2009.01.0802:14:00UTC+00Mexico Unveils Emergency Measures

Mexican President Felipe Calderon Wednesday pledged to inject $150 million (2 billion pesos) into its struggling industries in a bid to save hundreds of thousands of jobs and protect its economy from the global financial crisis triggered by the U.S. recession, media reports said.

Calderon said Mexico was facing a period of great difficulty and rising unemployment. The emergency measures, part of a 25-point plan that includes freezing petrol prices, reducing household gas prices by 10 percent, and increasing unemployment benefits, would protect half a million jobs, mostly in export industries that depend heavily on the U.S. market, he said.

Additionally, a further 250,000 jobs will be created by advancing several planned infrastructure projects such as road repairs and restoration of historic sites. He warned that Mexico would be experiencing a difficult year in terms of economic growth, investment and employment.

Meanwhile, the United States released another $99 million to Mexico Wednesday for equipment to fight warring drug cartels, bringing available funds for the country's anti-narcotics aid to almost $300 million.

Mexico, which sends 80% of its exports to the U.S. and also depends heavily on remittances from Mexican workers there, earlier believed it would be largely immune to the global economic crisis that began as the credit crisis in the U.S., but is now feeling the effects.

However, with oil prices tumbling from last year's record highs, Mexico could benefit from an earlier government gamble to hedge almost all its 2009 oil output at $70 a barrel, earning the country several billion dollars.

With oil production and foreign remittances -- the second-largest source of foreign revenue -- falling, the government is forecasting 1.8 percent growth in 2009 and a projected 2 percent in 2008.

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