Mexico’s new president, Mr. Vicente Fox, has wasted no time in getting down to business. During the campaign, he promised sweeping change. The Mexican people believed him, voting him into office in a historic election. In his inaugural address last week, Mr. Fox stuck to his theme of renewal. But the new president has his work cut out for him. Mr. Fox has ended the Institutional Revolutionary Party’s 71-year hold on the presidency, but he does not command a majority in the legislature. Worse, he faces endemic corruption and inefficiency. Mr. Fox will need every bit of his legendary stamina and charisma to transform Mexico as he intends.
The new president’s agenda focuses on basic issues. His priorities include economic growth, poverty reduction, raising the level of schooling and reforming the police and the judiciary. None will be easy; doing them all will be Herculean. His first budget, released last week, highlighted the dilemmas. Mr. Fox has admitted that there will not be a lot of extra money to spend on social programs.
His chief concern is the economy. Mr. Fox, along with other business and political leaders, worries that the economy is growing too fast, which could trigger runaway inflation. The Mexican economy is expected to grow 7 percent this year, but the president wants to slow it to 4.5 percent in 2001. Moreover, Mexico continues to be vulnerable to external shocks. Its dependence on petroleum revenues exposes the country to volatility in the oil market, while a U.S. slowdown will take a big bite out of exports, a driver for Mexican growth.
To stabilize the economy, Mr. Fox submitted an austerity budget of $150 billion that is in tune with that of his predecessor, outgoing President Ernesto Zedillo. There are some changes when it comes to raising revenue. Mr. Fox proposed raising tax collection by 1.7 percent, with big business and wealthy exporters taking the biggest soaking. The idea is to balance the economy, balance the budget and lay the foundation for a return to 7 percent growth in three years.
Although his approach makes sense, it is unlikely to appeal to the millions of Mexicans, both poor and middle-class, who have not shared in the prosperity of recent years. Mr. Fox has promised to up social spending by 2 percent; his goal is to reduce the number of Mexicans in poverty by one-third. He is also still committed to creating 1 million new jobs a year.
Even more important, Mr. Fox has pledged to increase spending on education to 7.5 percent of GDP, up from the current 4.5 percent. If achieved, this will raise the average level of schooling from 7.7 years to 10 years. Few investments would help the country more.
Dealing with Mexico’s social problems also means tackling the Indian rebellion in the south. Zapatista rebels took up arms six years ago to demand rights for Mexico’s 10 million indigenous Indians. The initial uprising led to 200 deaths in the southern state of Chiapas, and the government began negotiations with the rebel leaders. The two sides signed the San Andres accords, but the government backed out, fearing that autonomy for Indians would undermine Mexico’s unity.
Mr. Fox harbors no such fears. Five days after he took office, he sent the Senate a bill that would enact the accords. This bill will grant Indians full access to political representation, legal protection, education and other resources. As a demonstration of good will, Mr. Fox has already withdrawn military forces from sensitive areas in Chiapas.
Good will will not be enough, however. Mr. Fox faces formidable obstacles, not the least of which is opposition in the legislature. PRI loyalists will do their best to frustrate reform, especially since they represent the vested interests that stand to lose in the new order.
Inexperience is another problem. Mr. Fox is a former governor and successful businessman, but running a country requires a political machine. To compensate, he has drawn on support from across the political spectrum to fill out his Cabinet. That may give him intellectual firepower, but it also means that coordinating views will be difficult. And even if he can lead, a recalcitrant bureaucracy will have to be overcome.
Fortunately, Mr. Fox enjoys broad public support, although that too could prove ephemeral. He benefited from a protest against decades of PRI rule and the corruption it created. The new president must satisfy those citizens or they will turn against him as well.
It is, in sum, a difficult assignment. But Mr. Fox had no illusions about the challenges ahead. He has made a promising start. The world wishes him well in the difficult months and years to come.
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