Mexico, May 2nd 2007

In the last week or so, some interesting developments.

First, Mexicans are not exactly thrilled about the privatization of Social Security that La Gordita has planned. If you were planning to travel from the DF to Cuernavaca, better bring a mule, because the highways are otherwise occupied.

(Image from El Universal)

The key one has to do with the economy.

No sooner had 2007 begun than Banco de Mexico’s board began to realize that its fairly benign view of inflation was running up against yet another supply shock, this time involving corn and tortilla prices…..

By February, Banco de Mexico began to realize that the surge at the beginning of the year was likely to keep headline inflation higher for longer. …

Then came the April 27 surprise move to hike interest rates just one day after posting a deflationary first half of April report (-0.21%) and on the same day that the US announced that first quarter GDP was the weakest in four years. Of course, the first half of April deflation reading was largely the result of a few states moving forward a program of lower summer electricity prices and an early drop in packaged tourism prices. But still, core (ex-electricity) was tamed and core services (ex-tourism) was showing a slowing. What then caused Banco de Mexico to act? What constituted the “additional deterioration to the balance of risks” that the central bank had warned in March could trigger action?

Two events appeared to have triggered Banco de Mexico’s April move: falling market interest rates and the spillover of higher grain prices into consumer food products. …

Accordingly, we are revising our forecast to incorporate at least one additional move, bringing interest rates to 7.5% (up from our previous forecast of 7.0% by year-end).

Oaxaca remains tense:

[J]ust as this beloved colonial city is getting back on its feet, there is concern it could again plunge into disorder.

The 60,000-strong teachers union marched through the city Tuesday as part of International Labor Day observances…

[Following the police repression of last year,] Oaxaca City was filthy and barely recognizable. Tourism plummeted, leaving hotels and restaurants nearly vacant. The city lost an estimated US$800 million in revenue, according to the hotel association. …Things came to a head in late October with the shooting death of U.S. journalist-activist Bradley Will, one of about 20 people human rights groups say were killed in violence related to demonstrations here and in outlying areas.

…

CALDERÓN´S ROLE

For months, city police carrying over-sized batons have been deployed in the vicinity of the town square.

Mobile fences, which can be used to block crowds, have been strategically stockpiled.

…

Sitting in the town square and listening to marimba music, resident Eligio Paz did not sound like a typical retiree.

“If we raise our voice, they will crush us,” said Paz, who supports dissent. “We stay quiet, so they don´t throw us in jail.”

Only, as usual, Mexico News (for which one can blame The Miami Herald) is lying. It’s a lot tenser than that, according to Nancy Davies:

The bureaucrats did what the APPO didn’t: On Wednesday, April 25 they broke the police barricades and entered the Oaxaca zócalo.

More than 2,000 delegates from the Sindicato de Burócratas, which I interpret to mean the office workers and administrators’ union, in a rage over the new Social Security law for government employees, shoved aside the barricades and the police guarding the zócalo. They strung their anti-ISSTE reform banners on the kiosko, and denounced their union leader Joel Castillo. They repudiated him for trying to impose agreement to the pension law which will affect all government employees…

The union marchers headed to the zócalo where the police (only the handful normally present when URO is not expecting the APPO) without arms and riot gear, tried to put the iron mesh barricades into place. The police were shoved aside and the barricades were knocked flat.

Isn’t it just amazing how Mexico News manages to miss such events?

(Via SdP) Mexico’s Al Gore, Andres Manuel Lopez Obrador, has been doing townhall meetings in Veracruz and Baja California to let people know that if Calderon tries to alter the basic laws to privatize PEMEX, there will be a meeting to discuss this in Mexico City. Like the one last summer, with a million people or more.

I don’t know how any real American could support the Soviet-style system to the south. The boycott list includes Sabritas, Bimbo, Pepsi, Televisa, TV Azteca , Milenio, Banamex , Coca-Cola , Wal-Mart , M&M’s , Kimberly Clark , Burger King , Office Depot, Chevy, Kellogg’s, Kit-Kat’s, and even Dannon.