Mexico reform drive at stake as regions vote

Reuters, 7/7/2013

Mexican President Enrique Pena Nieto’s sweeping economic reform plans hang in the balance in local elections on Sunday with a strong opposition showing seen as crucial to preserve a cross-party pact. Nearly half of Mexico’s 31 states are voting for a mix of local parliaments and municipal governments, but all eyes are on the race for governor in the state of Baja California, a stronghold of the conservative National Action party (PAN).

The PAN lost control of Mexico in last year’s presidential elections, being relegated to the third force in Congress, but Pena Nieto must keep them on board to help him push through planned overhauls of state oil giant Pemex and the tax system. Baja California is one of the PAN’s few remaining bastions and if the party can hold the state it could be just what Pena Nieto needs to keep alive the so-called Pact for Mexico he forged with opposition leaders upon taking office in December.

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Mexico upgrade could only come after reforms approved, reviewed: S&P

Reuters, 5/23/2013

Standard & Poor’s could decide to boost Mexico’s debt rating only if the government approves a raft of ambitious reforms and the measures are effective, credit analyst Joydeep Mukherji said on Thursday. Mexico’s major parties signed a pact last year to push long-sought measures through the country’s divided Congress, including reforms to boost the country’s paltry tax take and raise production at ailing state-owned oil monopoly Pemex PEMX.UL.

Earlier this month, Fitch Ratings upgraded Mexico’s sovereign foreign currency credit rating by one notch to BBB-plus, pointing to the country’s solid economic foundations and welcome progress on reforms. But S&P’s Mukherji said his agency would only consider an upgrade after the reforms were approved and could be evaluated for their impact.

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Mexico’s economy: Reality bites

The Economist, 5/24/2013

Investors who were starry eyed about Mexico’s economic potential at the start of the year are now having misgivings. From a record high then, the stockmarket fell to an eight-month low on May 21st. Just to rub it in, stocks in Brazil, which Mexico views as its main regional rival, have recently been performing much better.

The immediate catalyst for the change of mood is the economy. In December, just as President Enrique Peña Nieto came to power promising to increase Mexico’s growth potential, the country’s strong recovery from the 2008-09 global financial crisis hit the skids. In the first quarter of 2013 sluggish sales to the United States, by far Mexico’s largest export market, helped reduce growth to a modest 0.8% compared with the same period in 2012. A fall in public spending as a new party took power contributed to the dip.

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Slim comes second: Is Mexico’s president a monopoly buster?

Global Post, 5/17/2013

Mexican President Enrique Peña Nieto vows big changes with the economic reforms he’s pushing and they’ve already taken more than a little change from the pockets of mega-mogul Carlos Slim. With stock in his flagship phone company America Movil slipping because of telecommunications reforms about to become law, Slim lost the title of world’s richest man Thursday to Microsoft founder Bill Gates for the first time in six years.

Peña Nieto seems on a roll with his campaign to shift the chatter about his country from drug war violence to economic possibility. Since taking office in December, he has worked with political opponents to push constitutional fixes aimed at breaking the choke hold interest groups have around Mexico’s economy.

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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 Parties Sign Electoral Deal to Resume Reform Agenda

The Wall Street Journal, 5/7/2013

Mexico’s government and opposition leaders signed an agreement Tuesday to prevent the use of federal antipoverty programs in support of candidates in coming local elections, a condition demanded by the opposition to continue backing the reform agenda of President Enrique Pena Nieto. The deal, signed at a public event at the National Palace, promises to end a political dispute that in recent weeks threatened to derail the so-called Pact for Mexico, an unprecedented accord between the government and opposition to secure legislative support for key economic and structural overhauls.

Tuesday’s agreement was added to the pact, a 34-page document outlining 95 commitments to bolster Mexico’s competitiveness, agreed in December by Mr. Pena Nieto, the conservative National Action Party, or PAN, and the leftist Party of the Democratic Revolution, or PRD. The Congress has already passed overhauls of the education and telecommunications sectors drawn up under the pact, raising expectations among Mexicans and foreign investors that the country can approve long-postponed reforms. A financial sector proposal to bring about more and cheaper bank lending, postponed in late April due to the political dispute, is now expected to be presented as early as Wednesday.

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No talks on key Mexico reforms until spat resolved: opposition

Reuters, 4/30/13

A multi-party alliance to modernize Mexico’s economy will not discuss pending energy and tax reforms until an electoral spat between the opposition and the government is resolved, the head of the main leftist party said on Tuesday. Jesus Zambrano, chairman of the opposition Party of the Democratic Revolution (PRD), said there could be no talks on these reforms until the government had taken clear steps to punish those responsible for a vote-buying scandal in the Gulf state of Veracruz that was exposed this month.

“There won’t be (talks) about anything that is not to do with the political and legal … structure that will enable us to get out of this impasse,” he told Reuters in an interview. President Enrique Pena Nieto’s ruling Institutional Revolutionary Party, or PRI, has been forced on the defensive since the conservative National Action Party (PAN) put out recordings of PRI officials advocating the use of government funds to secure votes in Veracruz in elections due on July 7.

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