Over the next few weeks, the Mexican Congress is likely to become a kind of theological council to discuss the so-called Energy Reform proposal put forward by President Enrique Peña Nieto. The measure would modify Articles 27 and 28 of the Constitution and allow contracts between the Mexican government and private companies to share profits from the extraction of oil and gas throughout the country as well as deep-water sites in the Gulf of Mexico. It would also open the door to free competition along the whole chain of the industry: refining, transport, storage, distribution and basic petrochemicals.
The historical significance of this proposal cannot be understated. In 1938, the Mexican oil industry was nationalized, and in 1960, a constitutional change assigned full control of the industry to Pemex, a state monopoly.
Krauze asks, “Why can’t Mexico, like Brazil or Norway, develop its publicly owned oil company into an enterprise that can successfully benefit from association or competition with private companies?”
He lists three reasons:
- The controversial record of privatization in Mexico,
- and a seldom-mentioned, but perhaps most powerful reason of all,
the fear that increased oil revenue will simply raise the level of corruption to the point reached during Mexico’s last oil boom, which began in the late 1970s and led to a traumatic experience for the Mexican people.
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