VZCZCXRO2764
PP RUEHCD RUEHGD RUEHHO RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHMC #0444/01 2701736
ZNR UUUUU ZZH
P 261736Z SEP 08
FM AMCONSUL MONTERREY
TO RUEHC/SECSTATE WASHDC PRIORITY 3189
INFO RUEHME/AMEMBASSY MEXICO PRIORITY 4190
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHMC/AMCONSUL MONTERREY 8683

UNCLAS SECTION 01 OF 02 MONTERREY 000444 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PLEASE PASS TO USOAS 
 
E.O. 12958: N/A 
TAGS: OVIP PGOV ECON SNAR ETRD MX
SUBJECT: SCENESETTER FOR VISIT OF USOAS AMBASSADOR HECTOR MORALES'S 
SEPTEMBER 29- OCTOBER 1 VISIT TO MONTERREY 
 
MONTERREY 00000444  001.2 OF 002 
 
 
¶1. (SBU) SUMMARY.  The Consulate General enthusiastically 
welcomes you to Monterrey, the business hub of Northern Mexico. 
We are certain that your private sector and academic 
interlocutors will be very interested to learn more about the 
upcoming Summit of the Americas.  ConGen Monterrey actively 
promotes U.S. interests through each section and agency, 
including an extremely busy consular section working to 
facilitate business and personal travel, and a law enforcement 
contingent that cooperates with Mexican authorities to interdict 
narcotics trafficking and protect our Southern border. 
Monterrey has a dynamic economy based on manufacturing large 
consumer products, but faces long-term issues of increasing 
international competition.  The state of Nuevo Leon plans to 
respond by is developing a knowledge-based economy and moving 
into the production of higher value added goods.  However, 
Mexico' s most intractable problem, including here in Nuevo 
Leon, remains security, as rival drug cartels fight over 
lucrative trafficking routes, resulting in a drug executions, 
kidnappings and public insecurity.    END SUMMARY. 
 
 
 
¶2. (SBU)  ConGen Monterrey is a large consulate with 78 direct 
hire U.S. employees, and home to eight other agencies, including 
the Drug Enforcement Administration, the Federal Bureau of 
Investigation, the Department of Homeland Security and the 
Foreign Commercial Service.  ConGen Monterrey is the second 
largest Non-Immigrant Visa (NIV) post in Mexico and fifth 
largest NIV post in the world.  ConGen Monterrey also handles 
approximately 50% of the worldwide demand for H2 visas for 
temporary unskilled and agricultural workers.  Law enforcement 
is also an important focus of the Consulate, and DEA, FBI, DHS, 
and ATF work closely with their Mexican counterparts to arrest 
drug traffickers, dismantle the drug cartels, arrest fugitives 
from the United States, track and stop the flow of illegal arms, 
and protect our Southern Border from threat.  In addition, the 
Political and Economic Section and the Foreign Commercial 
Service are engaged with the Mexican and American business 
communities and  work well with local political leaders. 
Finally, our public affairs section conducts radio interviews 
and sponsors speakers to present the USG perspective on 
immigration and U.S.-Mexico foreign relations. 
 
 
 
¶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.  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, although the 
region has sought to move into higher value goods and services. 
Nuevo Leon is also a leader in other fields, such as renewable 
energy.  Nuevo Leon uses refuse from state landfills to produce 
biogas, which is 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)  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.  In the 
longer run, Nuevo Leon is concerned about the intensifying 
international competition in manufacturing 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. 
 
 
 
¶5. (SBU)  President Calderon remains broadly popular, 
 
MONTERREY 00000444  002.2 OF 002 
 
 
particularly in the state of Nuevo Leon.  The PRI and PAN 
parties vie for dominance in Northern Mexico, while the leftist 
PRD is very weak.  In Nuevo Leon, Governor Gonzalez 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 
has built substantial infrastructure in Nuevo Leon, but an 
important remaining goal is to promote the Colombia railroad 
bridge to connect Monterrey to Texas through the narrow 13 km 
border that Nuevo Leon shares with Texas.  Meanwhile, Governor 
Gonzalez 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 U.S. academic 
institutions. 
 
 
 
¶6. (SBU)  As in all parts of Mexico, security overshadows all 
other issues in Nuevo Leon.  Previously Monterrey had been seen 
as a safe city, where drug cartels would operate but would not 
engage in public violence.  However, the rules have changed as 
the various Mexican drug cartels  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 has declined in 2008 as drug violence has 
moved to Cuidad Juarez and other Mexican cities.  However, there 
has been an increasing in kidnapping in Nuevo Leon, and public 
frustration has boiled over given 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.  State and local authorities 
have responded with plans to provide more police training, clean 
up the police forces, and have caught several kidnapping gangs. 
However, as the government of Nuevo Leon has admitted that over 
50% of the municipal police forces are infiltrated by the 
narcotics cartels, the fight for public security will certainly 
be long and difficult. 
WILLIAMSON