Tag Archives: pemex

Peña Nieto needs a Trump-sized confrontation to help his ailing presidency

Nearly two-thirds into his presidency, Enrique Peña Nieto is far more unpopular than either of his two predecessors. (Facebook)
Nearly two-thirds into his presidency, Enrique Peña Nieto is far more unpopular than either of his two predecessors. (Facebook)

Mexico’s president, Enrique Peña Nieto, was elected in July 2012 to great fanfare, so it was almost certain that his administration would fall well short of expectations.Mexico Flag Icon

In the leadup to that 2012 presidential election, Peña Nieto spent so many years as such a heavy frontrunner he was practically Mexico’s president-in-waiting. When he ultimately won the presidency by a margin of around 6.5%, it was less than polls predicted, but still the largest margin of victory in a presidential election since 1994. With movie star looks and a bona-fide star for a wife in Angélica Rivera, a model and telenovela actress, his victory was a triumph not only for himself, but for his party, the Partido Revolucionario Institucional (PRI, Institutional Revolutionary Party), which lost the presidency in 2000 after seven decades of consecutive rule in Mexico and that spent a difficult decade shut out of executive power at the national level. In Peña Nieto, the telegenic former governor of the state of Mexico, with over 15 million people, by far the largest in the country and the surrounding state of Mexico’s central federal district.

* * * * *

RELATED: For El Paso-Juárez,
Trump’s vision of Mexico based on misconception

* * * * *

When he rose to the presidency, Peña Nieto was widely expected to do just two things as the face of what Mexican voters believed to be a reformed and a modernizing PRI.

First, Peña Nieto would enact a range of reforms liberalizing everything from Mexico’s energy sector to its tax collections scheme. Second, Peña Nieto would bring peace to a country roiled by drug violence, lethal competition among drug cartel and what seemed like an increasingly self-defeating militarized response to drug violence by Peña Nieto’s predecessor, Felipe Calderón, of the conservative Partido Acción Nacional (PAN, National Action Party).

On both fronts, Peña Nieto fell short of expectations.

While Mexico might today be more becalmed than in 2012, violence and government incompetence have dominated headlines. Peña Nieto’s presidency will forever be marred by the abduction and assassination of 43 students in Iguala by police officers in Guerrero state in September 2014. The glory of his government’s capture in 2014 of Joaquín ‘El Chapo’ Guzmán, the leader of the infamous Sinaloa cartel, was soon eclipsed by his escape from a maximum-security prison in 2015, and Guzmán, recaptured seven months later, now faces extradition to the United States.

Peña Nieto’s presidency has been a mix of the good (significant political and economic reforms), the bad (corruption, impunity at the highest level of the PRI and his own administration and ineptitude in the face of cartel strength) and the ugly (the Iguala massacre).

By most measures, though, his performance has been far worse than many observers expected, with less impressive reforms than promised and a legacy of sporadic drug violence, police brutalization, personal conflict-of-interest scandals and continuing widespread corruption at all levels of government. That’s all on top of a Mexican economy struggling to deal with far lower global prices for oil and other commodities. It’s so bad that his approval rating sank earlier this month to just 23%, lower than any Mexican president since Ernesto Zedillo faced an acute peso crisis in the mid-1990s.

In the July 2015 midterm elections, the PRI lost nine seats in the Cámara de Diputados (Chamber of Deputies), the lower house of the Mexican congress, and in the June 2016 gubernatorial elections, the PRI lost power in states it’s held since 1929 — including Veracruz, Tamaulipas Durango and Quintana Roo.

Just this week, as he prepares to deliver his state of the union address on Thursday, Peña Nieto has faced down embarrassing revelations that he plagiarized much of the thesis that he submitted for his law degree. Earlier this month, his wife faced fresh accusations of a new conflicts-of-interest scandal involving the use of a luxury apartment from a Mexican businessman in Miami.

So as the Mexican president prepares to welcome Republican presidential nominee Donald Trump for an unexpected private meeting on Wednesday, it’s no understatement that Mexico’s beleaguered president could use a diversion. With his approval ratings so low, though, Trump presents an easy target. Continue reading Peña Nieto needs a Trump-sized confrontation to help his ailing presidency

The big winner of Mexico’s elections? The not-so-green Green Party


Of Mexico’s four largest parties, at least as of the last election, only one managed to increase its vote share between 2012 and 2015 — the Partido Verde Ecologista de México (PVEM, Ecologist Green Party of Mexico).Mexico Flag Icon

Since its foundation in 1993, the party has developed a cynical reputation for corruption than any particular devotion to the traditional left-wing, environmentalist causes of green parties throughout the world. Nevertheless, if preliminary estimates are correct, the PVEM will have won more than 7% of the vote in Mexico’s midterm elections, which means that it will almost certainly hold more the fourth-largest bloc of seats in the 500-member Cámara de Diputados (Chamber of Deputies), the lower house of the Mexican Congress.

That’s astounding in an environment where Mexicans rank political corruption at the top of their concerns, alongside drug violence and above even a sluggish, uneven economy.

With the exception of the 2000 election, when the Greens backed conservative maverick Vicente Fox for the presidency, the party has been a reliable junior partner for the ruling Partido Revolucionario Institucional (PRI, Party of the Institutional Revolution) and Mexico’s president, Enrique Peña Nieto. Together with the Greens and another small party, Partido Nueva Alianza (PANAL, New Alliance), the PRI is expected to hold a narrow legislative majority.

* * * * *

RELATED: Mexican left disintegrates as midterms approach

* * * * *

That’s not necessarily great news for Peña Nieto, whose personal reputation has been compromised by financial scandals surrounding himself, his wife and close colleagues, and whose party — certainly not impervious to corruption — remains highly distrusted after governing Mexico uninterrupted for seven decades until Fox’s 2000 election.

The Green Party, however, seems to thrill in flouting election law — Mexico’s new electoral authority, the Instituto Nacional Electoral (INE, National Electoral Institute) fined the party over $20 million in May after it illegally financed campaign advertisements. One sports personality said he was offered 200,000 pesos by the party to support it on election day via Twitter.

Its leader, Jorge Emilio González, the son of the party’s founder, known as El Niño Verde, has a black-hat playboy image of a corrupt baron. His reputation never fully recovered from videotapes that showed him apparently negotiating $2 million in bribes in relation to a shady land deal in Cancun.

Jo Tuckman, writing for The Guardian, finds that the PVEM draws disgust from analysts across the board as a party of ‘false greens’ that often acts more like an organized crime cartel controlled by the González family:

“The Greens concentrate the bad elements of Mexican politics and take them to an extreme,” said political analyst Jesús Silva Herzog. “There are sinister figures in all the big parties, but there are some respectable ones too. I cannot think of a single respectable figure in the Green Party.”

Continue reading The big winner of Mexico’s elections? The not-so-green Green Party

Will Venezuela or Argentina be the first to crumble into economic crisis?


I write tomorrow for The National Interest about the dual economic crises in Venezuela and Argentina.argentinaVenezuela Flag Icon

The similarities between the two economic crises are uncanny — inflation, capital controls, dollar shortages, overvalued currencies, shortages, etc.

But the similarities don’t stop there.  Both countries currently fee political limitations to force policy changes to avert crisis — and that limit the political capital of the leaders of both countries, Venezuelan president Nicolás Maduro and Argentine president Cristina Fernández de Kirchner, to enact reforms:

Accordingly, normal political channels seem blocked through at least the end of 2015, despite the fact that both countries should be considering massive economic policy u-turns that will require significant amounts of political goodwill neither Maduro nor Fernández de Kirchner possess. But there’s an even greater inertia lurking beyond even the routine political impasse—a kind of political dead-hand control in both countries, on both a short-term and long-term basis.

First, both Venezuela and Argentina remain tethered to the political ideologies of chavismoand kirchnerismo, even though their proponents, Chávez and Néstor Kirchner, are now dead. Those policies may have worked over the last decade to achieve certain goals, including greater social welfare and poverty reduction in Venezuela and a rapid return to economic growth and competitive exports for Argentina. But it should be clear by now that chavismoand kirchnerismo are unable to provide answers to their respective countries’ economic woes today.

Even more broadly, I argue that beyond the shortcomings of chavismo and kirchnerismo, Venezuela faces a long-term resources curse and Argentina faces the long-term legacy of protectionism and statism of peronismo, which in each case underlie the current economic crises.  What’s more, the IMF-sponsored reforms in 1989 that led to the massive Caracazo riots in Venezuela and the IMF-approved lending tied to Argentina’s 1990s ‘convertibility’ crisis that led to the 1999-2001 peso crisis have undermined orthodox economic policymaking:

What’s more, ill-conceived attempts to rupture those dominant paradigms through orthodox ‘Washington consensus’ reform processes led to economic and political disaster. In both countries, leaders experimented with neoliberalism, facilitated by the misguided zeal of the International Monetary Fund, without enacting any corresponding safety nets or shock absorbers. The resulting crises led both countries to double down on their prevailing ideologies, thereby, ironically, making economic reform today even more difficult.

In both cases, the political, historical and economic legacies have prevented the broadly moderate, business-friendly, social democratic middle courses that much of the rest of South America has embraced to wide success, including Colombia, Peru, Chile, Brazil.

Why the PAN’s victory in Baja California is good news for Mexican democracy

Kiko Vega

Francisco ‘Kiko’ Vega de Lamadrid has emerged as the winner of Sunday’s gubernatorial election in the Mexican state of Baja California, giving the conservative Mexican opposition a major boost in a high-profile election a year after its crushing defeat in the July 2012 Mexican presidential election.baja californiaMexico Flag Icon

Vega (pictured above), a former Tijuana mayor, a Mexican congressman from 2009 to 2012, and a former finance secretary of Baja California in the late 1990s, led an electoral coalition dominated by the conservative Partido Acción Nacional (PAN, National Action Party).  Initial results showed Vega having won around 47.15% of the vote to just 44.15% for Fernando Castro Trenti, the candidate of the governing Partido Revolucionario Institucional (PRI, Institutional Revolutionary Party).

That means not only that Vega will be the sixth consecutive PAN governor of Baja California, but that the PAN will continue to hold onto one of the party’s most symbolic strongholds a year after the PRI’s young and photogenic Enrique Peña Nieto won the Mexican presidency, giving the PAN a boost after a year of infighting and internal distractions.  A PAN loss in Baja California would have been nothing short of a complete disaster for the party and for its current leader, Gustavo Madero.

The entire peninsula of Baja California is technically divided into two states — Baja California and Baja California Sur  — and the state’s population of around 3.3 million means that it’s not among México’s largest states.

But there are a lot of reasons why Baja California is nonetheless an important state in Mexican politics.

One obvious reason is its proximity to the United States.  The sprawling border cities of Mexicali and Tijuana have been focal points of  migration of workers and products, both legal and illicit, from México to the United States, for decades at a time when U.S. policy is focused on immigration reform.  Both the peninsula and the state are among the most popular tourist destinations for U.S. citizens drawn to Baja’s beachfront bounty — although foreigners can hold 50-year interests in Mexican property in trust, foreigners are still banned from owning beachfront property in Baja California under laws dating back to the Mexican Revolution, despite recent legislation to ease property restrictions.

But Baja California also plays an important role in the development of Mexican democracy — it was in Baja California that a Mexican opposition party first won a gubernatorial race after decades of PRI dominance in what had been México’s one-party state since the 1920s.  When the PAN’s candidate, a young local businessman named Ernesto Ruffo Appel, won the July 1989 gubernatorial race, then-president Carlos Salinas acknowledged the PRI’s defeat on election night, thereby propelling the PAN to its first major shot at power in Mexican history.

It’s not difficult to draw a direct line from that night to ever greater milestones for Mexican democracy — the 1992 elections that saw the PAN win further gubernatorial victories; the 1997 elections that brought the leftist opposition Partido de la Revolución Democrática (PRD, Party of the Democratic Revolution) to power in the Distrito Federal, where the PRD has essentially governed México City ever since; and, of course, the 2000 presidential election that delivered the Mexican presidency to the PAN’s Vicente Fox.

Though Fox’s successor, Felipe Calderón, followed him to the presidency in 2006, the PAN’s 12-year hold on the Mexican presidency collapsed after Peña Nieto’s victory, which followed a decade-long project of rebranding the PRI’s role in a 21st century, multi-party democratic México.  The PAN’s candidate, Josefina Vázquez Mota, finished far behind Peña Nieto with just 25% of the vote and weakened by internal disputes within the PAN, despite the historic nature of her candidacy — Vázquez Mota was the first female major-party candidate for the Mexican presidency.

Vega’s victory gives the PAN something to celebrate and an opportunity to pivot from the nadir of its 2012 effort and the ensuing internal squabbling that’s followed, which ultimately bodes well for balancing México’s various political forces in advance of over a dozen gubernatorial races in 2014 and midterm congressional elections in 2015.

The victory also boosts Peña Nieto’s national agenda, the so-called Pacto for México among all three parties in the Mexican Congress, where no party holds an absolute majority of seats — the PRI actually lost 30 seats in the lower house, the Cámara de Diputados, in last year’s simultaneous legislative elections.  Peña Nieto is planning to push for tax and energy sector reform in coming months, and he’ll need the PAN’s support in order to carry out those reforms, especially given the Mexican left’s suspicion of any moves toward private investment in Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company.

That’s because the PAN’s victory will, for the time being, steady Madero’s leadership, who signed the Pacto with Peña Nieto earlier this year.  Although Calderón himself pushed for tax reform last decade (it was blocked by the PRD and the PRI at the time) and both reforms are largely in line with the PAN’s free-market economic views, the Pacto has divided Mexico’s conservatives, who were already split between maderistas and calderonistas (today, corderistas)  following the December 2012 election for the PAN’s presidency between Madero and Ernesto Cordero, a longtime Calderón loyalist and former Calderón finance minister.

In May, Madero demoted Cordero, who has been more skeptical about the Pacto, from his role as the PAN’s caucus leader in the Senato, the Mexican Congress’s upper house.  Cordero, a longtime Calderón loyalist, has been more pessimistic about the Pacto than Madero or Santiago Creel, also a senator and formerly Fox’s interior minister.  Both Cordero and Creel contested the PAN’s 2012 presidential primary against Vázquez Mota, and all three politicians plus Madero could seek the presidency in 2018.

Continue reading Why the PAN’s victory in Baja California is good news for Mexican democracy

Three candidates and two visions for Pemex reform in Mexican presidential race

Although the outcome of Mexico’s tedious presidential race has long seemed inevitable, it has spawned a serious debate over how to revitalize the Mexican oil industry — and, in particular, Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company.

Pemex is the second-largest company in all of Latin America (recently displaced by Brazil’s oil company, Petrobras).  The topic featured in a debate earlier this week among all but one of the Mexican presidential candidates, and it has been at the forefront of policy discussions throughout the Mexican campaign.

Pemex has long been a thorny problem for Mexico, the world’s seventh-largest oil producer.  Pemex is the source of around one-third of the government’s revenue, but the taxes and royalties that it pays to the government (around 60% of its revenues) have left it crippled and saddled with billions in debt, to say nothing of the corruption that has plagued the company throughout its history.

What this means is that, even when oil revenue have been at record-high prices, Pemex has been unable to reinvest in new technologies or further exploration.  To make matters even worse, Mexico’s main oil field production has already peaked and Pemex’s production recently fell at a faster rate than at any time since the 1940s.  Without reform, Mexico could become a net energy importer within a decade. Continue reading Three candidates and two visions for Pemex reform in Mexican presidential race

Mexican race still Peña Nieto’s to lose


Despite decisively winning the presidential nomination of the PAN (Partido Acción Nacional) in February and emerging in the Mexican presidential race with a flash,  Josefina Vázquez Mota has spent the last week attempt to rejuvenate her campaign and unite the PAN in her cause, even as the latest polls show that Enrique Peña Nieto, the candidate of the PRI (Partido Revolucionario Institucional), remains the strong favorite to win the Mexican presidency on July 1.

The latest polls indicate Peña Nieto leads with 38% of the vote to just 25% for Vázquez Mota and 19% for Andrés Manuel López Obrador, the candidate of the PRD (Partido de la Revolución Democrática), who came within a fraction of a percentage of winning the presidency in 2006.

In the 12 days since the campaign formally started, Vázquez Mota has been plagued by missteps— the former education minister’s campaign was ridiculed when her team misspelled the Mexican state of Tlaxcala as ‘Tlazcala’ on Twitter, for example. 

She has tried to draw a line around her campaign this week, starting with a show of PAN unity.  Her rival for the PAN nomination, former finance minister Ernesto Cordero, appeared at a press conference with Vázquez Mota on Monday, and Luisa María Calderón, the sister of outgoing, term-limited president Felipe Calderón, has been put in charge of the get-out-the-vote effort in Calderón’s home state of Michoacán.  Cordero was viewed as Calderón’s favorite and the favorite of many of the PAN elite during the nomination race.

Nonetheless, even today, former president Vicente Fox opined that it would take a miracle for Vázquez Mota to defeat the PRI and win the presidency:

Lo racional me dice que ahora lo que tenemos que hacer es de esa opción (el PRI) que puede llegar a la Presidencia, obligarla a ser buena, obligarla a que deje de sere nostálgico de aquel pasado, de aquellos niveles de corrupción y autoritarismo que vivimos antes, que sea una nueva generación de priístas.

[Translated into English: My rationality tells me that, we have the real option of (the PRI) winning the president, it will be obligated to be good, obligated to stop being nostalgic for the past, those levels of corruption and authoritarianism through which we lived before, that it will be a new generation of PRIístas.]

In the meanwhile, Peña Nieto has been off to an energetic start, avoiding some of the gaffes he endured over the winter — indeed, he has been able to outflank the traditionally business-friendly PAN by suggesting more private-sector involvement in — and potentially a public stock listing for — Mexico’s state-owned oil monopoly, Pemex.  On the campaign trail, he has praised the reforms of the Brazilian government in the 1990s to open its similar oil monopoly, Petrobras, to private investment.  Mexico is the world’s seventh-largest oil exporter, producing upwards of 2.5 million barrels per day. Continue reading Mexican race still Peña Nieto’s to lose