On July 6, election officials confirmed Enrique Peña Nieto as the winner of Mexico’s presidential election. However, the announcement did not prevent his leftist opponent Andres Manuel Lopez Obrador from filing a formal complaint charging Nieto with manipulating media coverage of the campaign and exceeding campaign spending limits. Obrador’s challenge is unlikely to overturn the election results, but it represents yet another indication that the new president’s political honeymoon will likely be brief.
Mexican President-elect Enrique Peña Nieto has vowed to deliver “results” after the Institutional Revolutionary Party (PRI) was swept back into power on July 1 on a tide of voter frustration at weak economic growth and drug-related violence.
Peña Nieto, who will take power on December 1, has promised to improve security and boost economic growth to six percent a year, partly by opening state-owned oil giant Petroleos Mexicanos (Pemex) to private and foreign investment, liberalizing the country’s labor laws and expanding the tax base to increase government revenues.
The official count shows Peña Nieto won more than 38 percent of the votes, putting him well ahead of his two main rivals: Andres Manuel Lopez Obrador of the left-wing Democratic Revolution Party (PRD), who got more than 31 percent of the vote, and Josefina Vazquez Mota of sitting President Felipe Calderon’s center-right National Action Party (PAN), who received around 25 percent.
But the PRI, which ruled Mexico for 71 years until 2000, when it was unseated by the PAN, could struggle to get the reforms passed into law, with early results indicating the center-left party is likely to lose its majority in Congress.
Despite this challenging outlook, Credit Suisse analyst Alonso Cervera remains optimistic that Mexico’s incoming administration will deliver on this ambitious reform agenda.
“We are encouraged … by the strong discipline this party has shown in Congress over time,” he wrote in a recent research note.
Throughout the campaign Peña Nieto was the favorite, with voter surveys consistently giving the telegenic and charismatic candidate a comfortable, double-digit lead over his competitors.
But he was also dogged by several political scandals that only served to fuel suspicion that the PRI – the target of allegations of corruption and economic mismanagement during its more than seven decades in power – had not changed.
During his victory speech last week, Peña Nieto stressed that the current PRI was a “new generation” and would not “return to the past.”
It was a promise he made repeatedly on the campaign trail – and it seemed to do the trick.
Peña Nieto’s market-friendly agenda underscores his concerted effort to cut ties with the PRI of old. On the fiscal front, Pena Nieto has vowed to broaden the tax base by, among other things, simplifying tax collection and streamlining fiscal exemptions. It is an important reform: Mexico’s federal government depends on taxes from its oil production to finance much of its federal budget. Getting this reform in the books would require a simple majority in Congress, Credit Suisse’s Cervera points out.
Opening the country’s 3-million-barrels-per-day oil monopoly to foreign investment, however, might be more complicated, as it will require amending the Mexican constitution. The reform, as outlined by Peña Nieto, would allow foreign companies to invest with Pemex to jointly develop oil fields. Foreign companies would also be able to invest in the company’s downstream businesses, including its refining and petrochemical units. Peña Nieto has indicated that he is confident he can achieve what would be a historic reform ahead of his December inauguration.
Delivering on this ambitious agenda, though, partly rests on the PRI’s ability to maintain a working majority in Congress. If it doesn’t, then the PRI may be forced to do deals with its opponents, such as Lopez Obrador, who lost the 2006 election by a razor-thin margin and has voiced strong opposition to opening up Pemex to private investment.
PRI and the allied Green Party won a slight plurality with 232 deputies, down from the 262 they held in the previous legislature. The PRD and its allies, led by Lopez Obrador, secured 140 seats and the PAN 118.
Overall, analysts say, the election results reflect the country’s deep frustration with the increasingly gruesome killings and lack of job opportunities under the PAN. The electorate is convinced the PRI was more effective at implementing reforms and, more importantly, at keeping the violence in check.
“They want a party that knows how to manage things,” says Christopher Wilson, an associate at the Mexico Institute of the Woodrow Wilson International Center for Scholars.
Given the country’s frustration with the current state of affairs, Peña Nieto will be expected to start delivering on his campaign promises months before he even takes office.
Come September, when Mexico’s new Congress is inaugurated, the burden to implement these reforms will “fall on President Peña Nieto but also on his party,” says Cervera of Credit Suisse. “The challenge is clear: deliver, or face the music six years from now.”
Allison Jackson is a freelance journalist based in Guadalajara, Mexico. She has written for the GlobalPost in the United States, Agence France-Presse in China, The Australian, The Sydney Morning Herald and Thomson Financial.
Photo: Enrique Peña Nieto — Facebook