Mexico: Domestic Politics: Mexico Under New Management? – July 2012

British Embassy Mexico City

Summary

Pena Nieto's new transition team will emerge in coming weeks, and map out a key reform agenda. Highlights will be energy, taxation, labour and social security. With no majority in Congress, PRI will need to build cross-party political consensus. We can expect a strong emphasis on economic growth. Other issues are Mexico’s monopolies and its poor distribution of wealth. On foreign policy, his public statements suggest he is likely to prioritise the Americas and Asia. Meanwhile Mexico's electoral authorities have agreed to recount more than half of ballot boxes to bring electoral process to a close. The electoral tribunal is required to ratify the result by 7 September.

Detail

Partial recount but PRI victory still assured

Since the election results on 1 July that handed a victory to the PRI’s Enrique Pena Nieto, left-wing candidate, Lopez Obrador has refused to accept the preliminary vote tallies. He claims that the election campaign was marred by overspending, vote-buying and favourable treatment of Pena Nieto by Mexico's monopolised television conglomerates. His team claims to have detected irregularities at a majority of polling stations, and called for a total recount. This was partially rejected by Mexican electoral authorities, who are currently recounting around half the ballot boxes. Early indications are that this recount will deliver marginally more votes to Pena Nieto and marginally fewer to Lopez Obrador.

Meanwhile Pena Nieto continues to receive numerous messages of congratulations from foreign leaders, and seems to be moving ahead in planning for transition. His messaging to the nation is consistently linked to deconstructing the PRI’s corrupt image, reminding Mexicans there will be no return to shady PRI practices of the past, and seeking reconciliation across society and the political spectrum.

Traditionally the PRI has been associated with State intervention, strong economic management and support for big business interests – including key monopolies.

Key therefore will be the extent to which progress can be made on the structural reform agenda: particularly the four priorities of labour, fiscal, energy and social security. Throughout his presidential campaign, Pena Nieto pledged to lead a government that would be defined by greater efficiency capable of delivering concrete results. Reform in these areas would likely boost Mexican economic growth as well as providing significant opportunities for UK businesses as we work to double our bilateral trade by 2015.

Less clear is whether the new Government will be able to break the power of monopolies in Mexico or lift out of poverty many of the 55 million Mexicans who, according to Mexico’s Multidimensional Poverty measure (which looks at access to services, education and opportunities as well as financial income), live under some form of poverty.

Security

On security, Pena Nieto has promised to continue Calderon's confrontation with cartels but combined with a policy shift that would favour reducing murder over elevating arrest rates. Peña Nieto has already recruited Colombian General Oscar Naranjo, who was instrumental in bringing about the down fall of Colombian cartel boss, Pablo Escobar, as his security adviser.

During his campaign, Pena Nieto pledged to create a new 40,000-member gendarmerie style federal police force that would be dispatched to areas most affected by organised crime violence. He has also promised to halve the number of kidnappings and murders during his six-year term by moving law enforcement away from showy drug busts and focusing on protecting ordinary citizens from gangs.

Foreign policy priorities

On Pena Nieto’s likely foreign policy, the former PRI Foreign Minister, Rosario Green (currently chair of the Senate Foreign Relations Committee) has said that Mexico will not neglect its ties with the US, by far Mexico’s largest export market. She has also said that “If you ask me what is likely to be his first, second and third priority, I would say the US first, Central America second, and the Pacific Rim third,” “It is a fact that the centre of gravity has shifted to the Pacific, and that there are a lot of things that we can gain from looking east.”

The PRI team have also said that they want to keep up with Europe. But it will be a competitive situation. Pena Nieto has also spoken of stepping up his country’s activism in Latin American affairs, including a strategic partnership with Brazil.

Foreign policy is likely to be focused on economic goals – pointing to boosted relations, in particular trading, with Asia. Pena Nieto’s international relations campaign coordinator has already said that he “will seek a more modern, more pro-active foreign policy, aimed at becoming an engine for the country’s economic development.

Disclaimer

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