By: Violeta R. Núñez Rodríguez *
In one of the pamphlets of the National Fund for the Promotion of Tourism (Fondo Nacional de Fomento al Turismo, Fonatur), which promotes the Maya Train, the most important infrastructure work of the current federal government, which contemplates 30 stations (22 passing through and 18 with development poles –Fonatur, 2020–) that they intend to build on ejido and small property lands, it states verbatim that: “the stations will be financed through an Infrastructure and Real Estate Trust (Fideicomiso de Infraestructura y Bienes Raíces, Fibra), called the Maya Train Fibra” (Fonatur, 2019). In other words, they will not be financed with public investment.
But what is this Fibra? It’s a financial instrument that is quoted like any share inside the capital market on the Mexican Stock Exchange (BMV, its initials in Spanish). “What’s that?” That’s what the vast majority of this country’s population would say, since only 0.4 percent of all Mexicans invest in the BMV (CNBV, 2018). Added to that, regarding this financial instrument in particular, there is little experience in Mexico since it has been just nine years that it has been listed on the BMV. This contrasts with the United States where, in addition to the fact that 60 percent of the population invests in the stock market, this type of instrument (known as a Real Estate Investment Trust) is more than 60 years old. We must add to this that there is no experience in Mexico. According to what some financial specialists indicate (Rankia, 2020), there is no experience anywhere in the world where a Fibra is constituted on social (ejido) property, which implies that there is no history.
But, what is this instrument about? According to the BMV, “Fibras are vehicles destined to finance the acquisition and/or construction of real estate that have as their purpose the lease or acquisition of the right to receive the income coming from the lease of said property” (BMV, 2015). In Mexico the Fibras have been used to finance office buildings, commercial properties, high quality shopping centers, industrial parks, industrial storage parks, hotels, etcetera. But the way it is financed starts with the capital market, a market where risks exist, given the volatility of stock market prices, which will depend on the economic situation of the markets where it is invested, and also on the national and global economic context.
Specifically, how will the Fibra proposal work? In an interview with one of the territorial links of the Maya Train, he explains that they express the following to the ejido owners: “You contribute land to the trust (Maya Train Fibra). What does the trust give you in exchange? It gives you shares in the company; it makes you a partner in the company, just like any other partner. Land will be necessary for the development poles. The ejido owners contribute their capital in the form of land. The land will belong to the partners in the project: the landowners and those who put money into developing the cities. Where does that money come from, from the capital market, from the BMV” (Fonatur, 2019). In this sense, the ejido owners “affected” by the Maya Train, in order to become partners will have to contribute their land to the trust, and on it they will build the stations, cities and development poles, which implies that if they wanted to reclaim their lands, it would be impossible.
Added to that, the Fibras are hybrid financial instruments. They contemplate two incomes that will be “delivered” to investors, the fixed and the variable. This latter income, which constitutes the major part of the instrument, is no known beforehand and is not guaranteed, it could even lose everything invested, which will depend on multiple factors. In other words, could the ejido owners lose their investment? According to the definition of variable income: yes. In addition, if they didn’t have a good return being in the trust, it’s very probable that they would end up selling their shares in the future, with which they would lose the land they contributed, and they would stop being property owners. Most likely, the owners of most of the shares would be the ones who buy them.
Before these scenarios that could constitute a dispossession of social property, a very big question is added. How does Fonatur propose a Fibra figure for incorporating the ejido owners as partners, if the Agrarian Law doesn’t contemplate it? In that regard, the agrarian prosecutor indicates that: “the law establishes that the contribution of land is for agricultural, livestock or forestry societies and could not be for industrial and urban development projects. The law does not foresee it” (Hernández Palacios, 2020). So, what are they betting on, that the ejidos become fully dominated and are sooner or later privatized? Let’s not forget that this has been the big dream of the neoliberals.
*Professor-Researcher at the Metropolitan Autonomous University, Xochimilco. Author of the book “Mexican Mining in 21st Century Capitalism.”
Originally Published in Spanish by La Jornada
Sunday, February 23, 2020
Re-Published with English interpretation by the Chiapas Support Committee