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 News Around the Republic of Mexico | February 2006 
Fox in Warning on Congress
 Adam Thomson - FT.com
President Vicente Fox of Mexico says the country’s next leader could face the same congressional deadlock that has plagued his administration, blocking structural reform considered vital to higher growth.
The warning was made as Mexico gears up for what promises to be the most tightly contested election in its history. For the fist time since independence in 1821, any one of three candidates appears to have the chance of winning office on July 2.
But Mr Fox, who has just entered his final year in power, told the FT that whoever emerged as the winner would face an uphill battle with Congress.
“The polls and statistics show that the next president of the republic will have 36 per cent of the vote. My government had 42.5 per cent of the vote and we are a minority government, so the grade of difficulty in reaching accords and consensuses [in Congress] is going to remain,” he said in a recent interview.
That does not bode well for Mexico’s growth prospects. Most economists believe that the country must implement reform of its labour laws, fiscal framework and energy sector if it is to break free from its recent record of sluggish growth.
Excluding revenue from Pemex, the state oil monopoly, government receipts total just 11 per cent of gross domestic product, the lowest in the region apart from Haiti. Pemex, meanwhile, is starved of sufficient funds to invest in much-needed oil exploration, and Mexico’s constitution prohibits the monopoly from entering into joint-association contracts with private companies.
Mr Fox, who is from the centre-right National Action party (PAN), came to power in 2000 on a wave of optimism after more than seven decades of one-party rule under the Institutional Revolutionary party (PRI). But his ambitious reform agenda designed to tackle those structural barriers to growth found bitter resistance in Congress. Mr Fox, a former Coca-Cola executive with little political experience until 2000, has proved unable to break the deadlock.
“I am sure that if Congress had approved the structural reforms that I presented from the first day of my government, we would be growing at rates above 5 per cent. Mexico can grow at those rates but we need the reforms.”
Without them, however, Mexico has grown at an average 2 per cent a year in the five years since Mr Fox took office, a rate that Mr Fox describes as “insufficient”.
He said: “I hope the next president has the political skills to achieve consensus and that the next federal Congress takes up its task with more maturity and a greater interest for the nation than for its members’ own political party or personal interests.” |
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