Mexico’s Dubious Reforms
Many Mexican politicians are losing sleep lately pondering an enigma: How is it possible that the most important set of governmental reforms in decades has aroused so much enthusiasm abroad and yet so much rejection in Mexico? How is it that, while the groundbreaking reforms were approved by a two-thirds majority of Congress, ordinary Mexicans affirmed in a poll that they believe their country is moving in the wrong direction?
Some observers have compared the scope of Mexico’s reforms with American legislation to combat monopolies initiated by Theodore Roosevelt early in the 20th century. Roosevelt’s program put formal limits on the ownership of railroads, mines, oil resources, and steel and tobacco production. President Enrique Peña Nieto, in the 21 months he has been in office, has set limits on the state’s longstanding monopoly on the extraction, production and distribution of oil, gas and electricity by permitting private investment; he has diminished the power of the telecommunications giants Telmex and Televisa by opening the door to competition; and he has compelled the huge National Union of Education Workers to accept reforms that prohibit the sale or inheritance of teaching positions and that introduce compulsory exams to evaluate teachers.
For Mr. Peña Nieto and his team of old-guard politicians and young technocrats, these reforms were a top priority, especially as the government risks losing its legislative majority in the interim elections next July. The legislation is all the more significant because it was pushed through as a grand “Pact for Mexico” via a previously unthinkable deal with the major opposition parties. So why is practically no one celebrating the president’s achievement?
One answer lies in the bitter experiences of Mexico’s recent history.
Toward the end of the 1970s, the discovery of huge oil deposits in the Gulf of Mexico led President José López Portillo to promise the Mexican people an “administration of abundance.” A wave of hope swept the country. But these vast resources were siphoned off into an ocean of waste, bad investments and corruption. The reckoning came in 1982 with Mexico’s financial bankruptcy. Reforms subsequently put in place during the administration of Carlos Salinas de Gortari (1988-1994) were undermined by political scandals and violence, and then a series of economic errors provoked a second financial collapse.
But with the arrival of President Ernesto Zedillo (1994-2000) and his moves to battle corruption and initiate political reforms that would permit a transition to democracy in the 2000 elections, the national mood improved once more. Nevertheless, the fundamental problem of powerful public and private monopolies was not addressed, and neither of the next two presidents, Vicente Fox (2000-2006) or Felipe Calderón (2006-2012), were willing or able to confront the issue head-on.
Unfortunately, at the beginning of this century, a new factor entered the political equation: the fast-spreading violence of the drug cartels and organized crime. Suddenly, ordinary citizens’ illusions about the protective power of the government were shattered as thousands of people died in the drug wars year after year. Even with the recent arrests of some of the kingpins, the drug trade, kidnapping and extortion remain the scourge of many parts of the country —leaving the people little hope of an imminent return of national confidence.
This background of more than a decade of unrelenting violence has colored the public’s reaction to the reforms of the Peña Nieto government: Many people doubt whether the changes will be productive, much less transparent.
The government insists that investment in the energy sector will rise significantly with the entry, though limited, of private capital. But people are asking how this process will be controlled and monitored. Will the regulatory agency be effective? And who will run that agency? Will the expected benefits of the new rules actually reach the Mexican people, especially those most in need? Or will the entire scheme become just another opportunity (as so often before) to grow another bureaucracy and enrich yet another crew of politicians and businessmen?
The other reforms are raising questions as well. Will they improve the quality of television programming, telephone service and the Internet? The teaching profession once held a place of high honor in Mexico. Can this be regained by breaking the hold of bureaucratic inertia and ideological sectarianism among many teachers? Fiscal reforms have widened the tax base and substantially increased the amount collected, but opponents claim that their effect —along with delays in public investment, especially in infrastructure— has been to inhibit economic growth.
Making things more complicated, the government has done a poor job of communicating about the nature, extent and possible results of all these reforms. Opening the oil industry to even limited private investment contradicts 75 years of nationalist thinking. To understand such a profound policy change, the public deserves to hear more than prepackaged promotional messages from the government. Instead, it needs a sincere explanation of the changes, the sacrifices they imply, and the time it will take them to bear fruit.
Perhaps if the economy were growing at a reasonable rate and offering new opportunities, the national mood would be more positive. But the economy is barely moving — and the people are fed up. They believe their government acts in its own political interests and not for the good of society; they feel powerless against the corruption pervading the political spectrum.
Although Mexico has now opened up its economy and operates under an electoral democracy, there remains one reform that could be more vital than all the others: full establishment of the rule of law. Its most important element should be limits on the legal impunity of criminals and criminal officeholders —one of the gravest ills of our society. Without sufficient judicial controls and punishment for the authors of crime and corruption, the Mexican people will never be able to believe in a better future.
This article was translated by Hank Heifetz from the Spanish.