LatinFinance - September/October 2013 - 43

sible the existence of the PRi,” says political
columnist Jorge Zepeda. the proposals
include no reform to the Pemex union,
notorious for its low productivity. “He and
the groups that surround him are anchored
in pre-modernity,” adds Zepeda.

be passed. Peña nieto commands enough
votes for the constitutional reforms among
legislators of his PRi party, its small ally
the Green Party, and the conservative,
free-market oriented national action Party
(Pan). the bad news in the economy might
even boost support and public opinion in
favor of the reforms.
Losing the battle
Still, there will be noise — and plenty of
it. the site and date of Peña nieto’s stateof-the-union address had to be changed
because demonstrations by teachers,
staunchly opposed to his education reform, sealed off the traditional venue. the
president ended up pitching his plans for
change inside the official residence, los
Pinos, which was surrounded by armed
cars and guard dogs.
“they are losing the battle in the street,”
Raúl feliz, an economist at the center for
economic Research and teaching (ciDe)
in mexico city, said of the late-summer
protests.
next on the docket are the energy opening and a fiscal reform — and these have
triggered even stiffer and broader opposition. the energy reform pushes the button
of mexican nationalism like no other. “it
is loaded with ideology and the potential
to unify the left which is strongly statist,”
says feliz.
the populist leftist leader, andrés
manuel lópez obrador, organized a demonstration in mexico city on September 8
to protest the proposals. around 50,000
people turned out. they heard lópez
obrador denounce the oil opening as “a
vile and blatant assault that would mean
handing over $30 billion to $40 billion
annually to foreign companies.” He called
for a national protest on September 22 in
mexico city.
Unveiling the energy reform, the government strived to pay homage to lázaro
cárdenas, a former president who nationalized the oil industry, by stressing that the
proposal respects his constitutional edicts.
But that didn’t bring on board the moderate leftist leader, cuauhtémoc cárdenas,
who said the state was ceding control of the
country’s oil reserves and the electricity
grid.
Some argue, though, that the reform
package is less ambitious than it may
appear.
“Peña nieto lacks the authentic will
to transform mexico because that would
imply dismantling the bases that make pos-

Devilish details
Despite the grand scale of the reform plans,
the regulations that come out of them will
take months to draft and negotiate. the
horse-trading will determine the final shape

TRANSFORMATION: In his first state of the
union address, Enrique Peña Nieto, Mexico’s
president, vowed to push through reforms

ENRIQUE PEÑA NIEto

“I pledged to reach
across polItIcal
aIsles and adopt
a comprehensIve
reform agenda to
boost economIc
prosperIty and productIvIty”

and impact of the mexican transformation.
the energy reform is the real gamechanger. a victory will be a reform that
attracts big multi-national corporations to
mexico, observers say. in the last decade,
former presidents Vicente fox and felipe
calderón won reforms that created service
and incentive contracts but stopped short
of altering the mexican constitution — and
the big money stayed home.
a “libertarian reform” allowing Pemex to
form partnerships and to gain capital, technology and share risks, is necessary, energy
minister Pedro Joaquín coldwell told local
media after the plan was announced.
even with current record levels of investment — $25 billion a year — Pemex is unable
to fund shale gas or deep water exploration,
nor rebuild pipelines and stop gasoline theft
around the country. as a state monopoly,
“Pemex had no market signals as to how
underinvested they were in gas pipelines,
and that goes on in Pemex as a whole,”
says Baker.
the constitutional reforms to open
Pemex to private investment are possible
from the combined votes of PRi, Pan and
September/October 2013 - l atinfina nce.com 43
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