Senate Passes Political Reform – Energy Reform Next, Stolen Radioactive Material, and Mexico´s Competitiveness vis-à-vis China – Weekly News Summary: December 6

coffee-by-flikr-user-samrevel1The 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 the Washington Post noted that Mexico’s Senate passed the most dramatic political reform attempt in decades which would allow re-election of federal legislators, create new election oversight and make the Attorney General’s office independent from the executive. It also highlighted that the Senate is moving on to energy reform, which is considered the most critical part of the reform package that President Enrique Peña Nieto is pushing to have passed before the end of this year. The Economist noted that it will be difficult for Mexico´s left to stop the Energy Reform after Andrés Manuel Lopez Obrador suffered a heart attack on December 3rd. His absence weakened a blockade of the Senate that he had promised. Meanwhile, the Financial Post was not enthusiastic over the Energy Reform. In an article published this week, it argued that that even if the proposed reform is passed within a year, it could take up to 10 years for production to begin in the deep-sea reserves. Additionally, the profit-sharing contracts may not be as profitable as anticipated, as the terms under the proposal stipulate that foreign companies would receive a share of the revenues from the fields, rather than the oil and gas to sell themselves.

In another note, the BBC reported on Wednesday that a truck carrying medical radioactive material had been stolen near Mexico City. Mexico’s Nuclear Security Commission said that at the time of the theft, the cobalt-60 teletherapy source was “properly shielded”. Nonetheless, the Washington Post noted on Thursday, that the theft of the material sparked international concern over the possibility that the cobalt-60 could be used in a “dirty bomb.” By Wednesday afternoon, the same news outlet reported that authorities had found the stolen the radioactive material. The National Journal claimed that after the theft, a group of critics questioned if the International Atomic Energy Agency’s radiological security rules were enough for securing radioactive materials.

As a final topic, the Los Angeles Times published an article over the increasing number of manufacturing plants that are moving from China to Mexico. According to the news outlet, the global recession and its aftermath led companies to rethink their supply chain. Faced with rising wages in China and high oil prices, many are reconsidering the appeal of manufacturing close to the United States, especially small and medium-size businesses without the bargaining clout of Apple and Wal-Mart. Those businesses are finding a skilled workforce for high-tech manufacturing in Mexico. The Financial Times noted in a similar piece that although wages in Mexico remain mostly higher than in China and other Asian countries, there are benefits in flexibility, the amount of stock manufacturers need to hold and, in some cases, transport costs. These factors have driven the increase in investment by car manufacturers and white goods producers.

What Mexican columnists had to say…

Mexican columnists considered the many important events occurring in the country during the past week. Milenio columnist Ciro Gomez Leyva wrote that PAN Senator Ernesto Cordero has said that he is confident the energy reform will be passed and that it will “be much more like than PAN initiative than people think”. He has said that the PRI must commit to changing the energy sector and to making Mexico more competitive. The author wondered: will the PRI accept this? Cesar Camacho has said that hydrocarbons and production will, without questions, continue to belong to the Mexican state, and that foreign companies will not be able to obtain barrels. He condluded that he thinks the PAN will get its way.

Writing for Reforma, Jorge G. Castañeda stated that he is very skeptical of what will happen with the electoral-political reform and the energy reform. He expressed that he is afraid that once again, a good government proposal will yield a poor result, poor reforms. It is clear, a year after the President started his term, that people are unhappy, and his ratings are down. The cause for this is that people care more about the poor economy than they do the improving security situation. He insisted that people remember that the President started off with lower approval ratings than his predecessors, and that he eventually reached the 45% approval that is typical of the PRI. To overcome this figure, EPN must prove that the PRI has changed. Or perhaps he needs to help people forget that he is a part of the PRI.

Lorenzo Meyer expressed his disconent with the energy reform. In his opinion, the Mexican government is sacrificing the future of Mexico and Mexicans. The energy reform that EPN and his government are proposing will provide short-term success and satisfaction, but will do little for future generations. They are playing with the rights that we all have over hydrocarbons. The benefits of this reform will not be reaped by all. In an earlier article, he stated that the idea to turn the IFE into the INE is nothing more than that: an idea, albeit not a good one. It lacks logic, and it fails to address important questions. It will require us changing our constitution, and will lead us down a path of uncertainty, error, and likely, corruption and failure. It will not facilitate and consolidate electoral services, nor will it be staffed by qualified candidates.

Writing on a similar topic, María Amparo Casar stated that the main problem with Mexican democracy does not have to do with the rules of the “democratic game” but rather, with the players. These players follow the rules and respect results only when they benefit them, and when they don’t, they abandon them. In her opinion, this is why Mexico´s democracy cannot and will not be fixed by any sort of political or electoral reform.

Jorge Fernández Menéndez, addressed recent studies which detail Mexico´s terrible levels of education and poor scores on corruption indexes. Bad educational systems and high levels of corruption are endemic in our country, he said, and unless we address them, any progress that we make in terms of security, the economy, quality of life, and inequality will be insufficient and constantly undermined. A nation that is corrupt and uneducated has no place on the national stage, and cannot hope to be developed and competitive.

The columnist also noted that under the current government, coordination between the various federal and state security agencies has improved. However, Mexico’s security situation continues to be dire, and the rates of kidnappings, extortion and violent robberies must be reduced. In economic terms, he argued, this has been a bad year: people in Mexico have struggled to make ends meet. The president has insisted that we think of this past year as the time in which his government “sowed the seeds” that will bear fruit in the coming 5 years. No government plan can succeed if people do not perceive that the economy and that their personal wellbeing are both improving. We must strive not only to ensure people are employed and make good salaries, but also that there is public security. Leo Zuckermann commented that there is no doubt that an impressive number of reforms have been passed in the first year of EPN’s government – more, in fact, than were passed in the terms of the past four presidents combined. What remains to be seen is whether these reforms were well crafted, and whether they will improve Mexico and stimulate economic growth.

Jorge Chabat argued that it is evident that the EPN government is betting everything on the energy reform, and that it is committed to doing anything to ensure that it passes despite opposition from the left. The idea is that if it is passed, the rest of the president’s term will be marked by a growing economy, and therefore, he will be remembered as a great reformer and modernizer. This is a very risky bet, though one that could work. The real question will be – can our political structures resists, survive, until the supposed economic prosperity occurs? Will it ever occur?

Finally, Jesús Silva Herzog-Marquez argued that the first year of EPN’s government has consisted of spectacularly inaugurating not a project or achievement, but a façade. The Pacto por Mexico was the most important of all inaugural events. Although it was easy to predict that it would fall apart with the passing of time, it nonetheless remains proof that pluralism can exist, if not triumph. The government has managed to push through two important and well-supported reforms, and the energy and electoral reforms are said to be around the corner. While this is no small feat for a young government, we must be careful to celebrate what the reforms consist of, what they will do, and not the fact that they were passed.


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