Calderon, one year later

Mexican President Felipe Calderon took office a year ago under inauspicious circumstances--emerging with a bare plurality in a bitter three-way race, accused of stealing the election, facing paralysis in the national capital as supporters of Andres Manuel Lopez Obrador took to the streets.

Today, at least one poll has his approval rating over 60 percent. The apparent seriousness of his war on drug cartels, and his relatively quick response to the catastrophic floods in Tabasco, are winning over many people, it seems. He has five more years to consolidate these gains.

A full six years of good government could get Mexico out of two centuries of malaise and on the road to a real, functioning, prosperous democratic country. Think it can't be done? Spain did it, overcoming an equally bleak legacy that not so long ago, seemed to doom that country to near third-world status.

Read an English report on Calderon's one-year anniversary speech here.

Calderon stays focused on growth

Mexico's President Calderon appears to be working hard to jumpstart his nation's economy, pushing major new investment in infrastructure and pledging to promote more competition in telecom.Reuters reports.

Under the Mexican political system, he has one six-year term to accomplish his agenda. There is no reelection. If Mexico's economy can't do a better job of delivering better life to millions of Mexicans in that time period, the left wing has an excellent chance of getting into power.

But if Calderon can subdue drug rings and other criminal activity while getting Mexico's economy to come closer to its potential, he could establish a dynasty for his party and his economic philosophy.

Free market economic theory is highly suspect among many in Mexico. The last few presidents from the former ruling party, PRI, espoused an opening of Mexico's economy along free market lines, breaking away from the party's tradition of left-wing rhetoric to mask a system of old-fashioned cronyism and kleptocracy. The free market "neoliberals" talked a good fight, but many Mexicans felt that their prospects were getting worse instead of better. Vicente Fox, the first non-PRI president in decades, could not do much to reverse that trend--altho some observers say some of his measures did help Mexico's middle class.

But Lopez Obrador, promising a turn back to a more populist approach, came within an eyelash of winning the presidency--Calderon got little more than a third of the vote in a three-party contest. That's hardly a mandate.

So a lot is riding on the success of his economic policy. Mexicans may not be in a mood to give free-market, pro-U.S. policies another chance if Calderon's ambitious rhetoric turns out to be empty.

War on drugs

We talk about a war on drugs, but in Mexico the use of the word "war" is no exaggeration. In a Reuters report on U.S. efforts to extradite a drug lord (lady?) known as the Queen of the Pacific, the reporter notes in passing that the war between rival Mexican drug gangs has claimed 2,300 lives this year. You read that right.

Come to think of it, that's not a "war on drugs." More like a "war over drugs."

President Calderon, however, appears to be waging a "war on drugs," putting 25,000 troops into action against the drug gangs, in the evident belief that just waiting for them to kill each other would not really work, tempting though that might be.

I said he "appears to be waging" this war because things in Mexico are not always (not hardly ever) what they seem. I have no reason to doubt Sr. Calderon's integrity, I would hasten to add.

I would only observe that in Mexico, an attempt to crack down on illegal activity has sometimes been little more than an attempt by people in authority to take over that activity and the income to be derived from it.

I recall during my days in El Paso in the 1970s, a new governor in Chihuahua state launched a ballyhooed crackdown on prostitution in Cd. Juarez. The old Mexico hands were laughing about it. Every new governor does this, they said--getting the whorehouses on board, plugged into their power structure, paying the proper portion of proceeds.

Of course, that was the bad old days of the PRI's one-party control. One hopes that Calderon is what he appears to be.

Calderon wants more jobs

Mexican President Felipe Calderon says he's ready to cut power rates for big industrial users, lest energy costs inhibit economic growth. Bloomberg has a short report.

Foreign investment in Mexico

Foreign investors appear to be discounting the political strife and the pipeline attacks that disrupted industrial production earlier this year.

The Mexican government reports in Milenio that foreign investment is up more than 30 percent this year. I was surprised to learn that barely 50 percent of this investment is from the U.S. The Netherlands is second with 12 percent; Spain third with about 10 percent, followed by France with nine percent.

Foreign investment is controversial in a lot of places, including the U.S. Remember the furor when a Dubai firm wanted to buy port facilities here?

But in Mexico, there is quite a bit of a tradition of isolationist nationalism that views all foreign investment, especially U.S. investment, as a threat to national sovereignty.

In a related story,
President Felipe Calderon met with a group of Lebanese business people--apparently Mexican citizens/residents-- and brushed aside that tradition, saying that Mexico's economic transformation requires lots of investment, foreign and domestic--not demagoguery. To encourage investment, Calderon said the government needs to provide security, legal certainty and clear regulations.

Cathedral controversy simmers down

The Federal District government and the Catholic archdiocese held closed-door talks aimed at reaching an accord on future security measures to prevent any more political incidents and intrusions into the religious precincts. W Radio has details.

Church officials seem to feel they have the upper hand in this. They want the government to agree to help track down the people responsible for Sunday's incident.

In other news, President Calderon reasserted his determination to defeat the nation's powerful drug cartels. He was speaking at a medal ceremony for members of the armed forces.

"We Mexicans continue to advance in this war against organized crime, until we see our country freed from the claws of criminals," he said. (my translation)

Read it here.

PEMEX

Apparently Calderon's new tax and revenue package referred to in an earlier post was designed to reinvigorate Pemex. The national oil company will get to keep more of its revenues, presumably to reinvest in the company. To make up for the lost revenue to the government, Calderon got the Congress to agree to a retail tax on gasoline, which is probably not one of the more popular ideas on the streets of Mexico.

But if there's any serious privatizing being proposed, I'm missing it.

Read a commentary written by an Exxon Mobil official here:

Petroleum World guest editorial