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After president's first year, Mexico still a mess by many measures

President Enrique Peña Nieto is having a tough time delivering on his bold promises, analysts say. The economy is stagnant and crime numbers are mixed.

December 01, 2013|By Richard Fausset
  • President Enrique Peña Nieto, pictured last week, is asking his fellow Mexicans to give his big-picture agenda time to generate results.
President Enrique Peña Nieto, pictured last week, is asking his fellow… (Marco Ugarte / Associated…)

MEXICO CITY — To President Enrique Peña Nieto's supporters, his first year in office has been a time of bold promises kept as he pursues an ambitious agenda of reforms designed, in the long term, to bring peace and economic growth to Mexico.

But in the short term, by many measures, his country remains a mess.

Though he promised to focus on Mexico's economic potential, Peña Nieto has presided over an economy that has hardly grown at all. Though he vowed to reduce the kind of violence that affects innocent citizens, his record has been mixed, with kidnappings and extortion rising nationwide even as the number of homicides drops.

And the drug war rages on. In recent months, the key agricultural state of Michoacan has devolved into something close to a failed state, as armed peasants have formed ad hoc militias to protect themselves from the surging cartel menace. On Wednesday, the president's finance minister, Luis Videgaray, declared that the ongoing chaos there was a threat to Mexico.

As Peña Nieto marks his first year in office, he has successfully pushed major banking, education, tax and telecommunication reform bills through Congress, and is pursuing changes in the crucial oil industry. Yet the young, confident and telegenic president, who as a candidate promised a "government that delivers," is facing doubts about his ability to do just that.

A poll from El Universal newspaper last month put Peña Nieto's approval at 50% and his disapproval at 37% — his worst numbers so far as president. In the newspaper Excelsior, columnist Leo Zuckermann last week noted that the president had failed to transform the positive story he tells about Mexico into actual good news.

"It was one thing to 'sell' great expectations, which the Peña government did very well," Zuckermann wrote, "and another very different thing to deliver good results."

On Sunday, thousands of the president's critics marched in the historic center of Mexico City to protest his first year in office, and the idea of opening the state oil monopoly to foreign investment.

Some protesters threw rocks at a storefront and at the headquarters of Televisa, the giant TV network that many consider to be biased in Peña Nieto's favor. Seven protesters were reportedly arrested.

The government expects the Mexican economy to grow by an anemic 1.3% this year, which many analysts blame largely on a troubled world economy.

The president, meanwhile, is asking his fellow Mexicans to give his big-picture agenda time to generate results.

"I am sure that the foundations that we are achieving will be very firm and solid, and will allow Mexico to have more economic growth and more social development," Peña Nieto said at an October business summit in Guadalajara. "I'm convinced of it."

While the president's initiatives have included some ideas that could be considered liberal, including tax hikes and an anti-hunger program, others have sought to address the market distortions that linger from the last century, when his Institutional Revolutionary Party, or PRI, ruled Mexico with a dollop of socialism and a heap of corruption.

It may be a challenge, however, to convince Mexicans that a radical transformation is truly underway. This is a country with a history of passing beautifully constructed laws that often end up doing little to change the real-life status quo. Some critics argue that Peña Nieto and his allies have allowed key elements of their reform package to be watered down and made less effective as they compromised, trying to mollify often raucous special interest groups and opposition political parties who had agreed to a general reform framework in a so-called Pact for Mexico, signed just after Peña Nieto's inauguration.

The education law, for example, has been criticized for not being tough enough on chronically underperforming educators: Teachers can be reassigned, but not fired, for repeatedly failing new evaluation tests. The law was passed over the fierce objections of a radical union whose protests choked Mexico City for weeks.

The tax proposal, meanwhile, sought to boost revenue in a country that has the lowest tax collection rates in the developed world. Though the law that eventually passed included some tax increases, a proposed sales tax on food and medicine was left out in an effort to placate the left.

Peña Nieto has yet to push through the most controversial change of all: a plan to open the bloated and inefficient state oil monopoly, Pemex, to foreign investment. The company supplies a third of the federal government's income, but production is dwindling precipitously, and analysts say Pemex requires injections of foreign expertise and technology to turn itself around. But the constitution mandates that oil is the property of the Mexican people, and the issue touches deep chords of national pride.

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