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Mexico’s New Election, How It Will Affect Business

Article Summary:

Mexico is set to go to elections in July and the first female major-party nominee for president is rising in the polls ahead of her competition. How will these competing political parties change Mexico’s political atmosphere and what is at stake for Mexico’s business community this election?

Original Article Text From The Dialogue:

What’s at Stake for Businesses in Mexico’s Presidential Election?

Q: Josefina Vázquez Mota, the candidate of Mexico’s ruling National Action Party, or PAN, and the first female major-party nominee for president in Mexico’s history, is rising in the polls ahead of the country’s July presidential election. Vázquez Mota had 32 percent support (eliminating undecided voters) in a poll released Feb. 20 by El Universal and polling firm Buendia & Laredo. The poll showed that Vázquez Mota is still trailing Enrique Peña Nieto of the Institutional Revolutionary Party, or PRI, by 16 percentage points. Will Vázquez Mota’s support continue rising until election day? How similar is Peña Nieto’s PRI from the party that lost Mexico’s presidency in 2000 after holding it for more than seven decades? What is at stake for Mexico’s business community in the election?

A: Nicolás Mariscal, member of the Advisor board and chairman of Grupo Marhnos in Mexico City: “From my observations, Josefina Vázquez Mota’s PAN is the same as President Calderón’s PAN and Enrique Peña Nieto’s PRI is not much different than the PRI that governed Mexico for 71 years. Peña Nieto has had considerable support, and his challenge is maintaining it through the election. Meantime, Vázquez Mota has increased her support, and I think that trend will continue until the vote on election day, which is expected to be close. In the short term, a win by either Vázquez Mota or Peña Nieto will be favorable for the business community, as both candidates have a favorable view toward the sector and its role in creating jobs and economic prosperity. However, in the long term, both for the business sector and for Mexicans in general, the boldest candidate and the one most capable of achieving reforms and structural changes in these four points will be the best for the country’s future:
1) Reforming the large shortcomings in the educational system and the corruption that has penetrated it through the National Educational Workers Union.
2) Combatting the inefficiencies of the state energy-sector monopolies, Pemex and CFE.
3) Consolidating fiscal reform and, most importantly.
4) Ensuring rule of law and fighting corruption. We are in the decade of the emerging economies, and Mexico must make great efforts to improve its competitiveness and not be left behind. Fundamental changes in these four areas cannot be delayed.”

A: Andrew Selee, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington: “The three candidates in the Mexican election are offering different paths for the country’s future. The PRI’s candidate, Enrique Peña Nieto, is focused on competence and is touting the party’s ability to get things done. So far, it has been an appealing message that is giving him a significant lead in the polls. Josefina Vázquez Mota, who was only recently elected as the PAN’s candidate, is making favorable gains in recent polls, but remains 15-16 points behind. She is arguing that Mexico needs to stay the course of change that Vicente Fox started in 2000 when he defeated the PRI, and she is positioning herself as the champion of Mexico’s modern future. Her path to victory requires reminding Mexicans of the PRI’s more than 70 years of rule and asking the public whether they want to return to it. Finally, the PRD’s Andrés Manuel López Obrador, on the left, is further behind in third place, but has seen his positive numbers increase in recent polls. He is emphasizing the need for more drastic changes in Mexico’s power structure than the PAN has been willing to make. Both Vázquez Mota and López Obrador are hoping that Peña Nieto makes careless mistakes during the campaign-he has already made a few-and that this gives them an opportunity to cut into his lead. In the end, the election is likely to be far closer than it is now, but it remains to be seen whether Vázquez Mota or López Obrador can make it a truly competitive race against the PRI.”

A: James R. Jones, member of the Advisor board and co-chair of Manatt Jones Global Strategies: “I wouldn’t put much stock in any polls at this stage of the elections. When the campaign officially begins at the end of March, the shape of the race will be much clearer. My personal judgment is that the winner will probably get less than 40 percent of the vote and the outcome could well be another cliffhanger, as happened six years ago. The PRI and its leadership are substantially different than they were a dozen years ago when the party lost its first election. However, its political machine in all parts of the country is intact and rejuvenated. Thus, the PRI’s campaign ground game is quite impressive. Its candidate, Enrique Peña Nieto, is an attractive campaigner. However, he has really never been tested in a gloves-off national campaign which I expect this to be. Josefina Vázquez Mota is a scrappy campaigner who will carry the fight to her two male opponents. She can separate herself in many ways from the unpopular record of President Calderón without losing the core PAN support and attracting independent voters. Unless something unforeseen happens, she will make this a very close race and has every potential of winning. Andrés Manuel Lopez Obrador is the biggest unknown. He needs to reinvent himself and establish an image that supports development of business while not forsaking his fight for the poor. He is doing that now. If he succeeds in emulating a Lula-type image, then he could make it a very competitive three-way race. Whoever triumphs, the winning party will again head a minority government. Thus, it will be imperative to be thinking about a coalition in the Congress that can agree to pass a limited but important legislative agenda of reforms to get Mexico on the road to achieving its real potential. Perhaps a multi-partisan cabinet coalition will also be considered. Otherwise, Mexico might well miss another opportunity to build on the impressive economic and political reforms that occurred in the 1990s.”

A: Rogelio Ramírez de la O, president of Ecanal in Mexico City: “If Josefina Vázquez Mota has surged as significantly as the polls show, the main implication is that Peña Nieto’s lead is fragile, for the campaign has not even officially started. Whether Josefina’s share continues to rise through the election is difficult to say without knowing first the cause of that rise. Despite having a new face in Peña Nieto, the PRI still has its old vices, and many Mexicans would regard the PRI’s return to power as a major regression. Josefina’s rise in the polls probably suggests that the public is very suspicious of the PRI. At a more profound level, however, the issue-which voters may not have seen-is that with both parties, PAN and PRI, Mexico has deteriorated in almost every aspect, save for macroeconomic stability. And even this stability has come at the cost of an almost inert economy as shown by the country’s poor growth record and lack of excitement on the part of major investors. No one can deny the possibility that Peña Nieto and Josefina may, as individuals, overcome their own parties’ limitations and vices. But their own records as part of PRI and PAN governments do not suggest they would. And this is the real issue stake for the business community.”

Link to Original Article:

From The Dialogue

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