VZCZCXRO1426
PP RUEHCD RUEHGD RUEHHO RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHMC #0455/01 2821611
ZNR UUUUU ZZH
P 081611Z OCT 08
FM AMCONSUL MONTERREY
TO RUEHC/SECSTATE WASHDC PRIORITY 3199
INFO RUEHME/AMEMBASSY MEXICO PRIORITY 4202
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHMC/AMCONSUL MONTERREY 8696

UNCLAS SECTION 01 OF 02 MONTERREY 000455 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: OVIP PGOV ECON SNAR MX
SUBJECT: SCENESETTER FOR THE OCTOBER 14-16 VISIT OF WHA P/DAS KELLY 
TO MONTERREY 
 
REF: A) MONTERREY 10; B) MONTERREY 194; C) MEXICO 2948; D) MONTERREY 433; AND E) MONTERREY 438 
 
MONTERREY 00000455  001.2 OF 002 
 
 
¶1. (SBU) SUMMARY.  The Consulate General of Monterrey 
enthusiastically welcomes your October 14-16 trip to Monterrey, 
the business hub of northern Mexico.  We are certain that your 
participation in the International Conference on Philanthropy 
and the Non-Profit Sector will advance collaborative work on key 
areas such as education, economic development and poverty 
reduction.  You will find that the state of Nuevo Leon is ahead 
of the curve in many economic and social indicators, but it 
still faces, as does the rest of Mexico, daunting security 
issues and lagging international economic competitiveness. 
END SUMMARY. 
 
 
 
NCCEP Conference 
 
 
 
¶2.  (SBU)  The International Conference on Philanthropy and the 
Non-Profit Sector ('conference') seeks to promote partnerships 
among business, charitable foundations, civil society 
organizations and government, in the spirit of the July 2007 
White House Conference on the Americas, hosted by President Bush 
in Washington DC.   The Monterrey conference will bring together 
U.S. and Mexican business executives and civil society leaders 
to share best practices and form new alliances to make an impact 
in areas such as health, education, economic development, and 
the environment.  To fund and coordinate projects in these 
fields throughout Mexico, participants will also be invited to 
establish an international donors' group.  Although there are 
impressive NGOs in Mexico, the sector would be stronger if it 
were not hamstrung by burdensome regulations and (legitimate) 
donor concerns about transparency.  The conference is 
co-sponsored by the Mexican chapter of the National Council for 
Community and Education Partnerships (NCCEP), a U.S.-based NGO, 
the Consulate General of Monterrey, the state of Nuevo Leon, and 
the federal Ministry of Public Education. 
 
 
 
Northern Mexico Relatively Developed 
 
 
 
¶3. (SBU)  A recent survey found that Monterrey is the most 
economically competitive area of Mexico.  Monterrey greatly 
exceeds Mexican national averages for per-capita income and 
Nuevo Leon continues to enjoy higher than average economic 
growth.  Monterrey has benefited from its proximity to the 
United States, an excellent business climate, and a nucleus of 
industrialized Mexican firms (see reftel A).  There are strong 
economic ties between the United States and Mexico, as Nuevo 
Leon continues to attract large flows of foreign direct 
investment ($1.8 billion from the United States in 2007), and 
the local American Chamber of Commerce is vibrant, with over 300 
members.  Monterrey continues to focus on manufacturing, 
particularly bulky consumer items such as automobiles and 
domestic appliances, but the region has sought to move into 
higher value goods and services as well.  Nuevo Leon is also a 
leader in other fields, such as renewable energy.  The state 
uses garbage from landfills to produce biogas, which is in turn 
used to power 40% of public lighting in the Monterrey municipal 
area.  Although relatively poor by U.S. standards, Nuevo Leon 
has one of the highest levels of education in Mexico and one of 
the lowest percentages of poverty (24% of the population). 
 
 
 
4 (SBU)  President Calderon remains broadly popular, 
particularly in the state of Nuevo Leon.  The PRI and PAN 
parties vie for dominance in northern Mexico, and the leftist 
PRD is very weak.  In Nuevo Leon, Governor Jose Natividad 
Gonzalez Paras is in the last year of his six year term, and 
although he still has respectable approval ratings, he has had 
trouble bringing a number of his visionary plans to fruition. 
Governor Gonzalez Paras has built substantial infrastructure in 
Nuevo Leon, and an important remaining goal is to promote the 
Colombia railroad bridge to connect Monterrey to Texas through 
the narrow 13.5 km border that Nuevo Leon shares with Texas. 
Governor Gonzalez Paras has built a 'City of Knowledge' 
industrial park near the airport to promote innovation and high 
technology products.  The City of Knowledge houses government 
agencies, local and international businesses and Mexican and 
three U.S. academic institutions. 
 
 
 
¶5.  (SBU)  Nuevo Leon has been a leader in educational reform, 
 
MONTERREY 00000455  002.2 OF 002 
 
 
one of the keys to generating more and better jobs for Mexican 
citizens.  Mexico does a poor job educating its children, as 
they were dead last in the OECD in mathematics, reading and 
science in the latest test in 2006.  However, Nuevo Leon's test 
scores have started to improve, showing gains in all three 
areas.  The state has started to test prospective teachers and 
has provided classrooms with additional technology (reftel B). 
Nationally, President Calderon, his Secretary of Education 
Josefina Vazquez Mota and the head of the SNTE teachers union, 
Elba Esther Gordillo have agreed on an 'alliance for quality' to 
implement teacher testing on a national basis.  However, the 
prospective teachers did very poorly on the first round of tests 
(two/thirds failed the test), and there are teachers strikes in 
several states protesting the teacher testing and claiming the 
right for teachers to inherit or sell their teaching positions 
(see reftel C). 
 
 
 
¶6.  (SBU)  Although low by Mexican standards, an estimated 1 
million people in Nuevo Leon live in poverty (24.6% of the 
population).  Gonzalez Paras has implemented a Council for 
Social Development which has unpaid civil society advisors, and 
focuses on the elderly, the disabled, and mobile social services 
units.  A recent survey of the poor found that 80% expressed 
general satisfaction with food, housing and public services. 
Charitable NGOs, including religious ones, also provide housing 
and services to the poor and disadvantaged (see reftel D).  You 
will visit one such NGO, Back-to-Back Ministries/Casa Hogar 
Douglas, which provides housing and education to orphans and 
homeless children. 
 
 
 
Troubles Loom over the Horizon: Economic and Security Issues 
 
 
 
¶7. (SBU)  Despite these accomplishments, Nuevo Leon has concerns 
with respect to its economic future.  Mexico in general, and 
Monterrey in particular, are closely tied to the U.S. business 
cycle, and Monterrey could well be affected by reduced growth in 
the United States, which will lower demand for Mexican exports. 
To date Monterrey's economy remains strong, although it is 
likely to slow down if exports to the U.S. decline.  Moreover, 
remittances from Mexicans living in the United States to their 
relatives in Mexico have already declined by 12% compared to a 
year ago.  Mexico is also concerned that tighter global credit 
markets will further depress Mexican economic growth in the near 
term.  In the longer run, Nuevo Leon worries about the 
intensifying international competition in manufacturing 
production from China and other Asian countries and from lower 
cost CAFTA countries.  Nuevo Leon hopes to move to high value 
added industries such as software design, aerospace, and 
biotechnology.  However, these goals are still in the future, as 
the great majority of Nuevo Leon's economic might remains in 
manufacturing. 
 
 
 
¶8. (SBU)  As in all parts of Mexico, security overshadows all 
other issues in Nuevo Leon.  In a recent poll by the leading 
newspaper El Norte, 68% of the public thought that security was 
the most important issue, and only 61% felt secure, a decline 
from79% only three years ago.  Previously Monterrey had been 
seen as a safe city, where drug cartels would operate but 
without disruptive violence.  However, the rules have changed as 
the two main Mexican drug cartels, the Gulf Cartel and the 
Sinaloa Cartel, have fought for control of the lucrative drug 
shipping routes through Monterrey to the United States. 
Monterrey suffered a record 107 drug executions in 2007, 
although that number has declined in 2008 as drug violence has 
moved to Cuidad Juarez, Tijuana and other Mexican cities. 
However, kidnapping has risen in Nuevo Leon, along with 
concomitant public frustration at the inability of state and 
local police forces to crack down on crime.  As in Mexico City 
and other cities, citizens in Nuevo Leon marched on August 30 
demanding better public security.  For their part, state and 
local authorities have caught several kidnapping gangs and 
responded with plans to provide more police training and clean 
up the police forces (see e.g. reftel E).  However, even the 
government of Nuevo Leon admits that over 50% of the municipal 
police forces have been infiltrated by the narcotics cartels, so 
the fight for public security will be long and difficult. 
WILLIAMSON