What’s Going On In This Country?

December 14, 2015 Edition
BY: SANTIAGO VERDUGO

Merry Christmas precious readers!

I spent the week doing some investigative under cover work for you, and here’s a picture of my clever steak out. This was all on purpose, mind you, I could have got down any time.

I hope everyone has a wonderful holiday season and I will be back to you before the new year! Feliz Navidad a todos.

Cheap property taxes. Anyone who pays property taxes here knows they’re a joke. Although gains have been made in the amounts of property taxes collected in recent years, Mexico still lags when that revenue is measured in terms of gross domestic product. Mexico was at the bottom of the list of countries in 2012, the most recent year for which figures are available, tied with the Netherlands and Estonia with property tax revenues representing just 0.3% of GDP. Mexico collected a total of US $2.7 billion in 2012, which was only about a million dollars more than in 1980.

Bank fraud. Mexican banks registered almost 3 million cases of  fraud totaling $480 million last year. A study by the consumer protection agency Condusef indicates that although the number of cases decreased by 2% last year, the financial impact increased by 3%.

Credit card fraud accounted for 48% of the total. Savings deposits were next, then debit card fraud and prepaid card fraud. It seems as though people can find ways to steal from any system.

The banks with the highest number of registered fraud claims were Banamex (800,046), Bancomer (713,486), Santander (534,245), Banorte (261,862), HSBC (172,081), Banco Azteca (137,463), Scotiabank (99,450), and Inbursa (52,345). Banco Azteca saw a 130% increase in cases, up from 59,657 claims in 2013. So now you know where your bank stands.

Oh No! Mexico bought 30 Sukhoi Superjet 100 aircraft from Russia, costing a total of $1.78 billion. Haven’t we learned our lesson? Just this year Mexico hired the Ruuskies to send up a communications satellite, a very expensive item, and Russia’s rocket fizzled out and crashed back to Earth, totally destroying our satellite. So Mexico built another one and this time hired NASA to launch it for them. The deal went smooth as butter. Now they’re once again going the cut rate route? What are they thinking? Well, I’m thinking I’m not flying on them, that’s for sure.

 More Pemex grief. Pemex has opened five gas stations in Houston, Texas, hoping to cash in on all the Mexicans living there. More could  follow if that goes well. Stations, not Mexicans. But that’s a big if, considering how nobody here feels the love for cheating Pemex stations. The company said in a statement that the Houston pilot project would allow it to measure the impact the Pemex brand has against American brands and identify business opportunities. Good luck with that.

Hot gas. Federal authorities estimate that 30% of all gasoline and diesel sold in Mexico’s gas stations is stolen, a figure they hope will be reduced by new controls on fuel sales that take effect next year. There will be a registry of all commercial fuel transactions in which all gas stations must participate, although only half of Mexico’s 15,000 stations have begun the process of obtaining the permit they will need  to continue operating. The registry is intended to keep track of all fuel sales along the supply chain and ensure that all the fuel sold by gas stations has been legally sourced. The Federal Tax Administration, SAT, will also play a role in the process by cross-checking fuel sales against tax filings. With a 90-day processing period, stations that haven’t applied by the end of September will not be allowed to operate come January 1. So that’s about half of all gas stations. Well, this will be interesting.

Is everyone a crook? The small village of Polixtepec, in the state of Guerrero, population 250, is under siege in the wake of violent confrontations between drug traffickers, community police and people from neighboring villages. Schools have been closed since all the teachers fled the town, as did the only nurse at the community’s health center. There is little food available.

Before you start feeling too sorry for these people, the beef is a fall out among thieves. They’re fighting over control of opium poppy cultivation, which the locals admit they grow.  But they say they are not criminals, only farmers. Well, if you grow opium instead of food, yeah, you might be a farmer who goes hungry.

Cheap gas. Of the other kind. Propane prices could plunge. As in 30%. Changes are coming with the liberation of import rules that take effect January 1. These include the liberation of import restrictions in 2016 and the elimination of price controls the year after.

The first will see private companies being allowed to import gas themselves, rather than go through Pemex, the state oil monopoly. At present, a firm such as Grupo Tomza buys its gas in the U.S. and transports it to Mexico, where it is purchased by Pemex, the only company allowed to import the product. Tomza then buys it back from Pemex and sells to consumers. As of January, Tomza will be able to bypass Pemex, but gas prices will still be subject to regulation by authorities. Then in 2017, supply and demand will actually kick in. This week although the international price for LPG was 4 pesos per kilo, Pemex was selling it to distributors for 9.2 pesos. By the time it gets to the consumer, a 20-kilogram tank costs 280 pesos. However, Landeros predicts that price will drop to 200 pesos, a significant change in a country whose propane gas consumption for domestic use is said to be the highest in the world, used by 80% of the population.