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Wednesday, July 21, 2010

Mexico politics: New minister, same challenges EIU ViewsWire






Mexico politics: New minister, same challenges - EIU ViewsWire



FROM THE ECONOMIST INTELLIGENCE UNIT


It ís one of the toughest jobs in Mexico's government: the interior, or government, secretary is responsible for public security as well as domestic political strategy and relations with Congress. It is traditionally viewed to be the most powerful post after the presidency, and a springboard to the top job. Yet President Felipe CalderÛn has named his fourth interior minister in four years, suggesting that the job has proved overwhelming and that the presidentís support base within his own party is growing shaky, in an environment of escalating violence and difficult political challenges. This increases the risk that Mr CalderÛn will be able to accomplish little in what remains of his term.


Mr CalderÛn replaced his previous interior secretary (ìsecretario de gobernaciÛnî), Fernando GÛmez Mont, on July 14th with the relatively unknown JosÈ Francisco Blake, a senior official from the ruling Partido AcciÛn Nacional (PAN) in the government of Baja California state. Mr GÛmez had been named to the post in 2008, after the sudden death of Juan Camilo MouriÒo, one of Mr CalderÛnís closest allies. But Mr GÛmez became highly unpopular because of the ever-growing drug violence in the country, which has taken more than 26,000 lives since the president launched his anti-crime offensive in December 2006. Mr GÛmez also angered many Mexicans by downplaying the worsening drug war and its impact.


He also raised hackles for opposing the conservative PANís strategy of allying with the leftist Partido de la RevoluciÛn Democr·tica (PRD) in some races before the July 4th local and gubernatorial elections. That strategy proved effective in slowing the momentum of the leading opposition party, the Partido Revolucionario Institucional (PRI). Mr GÛmez quit the PAN earlier this year in protest at the deal making between the PAN and the PRD, and this seems to have triggered his downfall.


Unstoppable violence


Mr Blake is picking up the portfolio at a time when criminal violence is reaching new heights. This year Mexico is on track to post another record of drug-related deaths, and the incidents are growing bolder by the day. On July 18th gunmen attacked people at a birthday party in the city of TorreÛn, killing 17. This followed a car bomb days earlier in Cuidad Ju·rez that killed four, the first attack of this kind in Mexico. The surge in deaths this year is worrying not only Mexicans, but increasingly officials in Washington.


Mr Blake seems to have had some relevant experience in combating organised crime in Baja California, but whether he can boost confidence in his office and the drug war nationwide is questionable, as the tools he has to work with are weak. Consequently, few believe the violence will end anytime soon. It will be difficult to make significant progress in important areas that need addressing, such as overhauling the corrupt police force and making the weak judiciary more effective, during what remains of the administrationís term (through December 2012), although some reforms in these areas have advanced.


Structural reforms stalled


Although Mr Blake brings some experience in the security area, as an unknown politician on the national level he will be handicapped in fulfilling another crucial part of the job. As interior secretary he is the most important political figure in the cabinet, charged with leading negotiations with opposition parties to advance the governmentís legislative agenda. This, too, will be a tall order in the next two years. Some critics fear that Mr Blake is simply another close friend of the president, and will not be up to the task.


The CalderÛn administration was able to secure some fiscal, pension and other reforms, albeit watered-down ones, in the first half of his term. But its agenda has stalled since the PAN was weakened in mid-term congressional elections last year. On the list of priorities are additional fiscal changes to boost Mexicoís low tax take, liberalisation of labour laws and reforms to allow more private investment into the state-controlled oil industry.


The agenda is ambitious, and legislative progress will be even more difficult as the 2012 presidential elections approach. The PRIónow the dominant party in the lower house of Congressówill be loath to co-operate with the government as it positions itself to regain the presidency (which it lost in 2000 after 71 years of uninterrupted rule). Further tax adjustments probably have the best chance of passage, given Mexicoís fiscal needs, but changes to labour laws and the stateís monopoly control of the oil sector have dim prospects.


Economy minister replaced


In another cabinet shift that investors hope will result in more positive results, Mr CalderÛn named Bruno Ferrari, until now head of ProMÈxico, an investment promotion office set up at the start of the current governmentís term, to the post of economy secretary. He replaces Gerardo Ruiz Mateos, who returns to being a top presidential advisor. The change indicates that the administration recognises the need to improve Mexicoís reputation after last yearís dismal economic performance, when the economy contracted by more than 6%. Mr Ferrariís experience should help support Mexicoís economic recovery and bring investorsí focus back on to the fact that growth has resumed. However, Mr Ferrariís effectiveness in his new role remains to be seen, as ProMÈxico has not been terribly effective in combating Mexicoís deteriorating image abroad of late.


Yet financial markets seem to have applauded Mr Ferrariís appointment: in its wake Mexicoís bond prices rose for several days, suggesting confidence that he will be able to attract more foreign investment.


Nonetheless, better investor, and popular, confidence will require more than just a cabinet shuffle at the top. Indeed, the latest changes are probably more a sign of the administrationís weaknesses at this point in its term than of its strengths. Mr CalderÛnís authority is likely to be increasingly undermined not only by the PANís reduced clout in Congress and the growing boldness of the opposition PRI, but also by the growing popular misgivings about the effectiveness of his government's military offensive against organised crime. Even with more than two years left to his term, he is looking ever more the lame duck.

The Economist Intelligence Unit
Source: ViewsWire

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