E-Notes

Mexico’s Vicente Fox at Midstream

by George W. Grayson

October 27, 2003

George W. Grayson, an associate scholar at the FPRI, teaches at the College of William & Mary. He has just written “Mexico’s Political Outlook 2003–2006,” published by the Center for Strategic and International Studies, Washington, D.C.

December 1 will mark Vicente Fox’s completion of three years as Mexico’s chief executive, the midpoint of his six-year term. He captured the presidency as the candidate of the “Alliance for Change,” which embraced his own center-right National Action Party (PAN) and the greens. He received worldwide attention for defeating the candidate of the Institutional Revolutionary Party (PRI), which had ruled the country in Tammany Hall fashion since 1929. During the election campaign, Fox— called the “Marlboro Man” because of his 6′5″ height and craggy good looks — excoriated the PRI for the corruption, nepotism, inefficiency, unemployment, and poverty that plagued this nation of 101 million people. In contrast to the PRI’s “abject failure” at governing, he pledged to attract investment, modernize the creaky energy sector, spur 7 percent economic growth, and create jobs for the more than 1 million newcomers who enter the labor force each year. Based on the “democratic bonus” springing from his triumph over the PRI, he also announced a “new relationship” with the United States — one grounded not on Mexican subservience but on the equality of neighboring democracies.

To accomplish his ambitious change-focused agenda, Fox brought in key advisers who had helped him run Guanajuato state, where he served as governor before winning the presidency. A former president of Coca-Cola for Mexico and Central America, he also recruited members of the business community for his cabinet who evinced “a discipline and accountability not usually found in political circles.” He vowed to end the PRI’s “old-boy network” and bring “technical and scientific methods” to the top tier of his administration.

What is Fox’s midterm record? Have he and his cabinet reformed Mexico’s political system? How has the economy fared? Has he ushered in a new era in Mexican-U.S. relations?

Political Achievements

Although Fox was a terrific vote-getter, until recently he disdained politics and politicians, possibly because of the sticky-fingered PRI apparatchiks whom he had encountered when in the private sector. Accordingly, he has relied on TV spots and free media to preserve his personal popularity. At the same time, he has resisted the heavy-lifting of politics — the schmoozing, back-scratching, and log-rolling needed to hammer out alliances required to transform campaign promises into concrete legislation.

He naively thought that his having won a democratic election combined with high approval ratings would compel opposition legislators, who commanded majorities in both the 500-member Chamber of Deputies and the 128-seat Senate, to back his initiatives. But PRI leaders regarded the presidency as their virtual birthright, and they joined with members of the nationalist-leftist Democratic Revolutionary Party (PRD) to thwart proposed fiscal, energy, and labor reforms.

Fox even managed to alienate many PAN lawmakers when, in 2001, he urged Congress to offer a forum for Zapatista guerrillas to voice the grievances of the nation’s indigenous population. While sympathetic to the downtrodden, many of his colleagues noted that the media-savvy rebels from Chiapas state had never won an election.

One observer condemned the president for conveying the message: “If you want to present demands to the government, arm a few hundred men, fit them out with ski masks, declare war against the state, and stage a highly televised march on Mexico City.” A largely cosmetic measure on Indian and human rights did pass. However, Fox’s only notable legislative accomplishments came in forging budget agreements and requiring greater transparency in government activities, including the contracting of goods and services.

His highly vaunted team won accolades for honesty, but they demonstrated a woeful lack of political skills and frequently freelanced instead of working together. This tendency that prompted pundits to nickname them the “Montessori cabinet.”

Economic Problems and Electoral Consequences

Fox’s economic achievements have also been meager. Thanks to the astuteness and resolve of Finance Secretary Francisco Gil Diaz and central bank chief Guillermo Ortiz, the inflation rate has fallen to 3 percent, foreign investment approached $14 billion last year, and hard-currency reserves have surpassed $48.5 billion. Nevertheless, a medley of factors — the U.S. and global economic slowdown, the dearth of credit for medium-sized and small businesses, and the jumble of innovation-stifling regulations in many sectors- have produced stagnation. The economy shrank during the 2001 recession, grew just 0.9 percent in 2002, and may expand only 1 or 2 percent this year. As a result, Fox has generated less than half the number of jobs anticipated, and many of these are in the underground economy.

In the July 6, 2003, midterm congressional contests, citizens registered their discontent with the legislative and economic paralysis in particular and the Mexican elite in general. More than 58 percent of eligible voters declined to participate, while 957,410 (3.74%) of those who turned out spoiled their ballots. Predictably, the people directed their ire at Fox’s party. The PAN saw its bloc of deputies plummet from 206 to 151, as the PRI increased its ranks from 208 to 222 — with the PRD enlarging its numbers from 55 to 95. (No senators were up for election this year.)

In view of this setback, the once-swaggering Marlboro Man admitted failures during his September 1, 2003, state-of- the-nation address. Although highlighting his moves to combat corruption, expand social programs, and promote transparency, he said that the public viewed the changes as “valuable but incomplete.” “There is a call from society for a change that is deeper and more dynamic,” he added.

Fox extended the olive branch to the PRI, calling for conciliation rather than confrontation. But no sooner had the president advocated rapprochement than a top PAN legislator proposed ousting a PRI senator because the union to which he belonged had funneled public funds into the coffers of Fox’s 2000 opponent. With PRI legislators emphasizing that this precipitous action would chill cooperation, the shadowy senator was allowed to retain his legislative immunity. Nonetheless, the episode raised questions about Fox’s ability to work with Congress and emboldened change-averse PRI stalwarts.

PRI president Roberto Madrazo, who hopes to succeed Fox, and Elba Esther Gordillo, who leads the PRI deputies, favor reforms, but even if bills make it through the lower house, PRI “dinosaurs” in the Senate have vowed to kill them. Despite these bitter-enders’ fierce huffing and puffing, most analysts believe that the PRI will help enact legislation to facilitate private electricity generation. Three reasons buttress this assessment: (1) most PRI leaders want to change their party’s image as self-serving obstructionists to that of constructive policy makers; (2) they hope to recapture the presidency in 2006 and would like to resolve controversial energy issues well before then; and (3) failure to act would give credence to “do-nothings” charge leveled at the PRI and the PAN by Mexico City’s popular mayor and presidential aspirant Andrés Manuel López Obrador.

If Fox is to advance his agenda, he must do so this year, before electoral considerations trump responsible decisionmaking. In 2004, ten governorships will be up for grabs, and politicking for the presidential nominations has already begun within the PAN, PRI, and PRD. Many Mexico-watchers claim that Fox has already made his lone mark: ousting the PRI from the nation’s top spot.

It remains to be seen whether his ineptness will allow the PRI to return to power or whether the PRD’s savvy Lopez Obrador will take advantage of any PAN-PRI stalemate to gain Los Pinos with populist appeals. If the election were held today, public opinion polls find that the messianic, indefatigable López Obrador would win. Not only has he has funned resources to senior citizens, the disabled, poor children, single women heads of households, and small businesses, he has begun to rehabilitate the capital’s crumbling historic zone, commencing public works projects, and cultivated a reputation for honesty.

U.S.-Mexican Relations

Even before his inauguration, Fox visited then-Texas governor and presidential candidate George W. Bush, and the two men delighted in calling themselves the dos amigos. Later, the White House seemed prepared to throw its weight behind some of Fox’s sweeping immigration proposals: legalizing the 4 million Mexicans who reside unlawfully in this country, issuing more visas to Mexicans, and launching a robust guest-worker scheme. In return, Mexico City began to cooperate actively with U.S. authorities to combat smuggling, narcotrafficking, and the movement of Central Americans through Mexico to California and Texas.

The bilateral love affair began to sour after 9/11, when Fox vacillated on backing Bush’s antiterrorism measures. Things went from bad to worse when Fox, whose country assumed a nonpermanent seat on the UN Security Council in 2002, denounced the U.S. hard line on Iraq. After the March 2003 UN vote, Bush showed his ire Fox by pointedly waiting four days to return a telephone call from his Mexican counterpart In a move to mend fences, Mexico backed a mid-October Security Council resolution to authorize a U.S.-led multinational force to oversee the establishment of a new, internationally recognized Iraqi government.

As the 2004 American election draws nearer, the Bush team is also prepared to let bygones be bygones. Bush’s political gurus Karl Rove and Ken Mehlman observe Mexico through the prism of domestic American politics. Boosting the GOP’s stock in the Latino community is part of their strategy to reelect the president. Rove and Mehlman believe that improved Bush-Fox relations will transmit a powerful signal; specifically, that the Republican Party cares about Hispanic-Americans, now the U.S.’s largest minority. Fox will visit Texas, Arizona, and New Mexico in early November, while Bush will meet with the Marlboro Man when attending the Summit of the Americas in Monterrey January 11 to 13.

Conclusions

Fox’s maladroit leadership has cost his PAN so many congressional seats that he must rely on the PRI, which he once reviled, to accomplish even modest legislative breakthroughs. In foreign affairs, the Marlboro Man crossed swords with Washington over Iraq, thus straining a once cozy relationship with his erstwhile amigo in the White House. Unless Mexico’s chief executive records one or more conspicuous achievements in the next three years, his own party will pay the political price. In this event, the Marlboro Man will face two options in 2006: passing the presidential sash to either a PRI stalwart or to a populist rabble-rouser and U.S.-basher like Lopez Obrador.

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E-Notes

Mexico’s Vicente Fox at Midstream

Political Achievements

Economic Problems and Electoral Consequences

U.S.-Mexican Relations

Conclusions

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