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PP RUEHCD RUEHGD RUEHHO RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHMC #0046/01 0351429
ZNR UUUUU ZZH
P 041429Z FEB 09
FM AMCONSUL MONTERREY
TO RUEHC/SECSTATE WASHDC PRIORITY 3454
INFO RUEHME/AMEMBASSY MEXICO PRIORITY 4501
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RHMFIUU/HQ USNORTHCOM
RUEHMC/AMCONSUL MONTERREY 9003

UNCLAS SECTION 01 OF 02 MONTERREY 000046 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON ETRD KCRM SNAR CASC MX
SUBJECT: SAN LUIS POTOSI TRAVELOGUE;  SECURITY GOOD; ECONOMY IN 
TROUBLE 
 
REF: MEXICO 146 
 
MONTERREY 00000046  001.2 OF 002 
 
 
¶1.        (U)  Summary.   We expect the 2009 governor's race in 
San Luis Potosi to focus on economic issues, since the state's 
security situation is relatively safe.  San Luis Potosi has had 
success in developing manufacturing industries, but export 
demand is down due to the U.S. recession.  The PAN and PRI will 
strongly compete in the upcoming July 5 election, which is 
likely to turn on local issues such as the economy and economic 
development in depressed areas.  On the bright side, while the 
capital is subject to intermittent spasms of drug-related 
violence, the security situation in both the city and the state 
of San Luis Potosi is generally good.  State officials have 
built a high tech C4 communications and command center that will 
allow them to further reduce common crime.  End Summary. 
 
 
 
¶2.       (U)  San Luis Potosi is located in a strategic area of 
central Mexico, near important highway and railroad links 
between Mexico City and the U.S.   San Luis Potosi, about the 
size of West Virginia and with a population of 2.4 million, has 
attracted important manufacturing plants such as General Motors 
to the capital city of San Luis Potosi and the city of 
Matehuala, but economic development has lagged in other parts of 
the state.  This state has been a PAN bastion, and while locals 
appear to approve of current PAN Governor Jesus Marcelo de los 
Santos, both PAN and PRI are expected to be competitive in the 
2009 Governor's race.   The PRD party is negligible in San Luis 
Potosi. 
 
 
 
Security Situation Relatively Good 
 
 
 
¶3.       (SBU)  Government officials proudly describe San Luis 
Potosi (SLP) as a relatively safe state.   According to press 
report, there were 33 drug related executions in SLP in 2008, a 
big increase from 11 killings in 2007 but still low by Mexican 
standards.   Governor de los Santos lauded the San Luis Potosi 
C-4 facility, which features a sophisticated system of cameras 
to watch key roads, provides analysis of common crime patterns 
and promotes intelligence sharing (see reftel).  The Governor 
maintains that the C-4 facility facilitated a significant 
reduction in crime.   De los Santos also praised the federal 
program Plataforma Mexico, which has provided training and 
helped clean up the state police force.  Moreover, de los Santos 
maintained that there have only been two important kidnappings 
for ransom in the last five years (in 2004).  The Governor 
admitted that there have been `levantones', or drug cartels 
kidnapping people who owe them money or members of the rival 
cartels, but he was dismissive of these cases. 
 
 
 
¶4.       (SBU)  Although San Luis Potosi is not quite as safe as 
the Governor claims, it is a relatively safe.  There have been 
several important drug executions, including high level police 
officials and a total of five police cadets were killed leaving 
the national police academy in SLP in two separate incidents in 
August 2008.  IN addition, there have two separate attempts to 
kill the head of the San Luis Potosi Security Council Cesareo 
Carvajal since he took office in November 2007.  Post has also 
heard reports of top level cartel officials meeting or traveling 
through SLP, and the state continues to be a transit point for 
drug shipments.  Nevertheless, Econoff spoke to three prominent 
businessmen, and they all agreed that the security situation is 
good in SLP, and that the Governor has been effective in this 
area.  Carvajal told the press that the C-4 facility has 
significantly reduced common crime, with robberies down 18% and 
homicide falling by 29%.  Note.  Econoff was not able to locate 
state crime statistics to verify these claims.  End Note.    A 
leading newspaper reported four kidnapping complaints in San 
Luis Potosi in 2008, but the official number usually grossly 
underestimates the actual number of kidnappings.   Note: 
Consulate Monterrey is aware of other cases of kidnapping for 
ransom, particularly in the `Ciudad Valles' region of the state, 
which were not reported to the authorities.  End Note. 
Nevertheless, the private businessmen did not reflect the same 
fear of kidnapping as seen in neighboring states. 
 
 
 
2009 Governor's Race Likely to Focus on Economy; Poverty 
Reduction 
 
 
MONTERREY 00000046  002.2 OF 002 
 
 
 
 
¶5.       (SBU)  Although San Luis Potosi has been a PAN 
stronghold, there could be a close Governor's race in 2009. 
Several business leaders praised Governor de los Santos for his 
work attracting foreign investment and building infrastructure, 
such as roads.  De los Santos was confident that the PAN 
candidate Alejandro Zapata Perogordo would win, and he cited the 
economy, security and poverty reduction as key issues, although 
he later retracted that to add that the economy and security 
were in good shape.  Three local businessmen thought that both 
the PAN and PRI candidates were capable, but that Zapata 
Perogordo (a former PAN federal senator) could do more for SLP, 
since he is a reportedly a close friend of President Calderon. 
In contrast, PRI Candidate Fernando Toranzo Fernandez is a 
doctor who formerly served as a senior health official in the de 
los Santos Administration.   Toranzo expects that his PRI 
campaign will be heavily outspent by the PAN, and he lamented 
that the compressed election schedule (limiting the campaign to 
a few months) will only allow him to visit some communities 
once.  Toranzo still expects to win.  Our Consular Agent, who 
has lived in San Luis Potosi for decades, commented that Toranzo 
is popular, and she expects a close race.   Our contacts 
generally agreed that the race would focus on local issues 
rather than serve as a referendum on President Calderon.  Note. 
Econoff was unable to meet with the PAN candidate during the 
trip.  End Note. 
 
 
 
¶6.       (SBU)  One challenging issue will be how to extend the 
economic development in San Luis Potosi and Matehuala to the 
other 50% of the population, particularly in the indigenous area 
of la Huasteca.  PRI candidate Toranzo thought that the primary 
campaign issue will be how to provide government services, such 
as water, electricity and health care, to the indigenous people 
of la Huasteca.  SLP Secretary for Economic Development Carlos 
Barcena commented that areas such as la Huasteca always ask for 
manufacturing plants, the same development strategy SLP pursues 
for the cities.  However, Barcena questioned whether these 
underdeveloped areas have the trained talent to run 
sophisticated manufacturing operations.  Instead, he thought 
that they should focus on developing their own competencies, 
including sugar cane or raising cattle, and the state is 
facilitating their development by building good roads to these 
areas.   A business man also thought that la Huasteca has 
potential for tourism, but first industry must build hotels and 
restaurants to support the tourist trade. 
 
 
 
US Economic Recession Hitting SLP Hard 
 
 
 
¶7.       (SBU)  San Luis Potosi is already feeling the effects 
of the U.S. recession, due to its dependence on manufacturing 
goods for export to the United States.  Governor de los Santos 
boasted how SLP had used incentives and good infrastructure to 
attract and retain 1,500 foreign companies, develop large 
industrial parks, and GM plans to open a transmission factory in 
the near future.  However, SLP Economic Secretary Barcena 
allowed that manufacturing in SLP is down 20-30% in late 2008, 
including a 25% drop in General Motors' production line since 
November.  Moreover, although state employment normally grows by 
5% annually, he projects that it will decline by 10% in 2008 and 
does not expect any further growth in 2009.  Meanwhile, the 
private businessmen, who own General Motors dealerships and 
local construction companies, were more pessimistic, claiming 
that SLP has been hit much harder than most states.   The 
businessmen reported that bank credit was very tight and 
expensive, particularly for purchasing housing or cars.  They 
noted that remittances, although only 3.4% of the state GDP, 
have declined, making it harder for ordinary people to pay for 
consumer purchases. 
 
 
 
¶8.       (U)  Comment.  Since the state economy is likely to 
continue to be battered by weak export demand for manufacturing 
goods, we expect local economy issues to predominate in the 
campaign for Governor.  Although this is PAN country, this year 
could be different.  The PRI candidate for Governor is well 
known and appears to have a sincere interest in the 
underdeveloped parts of the state.  Post will continue to 
monitor the Governor's race closely.  End Comment. 
WILLIAMSON