OAXACA:

Oaxaca has almost four million inhabitants. Oaxaca, Chiapas and Guerrero together make up the 3 states in the country with the highest levels of poverty, marginalization, illiteracy, and indigenous populations. The press has reported at least four guerrilla groups in Oaxaca: Ejército Popular Revolucionario (EPR), Ejército Revolucionario Popular del Pueblo Insurgente (ERPI), Ejército Indígena Revolucionario de Liberación Nacional and Comando Clandestino Indígena de Liberación Nacional (see Bulletin No. 200 and map at www.ciepac.org). There are also paramilitary groups and heightened levels of militarization in the region.

As of March, 2000, 69 firms with Foreign Direct Investment (FDI) were registered in the southern state of Oaxaca. This is equal to 0.4% of all FDI businesses in the country (in which the number has risen to 18, 809). Of the 69 firms, investors hold majority capital in 55 and minority in 14. The firms originate in: the United States (24), France (10), Canada (9), Italy (8), Germany (5), Switzerland (4), and one from each of Hong Kong, Argentina, Korea, China, Japan, Holland and Spain. In addition, there is also one business from the Pacific Rim and another from the European Union that were not identifiable. In total, 15 countries have FDI in Oaxaca.

In the country as a whole, Germany has 721 firms with FDI, Italy has 471, Spain 1 107, France 572, Switzerland 322, Hong Kong 24, the United States has 11, 630, Canada 1, 179, Japan 399, Korea 510, China 150, Argentina 286, and Holland 532.

The 69 firms are mainly in the municipalities of Santa María Huatulco (25 businesses), Oaxaca de Juárez (16), San Pedro Mixtepec (14), and Santa María Colotepec (5). The remaining 9 are in other municipalities. During the period analyzed, there was not FDI in the farming, electricity or water sectors, nor in transportation or communications.

There are 28 firms located in the ‘other services’ branch, (10 in restaurants, bars and night clubs; 9 in hotels and other temporary lodging; 3 in professional, technical and specialized services; 3 in travel agency and storage services, 2 in private film, theatre, radio and t.v. industries; and one in private recreational and sports centers).

In the ‘financial services’ branch, there are 14 firms (13 in real estate and one in equipment, machinery, and furniture). In the ‘construction’ realm, there are 3 businesses (2 in building and one in specialized construction work). In ‘mining and extraction’ there are 2 firms (one in extraction and/or exploitation of non-iron, metallic minerals and the other in extraction and/or exploitation of other non-metallic minerals).

In the branch of ‘manufacturing industry’, there are 8 firms (2 in the clothing industry and one each in the following sectors: meat industry, production of other food products for human consumption, furniture (mainly wood) manufacture and repair, manufacture of basic chemical substances, manufacture of other chemical substances and products, and other manufacturing industries).

In the ‘commerce’ branch, there are 14 firms (9 in wholesale, non-food commercial trade; 3 in wholesale food, drink, and tobacco commerce; 2 in retail, non-food products in specialized businesses).

Oaxaca ranks in 21st place in terms of having the highest number of firms with FDI in the country in the realm of construction; and, in terms of amount of invested capital in the country, it amounts to 0.7%. With regard to FDI in food, drink and tobacco industries, there are 2 firms in Oaxaca which represents 0.4% of the total number in the whole country. This places the state in 23 position; however, in terms of the amount of invested capital it ranks 25th.

During the third neoliberal government (1994- 2000), FDI investments amounted to 2.7 million dollars in Oaxaca, equaling 2.5% of investment attracted by the states of the Southern region (Oaxaca, Guerrero and Chiapas) in which the total amount was 110.1 million dollars. Oaxaca occupied the third position in the southern region and last spot between the 32 states in the country.

The conduct of FDI in Oaxaca varied considerably in these six years. In 1994, 0.1 million dollars was invested; in 1995, it rose to 2.1 million dollars; in 1996 it decreased to 0.3%. 1997 was the year with the highest investment with a total of 6.1 million dollars, but it lowered drastically in 1998, in which the total amount was 0.3 million dollars. In 1999 it rose to 0.9 million dollars. Between January and March of 2000, 1.0 million dollars of investment were registered. The total accumulated in the 6 years was 2.8 million dollars.

Of the 10 countries of the Southern Cone integrated in the Asociación Latinoamericana de Integración (ALADI), Oaxaca ranked 27th amongst the 32 Mexican states in which these countries invested, with only 2 firms from Argentina. Oaxaca ranked 23rd in terms of investment from the 29 countries integrated into the Organization for Economic Cooperation and Development (OECD), with, amongst others, 25 firms from the United States, 9 from Canada, 2 from Spain, 5 from Germany, one from Korea, one from Holland, 10 from France, 8 from Italy, 4 from Switzerland. The state of Oaxaca occupied 18th place in the country with respect to the number of firms located in Mexico from the 15 countries making up the European Union (EU), with a total of 28 firms from, amongst others, Spain, Germany, Holland, France, and Italy.

Oaxaca occupied 26th in terms of states with the highest number of businesses originating from the 20 countries who are members of the Asia Pacific Economic Council (APEC), with 25 from the United States, 9 from Canada, one from Korea, one from China, one from Japan, and one from Hong Kong. Oaxaca ranked in 25th place in Mexico with respect to the number of businesses from North America (Canada and the United States) located in the country, but in last place with respect to the amount of investment realized in the states. In Oaxaca there is no FDI from the Mercado Común Centroamericano (MERCOCEN) (Central American Common Market) composed of the countries of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

The Países Asiáticos de la Cuenca del Pacífico is composed of 14 countries: Australia, Brunei Darussalam, Korea, China, Philippines, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Papua-New Guinea, Singapore, Thailand, and Taiwan. In total, theses countries have in Mexico a total of 1, 303 firms with FDI, of those only 5 countries are in Oaxaca with one firm from each of Korea, Japan, China, Hong Kong and one unidentified country.

Below is a comparison by sectors with FDI in the states of the Southern Region of Mexico between 1994 and 2000. The numbers are in millions of dollars.

SECTOR	CHIAPAS	GUERRERO	OAXACA	TOTAL	%
TOTAL	5,448.1	101,981.9	2,717.4	110,147.4	100.0
Farming	585.2	0.0	0.0	585.2	0.5
Mining and extraction	0.0	0.0	6.4	6.4	0.0
Manufacturing industry	3,650.5	6,078.6	191.0	9 ,920.1	9.0
Electricity and water	0.0	0.0	0.0	0.0	0.0
Construction	0.0	31.0	3,809.8	3,840.8	3.5
Commerce	1,205.4	1,910.2	158.5	3,274.1	3.0
Transportation and communications	0.0	14.9	0.0	14.9	0.0
Financial services	7.0	163.3	292.5	462.8	0.4
Other services(*)	0.0	93,783.9	-1,740.8	92,043.1	83.6

(*) social and community; hotels and restaurants; professional, technical and personal; agricultural, livestock, construction, transportation, financial and commerce.

GUERRERO:

In Guerrero, during the period under analysis, violence has been a continual presence. It is also a very militarized state. The press has recorded the highest number of guerrilla groups in the country here; with at least 15: Ejército de Ajusticiamiento Genaro Vázquez, Ejército Insurgente de Chilpancingo, Ejército de Liberación del Sur, Ejército de Liberación de la Sierra del Sur, Ejército Justiciero de los Pueblos Indefensos (EJPI), Ejército Popular de Liberación José María Morelos y Pavón, Ejército Popular Magonista, Ejército Popular Revolucionario (EPR), Ejército Villista Revolucionario del Pueblo (EVRP), Ejército Revolucionario del Pueblo Insurgente (ERPI), Fuerzas Armadas Clandestinas de Liberación National, Fuerzas Armadas de Liberación para los Pueblos Marginados de Guerrero (FAL-PMG), Comando Armado Revolucionario del Sur, Comité Clandestino Revolucionario de los Pobres- Comando Justiciero 28 de junio (CCRP-CJ) and the Movimiento Popular Revolucionario.

Up to the month of March of 2000, 113 firms with FDI were located in Guerrero, representing 0.6% of all the companies in the country with foreign participation. These investors hold a majority of the social capital in 95 firms and are minority holders in 18. These firms are primarily located in the municipalities of Acapulco (52 firms), Ixtapa (21), Taxco (13), La Unión (12), José Azueta (9), and Iguala (2). There are 4 other firms in other municipalities. None of them are located in the farming, electricity or water sectors.

In the ‘mining and extraction’ sector, there is only one firm (in the extraction and/or exploitation of non-iron, metallic materials). There are 3 in ‘transportation and communications’ (all in water transport); 4 in ‘construction’ (2 in construction and industrial installations, one in building and the other in the construction of urban works); 11 in ‘commerce’ (9 in wholesale non-food products and 2 in wholesale food, drink and tobacco); 14 in the ‘manufacturing industries’ (6 in other manufacturing industries, 4 in the production of processed wood products, one in each of: milk product manufacturing, drink industry, iron and steel based industry, and manufacture, repair, and/or assembly of precision instruments and equipment); and 28 in ‘financial services’ (in other real estate services). The 52 remaining firms are located in the ‘other services’ sector (25 in hotels and temporary lodging; 6 in restaurants, bars and night clubs; 6 in professional, technical and specialized services; 5 in travel agency and storage; 4 in private recreational and sports services; 2 in private film, theater, radio and t.v.; and one in each of the following: private scientific research services, private medical, dental and veterinary services, diverse personal services; and services related to the transportation of water.

The sectoral distribution of firms in the Southern Region is:

SECTOR	CHIAPAS	GUERRERO	OAXACA	TOTAL
Farming	0	2	0	2
Mining and extraction	1	0	2	3
Manufacturing industry	14	8	8	30
Electricity and water	0	0	0	0
Construction	4	0	3	7
Commerce	11	10	14	35
Transportation and communications	3	0	0	3
Financial Services	28	2	14	44
Total	113	22	69	204

The period of the presidency of Ernesto Zedillo, 1994-2000 was characterized by a greater drive to insert Mexico into the neoliberal model of globalization. At the same time, violence in Guerrero escalated to its highest levels. Also during this period, FDI in the state materialized in investments of 102.0 million dollars, equaling 92.6% of investment attracted by the states of the Southern Region and placing Guerrero in first position, followed by Chiapas and lastly by Oaxaca. Nonetheless, while Chiapas and Oaxaca occupied the second-to-last and last positions respectively, Guerrero ranked 21st amongst the 32 states in the country in terms of attracting the highest percentage of the amount of FDI in Mexico (with 0.2%).

If we analyze by economic sectors, 92.2% of the FDI was destined for service sectors; 6.0% to manufacturing industry and 1.8% in other sectors. During the analyzed period, the conduct of FDI in Guerrero varied considerably. The lowest FDI was registered in 1997 and 1998 (2 and 3.2 million dollars, respectively). In contrast, in 1995, investment of 45.1 million dollars was registered and in 1999 there was investment of 31.9 million dollars. During these six years, the state of Guerrero did not receive importation of maquiladora fixed assets.

In the field of food, drink and tobacco, there are 518 firms with FDI in Mexico, of which only 2 are located in Guerrero (equaling 0.4% of the total) and placing the state amongst the 6 states with the least firms in this field. Investment in 1998 was registered at only 5.6 million dollars, without other investment registered up to this time. Of the 439 firms in the entire country with FDI in the construction sector, 4 are found in Guerrero (0.9% of the total). This places Guerrero in 17th place amongst the Mexican states; however, in relation to amount of investment in this branch it occupies 27th place. Investment registered in 1994 at only 3.1 million dollars, without, up to this date, other investment registered in construction.

19 countries have investments in Guerrero. The majority of firms are from: the United States (70 firms), Canada (14 firms), Germany (5), Spain (3), France (3), Israel (2), Italy (2), Cayman Islands (1), Korea (1), Australia (1), Hong Kong (1), Sweden (1), New Zealand (1), Community of Independent States- CEI- (1), Costa Rica (1), United Kingdom (1), Switzerland (1), and Belgium (1).

Guerrero counts on FDI from Costa Rica, which in the period under analysis invested  98.2 million dollars, placing this state in ninth position in terms of states with the highest percentage of FDI from MERCOCEN. Guerrero occupies 19th place in relation to amount and the highest number of firms coming from the APEC region, with investments from the United States, Korea and Canada. It ranks 20th in terms of federal states with the highest number of firms from the OECD, with a total of 97 firms equaling 0.5% of all that the OECD has in Mexico (which has risen to 17, 198). Guerrero holds 21st place amongst states with the most firms from the EU with the number rising to 20 and equaling 0.46% of the total of number of European firms in Mexico (which is 4, 262). It also ranks 20th in relation to firms from North America, with a total of 84 firms and representing 0.66% of the total number of firms (12, 557) from Canada and the United States in Mexico.

In terms of the Países Asiáticos de la Cuenca del Pacifico, Guerrero is in 21st position with 4 firms from Korea, Australia, Hong Kong and New Zealand. This represents 0.38% of the total of 1, 303 number of firms from this region located in Mexico. La CEI is made up of Armenia, Azerbaijan, Belarus, Georgia, Kazakstan, Kirguisistan, Moldavia, Uzbekistan, the Ukraine, Turkmanistan, Tadjikistan, and Russia. It has 36 firms with FDI in Mexico in only 7 states, including one firm in Guerrero. In addition, there are 24 in the Federal District, 5 in the state of Mexico, 3 in Baja California South, and one each in Jalisco and Quintana Roo.

The member countries of ALADI do not have FDI in Guerrero. However, in contradiction to other official reports, one document from SECOFI affirms that there is one firm from Argentina and that in the period under analysis, investment was registered from Brazil, Chile, Colombia and Perú.

For FDI, the Southern Region represents a desirable booty.  Petroleum, water, biodiversity, minerals, historical monuments, hydroelectric dams, ports, coast, borders with Central America and the rest of Latin American, cheap labour, etcetera, are all treasures for large transnational capital. The Isthmus Megaproject, the Montes Azules, Los Chimalapas, amongst others, are merely a small reflection of the potential significance of social and political conflict in a region (the region has most of the armed groups in the country and also the majority of the indigenous population, malnutrition and poverty).

Rather than development that is sustainable, just, inclusive and equal for all of the population of the continent, the Free Trade Agreements and The Free Trade Area of the Americas are preparing conditions of higher concentration of wealth and an overwhelming increase in poverty. It is necessary to emphasize the necessity of constructing an economic model based on justice, respect for human rights, and healthy intervention of the State in the economy of countries in order to not completely give into transnational interests, large monopolies, and the greed of global financial power.

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