Martin Miranda


This Note will present the arguments for and against foreign direct investment, but assess the Pemex reforms under the assumption that reform through privatization is necessary for survival. This Note will examine the likelihood of success for the recently proposed Pemex reforms, and what the Mexican government may expect with regards to Pemex's future. Part I provides an introduction to FDI and the legal and political framework that President Calderon must work in to accomplish Pemex reforms. Part II presents two financial models for energy reform that may serve as a blueprint for Pemex: 1) Mexico's electric power deregulatory scheme, and 2) the Brazilian oil sector's gradual privatization. In light of all these considerations, Part III will outline a reform model that can be applied to Pemex's delicate political-economic status.