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Job No. 1: Remake Mexico

The new president can't afford slow, small steps if his country is to move forward.

December 03, 2006|Denise Dresser | DENISE DRESSER is a columnist for the Mexican newspaper Reforma and a professor at the Instituto Tecnologico Autonomo de Mexico.

Mexico's new president is off to a rocky start. Felipe Calderon would like nothing better than to simply assume office and get on with the task of governing a troubled country. But all the signs suggest that he will have a

hard time doing so. A contentious election has left deep divisions between those who applaud Calderon and those who will never recognize the legitimacy of his rule. To bridge that divide, Calderon will have to prove that he is willing to modernize Mexico and that he is not just promising change while delivering more of the same.

His predecessor, Vicente Fox, leaves a disappointing legacy. A country with macroeconomic stability but insufficient growth; with more housing but also more drug trafficking; with more consumer credit but also more crime; with a less imperial and authoritarian presidency but a weak government cornered by vested interests; with a left that feels excluded through fraud by the political system and wants to make sure that Calderon won't be able to lead it.

Under Fox, Mexico muddled through for six years instead of undertaking reforms to become a functional democracy, a competitive economy, a more equal place. Fox preferred to be popular instead of effective; now Calderon needs to choose the reverse. Fox preserved the status quo; now Calderon needs to change it by dismantling the political and economic bottlenecks that explain why Mexico doesn't grow enough, compete enough, empower its people as it should.

If Calderon wants to survive politically and govern effectively, he will have to do all those things that Fox should have done but didn't. Distance himself from the worst practices of Mexico's authoritarian past and condemn them. Identify the vested interests that run Mexico's crony capitalism -- the rapacious monopolies and the privileged unions and the protected businessmen in key sectors that block innovation, competition and growth -- and take them on. Those are the obstacles; those are the real enemies of Mexico.

Calderon's economic Cabinet shows that he understands the need for continuity with policies that have worked: fiscal discipline, free trade, macroeconomic stability. Now he will have to build a more equal, dynamic country on those foundations. And that should entail speaking about the monopolies he will break up, the duopolies he will dismantle, the anti-competitive practices he will combat, the level playing field capitalism he will assure, the inclusive society he will build.

Calderon needs to prove that market-led reforms and democracy can work for the vast majority of Mexicans, because on the streets, Andres Manuel Lopez Obrador and his combative social movement will be shouting that they don't. Calderon needs to show that he is committed to leading Mexico down the path that successful countries such as Chile, Ireland, South Korea and Spain tread today -- countries that made dual decisions to grow and share, compete and educate, create wealth and distribute it better.

In order to achieve those objectives, Calderon will have to change the prevailing paradigm about the role of the Mexican government. For too long, those in power in Mexico have viewed public office as a vehicle for the distribution of the spoils. They have viewed the country as a shared booty and have allowed their friends and allies to take a large piece of it. But the recent election reveals the political costs of running Mexico in such an elitist, undemocratic way: 35% of Mexicans voted for a fiery populist who promised an alternative model because they believe, and rightly so, that the current one doesn't work for them.

Calderon should understand that the recent election was a wake-up call and that if he ignores it, he does so at his own peril. Fourteen million people went to the polls and shouted that continuity is not enough; many of them feel robbed and will act accordingly: marching, yelling, blocking Calderon's presidency and denouncing it at every turn.

And although Lopez Obrador's support has declined, the disaffection he drew attention to remains alive. If Calderon wants to prevent the future Bolivianization of Mexican politics -- social upheaval, that is, promoted by a disenfranchised underclass -- he will have to move quickly and aggressively. He will have to change Mexico in order to be able to govern it successfully.

But if Calderon opts for gradualist, minimalist reforms instead of profound transformations, his presidency will amount to deja vu all over again. And Mexico will continue to limp along, surviving on high oil prices and remittances sent by migrants who cross the border in search of opportunities they can't find at home. Mexico will be increasingly marginalized from the global economy by competitors such as China and India. It will continue to be a country held back by institutions it can't remodel, by monopolies it can't regulate, by unions it can't transform, by impoverished people for whom it can't provide social mobility. If Calderon doesn't use his presidency to modernize Mexico, he will end up prolonging its troublesome inertia.

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