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Mexico's armed forces salute the country's new president Enrique Peña Nieto. (Photo: Mexico's Presidency)
Wednesday, December 5, 2012

Mexico: A Change of Guard

High hopes for Mexico’s new president.


Mexico’s new president, 46-year old Enrique Peña Nieto, assumes office amidst high hopes among both Mexicans and the international community alike.

The top expectation is that he will be able to reduce the drug violence that has dominated headlines out of Mexico during most of the previous administration of Felipe Calderon.  

While committed to continue fighting drug trafficking, Peña  Nieto is expected to change the tactics in a way that will lead to less violence in Mexico, according to experts.   The violence, which left a death tally of at least 60,000 (mostly drug traffickers fighting each other for turf), weakened the legacy of Calderon, who otherwise won high praise for various reforms.

To help him spearhead efforts to improve security, Peña Nieto has appointed Miguel Angel Osorio Chong as his interior minister. He is a former governor and close confidante of Peña Nieto. Earlier this year, Peña Nieto also appointed Colombia’s well-respected former police chief Oscar Naranjo as an advisor.

There is some concern that the return to power of a president from the PRI party, which ruled Mexico from 1929 to 2000, will mark a return to some old nasty habits such as electoral fraud and widespread corruption which marked several PRI governments. However, such a fear simplifies PRI rule, which also included Ernesto Zedillo (who did respect electoral outcomes). It also ignores the fact that the PRI included many gifted and capable people that helped steer the country economically in the right direction, notwithstanding the so called tequila crisis in 1994.

We expect Peña Nieto to replicate the best – not the worst – of PRI’s past. One strong indication is his focus on anti-corruption laws.

One of the new president’s most interesting appointments to his cabinet is that of Emilio Chuayffet as
education minister, a move that may spell the end of teacher union leader Elba Esther Gordillos abusive power, as Mexican columnist Leo Zuckerman points out in local newspaper El Excelsior.

While Mexican classrooms are falling apart, Mexican teacher union leaders fly around in private jets and have bulletproof Hummers, as Luane Zurlo, president of Worldfund, has pointed out.

Meanwhile, Peña Nieto has signaled reforms of the energy sector, which has led to increased hopes that private actors can enter the key oil sector. Until now, state oil giant Pemex has been inefficient compared to its Brazilian counterpart Petrobras, which is state-controlled, but publicly traded and has allowed private capital to help it finance its rapid expansion.

Mexico’s new president assumes office at a time of general optimism about the economy. Many experts say Mexico’s generally market-friendly rules (which contrast the more protectionist regulations in Brazil) will help attract considerable foreign investment the next few years.

A big part of the reason for the attractive rules is the North American Free Trade Agreement, which was signed 20 years ago this month (see NAFTA Turns Twenty).

Despite its overall positive business environment, Mexico still needs major reforms, including ensuring that the country has a more competitive telecommunications market.

We hope Peña Nieto will succeed in reducing the drug violence, opening up the energy sector to private investment and generally improving the country’s economy and international relations. So far he has done all the right things. Now the hard work starts.

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