The Peña Nieto clean up

After capturing the brutal leader of Zetas drug cartel and outlining 4 trillion peso of infrastructure investment, Mexico’s Peña Nieto looks to be living up to his ambitious election agenda.

The London Economic

By Jack Peat

Delivering on election promises is a mammoth task when a comprehensive overhaul is on the agenda, but after less than eight months in leadership, Peña Nieto has managed to unveil a 4 trillion peso infrastructure investment fund in the same week as capturing the country’s most infamous drug lord, suggesting his ambitious plans may be coming into fruition.

Barack Obama is all too aware of the dangers of promising too much and delivering too little. Questioned by the Rolling Stone in the run up to the 2012 election how many promises he had kept in his first administration – a list that included Guantanamo Bay, the Iraq War and a Universal Health Care Bill – he said 70 per cent, and that was certainly a politicians estimate. After a towering defeat over John McCain in 2008, his campaign four years later against Mitt Romney was a much closer affair.

South of the border Mexico was also undergoing its own election battle as the country’s long-standing Institutional Revolutionary Party (PRI) battled with the Party of the Democratic Revolution and the National Action Party, winning by a slight margin under the leadership of Enrique Peña Nieto. Long seen as an economic powerhouse constrained by a tarnished past, Mexico had a lot of expectations in its new leader, who quickly set about making ties with the US and promoting the country’s growing economy rather than focusing on domestic difficulties which have come to dominate the international perception.

Promises

Mr Nieto is youthful and energetic, but certainly isn’t inexperienced. After joining PRI at 18, he rose to prominence by delivering on promises, once signing tasks before a notary as governor of the state of Mexico to convince voters he was serious about his commitment.

With 70,000 people estimated to have died in drug-related violence in Mexico over the past six years, Mr Nieto prioritised a ‘clean up’ of the streets, breaking from the US-backed campaign against drug cartels carried out under his predecessor, Felipe Calderón, and installing a national gendarmerie – or paramilitary police force, to eradicate widespread crime.

Chief among the president’s attack on drugs is the economy, stating from the outset that healthy levels of growth is a key weapon preventing organised crime. Without jobs and social programs, he said, “millions of my countrymen have no other option than to dedicate themselves sometimes to criminal activity,” which left international investment and organic domestic growth at the top of his agenda.

But despite possessing bags of economic potential (included in Jim O’Neill’s MIST acronym of developing nations), Mexico still lags behind many of its Latin American counterparts and has yet to find a catalyst for sustained economic growth. With Asian economies favoured in a global economy, Mr Nieto was tasked with making Mexico competitive again.

Breakthrough

After eight months in leadership Mexico has made several notable and positive strides towards becoming a developed, competitive nation. To add context, there are many ongoing grave and saddening problems, but for the first time in many years, there are more solid foundations behind ambitious promises.

– crime

Indications that Mexico’s long and bloody drug war may have reached a crossroads came to a fore this week as Miguel Ángel Treviño Morales, the feared Zeta crime boss, was arrested. There’s no illusion that the killing sprees will ease or that drug wars will cease to exist, but his arrest, the killing of the previous Zeta commander in October and the recent capture of several other lieutenants have rocked the trafficking organisations.

– infrastructure

A ‘transformational’ investment package has been unveiled by the president aimed at consolidating Mexico as a true emerging economic power. The 4 trillion peso (US$316 billion) plan is to be spent on transport-related projects, including three passenger rail lines and two urban commuter train lines. Plans for new cargo train projects have also been released, and four “international class” ports are to be built in order to improve international connectivity. The President said that if a planned tax reform due to be put to Congress in September is passed, investment could even be higher.

– economy

Manufacturing is the economic staple of Mexico and thanks to rising wages in China, the country is being allowed to re-establish its position as an attractive destination for inward investment from the US. Mr Nieto has had no small part to play in improving international relations.  Last year, for the first time in four decades, about the same number of Mexican migrants returned home as arrived in the US, bringing net migration to zero, according to the Pew Hispanic Center, underlining the strength of the Mexican economy.

– restructuring of party

Many though Mr Nieto’s accession into presidency would spell the return of the old-guard cronyism of the PRI, but he actually taken the opposite course, assembling a cabinet of young PRI technocrats and members of rival parties and mounting assaults against Mexico’s entrenched monopolies. This is symbolic of a similar cleaning out of internal party relations, highlighted by the embezzlement case brought against the all-powerful head of the country’s teachers union Elba Esther Gordillo.

Leave a Reply