In his first year of office Mexican President Enrique Peña Nieto has overseen a sluggish economy with an expected growth rate less than half (1.3 percent) of that registered in his predecessor Felipe Calderon’s debut year (3.1 percent).
His collaborators have been quick to blame this listlessness on issues outside of Mexico’s borders but the truth is that the president’s zealous reform package – legislation passed in the fields of banking, education, tax and telecommunications – has provided little or no visible stimulus to the country’s economy. (Neither have labor reforms passed at the tail end of the Calderon administration had any marked effect.)
{/access} In fairness, Peña Nieto always stressed that the major economic impact of the reforms would be felt in the long term and the short-term goal is to put down firm foundations for the future.While inflation has been kept to around three percent – similar to the yearly average of the previous two presidents – Peña Nieto scores poorly on other macro-economic indicators. Exports have increased by a measly 1.18 percent this year and official job creation stood around 480,000 up until October, meaning that one out of every three of the 1.5 million Mexicans entering the workforce this year will have to look to the informal or underground economy to earn a living.
Some economists and analysts say the real spur to the economy will come when changes are made to Mexico’s oil industry and the state-owned monopoly Pemex, an institution that has been bedeviled by inefficiency and corruption since its creation in 1938.
But selling Mexicans on the idea of opening up its oil industry to foreign investors is no easy task. As Congress prepared to discuss the energy sector reform package this week, a real threat of civil disobedience emerged as supporters of maverick left-wing former presidential candidate Andres Manuel Lopez Obrador took to the streets of the capital in large numbers. And Peña Nieto finds himself caught between two stools: those who see Mexico’s oil as sovereign and untouchable, and those who say the planned reforms don’t go far enough, that simply profit sharing with foreign investors won’t give the economy the boost it needs, and that the real incentive is to allow foreign ownership of the production process, if not the oil itself.