Enrique Peña Nieto will be the president of Mexico until the end of 2018. He won Mexico’s presidential election last night handily and will be bringing back PRI, Partido Revolucionario Institutional, to Los Pinos, where it has not been since 2000. In order to have a mutually beneficial relationship with Mexico, it is important that Americans know what Peña Nieto will bring to the table. Barack Obama, or Mitt Romney (should he become president,) should be mindful of that as well.
1. Neither PRI nor Peña Nieto is corrupt, but there is still some bad blood.
The election of Peña Nieto is notable because his party, PRI, was ousted in elections in 2000 after 71 years of corrupt rule. The party was known for doling out political favors and having a cozy relationship with organized crime. This legacy prevented some voters from voting for the PRI, once synonymous with corruption in Mexico.
However, times have changed. The backroom deals of PRI are history. For one, Peña Nieto, governor of the State of Mexico from 2005-2011, is a 45-year-old who, like his team that mostly consists of young technocrats, has acknowledged the history of the party and has pledged not to follow in its footsteps. Furthermore, the political landscape in Mexico has changed since the PRI’s hayday. Important democratic institutions such as the Mexico's supreme court, congress, central bank, and media outlets have become more autonomous over the years. It is unlikely that corruption will steal the day during the Peña Nieto years.
However, Peña Nieto does not have a perfect record. It is widely reported that Peña Nieto has close relations with a broadcast company, Televisa. In 2005, the marketing campaign for the gubernatorial campaign “was organized by Televisa's vice president for sales and marketing, Alejandro Quintero.” From 2005-2010, the Peña Nieto administration spent approximately $55 million, half of which went to Televisa. While this may appear troubling, it is not uncommon for Mexican politicians to have relationships with media outlets. It is also a far cry from previous PRI relationships with the media. Overall, Peña Nieto should be mostly trusted but, like every president, he should still be watched.
2. The war on drugs will stay mostly the same, but with a bit more domestic action.
Peña Nieto will certainly not emulate the PRI of the 20th century, which often cut deals with drug cartels. In fact, the Mexican war on drugs will remain mostly the same. The previous president, Felipe Calderón, was known for his hard-lined war on the drug cartels. The response from the cartels was violent, with 50,000 Mexicans dying during the Calderón administration. However, eight out of ten Mexicans still want the military to play a role in the crackdown on the cartels. Peña Nieto (and all of the presidential candidates he defeated, for that matter) agrees. He has pledged to support the current war on drugs. Indeed, the candidates’ interests in sustaining the status quo of how the drug war is fought and of drug policy is staunch and has disappointed some.
The only change to which the new president has committed is to shift law enforcement efforts away from drug trafficking (i.e. taking drugs to the United States) to reducing violence and crime in Mexico. Make no mistake, the United States and Mexico currently work closely on combating drug trafficking and this is not likely to fundamentally change. But because Mexico will not be fighting trafficking as much as they once were, the United States should be prepared to fill the gap. There are no codified agreements between Mexico and the United States that define their counter-narcotic cooperation. Therefore, when Peña Nieto brings in new staff in December with a new agenda, it will be very important for Barack Obama to reach out to the new staff and establish a working relationship. If Mitt Romney becomes president in January, both sides will be starting from scratch and should be ready to work together.
3. Peña Nieto will change the business climate in Mexico.
Mexico was hit hard by the 2008 recession but seems to be recovering. Mexico outpaced Brazil, the poster child of economic success in South America, in 2011 and looks poised to do the same in 2012. Initiatives such as its “Base Zero Regulation” project seek to open up the door to small businesses. For his part, Peña Nieto has already pledged to open up Mexico’s nationalized oil and gas business to private investment. American investors and politicians should look toward Peña Nieto's term as a time to invest in the burgeoning country. However, it is important that this is done quickly. China is Mexico’s second-biggest trading partner and will be eager to get their foot in the door, as well.
It will also be important for Peña Nieto to reform tax policy. Currently, oil and gas make up a third of Mexico’s revenue. Once that is privatized, Mexico will be in desperate need of cash. The obvious answer is to raise taxes. Mexican residents and businesses currently pay the lowest tax rates in the Western Hemisphere.
With the election of Enrique Peña Nieto, Mexico begins a new era that will not end until 2018. With a growing economy, growing population, and an enormous shared border with the United States, Mexico is a country we should continue to embrace and work with.