Mexico's economic reform effort may be echoing its soccer team's World Cup bid – paved with possibility at the outset, but now faltering.
Mexico’s path to the World Cup appeared paved with promise when soccer qualifying rounds began in February. The country won the Olympic tournament barely a year ago, while a generation of soccer stars were supposed to be entering the prime of their careers.
A similar storyline can be painted for Mexico's growth, which was supposed to surge after decades of subpar performances, create jobs and opportunity for an expanding population, and outpace other emerging economies. “This is Mexico’s moment,” President Enrique Peña Nieto said at his Dec. 1, 2013 inauguration, signaling the anticipated ascent of the country's economy.
Every presidential inauguration initiates an outpouring of optimism in Mexico for national renewal. But Mr. Peña Nieto's administration also brought about expectations, especially from international investors, that Mexico might overcome more than a decade of legislative gridlock and unleash long waited structural reforms in telecommunications, taxation, and the energy sector.
But both the soccer selection and Peña Nieto this week confronted scenarios few foresaw, and now a sense of pessimism pervades Mexico.
El Tri, as the national soccer team is known, faces an uphill battle to make it to Brazil for next year’s World Cup. The Tri lost 2-0 to the United States on Tuesday night in a crucial game. If it falls short in its next matches, it will be the country's first time missing a World Cup since 1990.
Soccer stardom has long strived to show a more successful side of Mexico, with players winning on the world stage. But it often suffered setbacks and unexpected exits in top tournaments.
Frustration in fútbol often reflected unhappy realities in Mexico, where monopolies thwarted competition, societal inequality stayed stubbornly high, and the economy sputtered. But since the late 1990s, Mexico has tamed inflation and gained credibility with its fiscal and monetary policies. The world recently took notice of Mexico, not for crime and violence, but for investors plowing money into its equity markets. Risk analysts and columnists penned glowing assessments of a country finally ready to reach its economic potential.
The president has compared the country’s potential to its soccer team. In one ad hammering home the message "yes we can," the government contrasted Mexico's Olympic soccer success to past World Cups that ended with losses on penalty kicks. “Our winning athletes show us every day that Mexico has an ability to compete with the best in the world and, above all, triumph,” Peña Nieto said at his Sept. 2 state of the union address.
But the recent soccer slump may be representative of broader shifts in Mexico. Unrest has swept the country, with teachers staging riots in the capital over recently approved education reforms and self-defense groups, or militias, taking up arms in long-marginalized states. The economy appears to be slowing once again, with 2013 growth forecasts recently cut from 3.1 percent to 1.8 percent by the finance ministry.
Peña Nieto has promised to move forward with his hefty reform agenda, despite protests. On Sunday he introduced a fiscal overhaul, which would raise tax revenues and reduce dependence on income from state oil company Pemex.
The agenda – which includes approved overhauls of education and telecommunications and proposals to fix the energy sector and tax system – are necessary for Mexico in order to achieve desired annual economic growth, Peña Nieto said.
Peña Nieto’s upbeat, sports-fan style has been met with skepticism and even sarcasm by some.
Gerardo Esquivel, professor at the Colegio de México, mocked the president's statements on Twitter:
‘We have to believe.’ ‘It’s time to take off,’ ‘No one will conquer the summit but us.’ Was this a state of the union (address), or group therapy?
Analysts say optimism can be a tough sell in Mexico.
“There’s a lot of change going on so that creates a sense of insecurity,” says Manuel Molano, adjunct director of the Mexican Institute for Competitiveness. “There are many groups that simply don’t benefit from change.”
Teachers are one such group, Mr. Molano says. Thousands of teachers have protested plans that propose an independent institute to evaluate their performance – arguing the test is a trick to fire them en masse and bring them back at lower pay. The recently approved reform would end practices such as teachers treating their jobs like personal property and selling or bequeathing them upon retirement.
Educators are being blamed for all the problems in the school system, while social circumstances and poverty aren’t being acknowledged, says Aldo Muñoz Armenta, political science professor at the Autonomous University of Mexico State.
Still, “the education system gives them certain rewards and incentives for protesting,” sometimes increasing their budgets, Mr. Muñoz says.
“They never dock their pay for protesting or being absent from their classroom. This obviously makes it so they have nothing to lose," he says.
On the same day Peña Nieto introduced his fiscal reform plan, two-time presidential candidate Andrés Manuel López Obrador organized protests against a proposed energy reform – which his supporters call privatization and even treason.
The plan calls for profit-sharing contracts with private companies, while keeping Pemex and the country's oil reserves in government hands. But problems with privatizations in the early 1990s have left lingering suspicions of such plans, says Ilán Semo, political historian at the Universidad Iberoamericana.
“The history of privatizations in Mexico is not good,” Mr. Semo says, pointing to Telmex, which helped make Carlos Slim one of the world’s richest men, as an example. “The sensation that people have is … ‘this is not a well-intentioned reform.’”
Fans appear to have similar skepticism toward El Tri, whose performance in recent years – U-17 World Cup wins in 2005 and 2011 and an Olympic gold medal – led to suggestions that the country had changed and that in the past 20 years, Mexicans, who grew up in the period after the North America Free Trade Agreement opened up the country, had shaken off old stereotypes, such as a reputation for not working well in teams.
Only 11 percent thought Mexico would qualify directly for the World Cup, while 39 percent posited that the Tri would arrive via the repechage, which pits the fourth-place team in the North and Central American and Caribbean qualifying group against New Zealand for one last spot.
The president, Semo says, has a similar "do-or-die" timeframe to achieve his reform agenda. "This moment [of multi-party cooperation] may not present itself again," he says.