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 News Around the Republic of Mexico | February 2006 
Calderon Would Share Power to Win Reform
 Lorraine Orlandi - Reuters
| | Mexico's ruling party presidential candidate Felipe Calderon gestures during a moment of silence for 65 miners trapped in a collapsed underground mine for more than five days after a gas explosion in San Juan de Sabinas, Friday Feb. 24, 2006, Calderon was traveling in the mining town of Parral in the northern state of Chihuahua, Mexico. (AP/Guillermo Arias) |
Mexico City Mexico's ruling party presidential candidate would form a Cabinet including opposition leaders to win fiscal and energy reforms that eluded President Vicente Fox, but he would drop Fox's controversial plan to tax food and medicine, a top aide said Friday.
In his economic platform, Felipe Calderon of the National Action Party offers much the same as Fox. In an oil-rich nation where half the population lives on less than $5 a day he calls for fundamental changes in taxation, labor law and energy production to generate investment and create more jobs.
It will be up to us to build on the consolidation of macroeconomic stability, which is one of the main achievements of this administration that is often overlooked and is at risk, said Calderon's economic advisor, Ernesto Cordero.
Inflation is under control, the peso is stable and periodic economic crisis seems to be a thing of the past in Mexico. That has made way for lower interest rates and a boom in credit fueling new housing for the poor, for example.
But Fox has failed to deliver on promises to create 1 million new jobs a year and achieve 7 percent economic growth over his six-year term.
His defenders blame Congress for blocking Fox's plans to open the energy sector to private investment and increase the tax base, among other measures seen as crucial to jump-starting the economy.
Calderon, a fiscal conservative like Fox who is running second in opinion polls for the July election, has said he would succeed where Fox failed by offering cabinet posts in a coalition government in exchange for votes in Congress to pass his key initiatives.
We think that is realistic, and besides there is no alternative, Cordero said in an interview.
NO FOOD AND MEDICINE TAX
Calderon worked as Fox's energy minister and shares his goal to open state oil monopoly Pemex to private investment, and make it more self-sufficient and fiscally accountable.
But unlike Fox, Calderon is not proposing to tax food and medicine, a plan that outraged opposition lawmakers who said it would hurt the poor most, and which helped sink Fox's fiscal reform package in Congress.
Instead, Calderon, wants to simplify the income-tax scheme and lower the income tax rate to widen the collection base, which he says would generate jobs and raise the tax take.
Cordero, a University of Pennsylvania-educated economist who worked under Calderon in Mexico's Energy Ministry, warned that stability remained fragile as Mexico embraces democracy.
The country's institutions are not solid enough to bear macroeconomic irresponsibility, he said. With mismanagement it could be over in a couple of years.
Fox's 2000 election ended 71 years of often authoritarian and corrupt rule by the PRI party, when the country was beset repeatedly by economic turmoil.
Wall Street and Mexico's business elite welcomed Fox's market-driven economic vision and are wary of leftist presidential front-runner Andres Manuel Lopez Obrador, whom they fear could turn out to be a heavy-spending populist. |
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