Analysis Agenda. July 1, 2013

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Within days of holding local elections in slightly less than half of Mexican states (in addition to the 14 originally envisioned, the extraordinary Sonora elections are also in this political outlook), national attention – when available – is focused on whether PAN will be able to keep the governorship of Baja California and on the attacks, threats and murders that have tarnished some of the political processes throughout the country. The potential outcome of the auditing of 2012 federal campaigns, marked by doubt, scandals and, let’s say it, simulation. What is true is that these facts exhibit the enormous faults of Mexican democracy, where local politics still have obscene impunity strongholds in the face of abusive exercise of power and federal administration cannot “tie the loose ends” in order to, at least, regulate the country’s “party-docractic” regime.

1-Violence in local electoral campaigns: an illness yet to be cured. In the current electoral campaigns of 15 states, there have been several events that have involved serious crimes: the most recent are the murder of a PRI campaign coordinator’s son in Sinaloa, the assassination attempt against a PRI candidate to the Oaxaca Congress or the attempted abduction of the State of Mexico PAN Deputy, Ulises Ramírez’s, daughter. Even in times where violent facts have occurred, ranging from threats to electoral brigades, theft or clandestine destruction of campaign materials to attacks and murders against candidates, their staff or families, the scandal is usually enclosed in the underworlds of local media. Even when this news reaches the national press they generate some sort of scandal, the truth is that these state elections have never ceased to be a clear scenario for the “rough Mexico”. Why do these conditions prevail? Is there any solution?

2-Debt of states and municipalities: how large is the bomb? According to data from the Secretariat of Finance, on the first quarter of 2013, direct debt of Mexican states amounted to 347.8 billion pesos, while municipalities’ debt was 44.3 billion pesos. Regardless of impunity and/or lack of transparency shown by government and tax authorities, there is a need to dimension the true magnitude of this problem in economic and political terms. The Chamber of Deputies’ Commission of Constitutional Matters has been discussing an opinion on several reforms, presented on April 30th, whose objective would be to establish clearer rules and limitations for the indebtedness of states and municipalities. How “sick” are public finances at state and municipal levels? Will legislative controls be able to heal them?

3-Electoral sanctions: the cynicism of “it’s worth paying the price”. This week will mark the beginning of the discussion of the results of the final report of IFE’s (Federal Electoral Institute) Unit of Auditing, which highlights several anomalies that would account political parties with fines for over 394 million pesos. Even though the Presidential campaign of Enrique Peña could apparently avoid the accusations for allegedly exceeding the expenditure ceiling, PRI could face a fine for up to 151 million pesos due to the expenses made by several of its Congress candidates. 12 years ago, the PAN Presidential victory faced a similar situation with the “Amigos de Fox” issue and the 400 million pesos fines it had to pay for several irregularities. What’s the point of accountability when sanctions do not deter any sort of illegal conduct?

4-Mexico and innovation: some progress but still further behind in the international stage. On July 1st, the World Intellectual Property Organization (WIPO) presented its 2013 Global Innovation Index. In the aforementioned report, Mexico is ranked 63rd, which is 16 places higher than its position on 2012. Regarding our commercial partners in North America, the country is still far behind Canada (ranked 11th) or the U.S. (ranked 5th); compared to the rest of the Americas, we are still overtaken by Colombia, though close to the seemingly decadent giant, Brazil. Even though the Calderón administration set the National Innovation Program, several organizations condemned its results on a report presented in September 2012 entitled “Towards a National Agenda in Science, Technology and Innovation”. Now, what could have changed in the last few months in order for Mexico to give such a “quantic leap” on the WIPO Index? How good is innovation in the country?

5. The emerging market of natural gas: where does Mexico stand? On July 1st and 2nd, Moscow will host the second summit of the Gas Exporting Countries Forum (GECF). It could be said that the aforementioned organization is a contemporary version of OPEC dealing with natural gas. Countries such as Bolivia, Venezuela, Egypt, Iran, United Arab Emirates and Russia will look forward to protecting their interests on a market that will be affected by the increase of hydrocarbon production in the U.S. and, eventually, all of the North American region (Mexico as well). Even though the International Energy Agency has estimated that Mexico will be fourth among the nations with higher potential reserves, the truth is that natural gas doesn’t look like a priority in the national energy debate. What will be the advantages and disadvantage of strongly boosting this industry in the country? How much is it worth coming up from behind on this issue?

Antonio De la Cuesta

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