Foreign Policy Blogs

Mexico: Rumbo a la elección

http://www.campeche.com.mx/noticias/nacional/pan-y-pri-marcan-ruta-del-2012/6942

Mexico’s presidential election, to be held July 1, looks like a foregone conclusion. President Felipe Calderón’s right-wing National Action Party (PAN) has fallen far out of favor due to Mexico’s terrible drug violence. In the past 5 years, the drug wars have killed over 45,000 people. The Northern border city of Ciudad Juarez had 300 murders in 2007; in 2010, the figure was 3,622, giving this place the highest murder rate in the world. As Mr. Calderón’s critics like to point out, Juarez’s murder rate is higher than anywhere in Iraq or Afghanistan. With the PAN’s national security policy in disarray, Enrique Peña Nieto of the rival Institutional Revolutionary Party (PRI) led a recent presidential poll by 25%. Seeing these numbers reminds me of last time around in 2005, when President Calderón and the PAN trailed but went on to win the election, and wondering if the upcoming result will be as everyone expects.[1][2]

Is it truly unthinkable that the PAN could win again? Polling evidence says it is indeed unthinkable. Mitofksy’s November 2011 poll of voter preferences gave 44.6% to Peña Nieto (EPN), 19.7% to the PAN’s Josefina Vázquez Mota (JVM), and 16.1% to Andres Manuel López Obrador of the left-wing Party of the Democratic Revolution (PRD). PAN optimists observe that at the same point before the 2006 election, Mr. Calderón was third place in the polls before coming back to win. The difference is that the PAN’s current deficit is much higher at 25%, versus the 5% deficit Mr. Calderón faced in November 2005. However, not all commentators agree that a PRI victory is inevitable. I will discuss three reasons the PAN has a shot: EPN’s recent campaign gaffes, Mexico’s growing economy, and the Vázquez Mota factor.

Enrique Peña Nieto, the PRI’s man in 2012, is photogenic, well-known, and liked. At age 45, he has already served 6 years as Governor of Mexico State, the country’s most populous. While his image is attractive, some are questioning his ability to relate to ordinary Mexicans. At the 2011 Guadalajara International Book Fair, EPN was asked to name three books that had influenced his life. He struggled with the answer in an awkward speech eerily similar to Sarah Palin’s inability to name her own preferred newspapers.[3] In another gaffe, EPN was unable to state the price of the tortilla, a staple food in Mexico. EPN explained that he was not “the lady of the house.”[4] While these are hardly political killers, it is unimaginable that the President of Mexico could not know the price of a tortilla. EPN’s party has also suffered from disgrace at the leadership level. On December 2, PRI President Humberto Moreira resigned due to a debt accounting scandal in Coahuila State, where Moreira had been Governor. The PRI led Mexico for 71 years until 2000, and its detractors call it a bastion of corruption. The Moreira scandal provides more ammunition.

Another concrete issue where the PAN can directly challenge the PRI is Mexico’s economic progress. Duncan Wood of the Center for Strategic and International Studies writes “it is undeniable that successive PANista governments have been successful in…preparing the way for long-term prosperity.”[5] According to data from the IMF and government sources, real GDP grew 5.4% in 2010 and about 3.8% in 2011, after falling 6.2% during the 2009 recession. On January 3, the Mexican Government sold $2 billion in 10-year bonds at lowest-ever coupon and yield rates. This means that the bonds pay lower interest rates than past issues, and that investors demanded a very small discount when buying them. There has also been progress on unemployment, which soared up to 6.41% in September 2009, but had declined to 4.97% in November 2011 (Source: INEGI). Inflation will be a challenge due to the recent depreciation of the peso, which declined in value from 11.5 per dollar in May to around 13.7 per dollar currently. However, analysts are confident that the Central Bank has both the reserves and the strategy to stabilize the peso. Mexico is also expected to run a negative trade balance of around $4 billion and a current account deficit of $7 billion for 2011. However, the current account deficit will be easily offset by foreign direct investment, projected at around $20 billion annually for the next couple of years. The PAN can use its record to show that it is best poised to help the economy take next steps. These include liberalizing the labor market, widening the tax base, and incentivizing private companies to invest in state-owned oil producer PEMEX. The latter reform is necessary because PEMEX’s refining capacity has lagged domestic demand, forcing the government to subsidize imported gasoline. This reform is also controversial, as PEMEX’s unionized workers are extremely opposed.

The third factor that should keep EPN up at night is the woman to whom The Economist attributes “a flash in the PAN.” Josefina Vázquez Mota, most recently PAN leader in the Chamber of Deputies, served as Education Minister under President Calderón (2006-2009) and Minister of Social Development under President Fox (2000-2005). She is now in the driver seat to become the PAN’s candidate for the highest office. The popularity of JVM’s party has waned – public opinion of the PAN was 27% favorable and 30% unfavorable in November according to Mitofsky. However, she has solid anti-establishment credentials. As Education Minister she argued with the head of Mexico’s powerful teachers’ union, Elba Esther Gordillo, a political ally of President Calderón. Calderón has also endorsed a competitor, former Finance Minister Ernesto Cordero, to be the PAN’s nominee.[6]

Separation from Calderón has not hurt JVM within the party where 52% of members prefer her to be the nominee as of November, up from 38% in August. She is also making strides with the public at large: in the 3 months from August to November, the percentage of the public that recognizes JVM increased from 56.4% to 67.4%. In the same period her share of preference in a head-to-head contest with EPN and López Obrador (AMLO) increased 3%. JVM’s campaign may have more potential to win supporters through advertising than her competitors, who are both known by over 90% of the public. The PAN’s official primary in February will give her a boost through media exposure. Her key issues, strengthening education quality and the justice system, will be used to accuse the PRI of failing to develop Mexican institutions during the PRI’s long period in power. JVM may be the breath of fresh air the PAN needs, and the PRI should be concerned: its polling lead over the PAN has declined from a gargantuan 42% in November 2010, to a less gargantuan 25% one year later.

 


[1] Rosenberg, Mica and Julian Cardona. “Federal Forces sully Mexico’s war on drugs.” Reuters. December 27, 2011.

[2] Consulta Mitofsky. “Así Van…México: Rumbo AL 2012.” November 2011.

[3] http://www.economist.com/blogs/prospero/2011/12/politicians-and-books

[4] http://www.economist.com/blogs/americasview/2011/12/mexican-politics

[5] Wood, Duncan. “Mexico 2012: Tracking Democracy in a Time of Uncertainty.” Center for Strategic and International Studies, May 2011.

[6] http://www.economist.com/node/21526362

 

Author

Hunt Kushner
Hunt Kushner

Hunt Kushner is a John C. Whitehead Fellow with the Foreign Policy Association. He currently works in Corporate Development with Ports America Group, the United States' leading port terminal company. Prior to this, he worked for 6 years at Deutsche Bank in the Corporate Finance and Mergers and Acquisitions for Latin America Group. In his 6 years at Deutsche Bank, Hunt worked on mergers and equity offerings for companies across Latin America in sectors such as energy, real estate, transportation, and banking. Hunt graduated from Yale University in 2006 with a BA in Political Science.

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