About SourceMex

SourceMex focuses on Mexican economic and political issues such as trade and investment, agriculture, elections, the petroleum industry, environment and sustainability, human rights, and social issues. It also places particular emphasis on developments and analysis of U.S.-Mexico relations, including matters related to the U.S.-Mexico border.

Current Issue

High Debt Limits Access to Commercial Loans for Many Mexican States

The amount of money available to state governments to borrow has become increasingly limited, in large part because of recent scandals involving governors. According to recent data from the finance ministry (Secretaría de Hacienda y Crédito Público, SHCP), commercial banks have tightened requirements for local and state governments to qualify for loans, effectively reducing the amount of money available to these entities. During the first half of 2016, commercial banks disbursed only about 8.4 billion pesos (US$463 million) in loans to local and state governments, which is half of the amount approved in January-June 2015. This was the largest year-on-year decline since the sharp downturn in the Mexican economy in 2009, which generally followed the economic crisis in the US that year. The reduced loan rate also follows a sharp increase in the liabilities of several states over the past five years. Veracruz, Quintana Roo, Nuevo León, and Chihuahua accounted for roughly one-half of the 70% increase in the liabilities of state governments between 2010 and 2015, which stood at 536 billion pesos at the end of December (US$29 billion), according to the SHCP.

Defense Ministry Reports Tens of Thousands of Defections from Military Since 2000

More than 150,000 members of the Mexican military forces deserted from their posts between 2000 and 2016, many to join the ranks of organized crime. A new report from the defense ministry (Secretaría de la Defensa Nacional, SEDENA) said the largest number of desertions occurred between 2000 and 2006, during the administration of former President Vicente Fox, with the numbers falling gradually during the terms of ex-President Felipe Calderón and current President Enrique Peña Nieto. According to the SEDENA report, the principal reason behind the decision of soldiers and marines to leave the military was the combination of low pay and high risk. Other factors were the extended time away from their families (six months) and poor military discipline. According to some experts, even though the military offers a steady salary, housing, clothing, and other basic needs, a high percentage of those who leave do so because they cannot withstand military discipline or lack the vocation or capacity for training. Another large percentage of deserters have found their way into the ranks of criminal organizations, where they can use their training to serve in the role of enforcers and bodyguards. By some estimates, one out of every three military deserters ends up employed by a criminal organization.

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