While we were in Mexico last week, I was reminded again, first-hand, of the "have" and "have not countries we tend to take for granted in the United States.
But, wait. Is it accurate to characterize Mexico as a "have not" country? The disparity of wage-earning opportunity between the United States and Mexico is always cited as the reason for the stream of immigrants—legal and undocumented—across our southern border.
Turns out, the country has some valuable natural resources, most of them below the soil. The country's semi-arid climate, its lack of rainfall, and its limited amounts of fertile land have made large-scale agriculture difficult. Only about 13% of Mexico's land is cultivated. Approximately one-fourth of the country is covered by forests, giving Mexico some of the world's largest remaining forest reserves, despite high levels of deforestation. Most of these forests are found in the Sierra Madre range, which runs north to south in the Pacific Ocean side of Mexico. The rainy, tropical region of the Yucatan Peninsula and the Chiapas Highlands, in southern Mexico, has both pine and oak.
Turns out, the country has some valuable natural resources, most of them below the soil. The country's semi-arid climate, its lack of rainfall, and its limited amounts of fertile land have made large-scale agriculture difficult. Only about 13% of Mexico's land is cultivated. Approximately one-fourth of the country is covered by forests, giving Mexico some of the world's largest remaining forest reserves, despite high levels of deforestation. Most of these forests are found in the Sierra Madre range, which runs north to south in the Pacific Ocean side of Mexico. The rainy, tropical region of the Yucatan Peninsula and the Chiapas Highlands, in southern Mexico, has both pine and oak.
Monarch butterflies enjoy the warmth near their overwintering colony in Michoacan, Mexico.
Monarch butterflies return year after year to the same swath of forest in central Mexico, to pass the cool winter months clustered together on evergreen trees.
Monarch butterflies return year after year to the same swath of forest in central Mexico, to pass the cool winter months clustered together on evergreen trees.
Mexico also has large deposits of silver, copper, salt, iron, manganese, sulfur, phosphate, zinc, mercury, gold and gypsum.
And then there's the oil.
Until recently, petroleum was the country's single most valuable mineral resource. For a decade, Mexico was one of the elite oil producers in the world, the fourth largest in the Western Hemisphere behind the United States, Canada and Venezuela.
From 1979 to 2007, Mexico produced most of its oil from the supergiant Cantarell Field, which used to be the second-biggest oil field in the world by production.
And, until last year, the state-owned company Petroleos Mexicanos (Pemex) had exclusive rights over all oil production in Mexico.
And then there's the oil.
Until recently, petroleum was the country's single most valuable mineral resource. For a decade, Mexico was one of the elite oil producers in the world, the fourth largest in the Western Hemisphere behind the United States, Canada and Venezuela.
From 1979 to 2007, Mexico produced most of its oil from the supergiant Cantarell Field, which used to be the second-biggest oil field in the world by production.
And, until last year, the state-owned company Petroleos Mexicanos (Pemex) had exclusive rights over all oil production in Mexico.
But annual production at Cantarell Field had dropped or failed to increase each year since 2004, and Pemex didn't have the financial or technical skill to exploit the remaining deep water reserves on its own.
So Pemex opened parcels to bid last December, and the international oil industry responded. Investors have agreed to pay billions of dollars to the Mexican government for rights to drill in the country’s portions of the Gulf of Mexico.
The auctions were the result of Mexico instituting energy reform legislation in 2013 and 2014, which ended the 75-year-old monopoly of Pemex and opened the country to foreign investment for oil exploration, production, pipeline construction and other energy ventures. The effort was viewed as the only way to end years of declining production.
“This is a vote of confidence that the energy reform is moving forward and for the geological potential of the Mexican Gulf deep waters,” said Jorge R. Piñon, former president of Amoco Oil Latin America and now an analyst at the University of Texas at Austin.
The government awarded eight separate blocks of offshore territory to companies including Total of France and Exxon Mobil and Chevron of the United States, which all already have a strong presence in the Gulf of Mexico and can therefore take advantage of existing service crews and pipelines they use in Gulf waters.
The most significant new entry may be by the China National Offshore Oil Corporation, or Cnooc, which won two blocks in the auction. Cnooc also has a strong presence in Latin America, and could now become a big player in Mexico as well.
So Pemex opened parcels to bid last December, and the international oil industry responded. Investors have agreed to pay billions of dollars to the Mexican government for rights to drill in the country’s portions of the Gulf of Mexico.
The auctions were the result of Mexico instituting energy reform legislation in 2013 and 2014, which ended the 75-year-old monopoly of Pemex and opened the country to foreign investment for oil exploration, production, pipeline construction and other energy ventures. The effort was viewed as the only way to end years of declining production.
“This is a vote of confidence that the energy reform is moving forward and for the geological potential of the Mexican Gulf deep waters,” said Jorge R. Piñon, former president of Amoco Oil Latin America and now an analyst at the University of Texas at Austin.
The government awarded eight separate blocks of offshore territory to companies including Total of France and Exxon Mobil and Chevron of the United States, which all already have a strong presence in the Gulf of Mexico and can therefore take advantage of existing service crews and pipelines they use in Gulf waters.
The most significant new entry may be by the China National Offshore Oil Corporation, or Cnooc, which won two blocks in the auction. Cnooc also has a strong presence in Latin America, and could now become a big player in Mexico as well.
The auction provides a rare moment of positive news in a gloomy period for Mexico. The peso has been battered by concern that the administration of President-elect Donald J. Trump will renegotiate the North American Free Trade Agreement, which is the foundation of Mexico’s manufacturing exports. Mexico is not a member of OPEC.
Across Mexico, entire regions are positioning themselves for what they believe will be a major makeover.
Mexican authorities hope that bringing in foreign energy companies will improve security by offering jobs to people who might otherwise work for the cartels.
“The best way to counterattack organized crime is by generating jobs in areas that are heavily influenced by criminals,” said one former Mexican ambassador.
Raúl Garcîa, 25, is an example of such a recruit. He said he once worked as a lookout for a cartel in Nuevo Laredo, earning about $200 a week, and thought of taking work as a hitman to double his pay. Then he heard of the Eagle Ford oil in south Texas. Now he earns about $1,000 a week as an oil field worker and shares a room with four buddies in a “man camp.” He sends much of his earnings to his wife and two boys back in Mexico.
“I hope someday I can go back and share my expertise,” he said. “That’s my dream.”
When it comes to illegal immigration, it seems clear that people from Mexico and Central America will continue to cross the border into the United States until the economies in their own homelands can provide them with employment that compensates them sufficiently to feed their families, and educate their children.
Thousands of miles of fencing will not change either of these facts.
Deportation does not work, either, they just come back. University of California at San Diego immigration expert Wayne Cornelius knows both tactics are futile. His recent study indicates that 97% of the people who try to cross the border eventually succeed, despite all the obstacles. “If they don’t succeed on the first try, they almost certainly will succeed on the second or the third try,” says Cornelius.
“Unless you can stop poverty or hunger, it will never stop, because people will always want to help their families. Doesn’t matter how tall the wall is, they will just dig a hole then."
The money sent back to Mexico by Mexicans living in the U.S. topped $26 billion in 2016. In 2015, those remittances totaled 2.3 percent of the country’s GDP.
In fact, Forbes reports that the money sent from the U.S. to Mexico by migrants, “replaced oil revenues as Mexico’s number one source of foreign income” in late 2015.
Will an infusion of new money into Mexico's flagging oil industry be enough to improve life for the average family in Mexico? And, if the standard of living does improve, will it improve enough to slow the flow of illegal immigrants into the United States?
The next few years will tell. In the meantime, I hope President Trump and his advisors will look carefully at our neighbors to the south, and not let knee-jerk decisions upset the delicate balance from potential improvement to total chaos.
Across Mexico, entire regions are positioning themselves for what they believe will be a major makeover.
Mexican authorities hope that bringing in foreign energy companies will improve security by offering jobs to people who might otherwise work for the cartels.
“The best way to counterattack organized crime is by generating jobs in areas that are heavily influenced by criminals,” said one former Mexican ambassador.
Raúl Garcîa, 25, is an example of such a recruit. He said he once worked as a lookout for a cartel in Nuevo Laredo, earning about $200 a week, and thought of taking work as a hitman to double his pay. Then he heard of the Eagle Ford oil in south Texas. Now he earns about $1,000 a week as an oil field worker and shares a room with four buddies in a “man camp.” He sends much of his earnings to his wife and two boys back in Mexico.
“I hope someday I can go back and share my expertise,” he said. “That’s my dream.”
When it comes to illegal immigration, it seems clear that people from Mexico and Central America will continue to cross the border into the United States until the economies in their own homelands can provide them with employment that compensates them sufficiently to feed their families, and educate their children.
Thousands of miles of fencing will not change either of these facts.
Deportation does not work, either, they just come back. University of California at San Diego immigration expert Wayne Cornelius knows both tactics are futile. His recent study indicates that 97% of the people who try to cross the border eventually succeed, despite all the obstacles. “If they don’t succeed on the first try, they almost certainly will succeed on the second or the third try,” says Cornelius.
“Unless you can stop poverty or hunger, it will never stop, because people will always want to help their families. Doesn’t matter how tall the wall is, they will just dig a hole then."
The money sent back to Mexico by Mexicans living in the U.S. topped $26 billion in 2016. In 2015, those remittances totaled 2.3 percent of the country’s GDP.
In fact, Forbes reports that the money sent from the U.S. to Mexico by migrants, “replaced oil revenues as Mexico’s number one source of foreign income” in late 2015.
Will an infusion of new money into Mexico's flagging oil industry be enough to improve life for the average family in Mexico? And, if the standard of living does improve, will it improve enough to slow the flow of illegal immigrants into the United States?
The next few years will tell. In the meantime, I hope President Trump and his advisors will look carefully at our neighbors to the south, and not let knee-jerk decisions upset the delicate balance from potential improvement to total chaos.
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