Mexico's Disputed Election

Luis Rubio and Jeffrey Davidow

From Foreign Affairs, September/October 2006

Summary:  The July 2 Mexican election was about more than picking a president. It represented a choice between continuing the liberalization of recent years or returning to the past. Neither alternative, however, offers a solution to the country's problems. To address those, the next president must not only deepen reforms but also extend their benefits to the many Mexicans who have been left out of the process.

Luis Rubio is President of CIDAC (the Center of Research for Development), in Mexico City, and a co-author of "Mexico Under Fox". Jeffrey Davidow is President of the Insitute of the Americas and the author of "The U.S. and Mexico: The Bear and the Porcupine." He was U.S. ambassador to Mexico from 1998 to 2002.

Mexico's government must also find ways to lighten the weight of bureaucracy and red tape. Creating a new company in Mexico is difficult and expensive. Maintaining a legal entity and complying with tax and other requirements is so burdensome that millions of Mexicans set up informal, non-tax-paying businesses. Avoiding bureaucracy and tax collectors makes sense from the perspective of the individuals involved, but it does not do enough to create wealth, permanent well-paying jobs, and resources for legitimate government needs. Mexico must expand the modern sector of the economy by developing government competence and entrepreneurial competitiveness while addressing the inequitable social structure of Mexican society. Neither López Obrador's reformulated PRI-ism nor Calderón's Foxist campaign promises offer the kind of root-and-branch structural reform that is needed.

Once the new president is sworn in on December 1, he will have to begin immediately to promote both economic growth and greater social equity to provide today's poor with opportunities to move upward. The new president will have no time to spare. The world is moving too fast. Mexico no longer follows Canada as the United States' second-biggest trading partner. It has been bumped down the pecking order by China. Unless the next six years bring high and sustained economic growth, millions of new jobs, and accompanying programs designed to decrease social inequality, the country will fall further behind in the global race, and more of its people will become disaffected and disenchanted. The grievances and resentments that played such an important role in López Obrador's run for power were not created by him. And they will grow unless Mexico enters a period of profound institutional and economic change.

Such reforms are essential, but some are so immense and politically difficult that they have disheartened Mexico's political leaders and caused them to redirect their energies to softer targets. Mexican politics has been notably sterile and unimaginative in recent years, marked by small-minded games of intrigue and daily point-scoring over opponents. All of the three major parties need considerable internal overhauls. The PRD is a collection of tribes, and its moral leader and founder, Cuauhtémoc Cárdenas, is notably uncomfortable with López Obrador's brand of populism. The PRI, humiliated by its third-place showing, will likely enter a period of internecine warfare. And the PAN will surely recognize that its performance in the election was hampered by an internal division between its more modern, business-oriented wing and the old school of social conservatism.

Much political blood will be spilled in the coming months, but the very instability could provide some new opportunities. Both Calderón and López Obrador made reassuring sounds during the campaign about broadening the base of their governments to include former opponents. Whether they were serious remains to be tested, but in a divided Congress, there will be no chance for movement without political coalitions built on a consensual program of reform.

JOINED AT THE HIP

It is a given that Mexico's success or failure will have a significant impact on the United States. The two countries are linked by a constant flow of commerce, culture, and people. Mexico's complex attitude toward the United States defies easy description. It is often contradictory: at times Mexico seems to act like one large Melanesian cargo cult waiting for whatever might fall from the northern sky, and at other times its fears of a loss of sovereignty and its natural prickliness keep the the United States at an unnecessary distance. Mexico has tried to maintain the pride of distance while still enjoying the practical benefits of propinquity.

The relationship is particularly awkward now because of the high tensions in both countries over immigration. Misreading President George W. Bush's natural Texas goodwill and rudimentary understanding of the issue, President Fox decided to bet his administration's fortunes on a change in U.S. immigration policy. The two presidents met at Fox's ranch in February 2001 and agreed to reach an understanding on a new approach within a matter of months. Political operatives in the White House, however, soon put a stop to serious consideration of the proposals offered by the State Department. They argued that liberalizing the law was too dangerous politically so early in the president's first term. After September 11, this view was set in concrete.

Unfortunately, Fox and his first foreign minister, Jorge Castañeda, could not, or would not, read the writing on the border wall. They blundered by insisting on pushing for solutions that had become politically untenable in the United States and by actively scuttling possibilities for incremental change. Fox and Castañeda made the same mistake that successive U.S. administrations had earlier: they publicly reduced the complexity of the U.S.-Mexican relationship to just one issue; for Washington it had been drugs in the 1990s, and for Mexico City it became immigration. The Mexicans' absolutist position and misreading of the U.S. political scene gave the White House a way out of taking any action, allowed the immigration issue to fester, and turned what had been a fringe group of right-wing members of the U.S. Congress into the voice of the Republican Party, ultimately resulting in the grotesque House bill passed in 2006 that would declare illegal aliens felons (as if the United States needed 11 million more criminals to track down).

The poorly handled immigration issue also caused both governments to lose focus on the most critical goal: facilitating trade and investment to promote economic growth and greater competitiveness for North America as a whole. This is the true key issue in the U.S.-Mexican relationship. The immigration mess is a direct result of the lack of growth and opportunity in Mexico. The U.S. Congress may pass some legislation that will be touted by its supporters as the answer to the problem, but it will be as ineffective as previous efforts. As long as Mexico remains poor and the lure of opportunity across the border persists, workers will continue to head north. Neither walls nor new laws will stop the flow. But there are immediate steps that the United States could take to make the flow more orderly and humane and, not incidentally, give the new Mexican government an important public victory early in its tenure.

An early test of how willing Washington will be to help Mexico relates to the last stage of compliance with the NAFTA agricultural provisions, which would end the remaining Mexican limitations on the importation of corn, beans, and powdered milk. Previous Mexican governments did not concern themselves enough with preparing Mexico's poorest peasants to face competition. The new government should create an assistance program directed to that segment of Mexican agriculture, so that the producers can survive, while at the same time negotiating a schedule of compliance with its NAFTA partners. This is one area in which a comprehending U.S. attitude could help immeasurably.