• Balloting results will provide an important evaluation of the effectiveness of the National Action Party’s (PAN) political and economic reforms and, indirectly, President Fox’s record and his reputation among the electorate.

• The PAN’s conservative, pro-business leadership favors privatization and the centralization of federal power. The Institutional Revolutionary Party (PRI) has reacted to this by moving left of center and adopting a platform similar to the Democratic Revolutionary Party (PRD) and several smaller left-leaning parties. They favor strengthened worker’s rights, a more publicly controlled domestic economy and a decentralized government emphasizing grassroots control. The two sides are most distinctly divided on the issues arising from the economic and political crises presently bedeviling the country.

• If the elections follow predictions, PAN will fail to win a majority of seats. Another divided Congress will paralyze the political process and guarantee that Mexico under Fox will face three more years of political stagnation. To implement his proposed legislative program of vigorous economic structural reforms, Fox must compromise with left-leaning parties.

• Political apathy and a projected high level of voter absenteeism indicate that the parties will have to more sharply distinguish their platforms in order to stand out in the 2006 presidential race.

• With Latin America becoming more independent and economically significant, Washington will be forced to reexamine its relationship with Mexico especially in such troubled areas as NAFTA, trade and Mexico’s growing ties to Brazil.

 

On Sunday, Mexicans will choose new representatives for the lower house of the national Congress and the governors of several important states. The elections present the nation with a welcome opportunity to evaluate its current leadership and help determine its political direction. In 2000, Vicente Fox’s bold platform and magnetic élan, as well as the people’s intense desire for political change, swept him into power. The PAN replaced the PRI’s 71-year regime, which had become deeply tainted over the years by scandals and corruption.

 

Mexico, Fox, and the National Action Party at the Crossroads

Fox’s victory gave him a unique opportunity to reshape Mexican politics, and he introduced many new proposals including the creation of a million new of jobs and the improvement of the national transportation infrastructure through private-public partnerships. In an effort to realize his goals, he has forcibly propelled the nation down its already plotted path of increased privatization and rapid industrial growth. However, evaporating foreign investment, an unstable exchange rate and an unsupportive left-of-center majority in both houses of Congress have doomed his ambitious agenda. His apparent aversion to compromise has brought upon him harsh criticism from many in the financial sector, including Guillermo Ortíz, president of the Bank of Mexico. Moreover, he has struggled with moving Mexico into an era of multi-party democracy. While he has taken several laudable steps towards purging the nation of its political corruption, he has yet to enact definitive reforms that will facilitate lasting change. Although he still enjoys relatively high popularity ratings, due in part to the charisma that pollster Guillermo Valdes has dubbed the “Fox effect,” many see him as “likeable but not effective,” in the words of Soledad Loaeza of the College of Mexico.

Fox’s political failures may have sealed his party’s fate. Unable to convince Congress of the merit of his plans, his less than effective leadership has inflicted serious damage to his party’s public image: according to most polls, even the longtime PAN stronghold of Nuevo Leon will almost certainly elect a PRI governor this Sunday. Moreover, with each new public opinion poll, it is becoming less likely that Mexico will elect enough PAN representatives to achieve a majority in the lower house of Congress. Fox, who once ranked himself with the likes of Gorbachev and Mandela, has been unable to negotiate a compromise between the two sides, making the PAN appear unwilling to back down from its hard-line neoliberal economic stance by examining alternate solutions to Mexico’s three-year depression.

Mexico’s other political parties are set to make a comeback. As Fox’s planned reforms fail to materialize in the current economic situation, many Mexicans have lost faith in the PAN and have begun to look to other parties for leadership and inspiration. The PRI, once the secularist and nationalist mainstay of Mexican politics, has been able to successfully remake its image as a left-of-center party. The distinctly leftist parties, such as the PRD, the Party of Work (PT) and México Posible (PMP), are becoming more popular. Many Mexicans see them as better representing their interests and better able to create a stronger Mexico in the future. If the balloting follows the predictable script, the Mexican legislature will again be dominated by the PRI. Unless the PAN rethinks its political strategy and is able to work out a functional arrangement with the opposition parties by forming coalitions or passing bipartisan legislation, the government will not be able to reach a consensus regarding the nation’s future. It seems likely that a powerful new leadership on either end of the political spectrum will not emerge from the election, and that Mexico’s political stagnation will continue for another three years.

Furthermore, the PAN’s steadfast loyalty to its politically conservative constituency has made it unlikely that the party will win the 2006 presidential election. Given that he is unwilling to make sacrifices in order to negotiate a mutually agreeable compromise, it is likely that Fox will find it difficult to fulfill his bold campaign promises in the second half of his term. With the growing popularity of potential candidates such as Mexico City’s widely acclaimed PRD mayor Andres Manuel Lopez Obrador and the PRI’s ongoing ability to consolidate power by forming alliances with smaller parties, it appears that Mexico’s next president will be left-leaning.

The resurgence of Mexico’s left wing could have significant influence on the direction of the country’s foreign policy, raising the possibility of an end to the era of economic domination by transnational corporations and major financial powers. Fox has failed to implement PAN’s strategy to base Mexico’s economy on a greater free-trade orientation, along with closer relationships with international financial institutions, such as the International Monetary Fund. Rather than embracing the U.S.-backed FTAA, Mexico could increasingly turn its attention to Latin American trading arrangements such as Mercosur, drawing upon the growing cooperation between Mexico City and Brasilia.

 

Voter Apathy Jeopardizes the Election

For Fox and the PAN, voter apathy and antagonism towards the political process have proven extremely dispiriting. Despite the fact that Mexico’s 11 political parties have combined to spend $500 million of public funds on advertisements, polls project only 50 percent voter participation, an abysmally low level in Mexico, even for a midterm election. Although the ballot, to be overseen by the autonomous Federal Elections Institute (IFE), will most likely turn out to be one of the least susceptible to manipulation in Mexico’s history, its citizens still appear extremely suspicious of election fraud. Recent government-sponsored advertisements featuring President Fox urging people to vote have created a flap since they are seen as publicly-funded PAN self-promotions. They have also angered the public and have further damaged Fox and his party’s reputation. Furthermore, despite the tug-of-war between the parties over such significant issues as privatization and control over federal agencies, the political campaigns have generally failed to capture public attention. Some voters have turned to smaller parties, which offer more radical alternatives to mainstream platforms, but most have largely ignored political developments altogether. Although voting is technically an obligation of citizenship, the parties’ inability to stand out and the ongoing government stagnation have convinced voters that their voice is becoming increasingly irrelevant.

 

Different Models of Economic Revitalization Proposed

The principal issue in the campaign is the poverty that pervades every sector of Mexican society. The facts reveal a devastating reality: according to the World Bank, over 45 percent of the population lives in poverty (defined as receiving an income of less than $2 per day) and over ten percent in extreme poverty (less than $1 per day). Employment provides little relief: minimum wage provides a fraction of the money necessary for even the most basic level of subsistence. Even a civil service salary is insufficient; police and civil servants must rely on bribes and kickbacks to maintain a living. This has led to profound disillusionment among the working class, who see their present condition as unchangeable. However, parties across the political spectrum realize that the fight against poverty cannot consist solely of supporting social service programs. Clearly, the solution requires creating more jobs and raising the quality of employment. However, while Fox recognized this economic reality in his 2000 campaign, he has since failed to bring about real change: rather than honor his pledge to create one million new jobs, he has allowed 250,000 of them to vanish.

The parties differ over how to achieve the necessary economic revitalization. Rallying behind the campaign slogan “take the brakes off change,” the PAN has reiterated its commitment to building strong domestic business enterprises. The party plans to expand the pool of skilled laborers through vocational education initiatives, facilitating the growth of more high-tech industries. Also, by simplifying the rules governing the currently flagging maquiladoras and other foreign-owned businesses, the PAN hopes to create jobs to make the industrial sector profitable once again by encouraging the construction of new factories. Finally, they envision that Mexico will eventually become a leader in the lucrative business of eco-tourism. Although workers drive the engines of economic growth, under the PAN’s leadership it will be investment capital that will stimulate the development and expansion of a profitable export and import substitution industry.

In contrast to the PAN’s top-down approach, the PRI, PRD and smaller parties are appealing to the interests of the majority of the population in shaping their plans for economic recovery. Laborers and farmers have long mistrusted corporate Mexico, instead backing populist initiatives and down-home politicians from the PRI or PRD. Rejecting the PAN’s notion of a “responsible industrialist,” these parties have taken a decisively pro-labor stance, supporting collective bargaining and more egalitarian labor laws. For them, employment, not gross profits, will be the most important component of the nation’s economic revitalization. The overall goal of the left’s economic recovery strategy is the empowerment of industrial workers through political support of wage increases, stronger unions and workers’ rights initiatives. A generation of empowered laborers will revitalize Mexico’s middle class. Small businesses, the key to the microeconomic competition that characterizes a healthy market, will be supported by federal microcredit loans and a simplified tax code.

While restarting markets is a significant left-wing priority, the parties also pledge to protect citizens’ long-term assets. For them, social security must be safeguarded at all costs, not plundered by nearsighted officials. Similarly, under left-wing policy, the government will have to go through an intensive review before it claims private property under eminent domain laws. The overall goal of the leftist parties is to increase Mexicans’ spending power, which disappeared during the global economic recession. Also, by instituting the PRI’s proposed campaign to bolster a sense of economic nationalism, Mexico will prevent jobs from being lost to nations with cheaper labor and will be better able to protect its economic interests abroad. By empowering native small business owners, Mexico under a left-of-center government could subscribe to reformist policies that could help rebuild its shattered domestic market and contribute to the growth of the middle class. Under such parties, ordinary workers and small-scale businesspeople will be the foundation for the country’s economic recovery.

The PRI and the more left-wing groups have adopted similar approaches in facing the problems plaguing Mexico’s struggling domestic agricultural sector. In order to guarantee a measure of economic sovereignty, Mexico must be able to provide for its own people. However, corruption, political marginalization and profit-minded agribusiness establishments have long hindered the prosperity of small-scale farmers. Faced with falling profits, many farmers have had to leave their fields to seek a livelihood in the already over-crowded urban areas. In order to respond to the needs of the farmers, most opposition parties support replacing private regulatory groups with publicly accountable government agencies. Under left-wing proposals, the federal government will invest in rural areas by disseminating modern technology, enacting measures to protect soil and water resources (both from pollution and from dangerous farming practices), and granting development loans to small, isolated communities. The PRI and the other parties would revitalize the domestic agriculture market through increased tariffs and a large federal subsidy program to prevent local crops from being undercut by a glut of subsidized foreign imports. At the same time, the federal government would protect the domestic market from the deleterious consequences of free trade. To better manage the distinct needs of Mexico’s diverse rural areas, the federal government might decide to adopt a policy of “fiscal federalism,” allowing local governments to implement more specific initiatives to deal with their area’s unique challenges. The goal of these reforms is to recognize the integral economic role that farmers play in order to prevent the further decline of Mexico’s agricultural regions.

 

How Best to Serve the People

The other important issue in the upcoming election is how to most effectively manage Mexico’s complex and imperfect democracy. Numerous minority groups, such as indigenous peoples, women and farmers, have been politically underrepresented for decades. Most importantly, as recent polls have demonstrated, popular frustration with the political system and a lack of trust in politicians have reached unprecedented levels. Although Fox has taken bold steps to challenge the corruption pervading all levels of the governmental structure, improving efficiency and accountability is one of the challenges his administration has yet to overcome. The judicial system suffers from regulations that are unevenly applied and change unexpectedly from year to year. Mexico must make its government appear legitimate by enacting authentic reforms that affect all levels of society.

The PAN advocates a reduction in the bureaucracy, including decreasing the number of lower house representatives from 500 to 400. For the party, a more centralized government will be better able to provide the strong leadership needed to fully implement Fox’s proposed reforms. These reforms would make the national financial structure more responsible by eliminating wasteful programs in order to increase financial support for historically underfunded development projects and social service programs, without necessarily raising taxes. Furthermore, the PAN asserts, the government must simplify tax laws, prosecute tax evasion and eliminate loopholes, exceptions and privileges. In order to increase political participation, the PAN seeks to strengthen the legitimacy of the electoral process by giving the Federal Electoral Institute (IFE) greater authority and autonomy.

In contrast, the PRI and left-wing parties look to make the government more transparent and responsive to the needs of Mexican society. Like the PAN, they advocate a strengthening of the IFE and more aggressive campaign finance reform in order to make the elections fair and competitive. In order to increase public participation, the parties propose to open the process of passing legislation, approving the federal budget and changing the tax structure to public review, allowing various sectors to voice their concerns. They propose that the federal judiciary be given the authority to effectively prosecute tax evasion as well as violations of civil rights.

The PRD and smaller left-wing groups take the PRI’s commitment to increasing popular participation one step further, proposing a decentralized government. To better deal with local challenges, the parties want to strengthen state and municipal governments and increase community organization. Responding to the buildup of executive power in the recent administration and Fox’s inability to readily work with Congress to enact reforms, several parties have advocated strong limitations on the power of the president. Also, they would like to create a better distinction between the prerogatives of the executive, judicial and legislative branches. The PRD also has proposed that representatives be able to summon members of the Cabinet before Congress for inquiries into the activities of their departments, as in the U.S.

 

The Future of Mexico

Although Fox has promoted the PAN as the party of change, his ideas for reform may not be what Mexicans truly want. Despite its history of scandals, corruption and internal divisions, voters may return to the PRI for leadership. Mexicans may even consider the left-wing PRD or smaller, more radical groups for more effective representation, in spite of widespread doubt regarding the seriousness of the parties’ proposed reforms.

The consequences of the election will profoundly affect not only Mexico’s self-image but also its place in the world. Almost certainly, a left-leaning Mexico will look less to international finance and markets for support, preferring instead to build a strong domestic market by a variety of means. Given the cooling of political ties with the U.S. since Fox’s refusal to join Bush’s “coalition of the willing,” Mexico is not likely to remain hidden behind the economic shadow cast by Washington. Rather, it will seek to form regional partnerships with countries on a similar economic plane, such as Brazil and Argentina. The U.S. could thus find itself ill-equipped to deal with a new reality. An economically independent Mexico will not easily bend to the will of mighty U.S. transnational corporations. In the future, our southern neighbor may no longer be the lackey we have taken for granted.

 

 

This analysis prepared by Alan Cordova, research associate at the Council on Hemispheric Affairs. Issued 5 July 2003, A.M.

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