From HR to CSR: management lessons from Mexico’s drug lords
Jul 28th 2012
MEXICO has 11 billionaires, according to Forbes magazine. Ten are often pictured smiling at charity dinners and other posh bunfights. One, Joaquín Guzmán Loera, has a rather different mugshot. Wearing a cheap anorak, he is pictured shivering in the rain inside the concrete walls of a high-security prison. Mr Guzmán, who is better known by his nickname El Chapo, or “Shorty”, is one of Latin America’s most successful exporters, having made perhaps $1 billion as chief executive of the Sinaloa drug “cartel”. There haven’t been many photos of El Chapo since he escaped from jail in 2001, hidden in a laundry trolley.
Other billionaires look down on Mr Guzmán. But unlike some of the entrepreneurs on Mexico’s rich-list, he seems to have weathered the American recession rather well. Conditions in his hideout in the Sierra Madre may not be luxurious, but his fortune is believed to have remained intact despite the efforts of the imbéciles on Wall Street that brought the Mexican economy to its knees in 2009. Armed with no more than a phrasebook and some Pepto-Bismol, Schumpeter went to the desert to see what lessons Mexico’s narcotraffickers might offer to other businesses.
A ruling on an oil project reasserts the indigenous’ right to consultation
Jul 28th 2012
DEEP in the rainforest, the village of Sarayaku is two days by river from the nearest town. But its 1,200 Kichwa Indians are now in the spotlight. On July 25th the Inter-American Court of Human Rights ruled that Ecuador’s government had ignored the rights of Sarayaku’s residents when granting permission for an energy project—putting governments in the Americas on notice that big physical investments are not legal until the indigenous people they affect have had their say.
The dispute began in 1996 when Petroecuador, the state oil firm, signed a prospecting deal with a consortium led by Argentina’s Compañía General de Combustibles (CGC). Much of the area it covered was the ancestral land of Sarayaku’s residents, who were not consulted. CGC later offered locals medical aid for their consent. Some villages signed up, but Sarayaku held out.
Half a century after Jamaica’s independence from Britain, its economy is struggling to get out of the starting blocks
Jul 21st 2012 | KINGSTON
THE world is used to trailing behind Jamaican sprinters. The small island has won a string of world records, and may claim more at the 2012 Olympics. Its economy, however, is not so speedy: on current forecasts it will finish the year with the slowest average growth rate since 2000 in the Americas—behind even earthquake-stricken Haiti. On August 6th Jamaica will celebrate the 50th anniversary of its independence. But the festivities will be muted by frustration with its performance.
The Jamaican economy should by rights be booming. The island is just a 90-minute flight away from the United States, the world’s biggest market, with which it shares a language. It is on the shipping route to the Panama Canal, and has a spacious natural harbour in Kingston. It is politically stable, without the ethnic tensions that have riven other Caribbean nations.
An outbreak of cholera tests a much-praised health system
Jul 14th 2012 | MEXICO CITY
CHOLERA was eradicated in Cuba more than half a century ago. But on July 3rd the government announced that the disease had returned, infecting 53 people and killing three in the south-eastern province of Granma. Since then unconfirmed reports have said that up to 15 may have died, and that the outbreak has spread to Havana, at the opposite end of the island.
The most likely source is Haiti, which since 2010 has suffered an epidemic that has killed more than 7,000 people, plus 363 in the Dominican Republic, its neighbour. Only 50 miles (80km) of sea separate Haiti from Cuba, which has sent hundreds of doctors to help the Haitians control the outbreak (and who may inadvertently have brought the illness back). Tests are expected to establish within days whether the Cuban cases match the Haitian strain.
AFTER recounting more than half the ballots at the request of Andrés Manuel López Obrador, Mexico’s electoral authority confirmed the original result of the July 1st presidential election. Mr López Obrador (31.6%) lost to Enrique Peña Nieto (38.2%) of the Institutional Revolutionary Party (PRI).
Despite the clear margin, Mr López Obrador wants the election annulled by the Electoral Tribunal. (He finds no fault with the congressional and gubernatorial races held on the same day, presumably because his left-wing coalition did well in them.) He claims that the PRI bought votes in return for supermarket gift-cards; the PRI says these were given out under a public programme, not for votes. The National Action Party, which came third, has made some belated complaints but accepts the result.
The former ruling party triumphs, but without the majority it had hoped for
Jul 7th 2012 | MEXICO CITY
THE band that struck up jolly music to greet Enrique Peña Nieto as president-elect probably had not bothered to practise any of its downbeat numbers. Mr Peña, the candidate of the Institutional Revolutionary Party (PRI), had long been the favourite and went into the election on July 1st leading by double figures in most polls. Sure enough he won, restoring to office the party that ran Mexico for seven decades until 2000. But his victory was slimmer than expected, and the PRI was denied a majority in Congress. Indeed, it appeared that the party had lost seats in the lower house. Voters are clearly not ready to hand the former ruling party free rein.
It was a good night for the left-wing Party of the Democratic Revolution (PRD) and its allies, whose presidential candidate, Andrés Manuel López Obrador, came within 6.6 percentage points of Mr Peña, less than half the predicted gap. His coalition will form the biggest opposition block in Congress's lower house. Of the five state governorships up for grabs the PRD lost one but took control of two, including Tabasco, which the PRI had run for more than 80 years. The PRI still controls most of Mexico's 31 states (see map). The result was dismal for Josefina Vázquez Mota of the ruling National Action Party (PAN), which was pushed into third place for the first time since 1988.
The president-elect must show that he is not a stooge of Televisa
Jul 7th 2012 | MEXICO CITY
MORE Mexican homes have television than running water. The influence of the box is greatest at election time: surveys show that, when deciding how to vote, people trust newscasters more than their friends. After the Institutional Revolutionary Party (PRI) won the presidential election on July 1st, protesters gathered outside the offices of Televisa, the dominant broadcaster, which they claimed had “imposed” Enrique Peña Nieto, the PRI's candidate, on a hypnotised public.
Before the election, newspapers claimed that the PRI had bribed Televisa to give rosier coverage (which both party and broadcaster deny). Televisa no longer styles itself a “soldier of the PRI” as it did during one-party rule. But whereas politics has become more plural since the 1990s, control of the airwaves has not. National free-to-air television is split between Televisa, with 70% of viewers, and TV Azteca. Televisa also has 45% of cable and 60% of satellite customers. The result is pricey as well as monotonous: regulators reckon that a third more households could afford pay-TV if there were more competition.
The party that held power for seven decades is poised to take back the presidency. Is Mexico ready?
Jun 23rd 2012 | ATLACOMULCO
WITH its roving vendors of pork-scratchings and its stucco and ochre cathedral, Atlacomulco looks like a typical Mexican town. Its politics follow the traditional Mexican model too: plaques commemorate the good works of former governors, who all belonged to the same party and in some cases share the same surname. The newest notices hail the achievements of Enrique Peña Nieto (pictured), who completed his term as governor of Mexico state last year, the fifth man from his extended family to do so.
For seven decades this was the story of Mexico. Power remained within the Institutional Revolutionary Party (PRI), and within what its founder, Plutarco Elías Calles, called the “revolutionary family”. Less blood was spilled on the road to democracy than in many Latin American countries, but it was a longer slog. Until 1989 the PRI ran all of the country's 31 states. It was another eight years before it gave up its majority in Congress. Only in 2000 was it finally prised out of Los Pinos, Mexico's presidential residence.
Timid steps to tame the world’s most violent country
Jun 16th 2012 | TEGUCIGALPA
LAST year Hondurans were about 80 times more likely than Western Europeans to be murdered. For men in their 20s, the odds were four times worse again. Poverty and a history of military rule meant that Honduras was never especially safe. But the murder rate has nearly doubled in the past five years. Barring war zones, this makes Honduras by most reckonings the most violent country in the world.
The cocaine trade, which over the past two decades was squeezed first out of the Caribbean and then from Mexico, bears much of the blame. “We are between those who consume drugs and those who produce them. Logically, we are a corridor of traffic,” says Pompeyo Bonilla Reyes, Honduras's security minister. In 2000 Honduras and the six other small Central American countries, all told, seized less cocaine than Mexico. By last year they captured 12 times more than their northern neighbour.
A much-watched debate fails to shake the front-runner
Jun 16th 2012 | MEXICO CITY
THE first of Mexico's presidential debates, aired last month, was snubbed by one television network in favour of a football match. The second and final one, broadcast on June 10th, attracted more viewers than any previous debate in Mexican history, as 15m tuned in at home and thousands crowded around giant screens in public squares. The election may be a done deal, according to most pollsters, but a somnolent campaign has at last come to life.
Browse our slideshow guideto the leading candidates for the Mexican presidency
None of the candidates landed a knockout punch in the more than two hours the debate lasted. Enrique Peña Nieto, who leads most polls by around ten points, tried to remain above the fray. Rather than attacking his rivals, he took the opportunity to outline his policy pitch of “effective government”. Andrés Manuel López Obrador, a populist leftist, improved on a slightly rambling performance in the previous debate, but did not seem to do much damage to Mr Peña.
Curbs on election advertising have not broken the power of the media moguls
Jun 2nd 2012 | MEXICO CITY
WITH a month to go until the presidential election, Mexicans switching on their televisions and radios can hardly avoid the candidates vying to win their votes on July 1st. In a country with more televisions than refrigerators, dominating the airwaves is crucial to being elected. But ownership of the broadcast media is highly concentrated.
Most people get their news through free-to-air television, a duopoly shared by Televisa and TV Azteca. Televisa, with about 70% of the audience, is forever associated in the public mind with the Institutional Revolutionary Party (PRI), which ruled Mexico for seven decades until 2000. In 1990 the network's chief commented that it was “a soldier of the PRI”.
The new president risks governing in his predecessor’s shadow
May 26th 2012 | SANTO DOMINGO
Fernández, Cedeño and Medina keep the party going
ECONOMIC storms have battered the Caribbean of late, blowing away the tourists and remittances on which most islands depend. Most of the region has barely seen any growth since 2009. Several governments have been washed away by the slump: in the past six months unhappy voters have kicked out the ruling parties in Jamaica and the Bahamas. But the sun still shines in the Dominican Republic, where growth has continued at over 5% a year. On May 20th Dominicans duly rewarded the ruling Dominican Liberation Party (PLD). But only just: Danilo Medina, its presidential candidate, won 51% of the vote, amid allegations of fraud.
Mr Medina faced a weak opponent in Hipólito Mejía of the Dominican Revolution Party, who campaigned under the enigmatic slogan “Here's Daddy”. Mr Mejía mishandled a banking crisis when he was president between 2000 and 2004. He cried fraud this week. Observers from the Organisation of American States certified the election result but confirmed reports of vote-buying. Participación Ciudadana, a local NGO, says that both main parties offered between 500 and 2,500 pesos ($13 to $65) to buy people's voting cards. No one knows the scale of the fraud, but the electoral authorities received 400,000 applications for duplicate cards in the weeks before the poll. The government's vote-buying appeared greatly to exceed that of the opposition, claims Francisco Álvarez of Participación Ciudadana.