Monday, February 25, 2008

What’s next for Mexico, Advancement or a Slippier Slope?

By Carlos Luken

During the Vicente Fox administration, Mexicans unexpectedly discovered that the bond that had held their political system together was absolute power. Once relinquished there was total confusion; directionless lawmakers, officials and the general public were lost and thus they began to improvise rules.

Afterwards, in a tight and contentious election, Felipe Calderon managed to eke out a victory and take reins over a much divided and confused country.

Calderon’s straightforward policies and hands on style were popularly received. Acknowledging its importance, he took serious pains and successfully reclaimed the presidential image while preserving both legislative and judicial autonomy.

But Calderon and Mexico now face hard challenges and difficult moments.

Mexico’s main problem is its dysfunctional political system. Having no rules, it operates on a “learn as you go basis.” Lawmakers rushed to fill the void left by the imperial presidency and seized all accessible authority.

Political parties also joined the melee by opportunistically empowering themselves. In their lust for control, they created a “partocracy” and now want to enact policy and execute measures; they see themselves as “substitutes” for the executive branch when they consider it convenient.

The combination of aggressive legislators and overambitious parties created chaos as they egotistically discarded Mexico’s welfare to block vital legislative reforms, hoping to deal for advancement or notoriety.

Presently the Democratic Revolution Party (PRD) is crumbling; the rivalries between authentic idealists and opportunists (headed by former presidential candidate Andres Manuel Lopez Obrador) have endangered the PRD’s stability. With both factions feuding over the party presidency, in a March 16 scheduled internal election, divisions and defections appear certain. Analysts predict the creation of a fourth party, which would undoubtedly weaken Mexico’s left and hinder its political future.

In the National Action Party (PAN), its younger elements ousted troublesome party president Manuel Espino. He was replaced by German Martinez, a Calderon loyalist, and while the move is expected to establish solid footings for future elections, the PAN’s fate will be determined by how Mexicans accept Calderon’s hard but necessary decrees.

The PRI (Institutional Revolutionary Party) is still bonded by its conventional networks and the firm grip of its aged hierarchy; however charismatic newcomers have positioned themselves to challenge PRI bosses and demand changes. At present the PRI is also confused and rudderless on what positions to take.

Experts believe that once the big parties settle their affairs, Mexico’s new political scene will present only three or four options to the electorate.

Mexico’s international relations present another challenge. The unending immigration debate has weakened once friendly US-Mexico ties, and Calderon must undo this Gordian knot and stabilize relations with the U.S. And he must do so without the complacent attitude of former President Fox, thus avoiding censure from Mexico’s left and Latin American neighbors.

Other challenges include solving the escalating conflicts caused by human trafficking, drug cartel activities, arms smuggling and widespread violence. There is a clear need for US-Mexico law enforcement actions, but any binational police agreement will be ill-received and criticized as interventionism.

Mexico is also economically challenged. Its main US dollar sources are oil, expatriate remittances and tourism. Despite their importance, little can be done to increase these contributions.

PEMEX’s vast resources are funneled to sustain government expenditures and social programs. Oil accounts for 60% of the country’s taxes, and although Mexican reserves are huge, the oil monopoly is impoverished and unable to finance infrastructure modernization, deepwater exploration and drilling. Legislative reforms, that are vitally needed to encourage private (and foreign) investments in PEMEX, have been blocked by partisan politics and suspicions that Mexican sovereignty will be compromised.

Labor law modernization has met the same fate. So Mexico continues to lose productivity levels, global competitiveness and employment.

Mexico’s considerable dependence on American growth has also turned into a liability. After a decade of North American Free Trade Agreement (NAFTA) promoted expansion, it’s evident that the US economic sluggishness is hurting Mexico’s development.

Mexico’s social situation is uneasy. Rampant violence, rising unemployment and poverty, and decreasing qualities in education and healthcare services create a desperate popular attitude; thus many emigrate to the U.S., searching for better living conditions as undocumented workers. They abandon their home communities, which in turn deprives the latter of the labor force needed for redevelopment, and perpetuates a vicious circle of poverty.

After decades of complacency, Mexicans now face a crucial crossroads. They must decide between the path to ongoing attrition, or the trail that leads to greater democracy. The choice must be made, and the price must be paid.

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Carlos Luken, a MexiData.info columnist, is a Mexico-based businessman and consultant.