In praise of Mexico's moment
With stunning political consensus, Mexico has passed 11 major reforms in 20 months, indicating a new civility, openness, and service to others.
Scan the globe for a country that is the most active in improving its identity and reputation and one might easily pick Mexico. Since 2012, when the three major political parties joined hands in a stunning agreement on change, 11 major reforms are now on the books. The practical impact may take time. But at least the country has made these conceptual leaps:
1. Civility and maturity in politics: The “pact for Mexico,” forged after the election of Enrique Peña Nieto as president, began a cascade of cross-party compromises. The most difficult one came in August with a law curbing the clout of Pemex, the petroleum monopoly and the symbol of national pride for more than seven decades. In coming months, new oil and gas deposits will be open for bid to foreign and domestic private companies. This reform alone may boost economic growth by 2 percentage points a year.
The unexpected consensus-building also yielded an opportunity for more of the same. After 2018, parties will be able to more easily build coalitions to create parliamentary-style majorities in Congress. Despite a return to full democracy in 2000, Mexico has struggled to find a political center. No one party commands a majority. Yet a number of factors are driving Mexicans toward compromise and reform: drug-fueled violence, a decline in oil revenue, and more global economic competition.
For now, a new generation of leaders sees an advantage to curb the old-style in-fighting. The new civility will be tested with mid-term legislative elections in July. But as the reforms bring tangible results – such as better school teachers, cheaper electricity, and easier cellphone shopping – voters may demand even more moderation.
2. Better service to others: While income disparity is down and education levels are up, Mexican leaders realize that a corrupt, inefficient government, combined with monopolies or duopolies in industries from television to energy, have not delivered enough progress. Mexico is one of the world’s most open economies, with 44 free-trade agreements. Yet foreign investors still balk at many restrictions on free enterprise. And polls indicate continuing pessimism among Mexicans.
The reforms will loosen labor policies, increase loans to farmers and small businesses, and bring more airports, trains, and roads. Teachers will be judged on merit. More competition will be injected into major industries, such as telecommunications, lowering prices and creating better service.
One immediate benefit: The number of murders has fallen 29 percent since 2012, a result of better policing, a squeeze on drug gangs, and new laws that unify the criminal justice system. Improved rule of law may be the most critical need for Mexico, not only for its economy but also its democracy.
3. Openness and transparency: The public doubts about implementation of the reforms has required an equal effort to keep the process clean. The president plans to create “transparency institutes” at the state level. And a new autonomous anti-corruption commission is being set up with powers to keep the government honest and open, especially in the awarding of contracts for offshore oil drilling and shale gas development.
Is this “Mexico’s moment,” a chance to lead not only the rest of Latin America but perhaps other emerging markets toward substantial progress?
The country has tried big reforms in the past, only to falter. The big difference this time is its healthy electoral system, marked by this recent shared stake in results over power. With reforms more deeply rooted in public thinking, they might well stick.