The “new party” President of Mexico

How we got here, where is he taking us?

Vicente Fox , former governor of the state of Guanajuato, is now the first President elect of the PAN (National Action Party). The PRI (Institutional Revolution Party) has controlled Mexico and the presidency since the party's inception in the late 1920's.

In addition to federal control, a majority of municipal and state governments were also PRI until the 1990's. It wasn't until 1989 that the first opposition party governor was elected. The first PANISTA governor was Ernesto Ruffo of Baja California. Ruffo was the change agent that created the momentum for one of the most dramatic political shifts in Mexico's history.

Many Yankees wonder how such an inept and corrupt party could maintain absolute control of the Executive branch of government, congress and consequently the judicial system for so many decades. The PRI party's domination of Mexico was accomplished by building a political machine that put Mayor Daly of Chicago to shame. Through intimidation, voter fraud, job security, control over the media, federal ownership of major industries, permission to commit bribery, a huge campaign treasure chest and massive amounts of patronage, the PRI held Mexico's reigns.

The PRI's colors are the same as the Mexican flag. Like the colors of the flag are woven into its fabric, the PRI interwove itself into the social, economic, psychological, historic and political fabric of Mexico. Mexicanos came to believe in the inevitability of PRI control forever.

Another historical fact, that U.S. statesmen never acknowledge publicly, is that our policy was to maintain stability at the border at the expense of democracy in Mexico. The PRI did offer stability through effective, dictatorial, political and economic domination. U.S. policy guaranteed the PRI an economic bailout whenever reckless economic policies caused the currency to take a dump or the outgoing president looted the treasury. Mexico is still recovering from the economic and political abuses of a despotic, autocratic rule that the U.S. supported for sixty years.

EXPECTATIONS FOR THE NEW GOVERNMENT

In the last six years,Zedillo's administration has made major inroads in reducing bribery among government officials. The nation expects a "ratcheting up" of those efforts under Fox. The PAN has a strong, catholic influenced, set of morals. PAN victories, in one third of the municipal and state elections since 1990, have resulted in a demonstrated commitment to clean government.

In economics I expect to see a greater shift toward free market principles. The PAN party, for better or worse, depending upon your perspective, is considered very pro business. Vicente Fox's first efforts, as president elect, was a trade tour of Latin America. He is promoting free trade agreements, especially with the major economies of Argentina, Chile and Brazil. He is working hard to convince Latin American leaders, before taking office in December, that the future lies in free market principles.

The last bastions of state owned businesses in Mexico are: PEMEX (petroleum) and CFE (the power company of Mexico). The PRI and left of center PRD (Democratic Revolutionary Party) have not been able to overcome nationalist, socialist/revolutionary dogma to change what is not serving the Mexican people well.

Fortunately the consumer enjoys reasonably low cost residential electricity. However, on the gasoline front, the consumer is getting hose and gas nozzle from PEMEX who exports oil that is sold cheaper to U.S. consumers than at gas pumps in Mexico. Fox has not shut the door on some form of privatization and could favorably entertain proposals for privatizing certain aspects of energy production.

TELMEX (Telefonos de Mexico) has the monopoly for local telephone service. President Salinas made sure his cronies, who bought TELMEX from the government, had guaranteed profits for generations to come. Under Zedillo, long distance competition was allowed to enter Mexico. However, TELMEX is supported by government tax breaks and incentives that give it an unfair advantage over long distance service competitors like AT&T, SPRINT, etc. The result is that the consumer is getting screwed by TELMEX.

I would be very disappointed if Fox did not take actions to increase telephone competition. Local calls are billed by message units for length of call and long distance rates are 50% higher than in the U.S.. Among other things, telephone costs limit access to the internet for the majority of Mexicanos who can barely afford a telephone without incurring internet server provider costs and expensive message units. Internet Cafes are loaded with young people because the Cafes lease server lines from TELMEX and can offer internet access at one third the cost of home telephone access.

A complete overhaul of foreign investment law since the mid 80's and NAFTA have greatly liberalized the foreign investment climate in Mexico. Foreigners, for example, can own 100% of the shares in a Mexican corporation. Mexican corporations that are foreign owned can buy property anywhere, including the beaches and the border. Only a few business activity sectors- banking, energy, fishing and telecommunications restrict percentage of foreign ownership.

What I do believe we will see is more confidence on the part of foreign investors, especially from the U.S. and Canada. They are encouraged by the fact that Fox and the PANISTAS are unabashedly pro business and chanting free market mantras. The world markets, now see Mexico as a first world democracy that is finally unleashing its potential of becoming a first world nation economically. 

On the domestic front, Fox has promised that every child be guaranteed equal educational opportunity regardless of economic limitations. That the dreaded national police force be reorganized to mitigate the present situation of cops and criminals being one and the same. That the minimum wage be raised significantly. He has also committed himself to removing the palapa ceiling placed on women in the workplace and vowed to go after dead beat dads. The problem of dead beat dads in Mexico is of pandemic proportions.  

If Fox can make successful inroads to combat machismo he will be doing a great deal in bringing Mexico to first world status and improving the plight of all Mexicanos; especially the children of these “cabrones”. Mexicano males, in too great a number, abuse women and leave them to rear children without economic support. This is a major contributor to Mexico's underclass of uneducated and unskilled workers – children without fathers and their abandoned mothers.