Felipe Calderón of the PAN party will become president of
Mexico on December 1. He won by less than 1%. His party will not
control either the Chamber of Deputies or the Senate. His main opponent,
Andrés Manuel López Obredor of the PRD, does not recognize
his victory and is promising more civil disobedience and a parallel
government. He enters office after a bitter and divisive election
that revealed the deep social and economic chasm that separates
the better-off North from the shockingly-poor South. He inherits
a stable economy that, at the same time, is losing its competitiveness
in the global economy. And he will be facing a rapidly mounting
crime rate driven largely by drug gang warfare.
All of this, and more, poses major challenges for a Calderón
government. Here are some of the key issues that must be tackled
to keep Mexico's political system intact, assure Mexico's competitiveness
in the global economy, reduce social tensions at home, and enhance
the rule of law and security.
The most significant failure of Calderón's predecessor,
Vicente Fox, was the failure to negotiate legislative coalitions
among the three major parties. As a result, his calls for "change,"
which drove voters into opposition to the long-ruling PRI, were
never translated into specific legislation. Calderón's razor-thin
margin of victory means he will have to implement a major change
in governing style and be willing to form coalitions around specific
issues with the opposition PRI (the bitterness of the PRD will probably
not allow it to participate in this process early on). In addition,
Calderón will have to propose major reforms of the electoral
process to make sure that the uncertainty of this election will
not happen again, perhaps by requiring a second round of voting
for the top two candidates if no one wins an outright majority.
And Mexico clearly needs to review its congressional "no re-election"
Deepen Economic Reforms
Mexico is losing competitive ground because it has not undertaken
the key reforms necessary to move it from being a "maquiladora-driven"
economy to being a part of the modern information age. Specifically,
Mexico's labor laws are hopelessly out of date for a modern manufacturing
and service economy. Mexico must restructure its capital markets
so that entrepreneurial activity is encouraged. The complex tax
system should be radically simplified and tax levels reduced to
encourage tax compliance (currently the government receives only
11% of GDP in taxes). Probably the most difficult issue will be
the reform of Mexico antiquated energy sector. Both the state-run
electrical and oil companies require massive outside investment
now. Calderón will have to overcome constitutional prohibitions
on foreign investment in these companies.
Mexico's educational system is simply not adequate for a modern
economy. At all levels, the quality and quantity must be raised
substantially. In particular, the primary system must move from
rote memorization to developing student reasoning, mathematical,
and language skills. The academic standards of the public institutions
higher education must be raised considerably. And there has to be
much more collaboration between business and education.
The election exposed a much deeper rift between rich and poor than
the government has recognized. Infrastructure programs must be developed
to encourage job creation and economic activity in the South. Recently
implemented and successful social programs should be expanded. Migrant
remittances must be increasingly channeled into productive investments
in the sending communities. And Mexico should use heightened US
concern about illegal migration to develop bi-national job creation
programs in Mexico rather than attempt to negotiate a wide-ranging
Much of the current violence is the direct result of the Fox administration's
highly successful attack on the drug cartels. Most of the leaders
are either dead or in jail. That has left a leadership void that
has fueled a rapidly escalating war for cartel control. This is
an area that requires intense US-Mexican cooperation. Both the US
and Mexico must give up their reservations about working with the
other and move aggressively to combine forces to put down the violence.
This is just the tip of what Mexico needs to become a highly competitive
economy that also provides its citizens with political stability
and social justice. What is absolutely clear is that Mexico can
not squander another six years in unproductive political gridlock.