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Mexico: Presidential Candidate Obrador Promises to End Monopolies and Raise Taxes on Mining

Article Summary:

Increasing competition is a huge task for Mexico. In a country where known monopolies control the force of the economy the plan from presidential candidate Andres Manuel Lopez Obrador, who lost the 2006 presidential by a few votes, to remove control and raise taxes on mining sectors is seen as nothing less than revolutionary.

Photo Credit: America Economia

Original Article Text From America Economia via Google Translate :

Mexico: López Obrador Promises to End Monopolies and Raise Taxes on Mining

Tapachula, Mexico. The presidential candidate of Mexico Andres Manuel Lopez Obrador promised to end monopolies and foreign mining companies looking to pay more taxes and higher wages if it wins the elections on July 1.

“All that will be corrected. Because price comparison, here you pay more for materials, construction, telecommunications, interest on loans, which in any other part,” he told Reuters in an interview over the weekend after an event proselytizing in the southern state of Chiapas.

In Mexico, production of many goods and services, ranging from bread and cement to television and the Internet is dominated by a few players.

Economists believe that the lack of competition has long been a drag on the second Latin American economy.

“The Mexican consumer would save up to 10% of their income if there were no monopolies in the country,” he said.
Economists believe that the lack of competition has long been a drag on the second Latin American economy.

“The Mexican consumer would save up to 10% of their income if there were no monopolies in the country,” he said.
The politician, who lost for just the 2006 presidential vote, said that to revive the economy requires the control of large sectors of the industry not be placed in a few hands.

Increasing competition is a huge task for Mexico. The country has a monthly subscription costs higher for basic broadband connection speeds and lowest among OECD countries, according to figures from September 2010.

Lopez Obrador, former mayor of Mexico City, was on the verge of winning the presidency and denounced electoral fraud, leading massive protests in the capital when her rightwing rival Felipe Calderon was declared the winner.

Those protests, which included the closure of a vital avenue capital city for several months, the presidential candidate popularity subtracted, whose support in recent polls is between 15 and 25%, down from favorite Enrique Peña Nieto, the opposition Institutional Revolutionary Party (PRI).

Intricate interests. Lopez Obrador, nicknamed “the Peje” by the alligator gar, a fish typical of his native state of Tabasco, has sought to soften his image as an agitator approaching the business community, encouraging private investment and promising greater prosperity.

The politician is willing to have some of the most powerful businessmen to enter closed areas to try to break the intricate interests of others.

Among the magnates is the world’s richest man, Carlos Slim, whose companies dominate the sector of telecommunications, who worked with the government of Mexico City to develop parts of the capital during the administration of Lopez Obrador in 2000-2005 .

The government of President Calderon has so far prohibited Slim enter the television market, dominated by Emilio Azcarraga of Televisa and Ricardo Salinas Pliego of TV Azteca.

“If Slim or any other citizen wants to participate in the business of television, I could do,” said the politician of 58 years.

“Whether or Salinas Pliego Azcarraga or any other means to participate in the telephone business, you can do,” he said.

And while half of its population lives in poverty, Mexico is among the countries that pay for bread and cereals within the 34-nation bloc.

However, the Calderon administration have been advances and Slim’s companies have been forced to make concessions.
Last year, the telecommunications regulator ordered the cell phone giant Slim, America Movil, to make adjustments that resulted in a 71% lower interconnection rates. Slim also reduced rates on calls from fixed phones in January.

Not expropriations. López Obrador said that foreign mining predominate among Canadians, have been treated very generously by previous governments, denying Mexicans a fair share of the benefits of its natural resources.

“We will seek in the case of mining convince and persuade the miners to standardize salaries. To be paid to a miner from Mexico, if not the same as paid to a Canadian mining, which takes into account that there is a great inequality “he said.

Miners also be required to meet environmental standards to avoid destroying or polluting the territory in which it operates, he said.

“We want to convince them to pay taxes as in Canada, because they pay taxes in Mexico. In Canada they have to pay 12% for mineral extraction. Here nothing. But we will not cancel concessions. We will not expropriate” he said.

The Canadian mining companies operating in Mexico include Goldcorp and Pan American Silver.

Tax rates for projects in Canada are determined by the provinces, are based on profits and vary from 3 to 17%. Companies must also pay income tax at the provincial and federal.

Lopez Obrador said that if he becomes president he will build five refineries in three years to ensure that Mexico exports crude oil and, instead, sell refined product.

The politician said that foreign investment would be more than welcome in their government.

“We are in favor of foreign investment. You need (…) I was head of government in Mexico City, and more foreign investment was when he reached the city,” he said.

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From America Economia

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