Mexico says foreign firms have pledged $20 billion in investments, but many are old or uncertain

MEXICO CITY (AP) — Mexican officials announced Tuesday what they claimed was $20 billion in new foreign direct investment in Mexico, but much of that was neither new, nor completely certain.

Investor confidence in Mexico has been shaken recently by controversial reforms to the energy sector and the judiciary, and the government is eager to regain the trust of foreign companies.

Among the bigger announcements Tuesday was what appeared to be a final investment decision by Mexico Pacific LLC for an LNG gas terminal on Mexico’s Gulf of California, also known as the Sea of Cortez.

That $15 billion project would import U.S. natural gas, liquefy it and ship it to customers largely in Asia. It is planned for Puerto Libertad, between the coastal towns of Guaymas and Puerto Peñasco.

Mexico Pacific CEO Sarah Bairstow said “this represents the largest foreign direct investment to date.”

However, that plan has been on the drawing boards since at least 2020, and still depends on getting cross-border gas pipelines approved and built.

Mexican Economy Secretary Marcelo Ebrard said the second-largest investment was a $6 billion commitment by Amazon.

While Ebrard did not specify what it was for, Amazon Web Services had already announced in February an investment of “more than $5 billion” to build cloud-computing infrastructure in Mexico.

And Ebrard said the cruise line Royal Caribbean pledged to invest $1.5 billion in the Caribbean coast resort of Mahahual, south of Tulum.

That was apparently a reference to the company plan — announced last week — to build a second “Perfect Day Mexico” on-shore facility for cruise ship passengers in Mahahual, which was once a sleepy coastal village until a cruise ship dock was built.

Ebrard said that, together with other projects, investments could total as much as $30 billion in 2025.

“The message of President Claudia Sheinbaum is certainty, assurance, investments in Mexico are safe,” Ebrard said at the event.

However, foreign governments and some foreign business groups have expressed concerns about a reform passed in September that would make all judges — including the justices of the Supreme Court — stand for election.

The fear is that would politicize court cases and put foreign firms — who obviously have no vote in the elections — at a disadvantage. They fear judges would be likely to heed the will of their constituents than the letter of the law.

And foreign energy companies are still smarting from their treatment at the hands of Sheinbaum's predecessor and political mentor, former president Andrés Manuel López Obrador, who left office on Sept. 30.

López Obrador pushed through laws to guarantee the state-owned electric utility a majority share of the power market. The reforms put foreign-owned electricity generating plants at the back of the line for power purchases, even though their power plants were often cleaner and used more renewables than the government's dirty coal and fuel-oil fired generators.

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Mexican President Claudia Sheinbaum, left, stands with Sarah Bairstow, CEO of Mexico Pacific LLC, during a news conference at the National Palace in Mexico City, Tuesday, Oct. 15, 2024. (AP Photo/Fernando Llano)

Mexican President Claudia Sheinbaum gives a news conference at the National palace in Mexico City, Tuesday, Oct. 15, 2024. The statue is of former Mexican President Benito Juarez. (AP Photo/Fernando Llano)

Mexican President Claudia Sheinbaum, left, speaks with her Economy Secretary Marcelo Ebrard during a news conference at the National Palace in Mexico City, Tuesday, Oct. 15, 2024. (AP Photo/Fernando Llano)

Mexican President Claudia Sheinbaum, left, listens to Mexican businessperson Francisco Cervantes speak during a news conference at the National Palace in Mexico City, Tuesday, Oct. 15, 2024. (AP Photo/Fernando Llano)

Mexican President Claudia Sheinbaum, right, and Mexican businessperson Francisco Cervantes arrive for a news conference at the National Palace in Mexico City, Tuesday, Oct. 15, 2024. (AP Photo/Fernando Llano)

SRINAGAR, India (AP) — Leaders of Kashmir’s biggest political party were sworn into office Wednesday to run a largely powerless government after the first local election since India stripped the disputed region of its special status five years ago.

National Conference leader Omar Abdullah will be the region’s chief minister after his party won the most seats in the three-phased election. It has support from India's main opposition Congress party, although Congress decided not to be a part of the new government for now.

The vote was Kashmir's first in a decade and the first since Prime Minister Narendra Modi’s Hindu nationalist government scrapped the Muslim-majority region’s long-held semi-autonomy in 2019. The National Conference staunchly opposed the move, and its victory is seen as a referendum against the Modi government's changes.

Lt. Gov. Manoj Sinha, New Delhi’s top administrator in Kashmir, administered the oaths of office to Abdullah and the five members of his council of ministers in a ceremony under tight security at a lakeside venue in the region’s main city of Srinagar. Some of India’s top opposition leaders, including Rahul Gandhi of the Congress party, attended.

However, there will be a limited transfer of power from New Delhi to the local government as Kashmir will remain a “union territory” — directly controlled by the federal government — with India’s Parliament as its main legislator. Kashmir’s statehood would have to be restored for the new government to have powers similar to other states of India.

India and Pakistan each administer a part of Kashmir, but both claim the territory in its entirety. The nuclear-armed rivals have fought two of their three wars over the territory since they gained independence from British colonial rule in 1947.

Kashmir’s last assembly election in 2014 brought to power Modi’s Bharatiya Janata Party, or BJP, the first time ruled in a coalition with the local Peoples Democratic Party. T he government collapsed in 2018, after the BJP withdrew from the coalition and New Delhi took the region under its direct control.

A year later, the federal government downgraded and divided the former state into two centrally governed union territories, Ladakh and Jammu-Kashmir. The move — which largely resonated in India and among Modi supporters — was mostly opposed in Kashmir as an assault on its identity and autonomy amid fears that it would pave the way for demographic changes in the region.

The region has since been on edge with civil liberties curbed and media freedoms restricted.

Like on election day, authorities on Wednesday limited access of foreign media to the oath ceremony and denied press credentials to most journalists working with international media, including The Associated Press, without citing any reason.

In the recently concluded election, the National Conference won 42 seats, mainly from the Kashmir Valley, the heartland of the anti-India rebellion, while the BJP secured 29 seats, all from the Hindu-dominated areas of Jammu. The Congress succeeded in six constituencies.

Militants in the Indian-controlled portion of Kashmir have been fighting New Delhi’s rule since 1989. Many Muslim Kashmiris support the rebels’ goal of uniting the territory, either under Pakistani rule or as an independent country.

India insists the Kashmir militancy is Pakistan-sponsored terrorism. Pakistan denies the charge, and many Kashmiris consider it a legitimate freedom struggle. Tens of thousands of civilians, rebels and government forces have been killed in the conflict.

Experts say the new government, stripped of all the essential powers, would face a daunting task to fulfil its election promises against huge public expectations to resist the 2019 changes and the federal government’s tight control.

Praveen Donthi, senior analyst with the International Crisis Group, said the region’s political vacuum of the last few years will not vanish with the polls alone.

“The Modi government should build on it by restoring full statehood and empowering the government,” said Donthi. “Otherwise, it will intensify disaffection and is a set up for failure.”

Modi and his powerful home minister, Amit Shah, have repeatedly stated that the region’s statehood will be restored after the election, without specifying a timeline. However, they vowed to block any move aimed at undoing the 2019 changes but promised to help in the region’s economic development.

For the new chief minister, meanwhile, it's going to be a tightrope walk.

“As a pro-India politician at the helm of this powerless administration, Omar Abdullah knows his limitations,” Donthi said. “He would be looking at his job as a buffer to moderate the worst instincts of New Delhi, but he would be clutching at straws."

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Paramilitary soldiers stand guard outside the venue of swearing in ceremony of ministers of Kashmir's local government on the outskirts of Srinagar, Indian controlled Kashmir, Wednesday, Oct. 16, 2024. (AP Photo/Dar Yasin)

Paramilitary soldiers stand guard outside the venue of swearing in ceremony of ministers of Kashmir's local government on the outskirts of Srinagar, Indian controlled Kashmir, Wednesday, Oct. 16, 2024. (AP Photo/Dar Yasin)

Paramilitary soldiers stand guard outside the venue of swearing in ceremony of ministers of Kashmir's local government on the outskirts of Srinagar, Indian controlled Kashmir, Wednesday, Oct. 16, 2024. (AP Photo/Dar Yasin)

Supporters of Indian National Congress and National Conference party celebrate early leads in election outside a counting center on the outskirts of Srinagar, Indian controlled Kashmir, Tuesday, Oct. 8, 2024. (AP Photo/Mukhtar Khan)

Jammu and Kashmir National Conference (JKNC) party leader Omar Abdullah, standing in car shakes hands with supporters as he celebrates his victory in the election for a local government in Indian controlled Kashmir, Budgam, Tuesday, Oct. 8, 2024. (AP Photo/Dar Yasin)