The dinosaurs fight back

The Economist recently published a good article called “The PRI’s long tail,” which documents a brewing battle between Mexican President Peña Nieto and the traditionalist dinosaurs of his party. There has been tension between the reformers and the dinosaurs at least since Carlos Salinas in the late 80s and early 90s.  But, as Jorge Chabat of CIDE (mine and Kevin’s old stomping grounds) points out, Salinas managed to enact  significant economic reform without fundamentally changing how party politics worked.  Things may be different this time, however:

“The next round of Mr Peña’s reforms, which have already sought to bust taboos in education and telecommunications, is likely to affect areas that could directly challenge the PRI’s grip on regional power. This is uncharted territory. The proposed opening of the energy industry, which will hurt the pro-PRI oil workers’ union, and the clampdown on electioneering, could mean Mr Peña will “crash headlong into the model of the old PRI,” Mr Chabat says.

The pacto, which is an agreement between the major political parties of Mexico to pursue serious reform, was thrown for a loop recently when it was discovered that at least part of the PRI was back to business-as-usual. Specifically,  “video footage showed [party officials] apparently planning to use handouts from federal anti-poverty programmes—which one official called “gold dust”—to buy votes in upcoming local elections.”

The pacto seems to be back on, for now at least, but the president may face the greatest push back from his own party.  Tax reform, which seeks to move collection from local to state authorities, could be strongly resisted by local PRI officials.  Héctor Aguilar Camín,editor of  the magazine Nexos, put it best when he states that “All the risks [of reform] will be plain to see. All the benefits will be in the future.”

President Obama was recently in Mexico and argued for a new, less corrupt Mexico, albeit in a less than diplomatic fashion (He said that “whether you’re looking for basic services, or trying to start a new business, we share your belief that you should be able to make it through the day without paying a bribe.”) For this to be true, and for Mexico to have any hope of serious reform, the dinosaur faction of the PRI needs to go for good.

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