Pena Nieto’s Mexico Energy Reform Faces Delay in PAN Shakeup

Bloomberg, 5/21/2013

Mexico President Enrique Pena Nieto’s reform agenda that includes legislation to end the monopoly of state-owned Petroleos Mexicanos faces delays due to a shake-up in the former ruling party’s leadership.

Former President Felipe Calderon’s National Action Party, or PAN, yesterday ousted former Finance Minister Ernesto Cordero from the Senate party leadership. The decision erodes the political consensus parties have built in congress, complicating the economic reform agenda, according to IdeaGlobal and Javier Oliva, a political scientist at Mexico’s National Autonomous University.

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Mexico launches military push to restore order in Michoacan state

Los Angeles Times, 5/21/2013

The Mexican government poured army troops — and high-level delegations — into western Mexico on Tuesday in a bid to take back control of a region long besieged by a deadly drug cartel. The operation in the Pacific state of Michoacan is the first major military deployment targeting drug traffickers to be ordered by the government of President Enrique Peña Nieto, which is still struggling to publicly define its security strategy six months after assuming leadership of this violent country.

Michoacan was probably chosen because it was fast spiraling into chaos. Parts of the state were awash in lawlessness, crippled by a cartel calling itself the Knights Templar, which in recent weeks blocked roads, torched businesses that refused to pay protection money and killed resisters. Entire villages were cut off, some reported to be desperately short on supplies. In response and feeling abandoned or ignored by authorities, groups of armed citizens attempted to fight back. But they often proved no match for the Knights Templar and were eager to see the army arrive.

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Opposition dispute rivets Mexico, threatens reforms

Los Angeles Times, 5/20/2013

A dramatic rupture in Mexico’s main opposition political party has aired the group’s dirty laundry and also could trip up President Enrique Peña Nieto’s ambitious agenda of reform. The political fireworks riveted Mexicans on Monday, dominating airwaves and social media as leaders of the National Action Party, or PAN, bickered openly.

On one level, citizens were viewing another chapter in the agony of a party that ruled for the last 12 years but has been corroded by infighting and a bitter power struggle. Also at stake, potentially, was the ease with which Peña Nieto has been getting legislation through a fairly compliant Congress. PAN chair Gustavo Madero over the weekend unceremoniously fired his party’s caucus leader in the Senate, Ernesto Cordero. Cordero will remain in the Senate, even continuing to hold his title of Senate president, but will no longer be the party’s go-to man.

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Mexico to create special police unit to search for the missing

Associated Press, 5/17/2013

Mexico’s government says it will create a special investigative unit to search for the missing, heeding a request by relatives of the disappeared who have been on a hunger strike for nine days. Attorney General Jesus Murillo Karam made the announcement Friday after meeting with a group of parents who have been on a hunger strike and living in tents outside his office.

Murillo Karam says the special unit will guarantee that the same investigators and forensic experts remain on the cases until they are completed. He said more details about the new unit will be made public in a week. President Enrique Pena Nieto’s government has said it has a database containing the names of least 26,121 people who went missing during his predecessor’s six-year administration.

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U.S.-Mexico Cooperation Against Cartels Remains Strong

Forbes, 5/16/2013

Mexican President Enrique Pena Nieto’s approach to combating Mexican drug cartels has been a much-discussed topic since well before he was elected. Indeed, in June 2011 — more than a year before the July 2012 Mexican presidential election — I wrote an analysis discussing rumors that, if elected, Pena Nieto was going to attempt to reach some sort of accommodation with Mexico’s drug cartels in order to bring down the level of violence.

Such rumors were certainly understandable, given the arrangement that had existed for many years between some senior members of Pena Nieto’s Institutional Revolutionary Party and some powerful cartel figures during the Institutional Revolutionary Party’s long reign in Mexico prior to the election of Vicente Fox of the National Action Party in 2000. However, as we argued in 2011 and repeated in March 2013, much has changed in Mexico since 2000, and the new reality in Mexico means that it would be impossible for the Pena Nieto administration to reach any sort of deal with the cartels even if it made an attempt.

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In Mexico, restrictions on U.S. agents signal drug war shift

The Washington Post, 5/14/2013

The recent changes ordered by new President Enrique Peña Nieto to Mexico’s anti-narcotics partnership with the United States have produced markedly different reactions here and in Washington, underscoring what appear to be diverging perceptions of the drug war’s goals and the costs of fighting it.

Peña Nieto’s decision to limit the ability of American agents to operate in Mexico has been met with dismay by U.S. law enforcement agencies, which left a heavy footprint under the previous administration of Felipe Calderon. They warn that intelligence sharing will suffer if they can no longer choose which Mexican force — the army, navy or federal police — to give sensitive information to; they’ve been instructed to now funnel everything through Mexico’s Interior Ministry instead.

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Op-ed: Why Mexico Will Always Play Second Fiddle

By George E. Condon Jr., National Journal, 5/9/2013

President George W. Bush was the picture of confidence as he sat in the Roosevelt Room talking to a small group of reporters about the upcoming visit of Mexican President Vicente Fox. Sipping on a Diet Coke and loudly crunching ice on this September day in 2001, Bush proclaimed the start of a new era in U.S. relations with its neighbor to the south. “The United States has no more important relationship in the world than the one we have with Mexico,” he declared firmly. Seven days later, terrorists struck in New York City and Washington, and that relationship suddenly didn’t seem quite as important as the alliances with countries ready to send troops to support American aims. U.S.-Mexico was shoved unceremoniously into the background. And Fox, who did not back the U.S. at the United Nations when Bush wanted to go to war with Iraq, found he could no longer get his phone calls returned by the White House.

It was a dramatic reminder that events—more than even presidents—set agendas. And it is a lesson with some relevance to President Obama, who traveled to Mexico last week and repeated some of the now-expected promises to elevate U.S.-Mexican relations in the foreign policy hierarchy. No one doubts the president’s sincerity. He understands the growing importance of trade with Mexico and with the Central American countries, whose leaders he met with last week in Costa Rica. In fact, a main purpose of the trip was to shift attention from the issues of drug cartels, crime, and violence that dominated earlier hemispheric summits. That repositioning came even amid indications that newly elected Mexican President Enrique Peña Nieto is reconsidering some security cooperation with the United States.

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Is easy credit coming to Mexico?

The Christian Science Monitor, 5/9/2013

Miguel Ángel Riva Palacio stuffs his savings in his sock drawer. He pays his bills and expenses with cash, doesn’t have a bank account, and never uses debit or credit cards – neither of which are accepted at the mom-and-pop dry cleaning shop he’s worked at for the past 43 years. “It’s something that has never interested me,” he says of opening a bank account. Mr. Riva Palacio is among the millions of Mexicans operating outside of a banking system that has produced robust profits in recent years, but has failed to embrace customers among the unbanked or extend credit to entrepreneurs. Mexico has one of the lowest rates of commercial lending in Latin America, which has been blamed for stunting economic growth.

But a series of banking reforms introduced Wednesday by a coalition of political parties aims to change that. The legislation aims to encourage competition among banks and increase the accessibility and accountability of financial institutions. It also intends to create incentives for lending to both individuals and the private sector.

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Mexican politics: The PRI’s long tail

The Economist, 5/9/2013

On May 7th Enrique Peña Nieto, Mexico’s president, showed off some of the fancy political footwork that days before had earned him the gushing endorsement of his first visiting head of state, Barack Obama. Flanked in the National Palace by leaders of Mexico’s three main political parties, he resurrected an ambitious reform programme that a scandal in his Institutional Revolutionary Party (PRI) had threatened to derail.

Notwithstanding finger-wagging by opposition leaders, Mr Peña persuaded them to restart a tri-party political pact that is the crown jewel of his five-month-old administration. On May 8th the pact was put into action when the government sent a package of bills to Congress to increase bank lending and competition. Next it hopes to liberalise the state-strangled oil industry and raise taxes broadly. Eventually, as Mr Obama succinctly put it, the aim is for Mexicans to make it through each day without paying a bribe.

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Mexico Seeks Easier Foreclosures, Cheaper Loans

Associated Press, 5/9/2013

Mexico’s government proposed a sweeping overhaul of the banking sector Wednesday to make credit cheaper and more available, a move desperately needed in a country where bank loans represent less than 20 percent of GDP — one-tenth the level seen in the United States. The plan would encourage banks to compete and lend more, create incentives for mid-size companies to list shares on the stock market, and modify bankruptcy laws to make it easier for lenders to seize debtors’ assets.

Critics warned it could launch a wave of foreclosures like those seen in Spain and the United States, while supporters said it is needed to spur banks to lend to Mexico’s credit-starved businesses. The plan has been submitted to Congress, where the country’s three major parties are supporting it.

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