Mexico’s Fair Trade coffee faces an uncertain future

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Aug 302011
 

An earlier post looked at why Mexico’s coffee harvest was unlikely to meet expectations this year. The 2010-11 harvest, hit by poor weather, totaled a disappointing 4 million 60-kg sacks (240,000 metric tons), almost entirely Coffea arabica and about 70% destined for export. This post looks at some recent trends relating to the production and consumption of coffee in Mexico.

Mexico is the world’s seventh largest coffee producer (after Brazil, Vietnam, Indonesia, Colombia, India and Ethiopia) and one of the leading suppliers of organic, shade-grown coffee. The nation’s 480,000 coffee growers, most working small parcels of land less than 5 hectares (12 acres) in size, are concentrated in the states of Chiapas, Veracruz and Oaxaca.

Mexico’s domestic consumption of coffee

Despite being one of the world’s leading coffee producers,Mexico’s domestic consumption averages only 1.2 kg (2.6 lbs) per person each year. While this figure has doubled since 2000, is is still only about half the equivalent figure for the coffee-growing Central American nations, and way below consumption in wealthier countries such as world-leader Finland (12 kg per person) or the USA (5.5 kg per person). Domestic consumption is rising but remains low.

Yields need to rise

According to Amecafe (Asociación Mexicana de la Cadena Productiva del Café), a major growers’ organization, global climate change is expected to have an adverse long-term effect on prices and on the sustainability of coffee-farming in Mexico. In an effort to raise yields of coffee to at least 12 quintals/hectare (19 bushels/acre) within 3 years and to 20 quintals/ha (32 bushels/acre) eventually, Mexico’s Agriculture Secretariat has announced financing of 16 million dollars for a program to gradually replace aging coffee groves in 12 states.

Fair trade coffee faces uncertain future

Soaring coffee prices might signal the beginning of the end for Fair Trade coffee. Much of the world’s specialty coffee comes from small-scale growers in Latin America, including Mexico, and much of it is marketed as “organic” or “fair trade”. After a decade of depressed prices, wholesale and retail prices for coffee have risen sharply in the past year. US retail prices have risen more than 20%; the price of coffee on international commodity markets has risen almost 60%.

The higher prices should be good news for growers, but as Kevin Hall points out in “Coffee prices being pushed by speculators” this is not necessarily the case. Many co-operative marketing organizations, including those considered socially-responsible or “Fair Trade”, do not have the resources to pay the new higher prices and acquire sufficient coffee to meet their existing contracts. This means they can no longer compete against the well-financed middlemen who specialize in purchasing coffee for regular distribution via commodities markets and major buyers. Farmers want the maximum return they can get on their crop, and they want it on delivery, which makes life difficult for any fair trade co-operative that lacks strong financial resources.

Further statistics:

  • USDA (US Department of Agriculture) June 2011 update on coffee (pdf file).

Related post:

Aug 292011
 

In a previous post–Ciudad Juárez faces economic fallout from the effects of the war on drugs–we looked at how violence in one border city has adversely affected the local economy, causing many businesses to close. The violence has also resulted in many people migrating away from the city. How many have moved? There is limited evidence to quantify the movement, but one demographer believes 40,000 have fled Ciudad Juárez to the U.S. as a result of drug-war violence since 2008.

Ciudad Juárez is not the only city from which people have moved as a result of the security situation. According to some demographers, the “Mexican exodus” comprises at least 125,000 individuals who have chosen to move away from the border area, and perhaps as many as 200,000. An interesting website–Mexodus– features some quality student journalism that examines some of the personal stories involved.

In its own words, “Mexodus is an unprecedented bilingual student-reporting project that documents the flight of middle class families, professionals and businesses to the U.S. and safer areas of México because of soaring drug cartel violence and widespread petty crime in cities such as Ciudad Juárez.” The project, partly funded by the Ethics and Excellence in Journalism Foundation, involved nearly 100 student journalists from four universities:

The collaborative nine-month venture resulted in more than 20 short articles, videos and slideshows relating to the on-going exodus of working families from border cities.

What makes the Mexodus project so interesting is that it is based on highly personal stories, ranging from families who paid ransom money to kidnappers to businessmen who chose to flee rather than pay protection money to safeguard their property. Some of the articles focus on the motives and decision-making processes of people who chose to stay rather than leave.

Mexodus is a valuable resource about the effects of drug-war violence on the lives of people in Mexico’s border cities, and on their decision to stay or leave.

 

Where are Mexico’s vehicle assembly plants located?

 Teaching ideas  Comments Off on Where are Mexico’s vehicle assembly plants located?
Aug 272011
 

Mexico is one of the world’s “Top Ten” countries for vehicle production and for vehicle exports. 75% of Mexico’s annual production of around 2 million vehicles are made for export. The industry attracts large amounts of Foreign Direct Investment (FDI). Vehicle assembly plants provide around 60,000 jobs, with a further 80,000 employed in distributorships nationwide and a whopping 420,000 employed in the autoparts sector. The combined exports of vehicles and autoparts bring 85 billion dollars a year into the Mexican economy.

There are more than 25 vehicle assembly plants in Mexico, manufacturing many brands of cars and trucks (see map). In addition, there are 1100 firms specializing in making parts for vehicles. In this post, we consider the location of vehicle assembly plants; in a later post we will look more closely at the characteristics of the vehicle assembly and autoparts industry in Mexico.

Vehicle assembly plants in Mexico, 2011

Vehicle assembly plants in Mexico, 2011. Credit: Tony Burton/Geo-Mexico; all rights reserved.

As the map shows, certain areas of Mexico have attracted more investment in vehicle assembly plants than other areas. The two largest existing concentrations are focused on Toluca in the State of México, and on Saltillo in northern Mexico. However, the fastest growing cluster is in the central state of Guanajuato, where two major plants are currently in the planning stages.

  • 1. What are the advantages and disadvantages of having several vehicle assembly plants in the same area?
  • 2. What the advantages and disadvantages of locating vehicle assembly plants far apart?
  • 3. Vertical linkages occur when one company controls many or all stages in the production of a product. For instance, an auto company may make its own engines and accessories to attach to the vehicles it makes. Horizontal linkages exist where one company is supplied with the components (engines, gearboxes) it needs by another company. What part do you think vertical and horizontal linkages might play when a major automaker decides where to locate a new vehicle assembly plant?
  • 4. Why are there no vehicle assembly plants in southern or eastern Mexico?
  • 5. What are the main reasons for the cluster of vehicle assembly plants near Mexico City and Toluca?
  • 6. Why has Ford chosen to locate its two plants in northern Mexico in different states?

Discuss your suggestions with your classmates and teacher. The answers to these questions should give you a useful list of the major factors that explain the distribution of vehicle assembly plants in any country, not just Mexico.

Related post:

A case study of clustering in a different industry

Are homicide rates in Mexico increasing? Perhaps, but…

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Aug 252011
 

This question is far more complicated to answer than might initially appear. To start with there are two primary sources of homicide data in Mexico which provide very different results and vary significantly from state to state and year to year.  The National System of Public Security (SNSP) compiles homicide statistics from police reports and investigations.  The National Institute of Statistics and Geography (INEGI) obtains homicide data from death certificates reported through the Ministry of Health. For 2010, SNSP reported 35,053 homicides in Mexico, while INEGI – Reporta el INEGI más de 24 mil muertes en 2010 – reported 24,374 homicides.

For a very interesting comparison (in Spanish) of trends over time for these two data sources, including a detailed look at the trends in some individual states, see:

For two earlier posts using SNSP data, see:

What factors may explain why the data is so different?

The terminology associated with homicides is very complex. This is equally true in English and Spanish. Even the basic subcategories do not necessarily match closely from the legal system in one country to that in another. Legal definitions and classifications depend in part on subjective decisions by officials concerning such things as the perpetrator’s motive, intent and state of mind.

In general terms, homicide (homicidio) means the deliberate killing of one person by another. A homicide may be either an:

  • intentional homicide or murder (homicidio doloso) or an
  • involuntary homicide, negligent homicide or case of manslaughter (homicidio culposo)

In some jurisdictions, intentional homicides are further divided into such categories as “first degree murder” and “second degree murder”.

The data associated with homicides are at least as complicated as the legal definitions. Statistics originating from police records will never exactly match those coming from death certificates or public records. For instance, some individuals may have been recorded originally as dying from accidents, natural causes or suicide on their death certificates, but then shown later to have been intentionally killed (murdered) and therefore counted in police records as murder victims. There are numerous possible scenarios in which the police data will differ from the data recorded on death certificates.

Differences in terminology, definitions and application may explain some of the differences in the two data sets, but is very unlikely to explain 100% of such significant differences, so care is needed before drawing any conclusions about Mexico’s homicide rate.

What do the figures for homicides suggest?

In 2000, INEGI, Mexico’s National Statistics Agency, recorded 10,743 homicides in Mexico. This number dropped gradually to 8,897 in 2007 before jumping up to 14,006 in 2008, 19,803 in 2009 and leaping  23% in 2010 to 24,374. Current information suggests the number of homicides will be at least as high in 2011.

The SNSP data have become significantly higher than INEGI data in recent years. They also show an increase in the number of homicides in 2010 (compared to 2009), but of only 11%.  Both data sets indicate a rapid increase. This is especially troublesome given that murder rates had declined rather steadily up until the “drugs war” started in earnest in 2007.

If we average the INEGI and SNSP numbers, it suggests that the overall 2010 homicide rate was about 27 per 100,000 population.

How does Mexico’s murder (intentional homicide) rate compare to that in other countries?

Wikipedia’s list of intentional homicide (murder) rates claims that Mexico’s murder rate in 2010 was 15 per 100,000. SNSP data for Mexico show 2010 figures of 18 per 100,000. Either of these figures is very high compared to Canada (1.6 per 100,000), Peru (3.2) or the USA (5). On the other hand, Mexico’s homicide rate is rather low compared to Honduras (78), El Salvador (65), Venezuela (48), South Africa (34) and Brazil (25). In 2007, Mexico’s murder rate was about 8.4 per 100,000, very close to the world average.

How many of Mexico’s murders are drug-war related?

Data released last January by the Mexican government indicated that drug-war deaths increased in 2010 by 5,659 from 9,614 to 15,273. These data suggest that 63% of Mexico’s intentional homicides in 2010 were related to drug violence compared to only 49% in 2009, 28% 2007 and roughly 10% in 2006. In fact, non-drug-war-related intentional homicides in Mexico appear to have declined 11% from 10,189 in 2009 to 9,101 in 2010, less than the total number of homicides in any year from 2000 through 2006.

This brings us back to our original question, “Are homicide rates in Mexico increasing?” Yes, they are increasing, but only as a result of the much publicized “war on drugs”. It is likely that if there was no drugs war, then Mexico’s homicide rate would be continuing to decline, consistent with its long-term trend.

Related posts, relying on data issued by the Office of the President of Mexico:

Car-makers building new assembly plants in Mexico

 Mexico's geography in the Press  Comments Off on Car-makers building new assembly plants in Mexico
Aug 232011
 

Two major Japanese car-makers—Mazda and Honda—have announced expansion plans in Mexico in recent months. They will help ensure that Mexico remains the 9th largest car manufacturer in the world, and the 6th largest vehicle exporter. In addition, Italian auto-maker Fiat is expanding its plant in Toluca.

Mazda plant in Salamanca

Mazda is building a new 500-million-dollar plant in Salamanca (Guanajuato) to assemble its best-selling Mazda2 and Mazda3 models. The Mazda3 is the Mazda’s top selling model in the USA. The Mazda plant, scheduled to open in 2013, will employ about 3,000 workers and produce 140,000 vehicles a year.

Honda plants in El Salto and Celaya

Honda, which currently has two manufacturing plants in El Salto (Jalisco), is to construct a third plant, in Celaya (Guanajuato). The new plant will produce the fuel-efficient Honda “Fit” for the North American market. Due to open in 2014, it represents an investment of 800 million dollars and will have the capacity to assemble 200,000 vehicles a year.

Mexican-made cars being exported to China

By early next year, Fiat will be producing 100,000 units a year of its model 500 at its new plant in Toluca, in the state of Mexico. Only 3.5% of these units will be sold in the domestic market. The remainder are destined for export markets, including China, Brazil and the USA. China has already received its first shipment of 100 exclusive “First Edition” vehicles and is expected to take 50,000 a year once the Fiat plant is operating at full capacity.

Related posts:

Mexico’s economic geography is analyzed in chapters 14–20 of Geo-Mexico: the geography and dynamics of modern Mexico. Buy your copy of this invaluable reference guide today!

Aug 222011
 

The proposed implementation of a United Nations-supported carbon storage program (REDD) in the southern Mexican state of Chiapas is provoking plenty of controversy. The debate is hotting up because a follow-up program called REDD+ is due to start in 2012. A good summary of the situation is provided by REDD rag to indigenous forest dwellers.

What is REDD?

  • REDD stands for Reducing Emissions from Deforestation and Forest Degradation
  • It is a carbon storage program, started in 2008 by the Food and Agriculture Organization (FAO), the U.N. Development Programme (UNDP) and the U.N. Environment Programme (UNEP).
  • It aims to conserve biodiversity and boost carbon storage by preventing deforestation and by replanting forests
  • It is focused on developing countries, and provides them wih funds and technical support

At first glance, it would seem like a good fit for Chiapas, one of Mexico’s poorest states, where a high proportion of the population are reliant on subsistence farming. The Chiapas state government backs REDD, considering it as one way of helping mitigate the likely consequences of climate change in the state. Chiapas’ total emissions of carbon dioxide amount to 32 million metric tons/year, about 4.5% of the national figure. The Chiapas contribution comes mainly from deforestation and farming.

NGOs working in Chiapas warn that REDD poses a serious threat to indigenous people. About 20% of the 4.8 million people living in Chiapas belong to one or other of the state’s numerous indigenous groups. Land tenure in many parts of Chiapas is hotly disputed; this was one of the reasons for the EZLN (Zapatista Army of National Liberation) uprising in 1994.

Protests in support of indigenous rights, Cancún climate summit

Protests in support of indigenous rights, Cancún climate summit, 2010

Miguel García, a spokesperson for an NGO founded in 1991 which supports indigenous groups and protects the environment, has been quoted as saying that REDD “will alter indigenous culture, will commodify it, giving commercial value to common assets like oxygen, water and biodiversity.” He is especially concerned that “resentment of and confrontation with the Zapatista grassroots supporters are being accentuated.”

As with so many geographic issues, there is no easy “right answer” here. The rights of indigenous groups need to be respected and their views taken into account, before any decision is made about the value of their forest home to global efforts to mitigate climate change.

This is one controversy we plan to follow as it plays out in coming months.

Want to read more?

Related posts:

Which cities have the best and worst water systems in Mexico?

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Aug 182011
 

The Water Advisory Council (CCA), a Mexican NGO specializing in water research, education and policy, has published its 2011 report on Mexico’s water management, sewerage and sanitation. The report looks at data for 50 Mexican cities, each of which has a population in excess of 250,000.

The report —Gestión del Agua en las Ciudades de México (Water Management in Mexican Cities)— uses data for 20 variables to develop the following 10 indicators: drinking water coverage; drainage and sewerage coverage; continuity and extension of services; productivity; metering; physical efficiency; business efficiency; operating income; wastewater treatment; and institutionalization.

In terms of overall performance, the city of León came top, followed by Saltillo, Monterrey, Mexicali, Aguascalientes, Cancún and Tijuana. Of the top six, three (Saltillo, Aguascalientes and Cancún) are managed by private operators, while León, Mexicali and Tijuana are public water systems. There is clearly no discernible difference between the performance of private operators and the best public systems. Towards the bottom of the rankings, all the cities have public water systems. The worst-ranking cities include several in the State of Mexico, as well as others in the south and southeast of the country.

For water quality, the leader was Ciudad Victoria, followed by Colima, Monterrey, León, Torreón, Tepic and Hermosillo. The ten worst were Villahermosa, Cuernavaca, Acapulco, Oaxaca, Xalapa, Chetumal, Chilpancingo, Celaya, Chimalhuacán and Campeche.

For efficiency, the leader was Saltillo, followed by León, Monterrey, Tijuana and Aguascalientes. The least efficient were Ecatepec, Campeche, Villahermosa, Celaya, Chilpancingo and Chimalhuacán.

The report says that where the private sector is involved, the important issues are transparent tenders; clear, balanced and flexible contracts; effective controls to prevent abuse; legal certainty; and effective regulation with stable, long-term regulating agencies.  The authors also emphasize the importance of pricing that reflects costs, and of removing the payment exemptions currently given to government agencies.

The Water Advisory Council argues that the Federal Agency for Environmental Protection (PROFEPA) should be in charge of all water monitoring, though its powers need strengthening to ensure it can fully carry out its mandate.

Aug 162011
 

In several previous posts we have looked at specific migration channels connecting Mexico to the USA:

A Mexican government website, for its Institute for Mexicans Abroad, has lots of statistics about the number of Mexicans registered at each of Mexico’s consulates (which number more than 40) in the USA, together with their state of origin. A series of handy interactive maps for 2008, 2009 and 2010 provide a quick overview of some of the major flows.

  • Mexicans registered in consulates in the USA, 2008
  • Mexicans registered in consulates in the USA, 2009
  • Mexicans registered in consulates in the USA, 2010

Hovering your mouse over any state in Mexico brings up details of which consulates in the USA attracted the highest number of registrations for migrants who originated from that state.

Example of map

Example of migration map, courtesy of Dr. Seth Dixon

By way of illustration, consider the patterns shown using the 2010 map for migrants who originated in the three states (Campeche, Yucatán and Quintana Roo) forming the Yucatán Peninsula. It turns out that migrants from the state of Yucatán are far more concentrated than migrants from the other two neighboring states. About 60% of all migrants from the state of Yucatán who registered in Mexican consulates in the USA registered in either San Francisco, Los Angeles (both California) or Portland (Oregon).

For migrants from Campeche, the “top three” consulates are Omaha (Nebraska), Atlanta (Georgia) and Dallas (Texas), but these three account for only about 22% of all Campeche migrants registered with a consulate, meaning that the spread of migrants from Campeche is far less focused than that of migrants from Yucatán state.

In the case of Quintana Roo, the top three consulates for registrations are San Francisco (California), Atlanta (Georgia) and Dallas (Texas); these three account for almost 40% of all registrations of migrants from Quintana Roo.

Identifying a pattern, or variations between the patterns for several states is one thing; explaining it is another!

Q. What factors might influence the differences in patterns noted for the three states of the Yucatán Peninsula?

The extraordinary ecological recovery of Mexico’s Cabo Pulmo Marine Park

 Updates to Geo-Mexico  Comments Off on The extraordinary ecological recovery of Mexico’s Cabo Pulmo Marine Park
Aug 152011
 

In an earlier post—Can Mexico’s Environmental Agency protect Mexico’s coastline? we took a critical look at proposals for a tourism mega-development near Cabo Pulmo on the eastern side of the Baja California Peninsula. Cabo Pulmo (see map), a village of about 120 people, is about an hour north of San José del Cabo, and on the edge of the Cabo Pulmo National Marine Park (CPNP).

Baja California Sur MapJacques Cousteau, the famous ocean explorer, once described the Sea of Cortés as being the “aquarium of the world.” The protected area at Cabo Pulmo, ideal for diving, kayaking and snorkeling, covers 71 sq. km of ocean with its highly complex marine ecosystem.

Cabo Pulmo is on the Tropic of Cancer, about as far north as coral usually grows. The water temperatures vary though the year from about 20 to 30 degrees C (68 to 86 degrees F).

The seven fingers of coral off Cabo Pulmo comprise the most northerly living reef in the eastern Pacific. The 25,000-year-old reef is the refuge for more than 220 kinds of fish, including numerous colorful tropical species. Divers and snorkelers regularly report seeing cabrila, grouper, jacks, dorado, wahoo, sergeant majors, angelfish, putterfish and grunts, some of them in large schools.

On my last visit to Cabo Pulmo in 2008, local fishermen and tourist guides regaled me with positive comments about the success of the National Marine Park, and the area’s recovery since the area was first protected in 1995. Ever since, I’ve wondered how much their positive take was due to wishful thinking, and how much was due to a genuine recovery in local ecosystems. My doubts have been answered by the publication of Large Recovery of Fish Biomass in a No-Take Marine Reserve in the Public Library of Science (PLoS) ONE journal. The article’s authors present compelling evidence, based on fieldwork, that the area has undergone a remarkable recovery.

Recovery of Cabo Pulmo Marine Park

Recovery of fish in the Cabo Pulmo National Marine Park (CPNP). Credit: Aburto-Oropeza et al (2011)

The graph above shows the changes in biomass for three distinct zones of the Sea of Cortés. The open access areas allow commercial fishing. The “core zones” are the central areas of other Marine Parks in the area, including those near Loreto, north of Cabo Pulmo. The CPNP is the Cabo Pulmo National Marine Park, where no fishing is allowed. Clearly, since the CPNP was established, the number and weight of fish inside the park boundaries really have increased rapidly.The total amount (biomass) of fish increased by a staggering 460% over 10 years.

The major reason for the success of the CPNP has been the strength of local residents in undertaking conservation initiatives, and their cooperative monitoring and enforcement of park regulations, sharing surveillance, fauna protection and ocean cleanliness efforts.

The Cabo Pulmo National Marine Park is perhaps the world’s best example of how local initiatives can lead to genuine (and hopefully permanent) environmental protection. The researchers describe it as “the most robust marine park in the world” and say that “The most striking result of the paper… is that fish communities at a depleted site can recover up to a level comparable to remote, pristine sites that have never been fished by humans.”

Here’s hoping that the residents of other parts of Mexico’s coastline threatened by fishing or tourism developments take similar actions and manage to achieve equally positive results for their areas.

Citation:

Aburto-Oropeza O, Erisman B, Galland GR, Mascareñas-Osorio I, Sala E, et al. (2011) Large Recovery of Fish Biomass in a No-Take Marine Reserve. Public Library of Science (PLoS) ONE 6(8): e23601. doi:10.1371/journal.pone.0023601

Further reading:

For an exceptionally informative series of papers (in Spanish) on all aspects of tourism and sustainability in Cabo Pulmo, see Tourism and sustainability in Cabo Pulmo, published in 2008 (large pdf file).

Another valuable resource (also in Spanish) is Greenpeace Spain’s position paper entitled Cabo Cortés, destruyendo el paraíso (“Cabo Cortés: destroying paradise”) (pdf file)

Aviation history as Mexico’s Aeroméxico uses biofuel for transatlantic passenger flight

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Aug 132011
 

Aeroméxico, Mexico’s major international airline, made aviation history in July. Aeroméxico flight AM1, from Mexico City to Madrid, was the first ever commercial transatlantic passenger flight using bio-fuel. The Boeing 777 flew on a mixture of biofuel and regular jet fuel. Earlier this year, another Mexican airline, Interjet, began using renewable jatropha-based biofuel for flights between Mexico City and Tuxtla Gutierrez in the southern state of Chiapas. Jatropha is a genus of plants, mainly shrubs, that grow wild in several parts of Mexico, including Chiapas. Plantations of jatropha require four or five years of cultivation before the plant is sufficiently mature for commercial harvesting.

Jatropha-based biofuel is marketed as “green jet fuel” and is currently significantly more expensive than regular jet fuel. However, the price of biofuel is expected to fall rapidly as more of it is produced. The “life-time” emissions from using jatropha (including its growing period, processing and combustion) are estimated to be at least 60% less than using conventional jet fuel.

Sources of biodiesel.

Sources of biodiesel. Credit: Bayer CropScience

Mexico’s aviation sector will need 40 million liters of biofuel a year by 2015 in order to meet the national target of 1% of all airline fuel coming from renewable sources. The aviation industry’s long-term target is to halve its 2005 carbon footprint by 2050.

Despite Mexico’s recent adoption of jatropha-based biofuel, there is considerable controversy about the plant’s real value as a sustainable source of renewable energy. See, for example, the critique “Hailed as a miracle biofuel, jatropha falls short of hype” on Yale Environment 360, a publication of the Yale School of Forestry & Environmental Studies.

US firms are near-shoring jobs from China to Mexico

 Mexico's geography in the Press, Updates to Geo-Mexico  Comments Off on US firms are near-shoring jobs from China to Mexico
Aug 112011
 

 Near-shoring means “the transfer of business or IT processes to companies in a nearby country, often sharing a border with your own country” (definition from SourcingMag.com). It is closely related to offshoring, now usually limited to similar transfers as near-shoring, but to more distant locations. Among the best examples of near-shoring are the hundreds of US companies that have set up factories and assembly plants in Mexico under the long-running maquiladora program (analyzed in detail in chapter 20 of of Geo-Mexico: the geography and dynamics of modern Mexico).

Maria Elena Rigoli, the President of Collectron International Management Inc., which helps companies make the move from the USA to Mexico, was interviewed about near-shoring for the 20 December 2010 issue of Food Manufacturing News. Despite reflecting her obvious vested interests,  the transcript of the interview is still interesting reading for geographers.

Rigoli first explains how Mexico’s maquiladoras work and then lists the major benefits of moving a company’s operations to Mexico:

  • Extremely fast shipping times offered by such a close location
  • Reduced labor costs
  • Trade agreements with many different countries, including NAFTA
  • Decades of experience in manufacturing and exporting
  • Highly-skilled, well-educated workforce

Quotes from the interview:

“Mexico is one of the world’s five largest developing economies. Global market research firm EuroMonitor International forecasts that Mexico will replace Italy as the 10th largest economy in the world within the next decade.”

“The technology used when producing goods in [Mexico’s] maquilas is the same or superior to that in the United States, as technology is typically transferred by the contracted companies individually. Additionally, the large pool of educated technicians coming out of Mexico’s many technical universities are trained to assemble, package, test and manufacture products in a maquiladora setting. This training is either on par or above the average training manufacturing personnel receive north of the border.”

“The growth of Mexico’s share in the aerospace industry speaks volumes about the craftsmanship and quality of products produced in Mexico. Originally, companies like Boeing and Bombardier only outsourced high volume-low tech operations to Mexico, now entire fuselages are designed and built here.”

How do Rigoli’s claims match up to what is happening today?

Well, among the numerous press reports that US manufacturers have started ‘near-shoring’ work from Asia to Mexico, is this one in Asian Shipper., that quotes figures from a survey conducted by consultancy AlixPartners of 80 big US companies.

The survey found that:

  • 9% have already shifted some or all of their operations from Asia to the Americas (= near-shoring).
  • 33% are considering doing it in the next three years

Is Mexico the most attractive location for near-shoring?

  • 63% say, “Yes!”
  • 19% think the USA is better.

What are the major advantages of near-shoring?

  • 30% said lower freight costs
  • 25% said speed-to-market
  • 18% claimed lower inventory costs
  • 16% said time-zone advantages such as easier management coordination
  • 11% liked closer cultural ties with North American managers.

What started as a trickle of US firms moving manufacturing back from China to Mexico seems to be becoming a clear trend. Globalization may have expanded the reach of many such US firms, but near-shoring now seems to be pulling some of them back, closer to home.

Related posts:

The Transnational Metropolitan Areas of Mexico-USA

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Aug 092011
 

Mexico shares a 3,169 km (1,969 miles) border with the USA. This is one of the most heavily guarded and frequently patrolled  land borders in the world, and a rare example of a land border that separates two countries with very different levels of economic development. These differences in development have, of course, prompted many Mexicans to migrate to the USA, either as seasonal or permanent migrants, and whether “legal” or undocumented.

Some regional geographers have even proposed that a regional division of North America should include a distinctive “border region”,  an international region straddling the boundary and including all border crossings and many notable cities. This region experienced rapid economic growth following the signing of NAFTA, when many companies moved to northern Mexico, setting up maquiladora manufacturing plants. The border area has long been a major focus of drugs-smuggling, with border transport of illegal narcotics getting ever more inventive. In recent years, sadly, this same area has become the scene of some of the worst drugs-related violence in the world.

Population of Mexico-USA Transnational Metropolitan Areas.

Population of Mexico-USA Transnational Metropolitan Areas. Credit: Tony Burton; all rights reserved

The map shows the 2010 population of the major transnational metropolitan areas of Mexico-USA. The diameter of each circle represents the combined population of the twin cities that have grown up either side of the border. The pattern closely reflects the volumes of overland transport links (road and rail) between the two countries, as well as of commuters who live one side of the border, but work on the other side and cross daily.

The easternmost part of the boundary between Mexico and the USA follows the Río Bravo (Grande). Inevitably, there have been disputes when the river changed its course. Part of the western boundary follows the course of the Colorado River, from which so much water is taken that it now rarely flows into its delta region in Baja California. All the varied boundary and water-rights treaties and agreements between Mexico and the USA are decided via the International Boundary and Water Commission.

Related posts:

Aug 082011
 

Durango has long been considered the scorpion capital of Mexico (even the local soccer team became known as Los Alacranes, the Scorpions). At one point in the past, the city paid a bounty for each scorpion killed. Some historical accounts suggest that the scorpion catch rose dramatically, until the local authorities realized that some families had started their own financially lucrative scorpion-breeding programs.

These days, few scorpion stings are reported in Durango, partly because Durango’s scorpion hunters (alacraneros) catch and kill thousands each rainy season; prime specimens are encased in souvenir key rings and wall clocks sold in the local market. They also supply medical research labs.  Research in one lab at the University of California has isolated several peptides that appear to suppress the immune system, promising another way to prevent transplant rejection.

Lourival Possani, and his colleagues at Mexico’s National University (UNAM) have discovered a toxin (named scorpine) in scorpion venom that slows down the growth of malaria parasites in fruit flies; if similar techniques work in malarial mosquitoes, it may be possible to dramatically reduce the spread of malaria.

About 250,000 people in Mexico are stung by scorpions each year—more people than in any other country. Several dozen people die each year. Indeed, for the past 20 years, scorpion stings have been the leading reason in Mexico for  deaths due to adverse reactions and poisoning caused by venomous plants and animals. There are more than 200 different species of scorpions in Mexico, of which only 8, all belonging to the genus Centruroides are a significant public health risk. The map shows the areas defined by Mexico’s Health Secretariat as being of High, Medium and Low risk for dangerous scorpions.

Mortality remains higher in the smallest settlements, and is greatly reduced in mid-sized and large settlements. This is a function of both the reduced proximity of medical care in small settlements and of the higher numbers of scorpions/10,000 people in less urbanized settings. The highest mortality rates by age occur in the 0-1 years group (7 deaths/million), followed by the 1-4 age group (3.8/million) and the 60+ years group (0.8/million) (all data from http://www.scielo.br/pdf/rpsp/v21n6/05.pdf)

Scorpion risk in Mexico

Scorpion risk in Mexico (Secretaria de Salud)

Fortunately, progress is being made. The number of recorded deaths from scorpion stings [1] has fallen from more than 1,000/year in the 1950s to 285 in 1995, about 80 in 2003, and 57 in 2005. This improvement is the result of public health campaigns stressing the importance of seeking emergency treatment and of the development of antivenin serum (known as Alacramyn in Mexico and Anascorp in the USA). Mexico’s antivenin industry, led by the Bioclon Institute, is world class, exporting serum to the USA and Australia as well as throughout Latin America. The biggest threat from scorpions comes from central and northern states in Mexico, including several along the Pacific Coast: Nayarit, Jalisco, Colima, Michoacán and Guerrero.

According to UNAM’s Biomedical Investigation Institute, 277,977 people in Mexico reported scorpion stings in 2010. In the first five and a half months of 2011, 98,818 people in Mexico have been stung. The five states with the highest incidence of reported scorpion stings are: Jalisco (19,995), Guerrero (15,769), Morelos (13,123), Guanajuato (12,326) and Michoacán (10,597).

The incidence of scorpion stings rises sharply in summer when higher temperatures encourage scorpions to leave their lairs and go exploring.

Q. What other factors, besides the ones mentioned in this post, might help explain the pattern of risk shown on the map? Hint – can you think of things that the states shown as “high risk” — or the “low risk” ones — have in common?

– – – – –

[1] A Google search using the terms “scorpion”, “deaths” and “Mexico” finds dozens of websites all claiming that “In Mexico, 1000 deaths from scorpion stings occur per year.” This includes the two highest ranking sites in the results here and here, for articles dated 14 April 2011 and 20 August 2009 respectively. Given that 1000 deaths/year from scorpions has not been true for 20+ years, perhaps it’s time for these sites  to update their data by referring to Geo-Mexico!

Aug 062011
 

The 2010 censuses in the USA and Mexico have led to numerous reports on either side of the border. This post looks mainly at recent reports from the Pew Hispanic Center, a project of Pew Research Center, which describes itself as”a nonpartisan ‘fact tank’ that provides information on the issues, attitudes and trends shaping America and the world.”

The total US population in 2010 was 308.7 million. The Pew report entitled U.S. Hispanic Country of Origin Counts for Nation, Top 30 Metropolitan Areas says the the USA had 50.5 million Hispanics in 2010, including 31.8 million of Mexican origin (63% of all Hispanics). [The categories are based on self-described family ancestry or place of birth in response to questions in the 2010 Census and the 2009 American Community Survey.] The population of Mexican-origin grew by 54% (11.2 million) between 2000 and 2010. Mexicans are the dominant Hispanic group in many major metropolitan areas, from Los Angeles to Chicago, and San Antonio to Atlanta, with some exceptions in the East, including Miami (Cubans) and New York (Puerto Ricans).

The report is accompanied by detailed statistical profiles, including Statistical Profile: Hispanics of Mexican Origin in the United States, 2009 that provides a concise summary of all the key data about the Mexican diaspora in the USA.

The Pew Hispanic Center has also updated its interactive maps and database on the USA’s Latino population. Data can be viewed by county for 1980, 1990, 2000 and 2009 and reveal the shifting patterns of residence of the Hispanic population since 1980.

Another Pew report, The Mexican-American Boom: Births Overtake Immigration shows that, since 2000, births have overtaken immigration as the main driver for the dynamic growth of the Mexican population in the USA. This is because:

  • Mexican-Americans are younger (on average) and have higher fertility than other US groups, and
  • The numbers of Mexicans migrating to the USA has fallen. Mexico’s 2010 census revealed that emigration from Mexico to the USA has dropped significantly in recent years, from an average of 480,000/year in 2000—2005 to around 145,000/year for 2005—2010.

Hispanics in the USA lag behind the rest of the population in terms of education. For example, only 9% of Mexicans in the USA aged 25 and over have at least a  Bachelor’s degree, compared with 13% of all Hispanics in the USA and over 20% for the US population as a whole. This is reflected in median earnings, where the average personal earnings for Mexicans in the USA aged 16 and over was $20,000 in 2009, compared to $28.900 for the US population as a whole.

A Presidential Advisory Commission has been formed to look at ways to improve the academic achievement of Hispanics, the largest and fastest-growing minority in the public education system.

The growing number of Hispanics in the USA has meant that Hispanics are now looking to have a greater say in politics. This has led to the formation of the Tequila Party, a nonpartisan movement launched on 5 May (Cinco de Mayo) 2011. Their first political rally, a call to “get out and vote”, accompanied by mariachis, was held in Tucson, Arizona.

Could Southern California’s water woes be eased by a desalination plant in Mexico?

 Mexico's geography in the Press  Comments Off on Could Southern California’s water woes be eased by a desalination plant in Mexico?
Aug 042011
 

Southern California water officials are reportedly considering helping to finance a desalination plant in Mexico as a partial solution to their on-going water issues.

A desalination plant proposed by San Diego County Water Authority and Metropolitan Water District of Southern California, and planned for north of the border in Carlsbad (San Diego County) has been tied up in lawsuits and permitting problems for over a decade. As a result, three states—California, Arizona and Nevada—originally approached Mexico about sharing a desalination plant.

Now, however, the San Diego County Water Authority and Metropolitan Water District of Southern California have proposed a new plant located in Rosarito, Baja California, across the border from San Diego. The plant would have a capacity of 284,000 cubic meters (75 million gallons) of water a day to serve communities on both sides of the border. Construction could begin as early as 2013, at an estimated total cost of $1 billion (one-third of which would be contributed by Mexico).

The proposal has been roundly condemned by several environmental groups, who claim it is an attempt to legitimize the unsustainable usage of water in southern California, while simultaneously destroying marine life off the coast of Baja California.

Related post:

Mexico’s water resources and water-related issues are the subject of chapters 6 and 7 of Geo-Mexico: the geography and dynamics of modern Mexico. Ask your library to buy a copy of this handy reference guide to all aspects of Mexico’s geography today! Better yet, order your own copy…

Mexico’s changing society: the phenomenon of “los ninis”

 Mexico's geography in the Press  Comments Off on Mexico’s changing society: the phenomenon of “los ninis”
Aug 022011
 

Los ninis are young people (aged 15-29) that “ni trabaja, ni estudia” (neither work nor study). They have become the focus of much press attention in the past couple of years, often accompanied by the phrase “Mexico’s lost generation”.

This El Universal article cites Education Ministry (SEP) figures that there are more than 7 million ninis in Mexico, 20.9% of the total number in that age group in the country. Apparently, at present, only five states have any specific programs targeting ninis and trying to persuade some of them either to enter the workforce or resume their education. These five states are Chihuahua, Baja California, Tlaxcala, Guerrero and Hidalgo.

The two states with the highest proportion of ninis (over 25% of the age group) are Chiapas and Michoacán, neither of which has any specific program to help them. The states with the smallest proportion of ninis (about 15% of the age-group) are Colima, Quintana Roo and Yucatán.

It is widely held that, in the absence of help, many ninis will have few options other than to turn to antisocial and criminal behavior, connected to drug trafficking, drug gangs, petty crime and the sex trade.

The state programs that are trying to work with ninis are adopting a variety of strategies, from seeking funding to recruit some ninis into local police forces or offering three-years paid service in the military to providing a direct monetary incentive to continue their education or financial incentives to firms that employ ninis. For example, the state of Chihuahua has funded 2,000 jobs, at a salary of 112 pesos (slightly less than 10 dollars) a day, for such socially-responsible tasks as painting homes in marginal parts of Ciudad Juárez or cleaning parks and public spaces  in Chihuahua city.

It is far too early to say whether these strategies will ultimately be successful. Finding an appropriate and productive role for Mexico’s millions of ninis is likely to remain one of society’s major challenges for decades to come.

Update (17 September 2011):

Mexico’s Secretariats of Education (SE) and of Labor and Social Welfare have issued a joint rebuttal of the previously published figure of 7 million ninis, which apparently originated in an OECD report, not from SE data as originally reported.

The rebuttal claims that 78% of these ninis are young married women, with children, who dedicate themselves to home-making. Up to 1 million young people are in this situation in the State of Mexico alone, the Secretariats claim. They emphasize that the figures reveal a gender inequality in access to educational and economic opportunities, linked to cultural patterns where many young women still see marriage and motherhood as their preferred or only option.

Read more:

The troubled rise of the Green Movement in Mexico

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Aug 012011
 

Two specific events helped stimulate the rapid growth of Mexico’s green movement in the 1980s:

These motivated many citizens to take direct action. Membership in Environmental Non-Governmental Organizations (ENGOs) surged, as “green brigades” aided the victims. Two months after the earthquake, representatives from 300 regional groups met and formed a coalition of green groups focused on issues such as deforestation, pollution, and opposition to nuclear power. The 1992 Rio UN Environmental Summit and opposition to NAFTA (because it neglected environmental issues) provided additional stimulus to the movement.

The number of ENGOs increased from fewer than 30 in 1985 to about 500 by 1997 when about one in twenty Mexicans was a member of an ENGO.  The ENGOs had highly professional staffs and were well funded from Mexican and international sources. Through demonstrations and militant actions they successfully stopped the construction of a half billion dollar tourism complex south of Mexico City and the proposed world’s largest salt mine in Baja California. They also were significant in the passage of new laws for environmental protection, reducing deforestation, protecting wildlife, and establishing protected areas.

Vicente Fox, the PAN/Green Party candidate, won the Presidency in 2000.  His Minister of the Environment, Víctor Lichtinger, brought scores of highly qualified fellow key ENGO leaders into the administration. While this put the nation’s leading environmentalists on the inside, it also essentially “decapitated” and deflated the ENGO movement, especially its more militant members. Despite these key appointments, Fox’s administration gave relatively low priority to environmental issues. When Fox sided with tourism investors, and decided against issuing a detailed analytical report on beach pollution, Lichtinger and many of his senior staff resigned. They mostly moved to international or academic positions and consequently did not rejuvenate the leadership of the ENGOs they had left.

Green party logo

Green party logo

For the 2006 election, the Green Party formed an alliance with PRI and came in a weak third. The party, which has suffered from despotism, bribery and violation of election laws, managed to elect 22 diputados in the 2009 election. The Calderón Presidency has obtained good environmental marks for its leadership in global warming; however its comprehensive tree-planting program has received some criticism. Current ENGO activity is focused less on high profile mass mobilizations and protests, and more on specific issues such as legislative  lobbying, public awareness, climate change, energy issues, water, deforestation, biodiversity, recycling and local tree=planting and clean-up campaigns.

Main source: Jordi Díez, “The Rise and Fall of Mexico’s Green Movement”, European Review of Latin American and Caribbean Studies 85, October 2008, 81-99.

Mexico’s environmental issues are analyzed in many chapters of Geo-Mexico: the geography and dynamics of modern Mexico, including chapter 30. Explore the book using Amazon.com’s Look Inside feature and buy your copy today!