To Soothe Investors, Mexico’s Pena Nieto Must Tackle Graft

To Soothe Investors, Mexico’s Pena Nieto Must Tackle Graft
Protesters hold up posters that read in Spanish “Pena Out!” during a march to pressure the government into finding 43 missing college students, Mexico City, Nov. 20, 2014 (AP photo by Rebecca Blackwell).

Autumn has been a difficult season for Mexican President Enrique Pena Nieto. Public furor has erupted into sustained and sometimes violent protests over the disappearance of 43 students in the rural southwestern state of Guerrero. Long one of Mexico’s poorest, most crime-ridden and isolated states, Guerrero had not been a priority for Pena Nieto’s administration, which has focused tirelessly on promoting the image of a modern and efficient Mexico to foreign investors. But as Guerrero’s longstanding economic and security problems became headline news across the world in the past month, that crafted image of a Mexico open for business after a series of economic reforms has been sullied by other scandals.

First, on Nov. 6 Pena Nieto’s government angered Chinese investors by canceling a contract for a high-speed railway to connect Mexico City to nearby Queretaro, which is home to a fast-growing aerospace industry. The contract had drawn criticism since it was awarded to a consortium that included Mexican companies such as Teya that are connected to long-time backers of Pena Nieto. Teya’s owner, Armando Hinojosa Cantu, won lucrative contracts while Pena Nieto was governor of the state of Mexico and also supported his presidential campaign. The Mexican government at first vehemently defended the contract; Transportation Minister Gerardo Ruiz Esparza even brushed aside criticisms by saying, “In these cases there are always some known personality. . . . Almost all the big companies can be connected to something.”

Then, on Nov. 9, noted Mexican journalist Carmen Aristegui, a longtime critic of the president, published an investigative report claiming that the multimillion-dollar mansion that Pena Nieto shares with his wife, a former telenovela star, is owned by Grupo Higa, a company also controlled by Cantu.

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