Peña Nieto Seen as Victor Over Billionaire Carlos Slim
Peña Nieto Seen as Victor Over Billionaire Carlos Slim
President Enrique Peña Nieto’s victory to open up Mexico’s telecommunications sector will “strengthen his hand” for the energy reform, points out COA’s Eric Farnsworth.
Billionaire Carlos Slim’s decision to break up his Mexico phone operations under threat of government sanctions is strengthening President Enrique Pena Nieto’s hand as he pushes to end an even bigger monopoly in the energy industry.
Slim announced plans to sell some of America Movil SAB (AMXL)’s assets yesterday as the Mexican Senate and lower house passed a bill pushed by Pena Nieto that would impose the harshest penalties the company has ever encountered. The rules build on constitutional changes he signed into law last year.
Pena Nieto is trying to bolster economic growth by spurring competition in telecommunications and luring more private investment to the oil industry. Congress is debating rules this week to implement the most sweeping transformation to the nation’s energy policies in seven decades, which the government says would increase long-term annual economic growth by 1 percentage point and draw as much as $30 billion a year in foreign direct investment.
“Political leaders strengthen their hand through success,” said Eric Farnsworth, head of the Washington office of the Council of the Americas, a group representing U.S. businesses. “Clearly, if you’ve taken on some of the icons of Mexico’s private sector, you’re building a record here that people have to take pretty seriously. It will strengthen his hand in terms of energy reform....”
