Mexico: Economic Programs for 2013-2019

AS/COA hosted a Davos-style panel with advisers to the three Mexican presidential candidates on Mexican economic programs for the next administration.

Panelists: Emilio Lozoya Austin, PRI candidate Enrique Pena Nieto’s international affairs coordinator; Fernando Turner, member of the PRD party’s Executive Board; Dr. Miguel Székely Pardo, PAN candidate Josefina Vázquez Mota public policy advisor. The panel’s moderator was José Enrique Arrioja, Bloomberg Mexico City bureau chief

With Bloomberg’s Mexico City Bureau Chief José Enrique Arrioja moderating, the advisors to Mexico’s three main presidential candidates articulated their economic visions for the country. The candidates agreed on what ailed Mexico, but differed on which specific prescriptions are needed to solve Mexico’s problems.

Emilio Lozoya Austin, advisor to the PRI’s Enrique Peña Nieto, emphasized the debilitating dependence of the Mexican economy on the U.S. economy. He added that a lack of suitable infrastructure has kept the country from exporting on a greater scale to Asia, home to most of the world’s growth. Lozoya blamed the PAN administrations for periods of sub-2 percent growth and said that, in the past 12 years, 12 million people were added to the roster of the country’s poor. What’s needed, he said, is employment: more and better paid. Lozoya posited that the solution lies in reforming energy, credit, and security and contended that the PRI is the only party with the political capital necessary to accomplish these reforms. Specifically, Lozoya mentioned the need for state oil firm Pemex to be reformed and opened up to private investment, an increase in broadband penetration, and the promotion of biofuels.

Fernando Turner, advisor to MORENA’s Andrés Manuel López Obrador, declared that Mexico’s current economic performance is and has been unacceptable. Touting his long career as an entrepreneur, he said that there are no studies that say labor reform will change anything. Monopolies are the issue, both public and private, said Turner. For the country to leave behind the 30 years of stagnation PAN and PRI governments have produced, investment in the country has to increase, he said. Better investment would come if a market-friendly environment absent of monopolies existed. More investment would spur more growth and jobs, and would eliminate extreme poverty. Turner said that this would be complemented by no increase in taxes, competitive energy prices, and an expansion of the Mexican banking sector. In reference to Pemex, he returned to the theme of monopolies, stating that past privatizations had only created monopolies. Ultimately, the private sector can already work with Pemex, he said, noting that tapping into Mexican oil reserves is what’s prohibited. For Turner, Mexico could be the fifth or sixth largest economy in the world, but not if it stays focused on near-sighted reforms.

Miguel Székely Pardo, advisor to the PAN’s Josefina Vazquez Mota, pronounced that Mexico is now seen as a model of macroeconomic stability and management. Because of the country’s experience during the 1994 Tequila Crisis, Mexico has kept its public debt at one of the lowest levels in the world. Székely echoed Lozoya’s call for labor reform and for the modernization of Pemex, citing the example of Petrobras. He agreed with Turner that monopolies must be eliminated. Székely‘s emphasized that the rules of the game must be changed and, as an example, he brought up the quota for hiring of teachers controlled by the teachers’ union. Székely said that while there is no magic recipe for growth, opportunities lie in eight key areas: security, fiscal reform, energy, labor, identifying sectors to prioritize, productivity, education, and the domestic market. He also suggested new areas of expansion such as medical tourism and retirement communities, which are complemented by demographics in the United States. These sectors would be propelled by private-public collaborations under Vázquez Mota’s proposed coalition government, he said.