[Marxism] WSJ: Mexican President Signs Law for Special Economic Zones

Shalva Eliava shalva.eliava at outlook.com
Wed Jun 1 18:07:41 MDT 2016

Ah yes, because every peripheral country that has introduced SEZs has then seen skyrocketing levels of economic development. Of course, I remember how the fundamentalist Marxists used to point to these SEZs as proof of the industrialization, hence capitalist development, of the periphery (thus "refuting" the theories of the dependistas). Thirty years later...what's changed?


Mexican President Signs Law for Special Economic Zones
Areas to offer tax breaks together with trade and other benefits to attract investment 

By Anthony Harrup
May 31, 2016 5:31 p.m. ET

MEXICO CITY—Mexican President Enrique Peña Nieto on Tuesday signed a new law for the creation of special economic zones that will offer tax breaks together with trade and other benefits to attract investment into areas with undeveloped economic potential in poor southern states of the country.

In an event in the Pacific port city of Lázaro Cárdenas, Mr. Peña Nieto said the government would draw up regulations in the next month and decree the first special economic zones by the end of this year.

The first three are Lázaro Cárdenas, Puerto Chiapas in Mexico’s southernmost state of Chiapas, and the Isthmus of Tehuantepec, joining the Gulf port of Coatzacoalcos with Salinas Cruz on the Pacific Coast. Another zone in the oil-belt states of Tabasco and Campeche, which has been hit hard by the downturn in the oil industry, is planned for 2017.

An anchor tenant, such as an industrial company that can attract suppliers and others, should be in place for each zone in 2018 at the latest, he said.

Mr. Peña Nieto illustrated the regional inequality of Mexico’s $1 trillion economy, where northern and central states have raced ahead of the south.

Two of every three people in extreme poverty in Mexico live in southern and southeastern states, he said. The three poorest states—Chiapas, Oaxaca and Guerrero—are home to one in 10 Mexicans but receive just $1 of every $36 in foreign direct investment, and their exports are equivalent to just 2% of those in the six states that border the U.S.

“There’s a Mexico that competes and wins in the global economy, with growing levels of income, development and well-being. But there is also a Mexico that has been left behind, which hasn’t been able to take advantage of its potential,” he added.

The special economic zones will include tax incentives for companies investing in the designated areas, trade and customs benefits, as well as streamlining of regulatory processes. They will also receive increased infrastructure investment, such as in energy and communications. The tax benefits should be competitive with special economic zones in other parts of the world, Mr. Peña Nieto said.

Lázaro Cárdenas, home to one of Mexico’s principal sea ports and a large steel industry, lies on the border of Michoacán and Guerrero states which in recent years have been racked by drug violence, organized crime and gang wars.

Security for investors and workers, and safe logistics corridors are essential for the special economic zones to be successful, said Juan Pablo Castañón, head of Mexico’s principal business umbrella group who pledged private-sector support for the program.

Special economic zones have a checkered record across the world, with some highly successful and others not so, according to the World Bank which advised Mexico in drawing up the plan.

Mr. Castañón pointed to the more than 50-year history of Mexico’s maquiladora, or export manufacturing industry, as an example of how such development plans can be a success. Many of the 2.5 million people employed in maquiladoras come from the states that would benefit from the special zones, he added.


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