[NYTr] Significant Reforms Ahead for Mexico
 
Date: Sun, 16 Dec 2007 14:08:02 -0600 (CST)

Via NY Transfer News Collective  *  All the News that Doesn't Fit
 
sent by Milt Shapiro (mexnews)

Oxford Analytica - Dec 13, 2007
http://www.oxan.com

Significant Reforms Ahead for Mexico

Next year may bring political consolidation for the administration of 
President Felipe Calderon.

Contrary to expectations, the president has governed effectively and 
secured approval of important reforms on taxation and public 
expenditure, public sector pensions and electoral issues. The first 
was a particular triumph, as the previous Fox administration 
unsuccessfully attempted it twice.

The government has been able to work with a divided Congress, 
particularly the center-left Institutional Revolutionary Party (PRI), 
and probably will continue to do so.

German Martinez on Dec. 8 was elected president of the ruling 
National Action Party (PAN). The previous PAN leader, Manuel Espino, 
clashed continuously with Calderon. Martinez is a strong ally of the 
president--he resigned from the cabinet to run for the leadership, to 
which he was elected unopposed. A smooth relationship with the PAN 
should allow the president to focus on negotiating with the 
opposition, particularly the PRI.

PRD implosion. 

Divisions within the center-left Party of the  Democratic Revolution
will benefit the government.
De facto PRD leader, Andres Manuel Lopez Obrador, insists he was 
robbed of victory in the 2006 presidential election; his demand that 
PRD legislators vote against the government on electoral legislation, 
which the PRD itself was instrumental in drafting, is likely to be 
ignored. A new leader will be elected in March 2008, probably Jesus 
Ortega, rather than Lopez Obrador's candidate, Alejandro Encinas.

During 2008, divisions between those willing to work with the 
government (including all PRD governors outside Mexico City), and 
those that follow Lopez Obrador, will continue to widen, possibly 
causing the party to fragment. Calderon will do his best to isolate 
Lopez Obrador further.

The government probably will continue to combine political and legal 
reforms--for which securing strong support is relatively 
straightforward--with economic changes that require tough negotiation:

--By early 2008, approval of judicial reform is expected, which 
includes features such as oral trials.

--This should revive proposals former President Vicente Fox made to 
Congress, which legislators never considered.

Oil reform? 

Calderon's most controversial reform proposals in 2008 could seek
partially to open the oil sector. State oil monopoly, Pemex, needs
increased investment to exploit deposits in the Gulf of Mexico. Pemex
requires not only money, but also technology.

Pemex is a source of national pride; even partial privatization of 
the oil sector-- nationalized in 1938--is virtually unthinkable. The 
government probably would seek to retain control of Pemex, but allow 
it to negotiate contracts that share discoveries with other firms 
through partnerships--currently constitutionally forbidden. Even this 
would be challenging.

To read an extended version of this article, log on to Oxford 
Analytica's Web site.

Oxford Analytica is an independent strategic-consulting firm drawing 
on a network of more than 1,000 scholar experts at Oxford and other 
leading universities and research institutions around the world. For 
more information, please visit http://www.oxan.com. 

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