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Commentary

Should Mexico Go the ‘British Way’?


     
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MEXICO CITY—As Mexico’s 2012 presidential election comes into focus, the question is whether the governing center-right PAN and the opposition’s left-wing PRD will present a coalition candidate, as they have done in gubernatorial races, against the PRI, which is leading the polls.

After talking to a broad spectrum of Mexicans, including President Felipe Calderon, politicians, business people, commentators and folks in the street, I believe the odds of a joint candidate are good. PAN and PRD could prevent the return to power of a party, the PRI, that has not reformed itself despite being out of federal government for 11 years even though its likely candidate, the charismatic governor of the state of Mexico, Enrique Pena Nieto, speaks the language of change. A coalition against the PRI could also strengthen the modernization of the left that a major PRD wing seems to have undertaken—represented, among others, by the current mayor of Mexico City, Marcelo Ebrard.

The reason this coalition might be successful takes into account that two consecutive PAN administrations, having delivered on political reform (Mexico enjoys freedoms it lacked for most of the 20th century), still have been unable to accomplish major economic reforms.

In 2008, for instance, Calderon attempted a reform of the oil industry. Production had been dropping since 2004 and reserves were dwindling because of scant capital investments. Pemex, the state giant, was corrupt and inefficient. The aim was to allow private capital to own and build refineries, and share some of the profits of exploration and production. The PRD’s opposition, hypocritically encouraged by the PRI, resulted in a watered-down law. Pemex would simply award some oil companies a fixed amount for each barrel produced.

The result? Mexico produces 800,000 barrels less per day than in 2004 and imports 40 percent of its fuel—offsetting any benefit from the skyrocketing price of oil.

Many other efforts, including fiscal and labor reform, which were timid to begin with, were similarly defanged by the PRI and the PRD.

The relatively open economic environment has nonetheless allowed the country to make a recovery after being brutally hit by the 2008 financial crisis and the ensuing recession. Last year Mexico’s economy grew by a healthy 5.5 percent, a performance likely to be repeated this year. About 700,000 jobs are being created annually.

Nothing could solidify the recovery more and give it long-term breadth than clearing the political air. The PRI, to judge by the states it governs and its conduct in opposition, offers little hope for reform, no matter what Pena Nieto says. His party is still a tangle of vested interests rather than a modern political institution.

The PRD’s division, meanwhile, has opened up an opportunity. A strong current that has promoted successful electoral coalitions with PAN in various states finally stands ready to embrace the post-Berlin Wall world.

The Jurassic wing of PRD headed by former presidential candidate Andres Manuel Lopez Obrador is threatening to split from the party if the right-left coalition dynamic continues. He is particularly worried about the state of Mexico, where elections will be held in July to replace Pena Nieto. If the coalition candidate that major leaders of PAN and PRD want is presented, the PRD’s splinter will be assured. Lopez Obrador knows that the next step will be a coalition candidate at the presidential election, leaving him out of the game.

Right-left coalitions are capricious animals. Few survive, but there are interesting precedents. The famous Greek pact of 1989 allowed the conservatives and the communists to kick Socialist Prime Minister Andreas Papandreou from power. A more substantial coalition is the one formed in Britain by the Conservatives and the Liberal Democrats, which is making possible a fiscal reform bolder than anything seen in the developed world for years.

Allowing for many differences, the PRI is to Mexico what Peronism is to Argentina: a major reason why modernization has not been possible. Until its powerful influence on Mexico’s political culture is overcome, change is unlikely. Even the loony-left wing of PRD is an old offshoot of PRI.

There is no guarantee that a PAN-PRD presidential coalition will take place or succeed. But leaving the PRI out of power for a while longer in order to give the country a chance and also foster the evolution of a major faction of the left toward liberal democracy and a market economy might be worth a try.


Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His Independent Institute books include Global Crossings: Immigration, Civilization, and America, Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth and the Future of Liberty, and Liberty for Latin America.

New from Alvaro Vargas Llosa!
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The erosion of national boundaries—and even the idea of the nation state—is already underway as people become ever more inter-connected across borders. A jungle of myth, falsehood and misrepresentation dominates the debate over immigration. The reality is that the economic contributions of immigration far outweigh the costs. Learn More »»






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