Mexico’s Elections: The Day After

With over 90 percent of the votes counted, Enrique Peña Nieto of Mexico’s Institutional Revolutionary Party (PRI) is the presumptive winner of the presidential elections. The PRI holds about 38 percent of the vote, the left leaning Party of the Democratic Revolution (PRD) has about 32 percent and the currently governing conservative National Action Party (PAN) holds about 25 percent.  As important as the presidential results, the congressional results indicate that the PRI will have a majority in the Senate. Although some PRD supporters may protest the results based on accusations of widespread distribution of cash and food to PRI voters, Peña Nieto’s lead makes it unlikely that a serious challenge from the Left will gain traction. What does a PRI win mean for Mexico and for the United States?

The election of Peña Nieto and his party will bring a shift in Mexico’s national security strategy away from attacking the kingpins of the drug trade to a focus to containing the widespread extortion, robbery and kidnapping in the country. This policy shift will likely move resources away from the work the country has been doing in trying to curb the shipment of drugs into the United States. Mexican voters voiced their opinions and clearly want their government to prioritize eliminating the violence in their neighborhoods. Washington will certainly push the Mexican government to continue its anti-drug policy and we should expect some discordance as the PRI government seeks to satisfy both policy strategies.

During the campaign, Peña Nieto acknowledged the country’s major corruption problem — particularly in the police, the armed forces and the political class. A test of his willingness to lead the country will be his willingness to dismiss the corrupt, even if it includes senior members of his own party. This begs the question of whether Peña Nieto will actually be a political leader in his own right or instead just the handsome face of a party still run by PRI old-timers?

PRI’s election manifesto promised change:  the privatization of PEMEX, the country’s state-owned oil company; the dismantling of the monopolies; investment in digital infrastructure and a transition to a law-carbon economy. The challenge is how to implement these changes. Privatizing PEMEX must be accompanied by a major fiscal reform otherwise the Mexican government would lose 40 percent of its budget. Both reforms have to take place simultaneously to avoid serious financial problems. And with a majority in the Senate, we should expect Peña Nieto to prioritize both these structural reforms.

Peña Nieto’s willingness to use political capital to push forward his priorities will test his presidential abilities.  On his side is a changed Mexican society: a middle class holding relatively more independent opinions; a more free and open press that is willing to criticize the government – although not entirely free; a younger generation emboldened by social media and willing to protest widely; and a global market place in which uncompetitive industries can drag down a national economy.

The Mexican economy is expected to grow at 3.8 percent this year.  Will it grow because of its ability to compete and create quality jobs, or will it grow because the incoming government will protect key industries from competition? During the elections, PRI’s Peña Nieto offered hope through his youthfulness and personal energy, but he must now focus on addressing Mexico’s tough challenges, including violence and security, corruption, job creation and the economy.