MEXICO CITY — Mexican President Enrique Peña Nieto is entering a critical stage of his term, analysts say, as his administration faces growing resistance to its wide-ranging, fast-track push to remake the country’s institutions.
Peña Nieto is under fire from Mexico’s left for taking on powerful teachers unions and for a proposal to open the state oil monopoly to private investment. On the right, opposition is building to his plan for tax hikes on the wealthy, corporations and a broad share of the middle class.
More moves are still to come, aimed at breaking up telephone and broadcast monopolies, overhauling the criminal justice system, election rules and other targets, all stacked on the president’s lengthy, urgent to-do list.
After 10 months in office, Peña Nieto’s approval rating — 56 percent in the latest national poll — is lower than those of his two most recent predecessors at the same stage. But his administration says it is pressing ahead, backed by a rare and fragile consensus among the country’s major political parties to take on long-festering problems as quickly as possible.
“This is a transcendental moment,” said Aurelio Nuño, the president’s chief of staff, in an interview at Los Pinos, Mexico’s equivalent of The White House, calling his administration’s agenda one of “radical reform.”
“Over the past 30 years, Mexico has undergone a democratic transformation,” Nuño said, referring to the seven decades of one-party rule by his own PRI party, which ended in 2000 and was followed by 12 years of heavy political gridlock. “But that transformation lacked the structural changes to make the state efficient, to increase growth and competitiveness, and to reduce poverty.”
Such changes, he said, will inevitably clash with the “interests” of Mexico’s status quo.
A crucial test for Peña Nieto might come as soon as mid-October, with lawmakers expected to vote in the coming weeks on his bid to rewrite energy laws and jolt the sagging national oil company, Pemex, which has long been closed to private investment.
If approved, the changes could trigger a flood of foreign capital, especially from the United States, where energy companies are eager to partner with Pemex to unearth the large reserves of oil and gas that Mexico lacks the technology and expertise to reach.
Mexico’s economy has softened since Peña Nieto took office in December, further raising the stakes for the energy overhaul his administration says is the key to achieving its goal of 5 percent annual growth. The country’s financial woes deepened this month as drenching tropical storms inflicted billions in damages across a wide swath of Mexican territory and were blamed for at least 139 deaths.
Mexico’s left has been galvanized by the energy debate, casting the president’s proposals as a resource grab by foreign interests and local elites seeking to “privatize” the country’s national patrimony. Nationalism has infused Mexican oil ever since former president Lazaro Cardenas seized the country’s wells from mostly U.S. and British firms on March 18, 1938, an event celebrated here as Oil Expropriation Day.
Cardenas’ son, Cuauhtémoc Cardenas, the former mayor of Mexico City and the founder of the country’s leftist Democratic Revolutionary Party (PRD), has led rallies in the capital under the banner “In Defense of Oil.” Andres Manuel López Obrador, the runner-up to Peña Nieto in last year’s presidential election, is also mobilizing protests and calling for a national referendum on reshaping Pemex.
“Energy reform has the support of the upper class, but it’s not well understood, most people don’t understand why opening up Pemex is a good idea,” said pollster Roy Campos.
The vote will also be a bellwether for the president’s broader agenda, and a defeat would leave him politically weakened with more controversial proposals — such as tax increases — still ahead. Administration officials say Mexico’s low rates of tax collection benefit the wealthy and hurt the poor, leaving the government too dependent on Pemex, which funds roughly a third of the federal budget but faces shrinking output as the country’s easy-to-tap oil wells go dry.
Former Foreign Minister Jorge Castaneda, now a columnist and political analyst, said Peña Nieto made a strategic error by starting with his easiest agenda items and leaving the toughest measures for later.
“He came in with a very ambitious agenda of well-intentioned, necessary, intelligent reforms,” Castaneda said. “But he’s proceeding in the wrong sequence, and I see things getting more difficult for him, not easier.”
Peña Nieto scored an early victory this month when lawmakers overwhelmingly backed his proposals for broad changes to public education. The new laws will submit educators to periodic evaluations and begin curbing some of the practices blamed for chronically low classroom achievement, like the buying and selling of jobs by union bosses.
The measures sailed through Mexico’s Congress but have met obstreperous resistance from unions since then. Their shifting, near-daily protests have snarled traffic in the capital for weeks, blocking access to the airport, government offices and the U.S. Embassy.
But the inability of the union mobilizations to reverse the legislation is a sign of Mexico’s maturing democracy, “where the streets matter less and less,” said Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington.
“The reforms are going to go ahead anyway,” Wood predicted, “and that speaks volumes to the government’s ability to negotiate with other political parties and their commitment to the reform program.”
Mexico’s three largest political parties have set old squabbles aside to work on a 95-point consensus agenda called the Pact for Mexico, which represents a rare break from the political inertia of the past. But as its vaguely worded tenets are translated into detailed legislation, more cracks are emerging in the coalition.
During a visit to Mexico last week, U.S. Vice President Joe Biden praised Peña Nieto’s ambitions and spoke almost exclusively of economic cooperation and trade, reflecting both countries’ stated aim of broadening the relationship beyond the drug war and other security themes that have dominated bilateral relations.
Peña Nieto has cooled off the close ties that developed between Mexico’s military and U.S. anti-narcotics agents, bringing some grumblings from Washington. But former U.S. Ambassador Antonio Garza said the relationship remains “on solid ground.”
“I think there have been issues that could potentially create friction, but they have been managed very well,” said Garza, now an attorney in Mexico City.
Even recent revelations that U.S. intelligence agencies eavesdropped on Peña Nieto’s personal phone calls seem to have only strengthened the U.S.-Mexico relationship, analysts say. Brazilian President Dilma Rousseff was also tapped, and while she slammed the Obama administration in a United Nations speech this week and postponed an official visit, the Mexican president has made his objections discreetly, in private meetings with Obama.
“The response was far more measured than Brazil’s, and ultimately more effective, because Mexico will be listened to,” Garza said.