks it is “ridiculous that a subordinate of the president is tasked with finding wrong-doing by his boss. We think it should have been an independent committee that does the investigation.”
Corruption issues have also snared companies such as Wal-MartCitiBank of America, and HSBC, who have seen their reputations damaged because of issues of bribery, fraud, and money laundering in Mexico. Wal-Mart has acknowledged that its probe into bribery in Mexico cost shareholders more than $439 million over the course of two years. In 2012 HSBC agreed to pay a $1.9 billion payment to settle money laundering charges in Mexico. 

Nathaniel Parish FlanneryContributor
I write about Latin American companies and political risk.full bio →
Opinions expressed by Forbes Contributors are their own.
LEADERSHIP  2,831 views

Will Arrest of Zeta Cartel Capo Omar Treviño Morales Improve Security In Northern Mexico?

Omar Treviño Morales, the alleged leader of Mexico’s notoriously violent Zetas criminal organization was captured in the border state of Nuevo Leon in northern Mexico early in the morning on March 4, 2015. The cartel leader used the alias Z-42 and was the brother of former Zetas boss Miguel Angel Treviño Morales. The Treviño brothers are known for ordering one of Mexico’s drugwar’s worst atrocities, the systematic kidnapping and forced disappearance of more than 300 people from a small ranch town in the northern state of Coahuila. The brothers also earned infamy for laundering millions of dollars in horse races in the U.S. and for adopting brutal tactics such as dismembering enemies while they were still alive. The Treviños also helped the Zetas also earn a reputation for being willing to battle police and soldiers and gain visibility through arson attacks on Ford and Nissan dealerships, a casino, and an Autozone store.
Improving security in northern Mexico is important, both to improve the quality of life for residents, and to help pave the way for the entrance of new investment in oil and gas. In addition to capturing a number of senior Zetas leaders, police in the state of Nuevo Leon have succeeded in drastically reducing crime rates in Monterrey, Mexico’s wealthiest city, an industrial hub that is home to production facilities operated by Whirlpool, Caterpillar and John Deere. Security problems continue to be a major cause for concern in another former Zetas stronghold, the state of Tamaulipas.
Fuerza Civil police officers have helped improve security in Monterrey, Mexico. Photo by N. Parish Flannery. Instagram: @nathanielparish
Fuerza Civil police officers have helped improve security in Monterrey, Mexico. Photo by N. Parish Flannery. Instagram: @nathanielparish
As I have previously argued, arresting drug cartel capos isn’t enough, Mexico also needs to do more to emulate the crime fighting success story in Nuevo Leon and invest more in effective local police forces. In Nuevo Leon, the creation of a highly professional police force, the Fuerza Civil, has helped the reduce the number homicides from 1,236 in 2012 to 135 in 2015. The arrest of drug kingpins may be important, but it needs to be part of a broader, locally-focused security strategy. Total, the number of homicides recorded by Mexico’s National Statistics Institute fell from more than 22,000 in 2012 to just over 15,000 in 2014. Overall, Mexico’s murder rate is falling but more needs to be done, particularly in the states of Guerrero, Michoacan, and Tamaulipas. 

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