MEXICO CITY (Reuters) – Dwarfed by surrounding reporters and with her head bowed to avoid the television cameras, the slender 16-year-old hesitated slightly before she answered the question. “I’m a hitwoman,” she said.

Maria Celeste Mendoza was among six teenage suspected gang members arrested this week by police after a shoot-out with authorities in central Mexico, one of the growing ranks of young people working for the country’s drug cartels.

Dressed in combat fatigues and with her face hidden, the girl from the northern border state of Tamaulipas described how she had been trained to use Kalashnikov assault rifles and other weapons by the Zetas, one of Mexico’s most brutal gangs.

In a listless drawl, Mendoza said she was paid 12,000 pesos ($1,000) for two weeks’ work, more than three times the national average. Although she said she was trained as a hitwoman, it was unclear if she had killed anyone yet.

As is customary in Mexico, she and the other suspects, six of whom were women aged 21 or below, were paraded in front of the media by police after their capture in San Cristobal de la Barranca, near the country’s second city, Guadalajara.

Rising youth unemployment, easy access to drugs and the quick cash cartels offer recruits are all blamed for felling

the delinquency that has cast a shadow over Mexico’s future.

MEXICO CITY, June 1 (Reuters) – Escalating drug war violence, a dysfunctional oil monopoly and political gridlock ahead of next year’s presidential election are clouding the outlook for Mexico, Latin America’s second biggest economy.

WORSENING DRUGS WAR

Nearly 40,000 people have been killed in Mexico since President Felipe Calderon launched his war on drug gangs in December 2006, and the country risks losing control of large areas to cartels near the U.S. border. [ID:nN15124805]

April was the most violent month yet in Calderon’s fight, with 1,402 deaths, Milenio newspaper reported. That month the biggest mass graves of the drug war were found in the northern states of Tamaulipas and Durango. [ID:nN27126453]

The government says the violence is a sign of chaos among the cartels, and that the army has cut the threat they pose, killing or capturing dozens of kingpins since December 2009.

But many, including Joaquin “Shorty” Guzman, boss of the Sinaloa cartel, are still at large and have infiltrated police forces, courts and town halls across Mexico. [ID:nN17147609]

Tensions with Washington, Mexico’s main supporter in the drugs war, have risen since suspected drug hitmen shot dead a U.S. agent in central Mexico in February. [ID:nN29276428]

MEXICO CITY (Reuters) – Mexican billionaire Carlos Slim may have to wait for years to enter his domestic television market now that the government has rejected his bid so close to next year’s presidential election.

Slim must go back to the drawing board after the Communications and Transport Ministry said his fixed line phone giant Telmex, which dominates the market, had not yet met the regulatory requirements for a TV concession.

The rejection was the latest in a string of setbacks for the world’s richest man, whose efforts to get into Mexico’s TV market have been strongly opposed by the dominant broadcasters Televisa (TLVACPO.MX: Quote, Profile, Research, Stock Buzz) and TV Azteca TVAZTCACPO.MX.

With the 2012 vote just 13 months away and polls showing his conservative National Action Party is way behind the main opposition, President Felipe Calderon is more likely to want to keep the TV bosses on his side than help Slim get richer, said Lorenzo Meyer, a political scientist at the College of Mexico.

“For now the richest man on Earth can’t impose his will on the government,” he said. “I think Slim will have to wait until Calderon’s government ends and negotiate with the next one.”

Slim is already the top pay TV provider in Latin America, with customers in all countries except Mexico and Argentina.

But if he cannot overturn the decision, investors may scale back expectations for his businesses, which have flourished on the platform he built with Telmex two decades ago.

MEXICO CITY, May 29 (Reuters) – Mexican billionaire Carlos Slim may have to wait for years to enter his domestic television market now that the government has rejected his bid so close to next year’s presidential election.

Slim must go back to the drawing board after the Communications and Transport Ministry said his fixed line phone giant Telmex, which dominates the market, had not yet met the regulatory requirements for a TV concession. [ID:nN27185763]

The rejection was the latest in a string of setbacks for the world’s richest man, whose efforts to get into Mexico’s TV market have been strongly opposed by the dominant broadcasters Televisa (TLVACPO.MX: Quote, Profile, Research, Stock Buzz) and TV Azteca TVAZTCACPO.MX.

With the 2012 vote just 13 months away and polls showing his conservative National Action Party is way behind the main opposition, President Felipe Calderon is more likely to want to keep the TV bosses on his side than help Slim get richer, said Lorenzo Meyer, a political scientist at the College of Mexico.

“For now the richest man on Earth can’t impose his will on the government,” he said. “I think Slim will have to wait until Calderon’s government ends and negotiate with the next one.”

Slim is already the top pay TV provider in Latin America, with customers in all countries except Mexico and Argentina.

But if he cannot overturn the decision, investors may scale back expectations for his businesses, which have flourished on the platform he built with Telmex two decades ago.

MEXICO CITY, May 27 (Reuters) – Mexico’s government on Friday put the brakes on tycoon Carlos Slim’s efforts to establish himself in his domestic television market, rejecting a bid by telecoms giant Telmex for a television concession.

Telmex — majority-owned by Slim, the world’s richest man — has been fighting a lengthy battle with regulators for the right to offer TV services. The billionaire is already the top provider of pay TV in Latin America.

The Mexican Communications and Transport Ministry said in a statement that Telmex had failed to meet the necessary requirements to enter the TV market. However, it added the company could still try again in future.

The rejection of the bid is the latest in a string of setbacks for the 71-year-old Slim, whose companies are worth some $74 billion, according to Forbes.

Last month, Mexico’s Federal Competition Commission fined Slim’s mobile giant America Movil $1 billion after concluding that the firm had abused its dominant position.

This triggered a double-digit rout of the company’s share price, though the stock recovered somewhat after America Movil launched a legal offensive to fight the fine.

Regulators and lawmakers have also stepped up their rhetoric in recent months against the market dominance of financial heavyweights like Slim, whose interests extend from telecoms to mining, high street retailers and the media.

MEXICO CITY (Reuters) – With time running out to win a drugs war that has cost nearly 40,000 lives, only the scalp of Mexico’s biggest kingpin can give President Felipe Calderon the symbolic victory his party desperately needs.

Mexico’s next presidential election is just 14 months away, and the conservative National Action Party (PAN) is now well behind its main rival in polls, battered by the violence unleashed by Calderon’s grinding campaign against the cartels.

Catching Mexico’s most powerful drug lord Joaquin “El Chapo” Guzman would be a “godsend” to the PAN, which needs to turn around public opinion before the July 2012 vote, said George W. Grayson, a Mexico expert at the College of William and Mary in Virginia.

“It would be a real coup for Calderon, much like the Osama bin Laden takedown was for Obama,” Grayson said.

After bin Laden’s death, Guzman hit the top of some “most wanted” lists, giving extra prominence to a man who has acquired semi-mythical status in Mexico since he escaped from a maximum security prison in 2001 eight years after his capture.

Although the government has killed or captured some other drug lords, none have the status of “El Chapo” (“Shorty”), who is a household name and has been a permanent thorn in Calderon’s side since the president launched his crackdown on cartels on taking office in late 2006.

While the conflict caused constant headaches for Calderon and strained ties with Washington, Guzman was busy extending the reach of his Sinaloa cartel as far afield as China, putting him on Forbes magazine’s list of the world’s richest people.

MEXICO CITY, May 4 (Reuters) – Mexico massively ramped up its gold reserves in the first quarter of this year, buying over $4 billion of bullion as emerging economies move away from the ailing U.S. dollar, which has dipped to 2-1/2-year lows.

The third biggest one-off purchase of gold by any country over the past decade took Mexico’s reserves to 100.15 tonnes – or 3.22 million ounces — by the end of March from just 6.84 tonnes at the end of January, according to the International Monetary Fund and Mexico’s central bank.

Gold has gained 11 percent this year, driven by concern over euro zone debt and the violence in the Arab world, as well as by the U.S. dollar’s 7.6 percent decline against a basket of currencies .DXY.

Sergio Martin, chief economist for HSBC in Mexico, said the government probably saw gold as a highly liquid asset that would reduce exposure to the falling greenback.

“They’re probably thinking that getting out of dollars and into gold makes sense because we know that the dollar has some trend to depreciate in the near future at least,” said Martin. “I don’t think they’re going to lose money with this.”

Mexico’s foreign currency reserves hit a record $128 billion in April, making the gold purchased mostly in February and March worth nearly 4 percent of that total. Mexican central bank data on gold holdings only exists through March.

The central bank did not respond to a request for comment.

MEXICO CITY (Reuters) – The United States has spent over $1 trillion promoting democracy in far-flung Iraq and Afghanistan while friendly neighbor Mexico gets a fraction of that to fight drug gangs and prevent a slide into chaos.

Mexico’s frustration with the priority Washington grants to a shared crackdown on drug gangs has plunged ties between the two allies to their lowest ebb in years.

Last year alone, the U.S.-backed campaign launched in late 2006 by President Felipe Calderon claimed the lives of over 15,000 people in Mexico. That was more than double the combined civilian deaths reported in Afghanistan and Iraq, where the United States has spent over $1.2 trillion in the past decade.

In contrast, Washington has pledged just $1.3 billion under the so-called Merida Initiative to help Mexico fight the traffickers.

“The Merida Initiative is almost an insult,” leading Mexican historian Enrique Krauze told Reuters. “America spends a trillion dollars in Iraq and a hundred million or so on Merida: Beautiful.”

“Things aren’t moving forward and I have no hope they will. We’re looking at ten years of war in Mexico. On our own. The Obama administration has been a huge disappointment for us.”

Despite quickly growing ties over the past two decades, investment and bilateral trade worth some $400 billion a year could suffer if the two sides cannot end the disputes that have dogged joint efforts to manage a conflict that some U.S. lawmakers compare to the Iraq war.

MEXICO CITY, April 10 (Reuters) – Mexican President Felipe Calderon’s conservatives suffered a setback on Sunday when they failed to seal an alliance that could have dented the chances of the main opposition party to retake the presidency in 2012.

The left-wing Party of the Democratic Revolution (PRD) rejected an offer to join Calderon’s National Action Party (PAN) in a key state election, a ploy that has brought success against the party that has traditionally dominated Mexico.

Though now in opposition, the Institutional Revolutionary Party (PRI) is leading national opinion polls. It hopes a July 3 vote in the state of Mexico, adjoining the capital and the largest by population, will serve as a springboard for a return to power in the country it ruled for over 70 years until 2000.

Had the PAN and PRD joined forces, repeating a tactic employed in other state elections, analysts said it would have raised the chance of ejecting the PRI from Mexico state for the first time, and undermined its momentum in national polls.

“If we’d got the alliance, we’d have been a step closer to defeating the PRI,” Manuel Camacho, a former Mexican foreign minister who split with the PRI in the 1990s and later served as a PRD congressman, told Reuters.

“But this story isn’t over yet,” he added. “It’s a tactical victory for the PRI, but not a strategic one.”

Although the PAN has held the presidency since 2000, the PRI remains the biggest political force in the country, governing 20 of the country’s 32 federal entities, including Mexico state, home to some 15 million people.

MEXICO CITY, April 4 (Reuters) – Attacks on Carlos Slim’s hold on Mexico’s telecoms market intensified on Monday when a secret group opposed to the world’s richest man rubbished his core business in a newspaper advert called “The Slimsons”.

Drawn in the style of U.S. cartoon sitcom “The Simpsons”, the full-page broadside against the 71-year-old tycoon ran in several of Mexico’s biggest dailies, lampooning the cost, reliability and services of Slim’s telephone networks.

Slim has become embroiled in a bitter feud with Mexican media moguls over his dominance of local telecommunications, which has spawned a series of attacks on his credibility on television, the Internet and now newspapers.

In the advert, four blue-faced characters in the clouds state respectively “In Slimlandia — clients get ‘quality service’”, “telephone charges ‘are low’”, “connection speeds ‘are infinite’”, and “your mobile ‘always works’”.

Below, a sad-looking man with a pink face says: “Not in Mexico.” Signed off by anti-Slim group calling itself “Todos los Mexicanos” (All the Mexicans), the advert adds:

“All Mexico is the territory of all the Mexicans,” in a parody of one of Slim’s best known phone advertising slogans.

A spokesman for Slim’s fixed-line phone giant Telefonos de Mexico (TMX.N: Quote, Profile, Research, Stock Buzz) (TELMEXL.MX: Quote, Profile, Research, Stock Buzz) declined comment on the advert.