The large expectations created by the energy reform’s Project coming from the Presidency will have to wait a few more days. Regardless of that fact, some potential details that the bill may contain have started to leak. The president of the Senate’s Energy Commission, David Penchyna (a PRI legislator), has anticipated that the legislation will include changes in the Constitution, without specifying which articles will be discussed. As of now, as there is a lack of certainty regarding its content, the reform will continue to generate all sort of speculation. Within this background, the word “privatization”, which refers to the electricity and oil industries, has emerged as a powerful taboo. The flagship of “fighting against privatization” has proved to be a quite effective political/rhetorical weapon in the past. The time has come to clarify some specific points.
As it is well known, the greatest objector to the energy reform – without fully knowing its content, but guessing what it might imply, regardless that this might be the least important for him – is Andrés Manuel López Obrador. The Tabasco-born politician claims that “privatization is a synonym for corruption”. On one hand, despite the fact that neither the federal government’s proposal nor PAN’s raise privatizing Pemex, it is worth remarking that the current regime of state monopoly of the oil and electricity industries has been anything but corruption-free. In fact, the creation of a sort of “sub-elite” was enhanced that, using the argument of protecting workers, amassed great wealth via laborers’ unions.
On the other hand, there is a need for clarifying differences between “privatization” and “openness to private participation”. When the government media set was put up for sale in the 1990s – which was how TV Azteca was created after Ricardo Salinas Pliego bought Imevisión – was indeed an example of the privatization of a company, but the radio spectrum, the country’s actual good, was only licensed. According to the current judicial framework, the radio-electric spectrum is working under a system of concessionaries, who can be legally deposed from them if the law considers them to be a “general interest” case. The aforementioned happened when, in the face of the 2007-2008 electoral reform, TV networks had to make room within their broadcasts in order to put IFE and political parties’ propaganda. That way, even if a concession regime of the oil industry was to be approved – as PAN proposed – the State would not lose the ownership of the resources. A sale of Pemex is not being suggested either. If the PAN initiative is to be taken as a reference – which is thought to be more radical than the one presented by President Peña – the fact of sharing risks with other companies, even if they’re from abroad, with the so-called “risk-contracts” or even offering them concessions, does not imply that the company is being sold nor that the oil revenues are being given away.
Finally, in addition to the line of responsibility of authorities of being clear at the moment of attending populist attacks against the reform, the government’s message ought to be vigorous at the time of making projections regarding its eventual benefits: deadlines and stages of opening (when the investments will come, how long it will take to install new infrastructure, how installed capacity will work, in what way it will be reflected on the GDP and how long it will take). Likewise, it will be essential to be careful when risking into saying ambiguous and unsupported figures about, for example, the number of new jobs to be created after the reform. The best way to fight against fiction is with reality.
As soon as the Executive Power presents its initiative, the political dynamics will change. Whatever its content may be, protests in the streets are to be expected (that includes PRI, whose leader stated that they will fight for the reform in all spaces). Analysis that will seek to assess the initiative on its reach and potential will proliferate. Finally, the legislative debate will begin, which will inevitably be influenced by what happens outside. The main question is whether the initiative presented by the Executive Power will be ambitious enough to justify the scandal that comes with it or if it will tackle what potential investors might require for their future involvement with the company. Once the initiative has been approved, a battle that deals with public finances will come next, all after the sought transformation of Pemex. In contrast with the energy reform, which deals with possibilities and promises (and interests affected in a relatively small circle), an ensuing tax reform promises to be a dispute that will affect the pockets of all Mexicans.
CIDAC
Comments