Mexico's New President Is Off to a Troubling Start

Enrique Peña Nieto is already governing more like a machine politician than a true democrat.

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A protester throws a smoke screen canister back at the police during protests against Mexico's new president, Enrique Pena Nieto, in Mexico City on December 1, 2012. (Reuters)

Peace and prosperity in North America is best served not by giving Mexico's new president, Enrique Peña Nieto, the benefit of the doubt, but by ramping up independent oversight of his actions and proposals. Otherwise, Mexico could follow the path of Egypt, where formally democratic elections have already given way to authoritarian politics under the leadership of Mohamed Morsi. In order to avoid such a scenario, U.S. civil society and the media need to resist the hype driven by Peña Nieto, who was inaugurated on December 1, and his allies in the Washington policy community and pay attention to what is really happening south of the Rio Grande. The hope for Mexico's future does not lie in Peña Nieto, but in the increasingly self-confident and non-violent social movements that will be challenging him at every step.

There has been a push in recent weeks to help Mexico overcome its "image problem" by overlooking news about drug violence, which has taken at least 60,000 lives over the past six years. Mexico, we are told, has become a model of successful economic development in Latin America. It supposedly has a burgeoning middle class, a well-established division of powers, and a free press. Meanwhile, Peña Nieto is painted as a pragmatist who is interested in establishing a close relationship with the United States and wants to implement fiscal, labor, anti-corruption and energy reforms. Recent pieces by Andrew Selee from the Woodrow Wilson Institute, Peter Hakim from the Inter-American Dialogue, Shannon O'Neil of the Council on Foreign Relations and Jorge Casteñeda in Foreign Affairs capture this dominant position well, as well as Peña Nieto's own article in The Washington Post.

The Democracy Report

According to this view, Mexico is supposedly moving in the right direction and the U.S. government, the media and civil society on both sides of the border should be patient with and support the country's new leader.

Such an approach is both wrong and dangerous. Numbers show that the Mexican economy is in fact stuck in a highly problematic low-growth cycle. According to the Mexican National Institute of Statistics, growth averaged only 1.7 percent between 2000 and 2010, underperforming in comparison to the rest of Latin America. During the 2008-2009 global economic recession, Mexico lost more economic ground than any other country in its region, losing 9.4 percent of GDP over four quarters, according to the Center for Economic and Policy Research. Its recent rebound, growing at 5.5 percent in 2010 and almost 4 percent in 2011, only implies that the economy has managed to crawl itself out of the hole -- not that it has started to take off.

It is true that more Mexicans are using cellphones, computers, and credit cards as well as purchasing cars, homes and household appliances. But these external trappings of "middle class" life hide the fact that poverty has actually been on the rise, from 42.7 percent to 51.3 percent of the population since 2006. Prices for basic goods have skyrocketed and real wages have shrunk by 3.5 percent over the same period. With a Gini coefficient of 0.51, Mexico also ranks as one of the most unequal countries on earth. Ten families control 10 percent of GDP and Mexico is the home to the wealthiest man in the world, Carlos Slim.

This concentration of power at the top is holding back economic growth. The neoliberal economic strategy that has dominated Mexico since the economic crisis of 1982 has created a new, highly empowered upper crust that's connected to international capital markets but contributes little to the national economy. Both the OECD and the World Economic Forum have given Mexico failing grades with regard to monopoly control and economic competitiveness.

These new plutocrats will not cede power on their own. Only a countervailing force can kick the Mexican economy into action by redistributing social power and overturning the trickle-down theory of economic development. It is not enough to create a few new wealthy families to "compete" with the ones who are already in control, as Peña Nieto seems to be interested in doing. If Mexico hopes to escape from its low-level equilibrium trap it needs to break altogether with the neoliberal model of growth without equality.

Peña Nieto and his Institutional Revolutionary Party (PRI), which ruled the country uninterrupted for 71 years until 2000, cannot be expected to stand up to the robber barons -- it was Nieto's party that put them in power in the first place. The last three presidents from the PRI were responsible for establishing the tenets of the contemporary growth system. Despite lip service to the contrary, Peña Nieto´s objective is to continue on with their legacy instead of looking toward new solutions.

Peña Nieto´s first actions and decisions offer strong evidence. For his cabinet, he has preferred cronies over experts. The core is made up of five ex-governors from four of the most politically backward states in the country, states where the PRI has ruled for over 80 years without interruption. There are two ex-governors from the state of Hidalgo, one from the State of Mexico (Peña Nieto himself is a former governor of this state), one from Coahuila and one from Quintana Roo.

Presented by

John Mill Ackerman

John M. Ackerman, a professor at the National Autonomous University of Mexico and a visiting scholar at American University. He is the editor-in-chief of the Mexican Law Review and a columnist for La Jornada newspaper and Proceso magazine.

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