Your “Pacto por Mexico” update

New President Pena-Nieto’s main accomplishment so far has been the surprisingly (at least to me) durable, Pacto por Mexico, a grand coalition of all three main parties (Pena-Nieto’s PRI, the PAN and the PRD) dedicated to making sweeping reforms.

Even though their only concrete accomplishment so far was to throw Elba Esther “La Maestra” Gordillo in jail, given the combative and divisive nature of current Mexican politics, it’s kind of cool that they are still hanging in with the program.

But all is not well with the Pacto.

Issue number one is alleged voting irregularities and vote buying by the PRI in the recently completed state level elections.

At a news conference on Sunday in Mexico City, PAN Chairman Gustavo Madero and PRD chief Jesus Zambrano slammed the PRI for not complying with prior calls to safeguard the polls but said they would remain in the pact if their conditions, aimed at cleaning up elections, were met.

In exchange for remaining in the pact, Madero and Zambrano said they expected the government to perform an “exhaustive” investigation into the July 7 elections, assigning blame to candidates and parties that illegally used public funds to finance campaigns.

They also asked the PRI to approve in an extraordinary session of Congress a pending political and electoral reform aimed at combating bad practices ahead of the next elections, among other measures.

Issue two is the looming PEMEX reform fight. The state oil monopoly is starved for investment. Foreign money is banned and since PEMEX is a cash cow for the state, its earnings do not go into R&D, or capital improvements. As the Economist magazine points out, letting in foreign money and broadening the tax base would help make PEMEX into a more efficient and profitable company and benefit the Mexican economy

However, it’s hard to see the PRD going along with such measures, and Pena-Nieto may have to choose between keeping the grand coalition or trying to ram through energy reform just with a “coalition of the willing”.

The Economist suggests that perhaps the PRI could trade the electoral reform the PRD wants for the PEMEX reform the President wants. That would be quite a feat, a true win-win for Mexico.


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