Mexico Lacks Sufficient Land for Special Economic Zones – Reuters

By Gabriel Stargardter

MEXICO CITY – According to the official in charge of developing Mexico’s new special economic zones, at least half of the land required for the initiative is not federally owned and will need to be acquired through other means. The official, Gerardo Gutierrez, ruled out expropriations.

In May, President Enrique Pena Nieto enacted legislation aimed at attracting private-sector investment to underdeveloped areas in southern Mexico by offering tax incentives. The government has pinpointed four initial regions for development: the Pacific port of Lazaro Cardenas, Puerto Chiapas on the Guatemala border, the Gulf port of Coatzacoalcos, and Salina Cruz, a refinery town on the Pacific coast.

Gutierrez expressed optimism about establishing "anchor" companies to draw in additional investors by the end of 2017, noting that over 30 companies have already shown interest.

Sources familiar with the project revealed that more than 50 percent of the necessary land is owned by state, municipal, or private entities. When asked if the proportion of non-federal land could be higher than 50 percent, Gutierrez acknowledged that it might be.

He stated that the land ownership situation would be resolved by the end of the year, promising acquisition through purchase, donation, or land exchange for equity in the project, while firmly ruling out expropriations.

Land acquisition for both federal and private projects has historically been contentious in Mexico. Notably, in 2002, landowners protesting with machetes disrupted plans for a new airport in Mexico City. This challenge is particularly pronounced in southern states such as Chiapas, Veracruz, and Oaxaca, where landowner groups and teachers’ unions often engage in protests.

Gutierrez emphasized that the goal is not to replicate the low-wage maquila factories commonly found in northern Mexico, but to attract value-added industries that can offer higher wages. The focus is on sectors including infrastructure, agro-industrial, transport, and food production, although he acknowledged that issues of security and social unrest would need to be addressed to successfully attract investment.

Special economic zones have emerged globally in recent years, but the World Bank notes that their success has been uneven.