Globalization: Soaring Commodity Prices a Mixed Bag for Mexico

Soaring Commodity Prices a Mixed Bag for Mexico - IPS ipsnews.net: "While Mexico is earning more revenue from oil exports, the cost of food imports has risen to the point where food security is threatened.

The 2011 budget is based on a price of 65 dollars per barrel of crude. But the social uprisings in Arab countries, particularly Libya, have driven the price of Mexican oil to over 100 dollars per barrel in the first week of March.

Analysts estimate that Mexico, Latin America's second largest oil producer after Venezuela, could take in an extra 11 billion dollars in oil income, in addition to the 27 billion dollars already budgeted.

'One would hope that the windfall earnings would be used to boost production, but there is no guarantee of that,' José Luís de la Cruz, an academic at the private Monterrey Institute of Technology and Higher Education, told IPS. 'The federal and state governments have not shown a willingness to do so.'

... two congressional bodies, the Centre for the Study of Public Finance (CEFP) and the Superior Audit Office, have criticised the use of windfall oil revenue for general government expenditure, arguing that it should go towards spending on social investment and infrastructure instead."