Working Out: A Letter from Sinaloa

Working Out: A Letter from Sinaloa

Mini Teaser: Sinaloa's maverick governor and his team have turned a narco-trafficking hellhole into a civic and commercial success. Maybe their formula can be franchised.

by Author(s): George Grayson

Cases like this explain why, during last year's Independence Day parade in the state capital of Culiacán, onlookers enthusiastically cheered a police force for the first time in the history of Sinaloa-perhaps in the whole history of Mexico. Needless to say, the hurrahs were directed toward the fri, whose members-although they live throughout the community-wear either ski-masks or tinted face shields to disguise their identities. These accolades irritated unpopular regular police officers, who belittle the high-tech special unit as "Nintendo cops" or "galactic warriors."

Such sour grapes notwithstanding, Comandante Simón, who disdains kidnappers as "the worst breed of cowards because they prey on children and other vulnerable members of society", has become a local folk hero. One rescued victim named him godfather of his child; grateful families have taken newspaper ads lauding the hard-charging Millán and the low-key fri chief; and primary-school teachers have reported their pupils saying "when I grow up I want to be like Comandante Simón." It is probably only a matter of time before he and his squad enter the lyrics of folk songs or are featured in a tv series. The bright lights are unlikely to lure Simón away from Sinaloa, however, in part because he has married a local woman and become a Mexican citizen.

The decline in kidnappings gives FRI professionals more time to upgrade their specialties and to spread the Sinaloa model. Comandante Simón and his crew, who have earned kudos from the federal attorney general's office, have provided training to law-enforcement agencies in a score of other Mexican states.

The Promoter

No one appreciates the tough-as-nails Venezuelan native more than Heriberto Félix Guerra, Millán's secretary of economic development, who is also vice president of the public-private Sinaloa Economic Development Council (co-desin). When requested, Ortega has heart-to-heart talks with prospective investors, including those from Japan and Korea who vividly remember the violence visited upon Sanyo, Mogami and Sharp executives in Tijuana in the state of Baja California in the mid- to late-1990s. Involving Comandante Simón when appropriate is also part of Secretary Félix's commitment to one-stop shopping for entrepreneurs. A former businessman, securities broker and chamber of commerce leader, the forty year-old Félix knows firsthand the frustrations of confronting sticky-fingered, come-back-tomorrow bureaucrats. That's why his mantra-and codesin's slogan-is "Todo En Un Solo Lugar" ("Everything in One Place").

Practically speaking, this means that a California resort mogul interested in building a luxury seaside hotel in, say, Rosario, can usually get answers to his questions and obtain all local, state and federal permits in the Government Palace in Culiacán, where all major federal agencies have offices. For most initiatives, Félix and his young staff can help the client complete the paperwork in eight hours. If complications arise, the secretary assigns a senior account executive to the investor's project. This troubleshooter, whose paycheck grows fatter with every success, will accompany the hotelier to Rosario, Mexico City or wherever there is red tape to slash. If obstacles remain, Félix himself will take charge and, as a last resort, enlist Millán to contact either a cabinet secretary or President Fox. Because the nation's chief executive belongs to the National Action Party, many pri governors have treated him with all the kindness of Cromwell ruling Ireland. Not so the savvy Millán. He has welcomed the president to Sinaloa six times. Good personal chemistry has engendered an effective working relationship-one that ensures that government big shots in Mexico City readily take the governor's phone calls.

Indeed, the power-point adept, tie-wearing Félix and the gregarious, open-collared Millán complement each other in winning converts to Sinaloa. The secretary crunches numbers, dispenses technical skinny and accelerates the acquisition of permits. For his part, the bon vivant Millán treats visitors to fist-sized shrimp, succulent steaks and delicate wines while regaling them with thrilling tales of his dealings with swag-bellied politicians and conniving union chiefs.

Eager to make the state more attractive, both men listen as much as they talk. Upon concluding one deal, Félix inquired of the new investor: "Now that all the papers are signed and we've emphasized positive things, please tell me what you find wrong with Sinaloa." Without a moment's hesitation, the client shot back, "Your airport is a museum piece." This response prompted Millán to lobby Mexico City for funds to modernize Culiacán's airport, now one of the most attractive in the country. A brand new bus terminal is a godsend for travelers seeking lower fares, and the capital's three major hospitals-one of which was the scene of the nation's first heart transplant-are undergoing improvements.

That Sinaloa is relatively far from major population centers accentuates Félix's and Millán's interest in transportation. Their offices overflow with maps showing how a few hundred miles of new highways could link the northern Sinaloan port of Topolobampo to both the country's Caribbean coast and the United States. Another projected highway arc, developed by Millán and Arizona Governor Jane D. Hull, runs from the state through the United States to Canada.

Neither Millán nor Félix courts industries that will pull up stakes the moment they can make a few more dollars offshore or in a neighboring state. Rather, they are determined to attract enterprises that will sink roots in Sinaloa and generate new and permanent jobs for Sinaloans. This excludes footloose assembly operations. "If you want to see Mexico's past just look at Baja California and Chihuahua", Félix told me. The handsome secretary with the fervor of a true believer added that

both states suffer soaring unemployment and crime because finicky maquiladora owners are shifting their operations to China or Central America to take advantage of sweat-shop wages. That's not for Sinaloa. Our objective is to lead the nation's economic advancement by 2010.

codesin thus focuses on seven sectors: food, tourism, textiles, light manufacturing, commerce and services, software and filmmaking.

Millán's round face lights up when he mentions Citrofrut. The governor phoned entrepreneur Guillermo Zambrano, a member of one of the nation's wealthiest families, who sought a site for a state-of-the-art fruit processing plant. Zambrano, who had narrowed his search to three other states, later said, "The only reason that I even visited Sinaloa was out of courtesy to the governor." He obviously liked what he saw, and Rosario-Millán's hometown-now has 200 residents employed in an ultramodern Citrofrut facility, the biggest in North America. Nearby, construction workers are building the Estrella de Mar, an upscale Spanish-style resort.

At a time when Asian and Caribbean competitors have put the squeeze on Mexico's textile industry, the Tex Ray Group has opened a new plant in Culiacán. Its "complete package" technology-that is, the capability of turning raw thread into finished goods under one roof-provides a comparative advantage vis-à-vis old-fashioned producers. And Charles Dudgeon, president of Thatcher Tubes, llc, which is headquartered in Woodstock, Illinois, opted for relatively parochial Sinaloa over Monterrey, the dynamic, cosmopolitan capital of Nuevo León state. In explaining his decision, he said:

Monterrey embodies the present in terms of having an infrastructure and well-trained workers, but the city is beginning to face a labor shortage; in contrast, Sinaloa represents the future because it has an abundant, well-educated, and stable labor force.

Dudgeon also gave high marks to Félix's team, saying that "their promises are not just words in a glossy brochure, they really come through."

Last May 30, Millán laid the cornerstone on the Forum Culiacán, which embraces 14 movie screens, dozens of restaurants, a deluxe hotel, night clubs, Sears and other major stores, and specialty shops operated by Nine West, Liza Minelli, Perry Ellis, Levi's, Dockers and Swatch. This mega-mall, the nation's newest, will make Sinaloa's capital the shopping mecca of northwest Mexico. Like Ortega's fri operatives, things seem to be working out.

Although vitally concerned about attracting new enterprises, Félix keeps in close touch with current corporate citizens. "How can the state assist you?", he asks. "Improved services? Better infrastructure? Job training?" Although several dozen corporations generate the lion's share of jobs and earnings, the codesin chief also remains attentive to small businesses. In particular, he encourages the large firms to purchase from smaller companies in the state. Millán expressed surprise when Félix balked at accompanying him on a trip to Los Angeles. "I can get more accomplished in Sinaloa-with grassroots businesses as well as with prospects-than I can in California", the secretary replied.

The strides made by Millán and his entourage have broad relevance for Mexico and other developing countries. First, the governor has articulated difficult but clear goals that address the fundamentals that citizens want from government-jobs, education, healthcare and personal safety. Second, he has assembled top aides who both share his vision and work well together, and he has given them a great deal of discretion and support to carry out their duties. Third, he has focused on meeting the needs of investors, who number among his most enthusiastic boosters. Fourth, he has built bridges-between labor and management, firms big and small, domestic and foreign companies, the executive branch and the state legislature, and himself and the nation's chief executive. Finally, he has labored tirelessly to gain the confidence of citizens, state employees and investors.

Essay Types: Essay