Myths and Those Responsible

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The myth that some reforms would give us direct access to Nirvana returns. Three decades of diverse reforms are witness to the indispensability of reforms, but they’re not everything: without clarity of course and effective leadership, they will always come up short. The true challenge consists of knowing what to reform and why and to add to this vision the backing of the entire population. Without this Mexicans will continue discussing “reforms” for the next three decades.
The problem about myths is that, as Carlos Monsiváis affirmed, “the reality of the myth is the irreality of the country”. Enormous edifices are built on the promise of a miraculous solution, which is then expected to change the reality in a New York minute. The problem with this conception is that a reform, in order for it to be effective, must satisfy at least three conditions: first, it should arise from an accurate diagnosis of the nature of the problem that it intends to solve; second, it should be coherent and consistent with other governmental actions undertaken in parallel fashion; and three, it should affect the interests that benefit from the status quo that the reform proposes to modify. If these three requisites are not satisfied, the reform will not accomplish its purpose.
Unfortunately, very few of these reforms (including privatizations) undertaken in the country from the eighties on have met these requirements. Worse yet, the notion has been espoused that all of Mexico’s problems are thoroughly diagnosed and that the only thing lacking is for Congress to act on to get out from the hole where we currently find ourselves. As illustrated by the polemic surrounding the labor reform that President Calderón recently sent to the Legislature, there is no consensus on the causes of the problems afflicting us. There are even less obvious solutions that enjoy the support of specialists or politicians. In other words, there aren’t any magical solutions.
In addition to the latter, given that each bill that is introduced provokes its own political dynamic (the product of forces with conflicting interests), there is a risk that, at the end of the process, each reform ends up being contradictory to others. That is, of course, something normal in a democratic setting where distinct forces intervene in every process that in the final analysis make up a unique product every time. The art of the possible, as the classicists would say.
However, we should aspire to more. The key to development, and to achieving high economic growth rates, lies in the coherence of the set of strategies that the government organizes and that take shape in the form of laws, rules, regulations, and budgets. Put another way, the success of a strategy resides wholly in the capacity of a government to articulate a vision and to convince the population and the legislators of its benefits. In this sense, it is an inherently political process whose results are discerned, for better or worse, in the economic performance.
That said, it is evident that the country requires reforms at least in energy, fiscal, and labor matters. But these reforms cannot be independent of whole to which they lay claim: they need to be conciliated and coordinated.
For it to be successful, a labor reform should facilitate the contracting of personnel and promote the growth of productivity without eroding the political and labor rights of the worker. These principles are basic, but it is noteworthy that this reform is much more important for small than for big businesses, whose size and scale allow them much greater latitude in matters of salaries and fringe benefits.  Additionally, labor costs as a percentage of the total costs of a business enterprise tend to be much less than in companies with high investment in machinery and technology than in those strictly dependent on manpower. That is, small businesses, which are those generating the most jobs but pay the lowest, are those that urgently require greater work flexibility. Proof of the latter is that it is in these companies that the informal economy predominates and where in there is no work protection or fringe benefits.
For it to be successful, an energy reform should make it possible for users to have access to fuels and raw materials at competitive prices and under conditions similar to or better than those characterizing their competition. At present, this premise is not only not complied with, but the availability of combustibles is uncertain and the monster monopolies entrusted with the sector engage the priority of satisfying their union interests and internal bureaucrats, as well as that of their political bosses. The market, economic growth or competitiveness are irrelevant in the existing equation. For it to work, an energy reform must resolve these blind alleys and, simultaneously, make possible the exploitation of resources with access to technologies that today are only feasible with private associations.
For its part, a successful fiscal reform would imply releasing the government from its dependence on oil income without this implying the squeezing of taxpayers so that the incentive to produce efficiently would be disturbed. Of course, in matters of taxes we all want somebody else to pay more, but the key lies in that the taxpayer were able to see in public services full justification for payment of his/her taxes. However, if one observes from public safety to the state of the pavement it is evident that the divorce between taxes and services is so great that it is impossible to attempt to conciliate these without a deep and serious governmental commitment.
Reforms are necessary, but there are so many obstacles, protected strongholds, favors, trade barriers, subsidies and bureaucratic red tape within the purview of Executive Power that serious acting on this front would have the effect of freeing up forces and resources, in addition to driving competition in key sectors of the economy. The same is true in sectors subject to concession (particularly media and telecommunications), always given to blackmail and monopolistic practices. In many ambits, the problems is less legislative than executive, but no less polemic or political due to this.
In making up his Cabinet, the president should balance the presence of world-class technocrats with that of effective politicians willing to address the special interests -in all ambits- that are keeping the economy at a standstill. If he appoints low-class political operatives he will reap low growth rates; appointing technocrats only will garner conflicts in all quarters. As they say in Washington, “you are who you appoint”. The president’s decision in this matter will provide clear evidence of his vision and of his real inclination to achieve what voted him into office: an effective government.

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Luis Rubio

Luis Rubio

He is a contributing editor of Reforma and his analyses and opinions often appear in major newspapers and journals in Mexico, the US and Europe (New York Times, Wall Street Journal, Financial Times, International Herald Tribune, Los Angeles Times, Washington Post, National Public Radio).