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Gas Price Protesters Gather In Solidarity At Mexican Consulate In San Diego

Protesters Gather At The Mexican Consulate In San Diego
Mexican Police Use Rubber Bullets, Open Border Rail Crossing
Analyzing Mexico's Increased Gas Prices GUEST:Ev Meade, director, Trans Border Institute at University of San Diego

Protests over a sharp spike in the price of gas are expected to continue in Tijuana this week. Over the weekend angry protesters took over our chaparral port of entry and close down the sandy Cedar across it for several hours. A weeklong blockade of a gas storage facility was broken up police on Saturday allowing gas trucks to make delivery to Tijuana gas stations. Joining me to explain why gas prices have risen so sharply in Mexico and what government expects to do about it is Ev Meade. Comes program. Me. As I have some -- as I understand it the hike has something to do with -- Many Americans are familiar with the privatization. Mexico will start giving leases to foreign oil companies. It will really be for the first time since Mexico nationalized in 1938. Why are they doing that? It is part of the reform. If you asked people in the finance industry they would say we are heavily subsidizing the price of gasoline and it is not sustainable for the future. You know the president of Mexico's argument is this takes money away from social programs that could go to the poor and eventually we will have to come to terms with this so let's do it now and try to phase it in. Americans look at the price and say almost 4 dollars a gallon in Mexico they look at it and say what is the big deal about a 20% hike in the price of gas we have seen much worse than that here. There are a couple things that people need to consider. First as if you look at the baseline cost of living minimum wage in Mexico is only about five dollars a day. A 20% increase in the price of gas for people who are on the margins and just making a and are dependent upon the cars for the business or get into work and school it is pretty significant. More importantly it comes a time in the peso is in crisis. Particularly in relation to the dollar. When he went back to 2014 if he had a dollar you could buy about 12 pesos nine can by nearly 22. There's a huge fall in the value of currency. For the people and the Mexican government who are subsidizing gas that means they are buying more and more gas and the subsidy is a greater portion of the price. This is also happening at a time when oil prices are going up. They have a double whammy. There is a week peso rising oil prices and a dated subsidy program that they had promised to get rid of as part of this energy reform. For them this is a fiscal necessity. They have to get rid of it it does not make financial sense we have to do it now we have a president who is coming to the end of his term in office this is the time to do it. We are going to do it for ordinary people even though the reform itself was announced years ago and the government has been warning about this is still came as a surprise because people don't have alternatives. It would be similar in the United States. Mexicans are dependent on the cards the same way we are and a dramatic increase in the price of driving around is a dramatic increase in the cost of living particularly for people. There were rumors that the blockade of the gas deliveries was leading to shortages at grocery stores in Tijuana. Any truth to that? I've heard that from multiple different sources and it makes a lot of sense. There's a transportation network in Mexico that is dependent upon trucks the same as here. When you shutdown the distribution facility in Rosarito that is huge -- it is a huge facility that you drive by that takes about five minutes to get by. You shut something like that down in a place like Baja California that has essentially one major highway that goes north to south and that is a major chokepoint. I find those reports very credible and it shows you that Mexico like the United States you think about the five freeway or the other north-south connections if you shutdown the major pipeline of gas between a port like Ensenada or a distribution facility like Rosarito just north of there and can have a major impact on, very quickly. What are the demonstrators acting for and is the government listening? That's the most important part of the stories because of gasoline and the impact of the supply. Everybody is focused on what Mexicans call the gasoline blow or gasoline punch. In reality that is only part of it. That is just the thing that let off a much broader wave of discontent with the government. If you look at the signs that most of the protester carrying they say -- they are telling the Mexican president to leave office. I read this much more as the level of uncertainty and discontent with the government in Mexico than I do with anything that has to do with gasoline prices. If you look at opinion polls with regard to the president they are at a historic low. There was one this past fall that showed his approval rating as 23% that is down for more than 50% in 2014. It's a dramatic fall off. Some of it has to do with his own policy failures things like failure to do anything substantive to bring the drug war to conclusion on the violence and uncertainty. Is drawn a lot of blame for that.. So that has to do with the relationship between Mexico and the United States in the presidential election here in the harsher ton of relations between the two countries things like the print -- threat by our President-elect to tear up the method -- NAFTA agreement and the peso crisis that made people poor overnight. People have terribles -- terrible uncertainty and discontent over what's going to happen to both of our countries. They are looking to their president and rightly or wrongly they are blaming him and his government for failing to do anything about it. How could this increase in gas prices in Mexico affect border communities like San Diego. In narrow terms like gas prices it will not have much of an effect. There's a segment of the population along the border people have multiple are tourist to be is -- visa so they can come to the United States they may choose to come across the border to get -- to buy gas and if there are protests and shortages that can make the border a busier place and that make the protest target places like this because of its symbolic value. It will not be a much of an impact there. The broader impact is really about the core issue of what will be the relationship between the United States and Mexico going forward. We live in a cross-border economy that has boomed over the last decade where the supply chains an aerospace and pharmaceuticals and automotive and lots of other industries have become very sophisticated and very interdependent. If anything happens in Mexico or the United States that threatens that relationship it will cost jobs and prosperity on both sides of the border. In the short term and with respect to gasoline there will not be much of an impact on San Diego but the broader issue that I think the protests represent there could be huge impact for our region and hopefully our policymakers and both sides of the border will pay attention to that. I have been speaking with Ev Meade from the University of San Diego. Thank you. Thank you very much.

Protesters gathered in front of the Mexican Consulate in San Diego Monday, in a show of solidarity with people in Mexico who are protesting a recent 20 percent hike in gasoline prices.

The gas price hikes took effect on New Year's Day.

“Mexico is going to start giving leases to foreign oil companies for the first time since Mexico nationalized its oil in 1938,” said Ev Meade, director of the Trans Border Institute at University of San Diego. “Part of the idea is, look, we're heavily subsidizing gasoline and it’s not sustainable for the future. The president of Mexico's argument is that this takes money away from social programs that could go to the poor and eventually we're going to have to come to terms with this so let's do it now and phase it in."

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The Sonora state government said late Sunday two police officers were injured and two protesters were arrested in the confrontation at the border rail crossing in Nogales.

Authorities said officers who tried to break up the blockade were attacked with rocks for about three hours and responded by "firing rubber bullets into the air."

Video aired by local media showed officers firing shotguns — commonly used to launch bean bags or rubber projectiles — at rock-tossing demonstrators.

The government said 11 trainloads with about 1,000 cars of merchandise headed for the United States were backed up by the protest. It said the blockade had threatened to temporarily shut down Ford Motor Co.'s stamping and assembly plant in Hermosillo.

On Monday, President Enrique Pena Nieto brought together labor and business leaders to talk about softening the gas price hike's blow to Mexican families. He said business leaders were committed to not allowing indiscriminate price increases passed off as due to gas prices.

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"If you look at the base line cost of living, the minimum wage in Mexico is only about $5 a day," Meade said. "So a 20 percent increase in the price of gas for people who are on the margins, or just making it, it’s pretty significant. More important though, it comes at a time when the peso is in crisis."

Within hours of the meeting, several thousand people marched along Mexico City main boulevard calling for Pena Nieto's resignation and burning him and U.S. President-elect Donald Trump in effigy.

In the border state of Baja California, the state tourism department acknowledged Sunday that gas stations there had run out of gas due to protest blockades of a distribution terminal in previous days, but said that supplies had been re-established.

Related: Tijuana Gas Protests Shut Down Southbound Vehicle Border Crossing

On Saturday, a lone protester drove his truck into a line of police guarding a fuel distribution terminal in Baja California. Federal police said seven officers were injured in the incident in Rosarito, near the border city of Tijuana.

Protests have largely been peaceful, and the looting seen last week has largely subsided. Hundreds of businesses were ransacked and more than 1,500 people were detained during that unrest.