Nick Miroff
By Nick Miroff
Mexican President Enrique Pena Nieto is entering a critical stage of his term, analysts say, as his administration faces growing resistance to its wide-ranging, fast-track push to remake the country’s institutions.
Pena Nieto is under fire from Mexico’s left for taking on powerful teachers unions and for a proposal to open the state oil monopoly to private investment. On the right, opposition is building to his plan for tax hikes on the wealthy, corporations and a broad share of the middle class.
More moves are still to come, aimed at breaking up telephone and broadcast monopolies, overhauling the criminal justice system, election rules and other targets, all stacked on the president’s lengthy, urgent to-do list.
After 10 months in office, Pena Nieto’s approval rating — 56 percent in the latest national poll — is lower than those of his two most recent predecessors at the same stage. But his administration says it is pressing ahead, backed by a rare and fragile consensus among the country’s major political parties to take on long-festering problems as quickly as possible.
“This is a transcendental moment,” said Aurelio Nuno, the president’s chief of staff, in an interview at Los Pinos, Mexico’s equivalent of The White House, calling his administration’s agenda one of “radical reform.”
“Over the past 30 years, Mexico has undergone a democratic transformation,” Nuno said, referring to the seven decades of one-party rule by his own PRI party, which ended in 2000 and was followed by 12 years of heavy political gridlock. “But that transformation lacked the structural changes to make the state efficient, to increase growth and competitiveness, and to reduce poverty.”
Such changes, he said, will inevitably clash with the “interests” of Mexico’s status quo.
A crucial test for Pena Nieto might come as soon as mid-October, with lawmakers expected to vote in the coming weeks on his bid to rewrite energy laws and jolt the sagging national oil company, Pemex, which has long been closed to private investment.
If approved, the changes could trigger a flood of foreign capital, especially from the United States, where energy companies are eager to partner with Pemex to unearth the large reserves of oil and gas that Mexico lacks the technology and expertise to reach.
Mexico’s economy has softened since Pena Nieto took office in December, further raising the stakes for the energy overhaul his administration says is the key to achieving its goal of 5 percent annual growth. The country’s financial woes deepened this month as drenching tropical storms inflicted billions in damages across a wide swath of Mexican territory and were blamed for at least 139 deaths.
Mexico’s left has been galvanised by the energy debate, casting the president’s proposals as a resource grab by foreign interests and local elites seeking to “privatise” the country’s national patrimony.
Nationalism has infused Mexican oil ever since former president Lazaro Cardenas seized the country’s wells from mostly US and British firms on March 18, 1938, an event celebrated here as Oil Expropriation Day.
Cardenas’ son, Cuauhtemoc Cardenas, the former mayor of Mexico City and the founder of the country’s leftist Democratic Revolutionary Party (PRD), has led rallies in the capital under the banner “In Defense of Oil.” Andres Manuel Lopez Obrador, the runner-up to Pena Nieto in last year’s presidential election, is also mobilising protests and calling for a national referendum on reshaping Pemex.
“Energy reform has the support of the upper class, but it’s not well understood, most people don’t understand why opening up Pemex is a good idea,” said pollster Roy Campos.
The vote will also be a bellwether for the president’s broader agenda, and a defeat would leave him politically weakened with more controversial proposals — such as tax increases — still ahead. Administration officials say Mexico’s low rates of tax collection benefit the wealthy and hurt the poor, leaving the government too dependent on Pemex, which funds roughly a third of the federal budget but faces shrinking output as the country’s easy-to-tap oil wells go dry.
Former foreign minister Jorge Castaneda, now a columnist and political analyst, said Pena Nieto made a strategic error by starting with his easiest agenda items and leaving the toughest measures for later.
“He came in with a very ambitious agenda of well-intentioned, necessary, intelligent reforms,” Castaneda said. “But he’s proceeding in the wrong sequence, and I see things getting more difficult for him, not easier.”
Pena Nieto scored an early victory this month when lawmakers overwhelmingly backed his proposals for broad changes to public education. The new laws will submit educators to periodic evaluations and begin curbing some of the practices blamed for chronically low classroom achievement, like the buying and selling of jobs by union bosses.
The measures sailed through Mexico’s Congress but have met obstreperous resistance from unions since then. Their shifting, near-daily protests have snarled traffic in the capital for weeks, blocking access to the airport, government offices and the US Embassy.
WP-BLOOMBERG
By Nick Miroff
Mexican President Enrique Pena Nieto is entering a critical stage of his term, analysts say, as his administration faces growing resistance to its wide-ranging, fast-track push to remake the country’s institutions.
Pena Nieto is under fire from Mexico’s left for taking on powerful teachers unions and for a proposal to open the state oil monopoly to private investment. On the right, opposition is building to his plan for tax hikes on the wealthy, corporations and a broad share of the middle class.
More moves are still to come, aimed at breaking up telephone and broadcast monopolies, overhauling the criminal justice system, election rules and other targets, all stacked on the president’s lengthy, urgent to-do list.
After 10 months in office, Pena Nieto’s approval rating — 56 percent in the latest national poll — is lower than those of his two most recent predecessors at the same stage. But his administration says it is pressing ahead, backed by a rare and fragile consensus among the country’s major political parties to take on long-festering problems as quickly as possible.
“This is a transcendental moment,” said Aurelio Nuno, the president’s chief of staff, in an interview at Los Pinos, Mexico’s equivalent of The White House, calling his administration’s agenda one of “radical reform.”
“Over the past 30 years, Mexico has undergone a democratic transformation,” Nuno said, referring to the seven decades of one-party rule by his own PRI party, which ended in 2000 and was followed by 12 years of heavy political gridlock. “But that transformation lacked the structural changes to make the state efficient, to increase growth and competitiveness, and to reduce poverty.”
Such changes, he said, will inevitably clash with the “interests” of Mexico’s status quo.
A crucial test for Pena Nieto might come as soon as mid-October, with lawmakers expected to vote in the coming weeks on his bid to rewrite energy laws and jolt the sagging national oil company, Pemex, which has long been closed to private investment.
If approved, the changes could trigger a flood of foreign capital, especially from the United States, where energy companies are eager to partner with Pemex to unearth the large reserves of oil and gas that Mexico lacks the technology and expertise to reach.
Mexico’s economy has softened since Pena Nieto took office in December, further raising the stakes for the energy overhaul his administration says is the key to achieving its goal of 5 percent annual growth. The country’s financial woes deepened this month as drenching tropical storms inflicted billions in damages across a wide swath of Mexican territory and were blamed for at least 139 deaths.
Mexico’s left has been galvanised by the energy debate, casting the president’s proposals as a resource grab by foreign interests and local elites seeking to “privatise” the country’s national patrimony.
Nationalism has infused Mexican oil ever since former president Lazaro Cardenas seized the country’s wells from mostly US and British firms on March 18, 1938, an event celebrated here as Oil Expropriation Day.
Cardenas’ son, Cuauhtemoc Cardenas, the former mayor of Mexico City and the founder of the country’s leftist Democratic Revolutionary Party (PRD), has led rallies in the capital under the banner “In Defense of Oil.” Andres Manuel Lopez Obrador, the runner-up to Pena Nieto in last year’s presidential election, is also mobilising protests and calling for a national referendum on reshaping Pemex.
“Energy reform has the support of the upper class, but it’s not well understood, most people don’t understand why opening up Pemex is a good idea,” said pollster Roy Campos.
The vote will also be a bellwether for the president’s broader agenda, and a defeat would leave him politically weakened with more controversial proposals — such as tax increases — still ahead. Administration officials say Mexico’s low rates of tax collection benefit the wealthy and hurt the poor, leaving the government too dependent on Pemex, which funds roughly a third of the federal budget but faces shrinking output as the country’s easy-to-tap oil wells go dry.
Former foreign minister Jorge Castaneda, now a columnist and political analyst, said Pena Nieto made a strategic error by starting with his easiest agenda items and leaving the toughest measures for later.
“He came in with a very ambitious agenda of well-intentioned, necessary, intelligent reforms,” Castaneda said. “But he’s proceeding in the wrong sequence, and I see things getting more difficult for him, not easier.”
Pena Nieto scored an early victory this month when lawmakers overwhelmingly backed his proposals for broad changes to public education. The new laws will submit educators to periodic evaluations and begin curbing some of the practices blamed for chronically low classroom achievement, like the buying and selling of jobs by union bosses.
The measures sailed through Mexico’s Congress but have met obstreperous resistance from unions since then. Their shifting, near-daily protests have snarled traffic in the capital for weeks, blocking access to the airport, government offices and the US Embassy.
WP-BLOOMBERG
