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Liberalizing Mexican Oil Industry Will Attract $16 Billion in Investment

By: Elena Toledo - @NenaToledo - Dec 21, 2016, 5:01 pm
Mexico is planning to liberalize its state-controlled oil and gas sector, which has generated controversy (
Mexico is planning to liberalize its state-controlled oil and gas sector, which has generated controversy (Igas).

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Liberalizing Mexico’s enormous oil and gas industry could generate new investment of at least USD $16 billion, according to a study released by Mexican oil giant Petróleos Mexicanos (Pemex). The new investment, according to the study, would entail massive improvements in infrastructure and logistics, buoyed by the construction of new service stations, as well as ensuring security in the supply chain.

Guillermo Ignacio García Alcocer, president of the Energy Regulatory Commission (CRE), pointed out that under the new plan each region will have the flexibility to sell gas at a different price, with a ceiling that will be fixed by the Ministry of Finance during a transition period, until price controls are abolished under the proposed reforms.

These statements were made during a press conference on Tuesday, December 20. Once the market-friendly measure takes effect, gasoline prices will depend on logistical costs, as well as international exchange rates, and oil production in each region of Mexico.

According to the liberalization schedule, this process will begin on March 30, 2017, and conclude on December 30, 2017.

The president of the Energy Regulatory Commission also said that in 2017 the gasoline and diesel markets will transition from a single supplier model to one in which it operates under an open and competitive scheme in which several players will distribute fuel throughout Mexico.

Current Mexican president Enrique Pena Nieto campaigned on a pledge to open up state-owned Pemex to foreign investment and the possibility for joint ventures; things which were previously forbidden under Mexican law. Pemex has a long tradition in Mexico: it was founded in 1938 by then president Lazaro Cardenas, who formed the entity from the remnants of various expropriations of international companies.

Productivity has been in decline at Pemex since 2004, yet Pena Nieto faces significant domestic opposition, particularly from the Mexican left, to liberalizing the country’s investment policies. Pena Nieto has faced a number of problems during his administration, including drug-related violence, uncertainty over the future of free trade agreements, and a dramatic plunge in the value of the Mexican peso.

Source: El Universal

Elena Toledo Elena Toledo

Educator by trade, social-media apprentice, activist for a democratic Honduras, and free thinker. Follow her on Twitter @NenaToledo.

Argentina Will Study Special Courts, Rehabilition Program for Minor Drug Offenders

By: Raquel García - @venturaG79 - Dec 21, 2016, 3:55 pm
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EspañolArgentina's government is working on a bill to establish special drug courts for prosecuting minor offenses in cases in which the accused seems to be affected by drug dependency. The government's intention is to develop tools for rehabilitation under conditions controlled by the Justice Department, similar to operations in the United States and Chile. The proposal, to be addressed in next year's National Congress, is being worked on by the Ministries of Justice and Security, together with the Secretary of Programming for the Prevention of Drug Addiction and the Fight Against Drug Trafficking (Sedronar). "The goal of drug treatment courts is to reduce incidents of problematic substance use related to criminal activity," a National Plan for Drug Demand Reduction said. The courts would not deal with drug dealing cases, but will reportedly set mandatory rehabilitation guidelines in exchange for terminating a criminal process. National authorities have been building on experience in the Salta Province since 2014. Addicts charged with misdemeanors may apply for admission to drug treatment programs instead of incarceration. The defendant must comply with certain requirements established by a judge, and if they fail to comply, their case could be returned to the normal justice system, where jail is a possibility. googletag.cmd.push(function() { googletag.display('div-gpt-ad-1459522593195-0'); });   A 2012 study reportedly revealed that 68.5 percent of the incarcerated population consumed illegal drugs, compared to the rest of the population which barely touches 10 percent. InSight Crime, a foundation dedicated to the study of organized crime in Latin America and the Caribbean, said there are examples of similar programs in the United States that may shed light on some of the pros and cons of addiction treatment as an alternative to imprisonment. The foundation said advocates of so-called "drug courts" in the United States argue that these programs save the state money by diverting defendants to drug treatment facilities instead of jail. They also ensure that drug courts reduce recidivism and addiction, which is achieved through treatment and the threat of jail. Read More: Argentina Survived Cristina Kirchner’s Economic Traps Read More: Chile to Help Argentina Join Pacific Alliance But InSight Crime also highlighted criticisms of such programs, claiming drug courts have at best been "minimally effective" in reducing recidivism and addiction, and that in many cases "they do not save money." For critics, many people accused of having addiction problems "do not meet the requirements of the programs and end up in jail rather than continuing to receive the necessary treatment." Insight Crime also said that while both positions have their merits, a long-term study sponsored by the United States government found that drug courts "effectively save money and reduce recidivism rates." "If Argentina moves forward with this proposal, it will be important for the authorities to carry out similar studies and define the programs based on the results of those analyses," Insight Crime said. Source: Insight Crime, La Nación.

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