In the period between 1994 and March of 2000, 22 firms with foreign capital participation or Foreign Direct Investment (FDI) were registered in Chiapas. This is the equivalent of 0.1% of the total number of firms in Mexico with FDI (which is 18 809). Foreign firms in Chiapas participate with majority capital in 14 companies and with minority in 8.

Of the 188 municipalities in Chiapas, foreign firms are located in only 6 of them: 12 in the municipality of Tapachila, 6 in the capital Tuxtla Gutiérrez, one in Comitán, one in Chiapa de Corzo, one in Ocosingo and one in Pijijiapan. These municipalities represent 5.08% of the total number of municipalities. 86.3% of these businesses are located in the three most important cities (where 20% of the population of Chiapas lives).

The geographic information for FDI refers to the state where the domicile of the legal representative or the administrative office of each of the foreign firms are located (the only data that foreign investors supply when they inform the Registro Nacional de Inversiones Extranjeras- RNIE [National Registry of Foreign Investment]), and not necessarily to the federal state in which there is actual investment. The same applies with fixed assets on the part of the maquiladora firms. The amount of FDI reported at RNIE is the investment made by foreign persons (either physical or corporate) who complete acts of commerce in Mexico and branch offices of foreign investors established in the country for the performance of services,  since for this corporate entities from other countries constitute a Mexican association.

For the period 1994 to 1998, FDI was composed of investment registered at RNIE and the importation of fixed assets by maquiladora companies. It is since 1999, that the concepts of new investment, reinvestment of profits, and accounts between companies are included amongst the reporting to RNIE.  This investment does not include all the actual investment in Chiapas by Mexican companies which have offices in other states (where their investment would be registered). The statistics on FDI are generated by the Secretaría de Comercio y Fomento Industrial (SECOFI) and the World Bank, in accordance with the recommendations made by the International Monetary Fund (IMF) in its Manual of Balance of Payments and by the Organization for Economic Cooperation and Development (OECD).

HOW MUCH MONEY IS INVESTED IN CHIAPAS?

During the period of the armed conflict, from January of 1994 until March of 2000, FDI in Chiapas has been 5.4 million dollars. It should be recalled that the federal and state governments announced that between 1994 and 1998, more than 6 million dollars has been channeled to support development and combat poverty in Chiapas. If we consider only the three states of the Southern Region, investment is distributed amongst them in the following manner: 92.6% in Guerrero, 4.9% in Chiapas, and 2.5% in Oaxaca. The total amount of FDI in the 3 states is 110.1 million dollars.

Of the 32 states in the country, Chiapas occupies second-to-last place for FDI. Oaxaca fills the last position while Guerrero is in 27th place. In Chiapas, FDI was as follows: in 1994 it amounted to 0.4 million dollars; the same amount was invested in 1995, the year of the offensive by the federal government against the EZLN; in 1996, the year of the signing of the San Andrés Accords between the EZLN and the federal government on Indigenous Rights and Culture, the FDI rose to 1.0 million dollars; it descended to 0.4 million dollars for both 1997 and 1998, the years of the suspension of the negotiations and budget cuts, in addition to an escalation of violence by the state government against indigenous communities in the first semester of 1998. In 1999, FDI rose again up to 2.8 million dollars. From January to March of 2000, in the context of the presidential elections and the elections for the state government, no investment was registered.

In addition, during these six years, no importation of fixed assets by maquiladora firms was registered in Chiapas, (this is one of the strategic routes proposed by new president Vicente Fox to stimulate employment and combat poverty in the state).

By economic sector, of the 22 firms with FDI in Chiapas, 67 percent are located in the manufacturing sector (8 firms), 22.1 percent in commerce (10 firms), 10.7% in farming (2 firms), and 0.2% in financial services (2 businesses). In terms of amount of investment, 50.6% of FDI is destined for the manufacturing sector (1 390 300 dollars), 28.6% for commerce (787 000 dollars), 20.5% of the farming sector (563 800 dollars), and 0.3% for financial services.

FROM WHICH COUNTRIES DOES INVESTMENT COME?

The 22 foreign firms come from 9 countries: 7 firms from the United states, 5 from Guatemala, 2 from Costa Rica, 2 from Switzerland, and one each from Thailand, Spain, England, and Canada.

For March of 2000, the United States had 11, 630 firms with FDI in all of Mexico (61.8% of the total of all FDI businesses in Mexico), with 86.4% participating with majority capital. 0.06% of these firms are in Chiapas. Of all the investment from the United States in Mexico, 60.8% is located in industrial manufacturing, 13% in commerce, and 11.4% in financial services.

Chiapas occupies last place (32 of 32 states) in the country for FDI from member countries of the Asia Pacific Economic Council (APEC), with a total of 8 firms (7 from the United States and one from Canada). Guerrero occupies 19th place and Oaxaca 26th.

Of the 49 firms with FDI from Guatemala registered in Mexico, 5 are in Chiapas. In relation to the contribution of the entire Mercado Común Centroamericano (MERCOCEN), Guatemala contributes 26.1% of the total investment, occupying second place after Costa Rica. It occupies first place in terms of number of firms in Mexico. MERCOCEN is composed of Guatemala, Costa Rica, El Salvador, Honduras and Nicaragua. It has in total 124 firms in 17 states in Mexico, with Chiapas occupying fourth place and fifth place in terms of quantity of capital invested. There are no MERCOCEN firms in Guerrero or Oaxaca.

El Salvador has 15 firms with FDI in Mexico (0.1% of the total number of firms) and occupies third place amongst MERCOCEN members regarding investment in the country. After the Federal District (with 8 firms), Chiapas occupies second place in terms of presence of Salvadorean firms.

During the armed conflict in Chiapas, Costa Rica registered 45 firms in Mexico (0.2% of the total of all firms with FDI). Of these, 36 firms participated with majority capital. 18 of the firms are located in the commerce sector, 14 in services, 9 in manufacturing industry, 3 in construction and one in farming. The total amount of investment in this period rose to 9 082 500 dollars (72.4% of the investment contributed by MERCOCEN countries, which was 12, 549 600 dollars). The manufacturing sector represented 82.9%, 12.3% in services and 4.8% in commerce. Costa Rica occupies second place amongst MERCOCEN, after Guatemala, in terms of number of firms Mexico, but in first place in terms of amount of investment (with 72.4%).

During this third neoliberal term, Switzerland registered 322 firms in Mexico (1.7% of the total of all firms with FDI), realizing investments of 484.5 million dollars (0.8% of FDI in total in Mexico in this period which rose to 57 945.5 million dollars). Swiss investment equaled 99.3% of all investment in Mexico contributed by the countries of the European Free Trade Association (composed of Switzerland, Norway and Iceland). 85.8% was invested in the manufacturing sector.

Spain has 1 107 firms in the country (5.9% of the total firms with FDI), equaling 1.8% of all investment in the period under analysis and 8.6% of investment contributed by the countries of the European Union (EU). While Spanish investors had 3 firms in Oaxaca and 3 in Guerrero, there was only one in Chiapas. If we add the total of all firms from EU countries, there are 28 firms in Oaxaca, 20 in Guerrero and only 2 in Chiapas (one Spanish and the other from England).

Thailand had 6 firms with FDI in Mexico with investment of 17 million dollars (amounting to 0.5% of investment of the Asian countries of the Pacific Rim and occupying 8th place) with one of these being in Chiapas. Two are in fishing. In addition, there is one in each of the following branches: manufacture of plastic products; manufacture, repair, and assembly of  machinery and equipment for general uses; wholesale commerce in food, drink and tobacco; and real estate services. Thailand is the only Asian country from the Pacific Rim that has FDI in Chiapas. The Pacific Rim is composed of Australia, Korea, China, Philippines, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Papua-New Guinea, Singapore, Thailand, Taiwan, and Brunei Darussalam.

Up until March of 2000, England registered 629 firms in Mexico (3.3% of the total in the country), with 80.8% as majority partners and 19.2% as minority partners. Of the 629 English firms, only one of these is located in Chiapas. Of all the firms from the United Kingdom, 39.2% are located in the services sector; 34.2% in manufacturing industry; 17.8% in commerce; 3.5% in construction; 1.7% in farming, 1.7% in mining and extraction; 1.7% in transport and communication; and 0.2% in electricity and water. From another perspective in relation to economic sectors, it was manufacturing industry that had the most invested, followed by transportation and communications (18.9%), mining and extraction (3.4%), commerce (3.0%), services (2.8%), and 0.5% in other sectors. From January of 1994 to March of 2000, the English made investments of 2 655.4 million dollars (equivalent to 4.6% of the FDI in all of the country for this period and 21.6% of that contributed by the 15 countries of the European Union). Thus, England occupied second place amongst countries of the European Union in terms of amount invested in Mexico.

Canada had 1 179 firms registered (6.3% of the total in Mexico), with one of those in Chiapas. Of all of these, 86.9% participate with majority capital. 35.5% of these are in the services sector, 23.6% in industry, 18.9% in mining and extraction, 18.3% in commerce, 2.1% in construction, 0.9% in transportation and communication, 0.5% in the farming sector, and 0.2% in electricity and water. However, by economic sector, 60% of the investment is in the manufacturing sector, 24.5% in services, 9.3% in mining and extraction, 5.7% in commerce and 0.5% in other sectors. Canadians realized investments of 2 342.1 million dollars (4% of FDI) and occupy sixth position amongst the countries which invested in Mexico during this period. From the point of view of the 1 179 firms, 278 are in manufacturing industry, 223 in mining and extraction, 216 in commerce, 109 in financial services, 25 in construction, 10 in transportation and communication, 6 in farming, 2 in electricity and 310 in other services (community and social services; hotels and restaurants; professional, technical and personal services; agriculture, livestock, etc.).

The Organization for Economic Cooperation and Development (OECD) is composed of an exclusive club of 29 countries including: Mexico, the United States, Holland, Japan, the United Kingdom, Germany, Canada, Spain, France, Korea, Swiss, Sweden, Denmark, Belgium, Italy, Luxembourg, Finland, Australia, Ireland, Austria, Portugal, the Czech Republic, Iceland, Greece, New Zealand, Hungary, Poland, Turkey, and Norway. In total, OECD countries have 17 198 firms in Mexico. Only the United Kingdom, Spain, the United States, Canada and Switzerland have investments in Chiapas, placing Chiapas last amongst the Mexican states in terms of firms coming from the OECD.

The Asociación Latinoamericana de Integración is composed of 10 countries from the Southern Cone: Argentina, Brazil, Colombia, Bolivia, Chile, Ecuador, Paraguay, Uruguay, Peru, and Venezuela. Up until March of 2000, ALADI had 973 firms in Mexico with FDI, representing 5.2% of the total in the country. Of these, 77.6% have majority capital and 22.4% have minority capital.

In terms of firms from ALADI, Argentina has the highest number of these in Mexico, followed by Colombia, Chile, Brazil, Peru, Venezuela, Uruguay, Ecuador, Bolivia and Paraguay in last place. However, from the point of view of the amount of investment, Uruguay holds first place with 34.7%, followed by Chile, Venezuela, Brazil, Argentina, Colombia, Peru, Ecuador, Paraguay, and in last place Bolivia. Of the firms from all of these countries, 37.2% are located in the services sector and 35.6 percent in commerce. The total amount of FDI investment from ALADI in Mexico is 176.6 million dollars (0.3% of the total FDI in Mexico). Only one document from SECOFI registers an FDI (from Colombia) in Chiapas, placing the state last, together with Colima, Guerrero, Tlaxcala and Veracruz, in terms of investment coming from ALADI .

IN WHAT ARE FOREIGN COMPANIES INVESTING IN CHIAPAS?

In the month of March, 2000, foreign participation in Chiapas was: 10 firms in commerce, equaling 22.1% of the total invested in the state (3 with participation of minority capital and 7 with majority capital); 8 in manufacturing industry, representing 67% of total investment (3 with minority capital and 5 with majority); 2 in the farming sector, equaling 10.7% of investment (one with minority capital and one with majority); and 2 in financial services, with 0.1% of FDI (one with minority capital and one with majority). Thus, of the 22 firms, 14 have more than 50% of the participation of invested capital.

From the point of view of the 12 recipient branches, the 22 firms with FDI in Chiapas are distributed as follows: 7 in the commerce of wholesale non-food products; 3 in wholesale trade food, drink and tobacco; 2 in the manufacture of plastic products; 2 in other retail services; and one in each of: livestock and game; fishing; footwear industry; cellulose, paper and paper product manufacturing; printing, editorial and related industries; production of basic chemical substances; manufacture of clay construction products; manufacture and/or assembly of machinery and equipment for general uses.

In the whole country, up to December of 1999, there were 213 firms with FDI registered in the realms of agriculture, livestock, game, silviculture and fishing (equaling 1.2% of the 18, 162 located in all of Mexico). 2 of these were located in Chiapas. All of these foreign firms were located in 26 of the 32 states of the country. Chiapas occupied 14th place amongst the states in terms of investment in these sectors, holding 0.3% of the total investment, or 585.2 thousand dollars. One should point out that, in these branches, 337.4 thousand dollars of this investment was realized in 1994, with a void in FDI in the years of 1995 and 1997. However, in 1996, when the San Andres Accords between the EZLN and the federal government were signed, 223.9 thousand dollars was invested. Only 2.5 thousand dollars was invested; and, in 1999, only 21.4 thousand dollars.

WHAT ARE THESE FIRMS?

SECOFI does not report on who the firms with FDI in Chiapas are, but some are known. In addition, there is foreign investment that is not direct but via affiliates in other parts of the country. In addition, there are other international organizations with investment in the state or that are financed by some of the large transnational or Mexican corporations. On the part of governments, some have supported small development projects via the state government.

Examples of some of the Mexican and foreign transnational firms include the Planta Maquiladora de Arnesespara Automobiles Axa Yasaki; ARBALA TTN which has cement, paper and recycling plants in San Fernando, Tapachula and Tuxtla; Planta Procesadora de Atún in Tapachula; Suministradora de Combustibles y Lubricantes of Puerto Madero, S.A. de C.V.; Kenworth Mexicana, Industrias Bioquímicas of San Cristóbal; Mc Donald’s and Sam’s Club in Tuxtla; Gumex, S.A. de C.V. y Cinsa S.A.; Nestle in Chiapa de Corzo and the Central Valleys; Novartis, Kimberly Clark, The Nature Conservancy and International Paper in the Montes Azules, Biosfera Lacantún, Monumento Natural Bomapak; Coca Cola Co. and Pepsicola Co.  Projects financed by the World Bank operating in the conflict zone of Chiapas and processing plants for flies (bred to combat livestock disease) (MOSCAMED) operated by the government of the United States and Mexico.

According to researcher Andrés Barreda, the corporation HydroQuebec- the builder of the most important hydroelectric dams in Canada- has had dealings with the government of Mexico for the exploitation of natural gas in Chiapas. He also links eucalyptus plantations to International Paper (world leader in the production of paper, tied to the Chase Manhattan group, owned by the Rockefeller family). In addition, Simpson and Pulsar International, together with Exxon, Ford Motor Company, United Airlines, Walt Disney and McDonald’s, finance Conservation International which operates in the ecological reserves of the municipality of Ocosingo and that strongly promote the privatization of the natural reserves with aims of biopiracy, amongst others.

Pulsar International, owned by Mexican businessman Alfonso Romo, who has been mentioned as a candidate to form part of Vicente Fox’s government, operates in Chiapas with plantations of bamboo, vegetables, tobacco, and other agricultural products and with fields of very advanced genetic experimentation. This businessman is also linked to the transnational Monsanto. For its part, Nestle has around 20 plants in the country, one of which is in Chiapas. This firm has interests in the production of milk, coffee and cacao and is one of the principal promoters of genetically modified organisms in agribusiness. The environmental organization Greenpeace has denounced the use of transgenic products by the firms of Minsa, Maseca, Bimbo, Gerber, McDonald’s and Coca Cola, which use high fructose sweeteners from transgenic corn from the United States, principally produced by Monsanto.

Engineering and Environmental Consultants, a firm from Malaysia, has investment interests in Palma Africana; the firm Ocean Liner has investment in the processing of mango; Hart Enterprise and Global Financial Services in shrimp in the coastal region; Mexitrade International in agricultural production of chicozapote (fruit and tree from which chicle is extracted) in Ocosingo; Ocean Garden in the processing of shrimp in Tapachula, etcetera. Thus, Chiapas is a booty for large transnational corporations; in particular because, in addition to the above, there are also non-explored minerals like zinc, lead, lithium, iron, magnesium, etcetera in the state. Moreover, the press for the privatization of petroleum, historical monuments, electrical energy, the use, management and distribution of water, and the privatization of the natural reserves means that Chiapas holds much potential for the voracity of huge capital.

INVESTMENT IN THE CONTEXT OF THE FREE TRADE AGREEMENTS

 From 1994 to the year 2000, the government carried out and is negotiating free trade agreements with approximately 40 countries. (See Bulletin No. 198, “The Free Trade Agreements and the Elections, www.ciepac.org). These agreements have been carried out bilaterally or by economic blocs like, for example, took place for the North American Free Trade Agreement (NAFTA) and with the European Union and the Northern Triangle. In order to be more precise about the impact of these treaties on the economy and development not only of Chiapas and the Southern Region, but of the whole country, it is necessary to analyze the periods in which tariffs for products will be liberalized and the terms on which these agreements were negotiated. From there, we can respond to the questions about: the future offered to the farmer, indigenous, ranching, commercial, and fishing sectors, amongst others; the future of the production of corn, coffee, etcetera; and, who will benefit or be harmed by the neoliberal globalization of the economy.

Already, we have seen many negative effects resulting from indiscriminate commercial liberalization. These effects make necessary a plan for development that is integrated, inclusive, self-sufficient, just and respectful of the economic sectors or development paths of the poor countries. The demonization of the role of the State as regulator of the economy and guarantor of the distribution of wealth, has brought about a reduction in its role and put us at the mercy of the interests of financial power and large transnational corporations. Thus, the Law of Foreign Investment attempts to grant legal security to corporations and transnationals, certainty to national and foreign investors, as well as simplification of the administrative procedures that apply to the registration of foreign investment in Mexico.

Sources: Instituto Nacional de Estadística, Geografía e Informatica (INEGI); Secretaría de Comercio y Fomento Industrial (SECOFI) www.secofi.gob.mx; Bulletins ‘Chiapas al Día’ No. 124 and 125 from August, 1998, www.ciepac.org; Secretaría de Desarrollo Económico del Gobierno de Chiapas, www.chiapas.gob.mx; and the state and national press.

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