http://timesofindia.indiatimes.com/articleshow.asp?art_id=1897955784
MEXICO CITY: Some say this is how globalisation is supposed to work: A rich US bank expands into a developing nation, spreading capital around. Others see Citigroup's acquisition on Friday of Mexico's second-largest bank as a classic example of a backroom deal that concentrates power and wealth. Citigroup's takeover of Banamex has weathered questions about money laundering, anger among taxpayers who paid billions to bail out the Mexican bank, and concern over the fate of Banamex's trove of Mexican art, which Citigroup will apparently acquire. But for many Mexicans, the biggest question is whether their country - in finance, transport, manufacturing - is becoming a mere branch office for foreign firms. Almost all of Mexico's financial sector has been sold to foreigners over the last three years. Few deals so typified the good and the bad of globalisation as the dlrs 12.5 billion cash and stock deal sealed Friday on the floor of the Mexico City Stock Exchange. When it was announced in May, President Vicente Fox called the acquisition an "extraordinary" event for Mexico, where banks are poorly capitalized, grant few loans and serve less than a quarter of the population. "We know we have to participate in globalisation," Fox said. "We know we have to create financial reserves inside the country and attract them from abroad, and that is what this gigantic investment by Citibank in our country does," he said. Some say Fox was happy for other reasons as well: His college buddy and campaign donor, Banamex President Roberto Hernandez, may have gotten as much as dlrs 3 billion for selling his stake in the bank. That wouldn't be too controversial, except that taxpayers spent more than dlrs 3.4 billion to bail out the bank when it was drowning in bad loans in 1995. Little of that money was ever repaid by the bank's shareholders or the loan holders. Both Hernandez and Fox say none of the sale price should be repaid to government coffers. Hernandez has waxed poetic about the global aspects of the deal: "The idea was to attack the market head-on, and create a truly trans-border North American bank." Others saw it in less glowing terms. "It's not fair that Mexicans subsidize with our tax money some juicy business deals that benefit a few," said Sen. Jesus Ortega. Fox's own policies have fed the growing sense that globalisation benefits only the rich. The president has resisted a full investigation of the bank bailout, and has appointed business magnates to key government positions. One of those - Carlos Slim, Latin America's richest man, who Fox briefly appointed to the board of the state-owned oil monopoly -hasn't sold out to foreigners yet. But his telecommunications empire is so far-reaching that, as newspaper columnist Marcos Rascon said, "it is present in every aspect of the culture ... using the Internet, making a phone call, watching television, going to the movies or buying a record." The issue of foreign domination is also significant in a country invaded by what are known as "los marts": Wal-Mart, HomeMart and other USchains. Mexico City, indeed, may be the only place in the world where Woolworth's stores - complete with lunch counters - are going strong. The foreigners have sometimes ridden roughshod over Mexican sensibilities. In June, USretailer Costco drew wide protests when it began to tear down a landmark 1940s resort near Mexico City to put up a shopping mall. Resentment is sharpened by the fact that, of the nearly 20 banks around before the 1994 peso crisis, only a few still exist - and the largest have been bought by the likes of Spain's Banco Bilbao Vizcaya or Canada's Bank of Nova Scotia. And it doesn't help that, along with Banamex, Citigroup will acquire one of the largest private collections of Mexican art and real estate, ranging from 16th-century palaces to great paintings. Nationalist fears were assuaged only slightly when experts said the artwork apparently cannot be sold or sent abroad by Citigroup. Mexicans also are distrustful of Citibank after learning it allowed its private-banking division to be used to channel almost dlrs 100 million in alleged drug money into Swiss accounts for Raul Salinas, brother of former President Carlos Salinas. None of that proved a problem for regulators in the United States and Mexico, who quickly approved the deal. "It's a grand case of fraud," said the leader of Mexico's Environmental Green Party, Jorge Gonzalez Torres. "It's all part of the Mexican tragedy." ( AP )
http://timesofindia.indiatimes.com/articleshow.asp?art_id=1897955784
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