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Mexico’s Proposed Labor Reforms: The First Test for the New PRI

October 30, 2012

by Juan Manuel Henao

 

Mexico’s 62nd Congress had just been inaugurated on September 1 when legislators heard from President Felipe Calderón, who sent a labor bill to the Chamber of Deputies for consideration. Under a new fast-track authority, the executive branch can submit legislation to the lower chamber of the legislative branch, after which the lower and upper chambers have 60 days to debate and vote on the president’s initiative.

Calderón’s labor bill asked members of Congress to modernize Mexico’s 40-year-old labor code, which was enacted at a time when Mexico’s economy and politics were closed; when dependency on international markets and investment was low; and when the Partido Revolucionario Institucional (Institutional Revolutionary Party—PRI) used unions to marshal grassroots support and to line the pockets of elected leaders and union bosses.

The results are ghastly: Mexico’s current labor code makes hiring easy and firing difficult. Disgruntled employees who sue former employers collect damages plus lost salaries during drawn-out court cases that can reach five years in duration. Subcontracting is also difficult, as is holding the boundary between consulting and full-time employment—the latter of which brings in salary and benefits.

Mexico’s antique labor laws have forced many employers to hire less and rely more on informal employment arrangements. The system also discouraged creativity and encouraged the informal sector to grow. (According to the World Bank, 50 to 60 percent of Mexicans work in the informal sector.) The World Economic Forum has also taken note, saying that Mexico’s ability to compete worldwide is constrained by its inflexible labor market.

The informal sector costs Mexico 2 to 4 percentage points in gross domestic product (GDP) according to the nation’s Instituto Nacional de Estadística y Geografía (National Institute of Statistics and Geography—INEGI). It also deters tax collection: the Organization for Economic Development and Cooperation (OECD) places Mexico last on its members list for tax collection at 17 percent of GDP; OECD countries, on average, collect 34 percent of their GDP in taxes.

Put simply: the country’s market policies neglect globalization, innovation and competition.

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Tags: Enrique Peña Nieto, Felipe Calderon, Labor policy

Colombia, Guatemala and Mexico Ask UN to Revise Drug War Tactics

September 27, 2012

by AQ Online

In remarks to the UN General Assembly in New York on Wednesday, Mexican President Felipe Calderón, Guatemalan President Otto Pérez Molina and Colombian President Juan Manuel Santos called on the UN to begin a serious debate on alternative ways to combat drug trafficking.

“Today, I am proposing formally that [the UN]…carry out a far-reaching assessment of the progress and limits of the current prohibitionist approach to drugs,” said the Mexican president. Calderón and his counterparts in Guatemala and Colombia made their remarks before the 193 nations of the General Assembly, challenging on an international stage the oppositional stance that nations such as the U.S. have taken toward drug legalization.

"It is our duty to determine—on an objective scientific basis—if we are doing the best we can or if there are better options to combat this scourge," said Santos.

The OAS is already studying the idea of drug legalization in the Americas as a way to cut down on crime and cartel-related violence, and is expected to release a report with recommendations within a year. In Mexico, the government last reported in January that 47,000 Mexicans had been killed between December 2006 and September 2011, but it is now estimated that 60,000 people have died in Mexico’s drug violence since Calderón took office.

Calderón, who will step down as Mexico’s president in December when Enrique Peña Nieto is inaugurated, asked drug-consuming nations “to evaluate with all sincerity, and honesty, if they have the will to reduce the consumption of drugs in a substantive manner.”

In his address to the UN, Guatemalan President Otto Pérez Molina was expected to bring up drug legalization, as he has in the past, but he did not do so. Instead, he said that Guatemala was interested in convening nations that are “well disposed to reforming global policies on drugs” to consider “new creative and innovative alternatives.”

In an interview with the AP on Tuesday, Pérez Molina, a retired general who vowed to fight crime in Guatemala with an “iron fist,” said that he needed more military equipment to effectively fight drug trafficking. The U.S. cut off military aid to Guatemala after the country’s brutal civil war, but the U.S. has still spent $85 million fighting drug trafficking in the country since 1996. Under the Central American Regional Security Initiative, the U.S. has spent $496 million since 2008 supporting security forces in Central America.

Tags: drug legalization, Felipe Calderon, Otto Perez Molina

Enrique Peña Nieto: Now Mexico’s President-elect

September 4, 2012

by Juan Manuel Henao

It is now official: Enrique Peña Nieto of the Partido Revolucionario Institucional (Institutional Revolutionary Party—PRI) is president-elect of Mexico. The nation’s highest electoral court, the Tribunal Electoral del Poder Judicial de la Federación (Electoral Tribunal of the Federative Judicial Power—TEPJF) declared July’s presidential contest valid, after runner-up Andrés Manuel López Obrador (AMLO) questioned the credibility of the election.  Having reviewed and analyzed numerous pages of accusations of vote-buying, the court has decided Peña Nieto won, marking the PRI’s return to power after a 12-year hiatus.     

TEPJF Justice Pedro Peñagos surmised the tribunal’s decision best: “In a democracy, one vote makes the difference. If Enrique Peña Nieto received an advantage of millions of votes in relation to the candidate that reached second place, then it follows that [Peña Nieto] should be declared the winner.”  Peña Nieto received just over 19 million votes, versus 16 million for AMLO.

AMLO rejected the court’s decision: “The elections were not clean, free or genuine.”  Memories of 2006 now pester downtown residents in Mexico City—and with reason.  Over the weekend, the weakened #YoSoy132 youth movement, along with Mexico’s electricians’ union, marched towards the deputy’s chamber. More marches are expected, to including a demonstration at the iconic Zócalo next weekend.

Notwithstanding, the president-elect is already moving toward setting his legislative agenda. The PRI maintains a plurality in both the deputies and senate chambers, but will need to negotiate with President Felipe Calderón’s Partido Acción Nacional (National Action Party—PAN) and AMLO’s Partido de la Revolución Democrática (Party of the Democratic Revolution—PRD) to pass legislation. In the lower house, PRI, PAN and PRD were elected to 207, 114 and 100 seats, respectively; and in the upper house 52 (PRI), 38 (PAN) and 16 (PRD) seats. In both chambers, the PRI counts on old political dogs as party leaders; Deputy Manilo Fabio Beltrones is serving a third non-conescutive term, and previously served as governor of Sonora state. He was president of the senate until last week. Senator Emilio Gamboa has also served as senator, deputy, minister, and deputy minister under two PRI presidents. Both are party men who follow former U.S. President Lyndon B. Johnson’s famous tactics of squeezing, prodding and logrolling to get legislation passed.

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Tags: corruption, Felipe Calderon, Transparency, organized crime, Enrique Peña Nieto, Meixco

Post-Election Mexico

August 13, 2012

by Juan Manuel Henao

After last month’s mass elections, Mexico is buzzing.  Will second-place Andrés Manuel López Obrador (AMLO) of the Partido de la Revolución Democrática (Party of the Democratic Revolution—PRD) take to the streets should the nation’s highest electoral court, the Tribunal Electoral del Poder Judicial de la Federación (TEPJF), fail to invalidate July’s presidential vote as a result of alleged voter fraud? Will the victorious Partido Revolucionario Institucional (Institutional Revolutionary Party—PRI) return to its old ways? And what will ever happen to the outgoing Partido Acción Nacional (National Action Party—PAN)?

An angry President Felipe Calderón summoned a number of PAN party leaders to Los Pinos for a series of meetings the week after the election. Everyone, except the party’s presidential candidate Josefina Vázquez Mota, received a mouthful from the president—with the most severe reserved for private secretary Roberto Zuarth, who ran Vázquez Mota’s failed campaign, and state governor Marco Adame whose political operation failed to prevent the PRD from taking the executive’s seat in the state of Morelos. Calderón also suggested that party president Gustavo Madero resign to allow for a rebirth of the party. It was this last suggestion that caused an intense and divisive internal battle between Maderistas and Calderonistas for power over the PAN. The battle includes naming rights over the PAN’s leader slots in the deputies and senate chambers when the new congress forms on September 1, as well as overall agenda-setting and decision-making over who keeps a job at PAN headquarters. 

Calderón and Madero have never seen eye-to-eye. Madero considers the president worn-out, intrusive, a micro-manager, stubborn and the main reason the PAN lost the presidency. Calderón, on the other hand, blames Madero for the PAN’s loss and wants the party to continue pushing his social and anti-narco policies well after he leaves office. Both have taken to the road, meeting with state and local PAN leaders. Calderón asks for Madero’s head; and Madero asks members to respect party statute, which stipulates a vote for new party leadership no earlier than May 2013.  It remains unlikely the 300-member National Council will hold a vote before the legal date, but it is not entirely impossible. At the height of power, Calderón expelled party president Manuel Espino from party ranks for “excessive use of freedom of speech”—Espino weighed against Calderón during primaries in 2006 and heavily criticized the president in books and interviews—and replaced party presidents and executive leadership in three separate occasions.   

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Tags: Felipe Calderon, Partido Revolucionario Institucional, Partido Acción Nacional, Partido de la Revolución Democrática, Andrés Manuel López Obrador, Enrique Peña Nieto

The Path of #YoSoy132

June 27, 2012

by Arjan Shahani

#YoSoy132 has been called many things: “the voice of a new generation;” “the Mexican Spring;” and “young people manipulated by the PRD [Partido de la Revolución Democrática, or Party of the Democratic Revolution]” are just a few. Whatever its true nature, this youth movement has left a new mark on electoral processes in Mexico—one which could shape not only the outcome but the aftermath of the 2012 Mexican elections next Sunday.

It all began on May 11 when Enrique Peña Nieto, presidential candidate of the Partido Revolucionario Institucional (Institutional Revolutionary Party—PRI), belittled a group of student protesters that had gathered at the Universidad Iberoamericana to repudiate his presence there. Peña Nieto called them a small group of rabble-rousers, accused them of not being actual students and minimized their protest to opposition made up of only 131 people.

This led to the students uploading a YouTube video showing their university IDs and claiming that their cause was shared by many more young people. The video went viral and the story spiraled into Twitter via the hashtag #YoSoy132 (“I Am 132”). Without a cohesive agenda or clarity with regards to what “being 132” really meant, people sympathized with the students and began retweeting that they too were 132.

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Tags: Mexico, Felipe Calderon, Youth, Andrés Manuel López Obrador, Enrique Peña Nieto, Josefina Vázquez Mota

Mexico and the Trans-Pacific Partnership

June 18, 2012

by Eric Farnsworth

Today in Los Cabos, Mexico, at the G-20 summit, U.S. Trade Representative Ron Kirk welcomed Mexico into the Trans-Pacific Partnership (TPP), an agreement currently under negotiation by nine Pacific nations. Mexico is an obvious and logical country for participation, particularly given the NAFTA relationship with the United States and Canada, and expressed interest in joining last November at the Asia-Pacific Economic Cooperation (APEC) meeting in Hawaii. Canada also expressed interest in the TPP at the same time, and will presumably be welcomed in the short term once last minute kinks in the pre-negotiation process are worked out. 

Until today, Mexico and Canada were the two remaining APEC nations in the Western Hemisphere outside the TPP negotiations. Having them on board will strengthen the negotiations by bringing significant added economic heft, support increased hemispheric economic integration, and begin to build out a more strategic approach to hemispheric trade relations. In addition, there is no particular reason to believe at this point that the negotiations will be slowed appreciably by Mexico’s participation.   

Making the announcement on Mexico today was an important step, given President Felipe Calderón’s hosting of the G-20 as well as the imminent elections in Mexico on July 1.  At the same time, it is a signal to other prospective TPP participants that the process is open and welcoming to those nations willing and able to sign on to the high-standards, commercially-meaningful approach that has been set out by the original parties to the discussions. That is a critical incentive to encourage potential TPP nations to make the reforms that will position them to participate in the agreement. 

Of course, this is only relevant for nations that would be allowed into the agreement in the first place even if they take such steps. At this point, only current APEC member nations are eligible to join the TPP negotiations. This unnecessarily binds U.S. policy in the Western Hemisphere, because it means that countries like Colombia, which otherwise would appear to be excellent candidates, have little additional incentive to prepare themselves politically or economically to participate in the TPP. That in turn causes nations to seek other partners in order to achieve the same goals. Indeed, we are seeing exactly that phenomenon across Latin America. 

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Tags: Mexico, Felipe Calderon, G-20, Trans-Pacific Partnership, Asia-Pacific Economic Cooperation

Mexico’s Final Presidential Debate

June 11, 2012

by Juan Manuel Henao

The second and final debate between Mexico’s four presidential contenders last night acted in accordance with public polling. Enrique Peña Nieto of the Partido de la Revolución Institucional (PRI) succeeded in not jeopardizing his lead.  Andrés Manuel López Obrador (AMLO) of the Partido de la Revolución Democrática (PRD), now in second place, held back negative attacks to gain independents’ backing. Josefina Vázquez Mota of the Partido Acción Nacional (PAN), in third place, pounced on all three opponents in an effort to tie AMLO for second place.  And Gabriel Quadri of Partido Nueva Alianza (PANAL), polling in the single digits, continued to draw attention to the PAN, PRI and PRD and their failed policies.    

Among the electorate, Mexicans from all corners left nothing to chance on debate day.  An estimated 90,000 protesters from youth movement YoSoy132 tied up downtown Mexico City as well as Guadalajara where the debate took place. These university students protested against Peña Nieto and honored the fallen on the 41st anniversary of the Corpus Christi Massacre of 1971 when government-sponsored paramilitary soldiers killed more than 100 students in Mexico City during anti-government protests.  House arrest and formal charges against ex-President Luis Echeverría (1970-1976) for homicide and genocide would follow, but the Supreme Court eventually lifted the house arrest and exonerated Echeverría citing statute of limitations precedents.      

Enrique Peña Nieto arrived tanned and fresh, but became tongue-tied as he spoke of more efficient government with independent citizen candidacies for federal office, introducing referenda for all Mexicans and offering a leaner congress with fewer legislators. He also lamented Mexico’s violence and poor security, which caused a decline in Mexico’s international standing; he showed a graph placing Mexico only above El Salvador on citizen security issues and declared Mexico’s security situation impedes economic growth and allows competitors like Brazil a disproportionate amount of foreign investment. Peña Nieto led few attacks, but did place on display PAN’s and PRD’s false pretenses of ideological purity by reminding viewers that both parties forged electoral alliances in recent years to win state and local elections against the PRI.  The candidate constantly reminded voters his only mission as president will be to ensure “Mexicans win.” He promised better-paying jobs, economic growth, universal health coverage, free school utensils for all public education students, and to purge hunger from student rolls. 

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Tags: Mexico, Felipe Calderon, Andrés Manuel López Obrador, Enrique Peña Nieto, Josefina Vázquez Mota

Monday Memo: AQ’s Top Expected Stories for the Week of June 11

June 11, 2012

by AQ Online

Top stories this week are likely to include: the Mexican presidential election pushes forward after last night’s debate; Chávez to file presidential candidacy today; Fernández de Kirchner to visit UN on Thursday; new UNASUR Secretary-General takes over; Brazil responds to lowered GDP projections; and B-20 business summit in Los Cabos.

Mexican Presidential Election: After last night’s second and final debate between the top four contenders for the Mexican presidency, the final weeks of the campaign are likely to see continued discussion over the candidates’ positions on how to fight nacrotrafficking and insecurity. Each candidate sought to spell out how their approach would differ from President Felipe Calderón’s heavy reliance on the military. According to the New York Times, the candidates, “while vowing to continue to fight drug trafficking, say they intend to eventually withdraw the Mexican Army from the fight,” pledge “to devote more attention to programs that address the social inequality that leads young people to join criminal groups.” In polling, PRI candidate Enrique Peña Nieto continues to hold a steady lead while PRD challenger Andrés Manuel López Obrador (AMLO) has moved into second. On AMLO, AQ Editor-in-Chief Christopher Sabatini notes that “despite his recent rise in polls, credible surveys still put him a very distant second and well outside the margin of error.”

Chávez to File Today: Venezuelan President Hugo Chávez will register his presidential candidacy in person today for re-election to a third term in the October 7 contest. Henrique Capriles Radonski, opposition challenger, filed his candidacy yesterday after a 6.2-mile (10 kilometer) march through Caracas flocked with tens of thousands of supporters. Chávez’ debilitating health after nearly a year of cancer treatment raises a constant red-flag. Notes Sabatini, “Capriles Radonski’s march through the city was intended to be a demonstration of strength, a counterpoint to Chávez’ absence and the mystery of his health. But will it work? Many of the old wedge issues remain, irrespective of perceptions of Chávez’ health: What will happen in a post-Chávez scenario both in terms of political turmoil and the still-popular misiones?”

Brazil Reacts to Lower GDP Projections: Economic forecasters have lowered Brazil’s projected 2012 GDP growth from 2.72 percent to 2.53 percent, according to Reuters. The revised figures are due to problems in the manufacturing sector and the European debt crisis, according to a poll from Brazil’s central bank. “While Europe and a slowing in Chinese demand are adversely affecting Brazilian manufacturing, the long-term challenge is to reduce the ‘Brazil cost’ of excessive bureaucracy, inadequate infrastructure and other manufacturing hurdles that companies face,”  according to AQ Senior Editor Jason Marczak.

CFK at the UN on Thursday: Argentine President Cristina Fernández de Kirchner (CFK) will attend the UN Special Committee on Decolonization meeting, known as the Committee of 24, this Thursday. According to Argentine Cabinet Chief Juan Manuel Abal Medina, CFK “expects a strong definition in terms of advancing in the path of dialogue and reaching an agreement to recover our Malvinas Islands.”

New UNASUR Secretary-General: Today, the Union of South American Nations (UNASUR) secretariat shifts from Colombia to Venezuela. All chancellors of UNASUR countries are currently in Bogotá for a ministerial-level meeting at the Casa de Nariño, where María Emma Mejía, former Colombian foreign minister and current UNASUR secretary-general, will hand over the secretariat to Venezuelan businessman Alí Rodríguez Araque, who was formerly the Organization of Petroleum Exporting Countries (OPEC) secretary-general and president of Petróleos de Venezuela S.A. (PDVSA), Venezuela’s state-owned oil company.

B-20 Summit to Precede G-20: The B-20 business summit will convene on Sunday and Monday in Los Cabos, Mexico, as an antecedent to the G-20 next week. The B-20’s objective, according to its website, is to promote dialogue between governmental and business leaders, enrich the discussions of the G-20 and facilitate the G-20’s objectives such as economic growth and social development. A sample of working groups in this year’s B-20 will include food security, green growth, employment, anti-corruption, and trade and investment.

Tags: Mexico, Colombia, Venezuela, Argentina, Felipe Calderon, Hugo Chavez, Cristina Fernandez de Kirchner, UNASUR, Enrique Peña Nieto, Henrique Capriles Radonski

Vicente Fox's Fury

June 8, 2012

by Juan Manuel Henao

With 24 days remaining until election day, Mexico’s National Action Party (PAN) has been unable to manage its public relations faux pas with former President Vicente Fox (2000-2006). Over the weekend, Fox said the nation will need to unite behind the winner on July 1—referring to Enrique Peña Nieto of the Institutional Revolutionary Party (PRI) who maintains an 18-point lead over his three rivals.     

Days later, at a speech before the Monterey Chapter of the Harvard Club, Fox repeated his claim that Peña Nieto is above in the polls and likely to become Mexico’s next president.  While Fox maintains his allegiance and affection to the PAN, he said his comments are a reflection of his party’s inability to do its homework in the past six years.     

Fox’s comments angered both his party’s leadership and leftist presidential contender Andrés Manuel López Obrador (AMLO). The former said Fox´s comments are insulting and ungrateful to the party that helped him become president. The latter dismissed Fox as “riff-raff” and attributed his comments to a fear that AMLO is only four polling points from the PRI frontrunner. (The figure has been questioned by pollsters, experts and other seasoned campaign consultants since the statement was made earlier this week.)

This is not the first time the former president has spoken positively of the PRI, the PAN’s lifelong nemesis. In April, Fox told reporters the PAN’s nominee, Josefina Vazquez Mota, needs a “small miracle” to win the presidency. Outcry from panistas ended when Vázquez Mota and Fox met to discuss campaign strategy and later posed for pictures with the media.  

Vazquez Mota and Fox have a long history: she served as his social development minister for all six years of the Fox administration, a job she executed with high integrity and total devotion. Vázquez Mota worked 18-hour days to reverse the ministry’s traditional politico-electoral operation to support pockets needed to win local, state and national elections. She carried out a census to truly determine how many poor lived in Mexico and brought monitoring and evaluation metrics to the ministry.  The relationship, however, was not always friendly due in large part to the First Lady Marta Sahagún and her interference with Vázquez Mota’s decision-making; the first lady wanted the ministry to promote her political agenda as a preamble to her running for president in 2006.

PAN President Gustavo Madero says the party will have to consider sanctioning Fox. But such a move could further wound the party. Former PAN Party President Manuel Espino (2005-2007) was both sanctioned and expelled from the party in 2010 after criticizing President Felipe Calderón both publicly and through two published books. Three weeks ago, Espino, a lifelong panista from Durango, held a large gathering alongside Peña Nieto to announce his support for the PRI in next month’s elections. In Mexico, expelling one´s once loyal party leaders comes at a high cost.         

Should the PRI win the presidency in July, the PAN will have a leadership vacuum among its most senior ranks. If defeated, Vázquez Mota seems unlikely lead the party; Calderón’s appointees will have no moral or political fuel left to reconstruct the party; and the party’s current leadership will lack the clout necessary to carry out any significant changes.  

Thus, it may be up to individuals like President Fox and a handful of state governors to set new standards and lead the PAN. While Fox’s comments are unfortunate, the party may have to think long-term before making any rash decisions about one of its most respected leaders.

Juan Manuel Henao is a guest blogger to AQ Online. He is a consultant based in Mexico City and former Mexico Country Director for the International Republican Institute (IRI), a Washington DC-based not-for-profit democracy promotion organization.

Tags: Mexico, Felipe Calderon, Partido Acción Nacional, Andrés Manuel López Obrador, Vicente Fox, Enrique Peña Nieto, Josefina Vázquez Mota

Carlos Fuentes Dies at Age 83

May 16, 2012

by AQ Online

Renowned Mexican author and influential political commentator Carlos Fuentes died of unknown causes yesterday in Mexico City. Fuentes was the author of many literary works and had continued writing up to his death. His most notable novels include La región más transparente (Where the Air is Clear), La muerte de Artemio Cruz (The Death of Artemio Cruz), Terra Nostra, and Las buenas conciencias (The Good Conscience). Fuentes was often cited as a candidate for the Nobel Prize in Literature, but never won it.

Although controversial at times, Carlos Fuentes is considered one of three great contemporary Latin American writers, alongside Colombia’s Gabriel Garcia Marquez, and Peru’s Mario Vargas Llosa. Political leaders from all around the world have expressed their condolences, including the president of his home country. Mexican President Felipe Calderón noted on Twitter that he “deeply laments the death of the beloved and admired Carlos Fuentes, a writer and universal Mexican.”

Fuentes was an influential and important figure in Latin American politics. He discussed political issues like corruption, censorship, immigration, and was an outspoken supporter of Fidel Castro’s Cuba. The prominent writer also emphasized that “literature and education were essential” to try to eliminate corruption. He often stated the vital roles artists—like himself—played to advance societies and “to point out what needs to be heard.”

Tags: Mexico, Felipe Calderon, Arts and literature, Carlos Fuentes

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