December 30, 2013


Mexico's Second Revolution (Jorge G. Castañeda, DEC 30, 2013, Project Syndicate)

[P]resident Enrique Peña Nieto's task since taking office one year ago has been to ensure that the promise of major change in Mexico finally translates into sustained economic growth, improved living standards, and faster convergence with the US and Canada.

While both the foreign and local press refer generally to "reforms," or lump together education, labor, financial, fiscal, energy, telecommunications, and political reforms, there are significant differences among them. Some consider all of the changes that have taken place in Mexico this year to be equally important. Others have mused that Peña Nieto's administration sometimes seems intent on announcing reforms, regardless of their content, the time necessary to implement them, or their actual impact on Mexican society.

In fact, a clear distinction can be drawn between two subsets of legislative achievements: those that, while not meaningless, are incomplete, superficial, or essentially maintain the status quo, and those that will change Mexico (if all goes well). The changes in how teachers are evaluated and their labor rights (wrongly described as an education reform), together with changes to tax and telecommunications legislation, belong to the first category; energy and political reforms belong to the second.

Energy reform opens up electricity generation and oil exploration, extraction, and refining to private foreign or domestic investment through licenses, concessions, production sharing, or profit sharing. The oil workers' union has been banished from the board of directors of Pemex, the national oil company, and new contracts for shale oil and gas, together with deep-water prospecting and drilling, will be signed with a government agency, not with Pemex.

Once the myriad legal and political obstacles are cleared, Mexico will be able to increase oil and gas production, drive down the price of electricity, and stimulate growth in an otherwise lethargic economy. One hopes that 12 years of obstruction by Peña Nieto's Institutional Revolutionary Party (PRI) will not mean that these reforms are too little, too late.

The second crucial reform is political. For the first time since the early 1920's, Mexican legislators and mayors will be allowed to seek reelection to consecutive terms. While no panacea, reelection is one of the most important instruments of accountability in a democracy, and Mexico has been deprived of it for nearly a century. The same is true of ballot initiatives, referenda, and independent candidacies, all of which were non-existent until the recent reform. For the first time since Mexico left behind 70 years of authoritarian rule, the country has a political and electoral framework that resembles those found in all modern democracies.

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Posted by at December 30, 2013 3:11 PM

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