Energy Reform Proposal in Mexico…not until next week. – Weekly News Summary: August 9

Coffee by Flikr user samrevelThe Mexico Institute’s “Weekly News Summary,” released every Friday afternoon summarizes the week’s most prominent Mexico headlines published in the English-language press, as well as the most engaging opinion pieces by Mexican columnists.

What the English-language press had to say…

This week, energy reform was in the core of the debate.  President Enrique Peña Nieto was expected to present his energy reform proposal. However, that did not occur. Early this week, Los Angeles Times, referred to PEMEX as Mexico’s a crown jewel pointing out that as Peña Nieto moves ahead with a plan to overhaul the company, he is navigating the most perilous political minefield of his young presidency. At the same time, he is toying with taboos and challenging revered perceptions surrounding the nation’s top revenue earner. For The Financial Times, the clock is ticking and the countdown has begun for one of the most eagerly-awaited policy decisions that President Peña Nieto will make during his term.

In general, the proposal is expected to include a change in the constitution to relax Pemex’s monopoly on oil production. As reported by Reuters, the Mexican Government will seek an overhaul aimed to allow more private capital to the oil, gas and electricity sectors in order to boost flagging output. However, as pointed out by The Economist, not only is it unclear how far the reforms will go, such is the state of Pemex that some doubt it is reformable at all. On the other side of the road, even when oil debate was the highlight of the week, the government is also poised to propose an electricity overhaul that could dramatically reduce costs for businesses. However, in an unexpected move, President Peña Nieto delayed presentation of his proposal until next week. According to The Wall Street Journal, the move came as a surprise, as Mr. Peña Nieto had reiterated Tuesday that the bill would be presented this week. The government is seeking more time to try to present a bill with as much consensus as possible among the principal opposition forces.

In the midst of this energy debate, the opposition Party of the Democratic Revolution, or PRD, launched a campaign to push for a national referendum on the future of PEMEX, energy industry reform and an overhaul of the tax system. As reported by The Global Post, the PRD will seek a referendum on the energy-related issues, levying the value-added tax, or VAT, on food and medicines, and electricity rates.

On a separate note, on Friday, a Mexican court ordered the release of infamous drug lord Rafael Caro Quintero after 28 years in prison for the 1985 kidnap and killing of a U.S. Drug Enforcement Administration agent, a brutal murder that marked a low point in U.S.-Mexico relations.

What Mexican columnists had to say…

This week, in Excelsior, Jorge Fernández Menéndez referred to the potential energy and fiscal reforms as the links that might pull out the rest of the chain in terms of economic growth. He argued that, even though nothing is known about the President’s proposal yet, it is plausible to foresee that it will seek a balance between the PAN proposal and the one recently presented by Cuauhtémoc Cardenas. Writing about the gasoline subsidy in Mexico, Sergio Sarmiento, wrote that although such a subsidy has fallen during the last years, it remains exceptionally high, especially in the current scenario, where gasoline prices in Mexico and the U.S. are quiet similar. On the reforms side, Maria Amparo Casar argued that even though the government’s communication strategy seems smart, this communication scheme has been oriented primarily to an audience that mostly has long been convinced of the need and benefits of reform. Finally, Carmen Aristegui wrote that a national debate is expected after the announcement of the energy reform initiative by the federal government. However, she continues, the mechanisms of the media and the official sector have begun to work, mainly by starting a campaign to support a reform, though the content is still unknown

Adding to the marijuana legalization debate, Genaro Lozano pointed out that Uruguay is now leading the discussion not only in that regard, but also in two other difficult social topics: the decriminalization of abortion and the approval of gay marriage. In the same line, in his Friday piece, Sergio Sarmiento wrote that the prohibition of drugs is one of the worst experiences that humanity has suffered arguing that the war that, for decades, governments have held against drugs has been useless. Not only consumption has not declined bur also is has generated other problems, such as violence.  On violence related topics, Eduardo Guerrero Gutierrez referred to recent figures on the topic, pointing out that this past July has been the most violent month during the administration of President Peña Nieto. Such figures, he argues, are a warning for the government that it is urgent to build a strategy and take decisive action.

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