As it Turns to 2015, How Can Mexico Put 2014 Behind?

2014 was an unfortunate year for Mexico, despite (initially) glowing praise from international media outlets and a relatively painless process of passing major economic reforms. Ultimately, dark reality triumphed over glittering narrative, and the PR-based presidency of Enrique Peña Nieto (EPN) buckled.

There was the anemic GDP growth and dramatic fall in FDI inflows, which contrasted sharply with the promises of reform-fueled development. There was the continued increase in drug trade-related violence, of which the Ayotzinapa case was a dramatic exclamation point. And there were the corruption scandals – up to and including EPN and his cabinet – that belied the PRI’s image as a ‘modern and reformed’ version of the party that presided over 71 years of authoritarian rule. And just in time to end the year, the Mexican peso dropped about 15 percent in value due to collapse in global oil and gas prices.

MXN 2014

Mexico’s Bad Mood

These events have taken a toll on EPN. His approval rating has dropped from 61 percent in 2012, to 50 percent in 2013, and to 39 percent as of the end of 2014.

presidencial01

More importantly, 67 percent of younger Mexicans (ages 18-29) and 82 percent of more-highly-educated Mexicans disapprove of EPN’s handling of the country.

Mexicans are particularly disappointed with EPN’s efforts to fight corruption in the country, with 65 percent indicating that he is doing a ‘bad’ job. Shockingly, 91 percent of ‘opinion leaders’ believe EPN is doing a bad job in fighting corruption, worse than any other issue (including violence, organized crime, etc).

Corrupción

Unsurprisingly, 78 percent of Mexicans believe that corruption in the country will increase (only 23 percent disagree). Moreover, levels of trust in Mexican institutions have fallen dramatically over the past year, with every institution losing ground (except for the Congress).

Cultura_politica

Moving On, But Where and How?

On January 4, EPN tweeted a message exhorting Mexicans to demonstrate their strength with ‘unity and courage’ by making 2015 a year of ‘achievements’, which attracted mockery and condemnation from Mexico netizens. And this response is understandable given EPN’s apparent lack of direction when it comes to tackling Mexico’s multiple crises in 2015, particularly corruption.

Indeed, as covered in detail here, the anticorruption reform was not passed and the Special Prosecutor for Anticorruption was not appointed by the end of the Congress’ 2014 session. Also, security experts have widely ridiculed EPN’s hastily prepared ‘police reform’, which he intended as a policy response to Ayotzinapa. The main weakness of these efforts is that Mexicans do not view the President or Federal Government as any less corrupt than the state, municipal, and local authorities, which disqualifies the former from remedying the latter’s conduct.

Immediate Steps

EPN should consider several immediate, and dramatic, steps if he hopes to regain the confidence necessary to be an effective executive during the remainder of his term:

  • Outside help – EPN should seek out international assistance – e.g., from multilateral bodies, third-party countries, private entities – in the investigation and remediation of the Ayotzinapa case specifically, and the problem of violence and disappearances generally. The public simply does not trust any branch of the Mexican government to handle this task. So, EPN needs to find an organization that is credible to the public, and rely on that credibility until faith in government is restored. More broadly, EPN could seek to establish one or a number of permanent commissions – similar to the Truth Commission in Guatemala – designed to investigate state-sanctioned violence and bring perpetrators to justice.
  • Clean house – EPN should determine whether any high-level members of his government have participated in or knowingly failed to prevent acts of corruption, whether it be collusion with organized crime, receiving inappropriate benefits, etc. These people either need to go or receive appropriate punishment. To the extent that EPN or his family members received any benefits in the past, they should be liquidated and the proceeds should go to a reputable charity.
  • Pass anticorruption reforms – EPN should push the anticorruption reforms through the Congress and ensure that their implementation is swift and clearly provides a mandate to any new monitoring/prosecuting bodies. If EPN faces political resistance in the Congress, in the interim he should push the Prosecutor General to pursue corruption crimes using existing resources.
  • Energy reform transparency – EPN must ensure that all public expenditures and auctions associated with the Energy Reform meet the highest standards of transparency. This means more than simply publishing the results of a tender, the participants, and a short justification for selecting the winner. Rather, EPN should impose requirements on information disclosure, record keeping, and interaction with bidding parties. In principle, anybody should be able to find a given tender and review the related planning, discussions, and decisions from start to finish – i.e., from need identification, to specification design, interactions with bidders, receiving/evaluating bids, and selecting a winner. Ideally, this enhanced level of transparency could eventually be adopted for all public tenders over a certain monetary threshold.
  • Reduce red tape – as the opinion surveys cited above show, Mexicans do not trust any part of the Mexican government, and what little trust they do have is rapidly declining. Although the public and media focus on high-profile cases like Ayotzinapa, much of this distrust likely stems from more banal and mundane interactions with low-level officials on regulatory matters. In other words, trust in government is damaged by low-level officials who solicit bribes in exchange for stamping a form or ignoring purported safety concerns. EPN should minimize ordinary Mexicans’ interactions with these officials to extent possible, e.g., by cutting the number of procedures required to obtain routine permits/licenses, reducing the regulatory bases for police interventions in traffic, and so on. Only the most competent officials should keep their positions, but at an increased salary sufficient to reduce the incentive to seek bribes. Although many of these regulations and officials are at the state/municipal level, EPN could still focus on federal civil servants and develop incentives to encourage local authorities to follow his lead.
This entry was posted in corruption, crime, economic development, economy, energy, fdi, Iguala, normalistas, oil and gas, organized crime, Pact for Mexico, procurement, reform, rule of law, tender, transparency. Bookmark the permalink.

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