Mexico is undergoing a fevered competition among states to win a potential Tesla facility in jostling reminiscent of what happens among U.S. cities and states vying to win investments from tech companies.

Mexican governors have gone to extremes, like putting up billboards, creating special car lanes or creating mock-ups of Tesla ads for their states.

And there’s no guarantee Tesla will build a full-fledged factory. Nothing is announced, and the frenzy is based mainly on Mexican officials saying Tesla boss Elon Musk will have a phone call with Mexican President Andrés Manuel López Obrador.

The northern industrial state of Nuevo Leon seemed to have an early edge in the race.

It painted the Tesla logo on a lane at the Laredo-Colombia border crossing into Texas last summer and is erecting billboards in December in the state capital, Monterrey, that read “Welcome Tesla.”

The state governor’s influencer wife, Mariana Rodriguez, was even shown in leaked photos at a get-together with Musk.

However, López Obrador appeared to exclude the semi-desert state from consideration Monday, arguing he wouldn’t allow the typically high water use of factories to risk prompting shortages there.

That set off a competitive scramble among other Mexican states. The governors’ offers ranged from crafty proposals to near-comic ones.

“Veracruz is the only state with an excess of gas,” quipped Gov. Cuitláhuac García of the Gulf Coast state, before quickly adding “gas … for industrial use, for industrial use!”

A latecomer to the race, García had to try harder: He noted Veracruz was home to Mexico’s only nuclear power plant. And he claimed Veracruz had 30% of Mexico’s water, though the National Water Commission puts the state’s share at around 11%.

The governor of the western state of Michoacan wasn’t going to be left out. Gov. Alfredo Ramírez Bedolla quickly posted a mocked-up ad for a Tesla car standing next to a huge, car-sized avocado — Michoacan’s most recognizable product — with the slogan “Michoacan — The Best Choice for Tesla.”

“We have enough water,” Ramírez Bedolla said in a television interview he did between a round of meetings with auto industry figures and international business representatives.

Michoacan also has an intractable problem of drug cartel violence. But similar violence in neighboring Guanajuato state hasn’t stopped seven major international automakers from setting up plants there.

Nuevo Leon Gov. Samuel García had to think fast to avoid being shut out entirely.

García reached out to the western state of Jalisco, whose governor, Enrique Alfaro, belongs to the same small Citizen’s Movement party. Together, the two came up with an alliance Thursday that would allow trucks from Jalisco preferential use of Nuevo Leon’s border crossing, the same one where a “Tesla” lane appeared last year.

Jalisco has a healthy foreign tech sector, but most importantly, it has more water than Nuevo Leon.

López Obrador’s focus on water might be more about politics than about droughts, said Gabriela Siller, chief economist at Nuevo Leon-based Banco Base. She said the president appeared to be trying to steer Tesla investment to a state governed by his own Morena party, like Michoacan or Veracruz.

That could be a dangerous game, Siller said.

“Tesla could say it’s not somebody’s toy to be moved around anywhere, and it could decide not to come to Mexico,” she said.

There are doubts that whatever Musk eventually does announce will be an auto assembly plant. Foreign Relations Secretary Marcelo Ebrard said his understanding is that it won’t be a plant, but rather an ecosystem of suppliers.

Musk at times has floated the idea of building a $25,000 electric vehicle that would cost about $20,000 less than the current Model 3, now Tesla’s least-expensive car. Many automakers build lower-cost models in Mexico to save on labor costs and protect profit margins.

A Tesla investment could be part of “near shoring” by U.S. companies that once manufactured in China but now are leery of logistical and political problems there. That those companies will now turn to Mexico represents the Latin American country’s biggest foreign investment hope.

“The fight among states to attract investments from this nearshoring phenomenon is going to be tough, complicated,” Michoacan’s Ramírez Bedolla said.

As Ramírez Bedolla put it, “wherever Tesla sets up, it is going to be big news in Mexico.”
…

In its latest ambitious roadmap to tackle climate change, California relies on capturing carbon out of the air and storing it deep underground on a scale that’s not yet been seen in the United States.

The plan — advanced by Democratic Gov. Gavin Newsom’s administration — comes just as the Biden administration has boosted incentives for carbon capture projects to spur more development nationwide. Ratcheting up 20 years of climate efforts, Newsom last year signed a law requiring California to remove as much carbon from the air as it emits by 2045 — one of the world’s fastest timelines for achieving so-called carbon neutrality. He directed the powerful California Air Resources Board to drastically reduce the use of fossil fuels and build massive amounts of carbon dioxide capture and storage.

To achieve its climate goals, California must rapidly transform an economy that’s larger than most nations’, but opposition to carbon capture from environmental groups and concerns about how to safely transport the gas may delay progress — practical and political obstacles the Democratic-led Legislature must now navigate.

Last year, the California state legislature passed a law that says no carbon dioxide may flow through new pipelines until the federal government finishes writing stronger safety regulations, a process that could take years. As a potential backup, the law directed the California Natural Resources Agency to write its own pipeline standards for lawmakers to consider, a report now more than three weeks overdue.

While there are other ways to transport carbon dioxide gas besides pipelines, such as trucks or ships, pipelines are considered key to making carbon capture happen at the level California envisions. Newsom said the state must capture 100 million metric tons of carbon each year by 2045 — about a quarter of what the state now emits annually.

“We do not expect to see (carbon capture and storage) happen at a large scale unless we are able to address that pipeline issue,” said Rajinder Sahota, deputy executive officer for climate change and research at the air board.

State Sen. Anna Caballero, who authored the carbon capture legislation, said the state’s goal will be to create a safety framework that’s even more robust than what the federal government will develop.

Last year’s Inflation Reduction Act increased federal funding for carbon capture, boosting payouts from $50 to $85 per ton for capturing carbon dioxide from industrial plants and storing it underground.

Without clarity on the state’s pipeline plans, the state is putting itself at a “competitive disadvantage” when it comes to attracting projects, said Sam Brown, a former attorney at the Environmental Protection Agency and partner at law firm Hunton Andrews Kurth.

The geology for storing carbon dioxide gas is rare, but California has it in parts of the Central Valley, a vast expanse of agricultural land running down the center of the state.

Oil and gas company California Resources Corp. is developing a project there to create hydrogen. It plans to capture carbon from that hydrogen facility and the natural gas plant that powers it. The carbon dioxide would then be stored in an old oil field. That doesn’t require special pipeline approval because it’s all happening within the company’s property.

But the company also wants to store emissions from other industries like manufacturing and transportation. Transporting that would rely on pipelines that can’t be built yet.

“These are parts of the economy that have to be decarbonized,” said Chris Gould, the company’s executive vice president and chief sustainability officer. “It makes economic sense to do it.”

Safety concerns increased in 2020 after a pipeline in Mississippi ruptured in a landslide, releasing a heavier-than-air plume of carbon dioxide that displaced oxygen near the ground. Forty-five people were treated at a hospital, and several lost consciousness. There are thousands of miles of carbon dioxide pipelines operating across the country and industry proponents call the event an anomaly. But the Mississippi rupture prompted federal regulators to explore tightening the existing rules for carbon pipelines.

Lupe Martinez, who lives in California’s Kern County, worries about what will happen as developers target the region for carbon storage.

He used to spray fields with pesticides without protective equipment. On windy days, he’d be soaked in chemicals. Martinez, who watched some of his fellow workers later fight cancer, says he was lied to about safety then and doesn’t believe promises that carbon capture is safe now.

“They treat us like guinea pigs,” said Martinez, a longtime labor activist.

The oil and gas industry’s emissions are a main cause of climate change and in the past the industry undermined sound evidence that greenhouse gases are deeply disturbing the climate. Now carbon capture — unproven as a major climate solution — will help the industry keep polluting places that are already heavily polluted, environmentalists argue. Instead of shutting down fossil fuel plants, carbon capture will increase their profits and extend their life, said Catherine Garoupa, executive director of the Central Valley Air Quality Coalition.

But advocates of carbon capture say it’s essential for Kern County oil and gas companies to find new ways to make money and keep people employed as California moves away from fossil fuels, an industry that is the “very fabric” of the region’s identity, said Lorelei Oviatt, director of Kern County Planning and Natural Resources.

Without a new revenue source like carbon capture, “Kern County will be the next Gary, Indiana,” she said, referring to the rust belt’s years-ago collapse.

There are currently no active carbon capture projects in California. To demonstrate the technology is viable and people can get permits for it, it’s essential to build the first projects, said George Peridas, director of carbon management partnerships at Lawrence Livermore National Laboratories.

Peridas said one area with potential to store carbon dioxide is the Sacramento-San Joaquin River Delta, a vast estuary on the western edge of the Central Valley that’s a vital source of drinking water and an ecologically sensitive home to hundreds of species.
…

Pakistan has to unwillingly accept the strict conditions of a deal with the International Monetary Fund (IMF) to provide a lifeline for an economy in turmoil, Prime Minister Shehbaz Sharif said Friday.

Sharif was speaking to top security officials at his office in Islamabad in a meeting that was telecast live.

“We have to accept unwillingly the strict conditions for the IMF deal,” he said, adding that an accord was still a “week, 10 days” away.

Pakistani authorities have been negotiating with the IMF since early February over policy framework issues and are hoping to sign a staff-level agreement that will pave the way for more inflows from other bilateral and multilateral lenders.

Once the deal is signed, the lender will disburse a tranche of more than $1 billion from the $6.5 billion bailout agreed to in 2019.

Pakistan has already taken a string of measures, including adopting a market-based exchange rate; a hike in fuel and power tariffs; the withdrawal of subsidies, and more taxation to generate revenue to bridge the fiscal deficit.

Officials say the lender is still negotiating with Islamabad over power sector debt, as well as a potential increase in the policy rate, which stands at 17%.

The strict measures are likely to further cool the economy and stoke inflation, which was 27.50% in January.

The South Asian country’s economy has been in turmoil and desperately needs external financing, with its foreign exchange reserves dipping to about $3 billion, barely enough for three weeks’ worth of imports.

A “friendly country” is also waiting for the deal to be confirmed before extending support to Pakistan, Sharif said without elaborating.

Longtime ally China this week announced refinancing of $700 million, according to Pakistan’s Finance Ministry.

Finance Minister Ishaq Dar on Friday said Pakistan’s central bank has received the money.

“Thank God,” he said in a tweet.
…

Russia’s invasion of Ukraine nearly a year ago has profoundly affected how the world powers itself.
…

The extensive sanctions imposed on Russia after its invasion of Ukraine one year ago have not led to the decimation of the Russian economy, as many experts had predicted. As recently as last fall, according to new polling data, many Russians actually believed they were better off economically than they had been before the war started.

According to data gathered by the Gallup organization, the share of Russians reporting they were satisfied with their standard of living increased by 15 percentage points, to 57% in 2022. For the first time in the poll’s history, satisfaction with living standards was above 50% in every region of the country.

The number of Russians reporting that their economic conditions were improving grew to 44% from 40%, while the number who said their economic prospects were declining plummeted to 29% from 50%.

Similarly, the percentage of Russians reporting that they were satisfied with the country’s leadership surged to 66%, up from 50% in 2021, while the share reporting that they were dissatisfied fell from just under half to only 21%.

The survey is part of Gallup’s expansive annual World Poll, which conducts large-scale polling in dozens of countries around the world every year. The poll of Russian citizens was taken between mid-August and early November of last year, and therefore cannot have captured any changes in attitudes since the fall. The survey involved in-person interviews with a random sample of 2,000 individuals ages 15 or older, living in Russia. The margin of sampling error is plus or minus 2.6 percentage points.

Surprising resilience

Recent data has demonstrated that the impact of international sanctions on Russia was not nearly as dramatic as the 10% contraction that many economists were foreseeing in 2022. The Russian economy contracted by a relatively mild 2.1% in 2022, and the International Monetary Fund has predicted that it will post small, but positive growth of 0.3% in 2023.

Russia began the war with a financial system braced for sanctions. The Russian central bank used currency controls and sharp interest rate hikes to stabilize the ruble early in the first year of the war. At the same time, Russian businesses began exploring deeper ties with countries such as China, India and Turkey, which allowed trade in goods and commodities to largely recover from initial dips at the outset of the conflict.

The biggest reason for Russia’s surprising resilience, however, was that it was allowed to continue selling petroleum products, far and away its largest source of pre-war revenue, on global markets. Prices were elevated at the outset of the fighting, and a slow move by many Western nations away from Russian oil and gas gave Russian firms time to broaden their sales to countries such as India and China.

In an address to the nation this week, Russian President Vladimir Putin touted the country’s economic performance.

“The Russian economy and system of governance proved to be much stronger than the West supposed,” he said. “Their calculation did not come to pass.”

‘Rally’ effect

Benedict Vigers, a consultant with Gallup, told VOA that the better-than-expected performance of the Russian economy may explain some of the economic optimism. However, a strong “rally-round-the-flag” effect is probably also in place.

When two countries go to war, there is a tendency for the people in both countries to demonstrate stronger affection for and satisfaction with their respective homelands, Vigers said.

“It is a well-known effect in Russia,” he said. “We have seen it historically, and it is happening now, in conjunction, to some degree, with Russia’s broader ability to evade some of the worst impacts of Western sanctions.”

He pointed out a similar spike in Russians reporting optimism about the economy and satisfaction with their government in the wake of the invasion of Ukraine’s Crimean Peninsula in 2014.

Repression of dissent

Another factor potentially coloring the responses to the Gallup survey is the fact that the Russian government aggressively punishes public criticism of the government, and has done so with more frequency in the months since launching its invasion of Ukraine. Tens of thousands of Russian citizens have been arrested for protesting against the war.

Galina Zapryanova, Gallup’s regional director for Eastern Europe and the former Soviet Union, told VOA in an email that the company cannot rule out the possibility that fear of reprisal affects peoples’ answers to poll questions.

“It is certainly possible that some people would not give a truly honest answer on questions related to approval of government policies, etc. — they may give the ‘safest’ answer that they consider most appropriate,” she wrote.

“This is a risk in all survey research in countries that are not entirely free, but we need to try our best to obtain representative data, while keeping in mind that a portion of any trend could be due to self-censorship by respondents.”

However, she noted that on the question of how Russians feel about the future of the economy, 56% opted for a response other than the seemingly “safe” option of declaring themselves optimistic.

Economic data suppressed

Another potentially complicating factor is that since the invasion in February 2022, the Kremlin has significantly closed off access to economic data that used to be public information.

“As far as mass media is concerned, economic information just recently fell victim to censorship,” Vasily Gatov, a senior fellow at the University of Southern California Center on Communication Leadership and Policy, told VOA. “Until spring last year, the Kremlin literally didn’t control narratives and the way people were writing about the economy in general.”

Gatov, who studies Russian media, said that since then, the government has blocked access to many reports on economic activity, making it more difficult for journalists and academics to get a full picture of what is happening with the Russian economy.

However, Gatov said, while it may be possible for the Kremlin to control access to some information, much of people’s perception about the economy comes from their own lived experiences.

“People receive economic information from various sources, and not always media sources,” he said. “One of them is their bank account. Another is prices at the gas station or grocery store.”

Without addressing the Gallup findings specifically, Gatov said that in his view, Russians “read between the lines” of information coming from the Kremlin and Kremlin-controlled media sources.

He said that they see major international brands refusing to do business in their country and are experiencing infrequent but serious shortages such as an ongoing lack of Western-produced drugs like insulin. “Russians are skeptical about the economic future of the country.”
…

Moscow’s invasion of Ukraine a year ago has had profound impacts on how the world powers itself. VOA’s Steve Baragona explains.
…