If you've been following the development of this story
at all, you may be wondering: What does it mean for the
United States if one Mexican candidate wins, as opposed
Of course the answer depends on you own political and economic
leanings, but I'll try to sketch out the differences between
the main candidates, one of whom will be the president-elect
of the Republic of Mexico after Sunday's vote.
The nominee of the National Action Party (Partido Accion
Nacional) or PAN, has consistently supported more open markets
and freer trade for Mexico during the campaign. The country
has traditionally been highly protectionist, defending domestic
industries and farm products against competitors worldwide.
has been telling his countrymen and women that continuing
the defense of Mexican industry and agriculture from outsiders
will be disastrous, and that the country has already lost
out significantly in the worldwide economic race to India
So the former energy minister proposes the encouragement
of investors worldwide to buy into the Mexican economy.
He wants to rev up the country's tourist industry, seeing
it as an underperformer despite the worldwide reputation
of resort cities like Cancun, Cozumel, and Acapulco.
Right now the country's government-owned petroleum giant,
Pemex, is by law barred from taking on outside investors.
The worldwide oil business can be hired as a contractor
to supply services and equipment, but can't buy into Pemex.
Historically, it's been a point of national pride that the
oil giant belongs to the people of Mexico, since President
Lazaro Cardenas shocked America's oil giants by seizing
some of the largest oil reserves in the world.
But the national oil company has too many workers for the
amount of oil it produces, and lack of investment has gradually
reduced the yield from Pemex's fields. Calderon's answer,
more investment from the rest of the world, is quite different
from that of his principal rival, Andres Manuel Lopez Obrador.
Andres Manuel Lopez Obrador
The nominee of the Party of the Democratic Revolution (Partido
de la Revolucion Democratica) or PRD, wants to keep Pemex
in Mexican hands. He cites Lazaro Cardenas, the man who
nationalized the oil, as one of his political heroes in
his stump speeches.
Obrador thinks its better for Mexico to become a producer
of more oil-based products instead of merely a resource
extractor. Though Mexico is one of the largest oil producers
in the world, and the second largest supplier to the United
States, the country imports much of its gasoline, lubricants
and other petroleum-derived products.
The differences with his main opponent don't end there:
Lopez Obrador, or as many supporters call him, AMLO, wants
to renegotiate the sections of NAFTA having to do with the
continued opening of the Mexican market to American corn
and beans. These traditional staples of the Mexican farmer
are already hard pressed to compete with the American product
with the market in transition. Mexican farms are smaller,
less mechanized, and make less use of expensive bio-engineered
seed. One by-product of NAFTA was to break up the egidos,
the communal farmlands that produced a lot of Mexican corn.
The breakup happened as the government reduced price supports
for corn, and American crops poured into the Mexican market
to replace the lower yields.
Drawing much of his political support from the poor, and
from more agriculture-dependent southerners, Lopez Obrador
has promised support for the Mexican farmer, which can only
aggravate the relationship with the United States. The U.S.
government would go to bat for American farmers, and fight
Mexican price supports.
Like Felipe Calderon, Lopez Obrador sees a future winner
in the tourist industry, and wants to increase both international
investment and government support for its continued development.
Throughout the campaign season the PAN candidate has pounded
away at his PRD rival in speeches and in aggressive national
advertising. Calderon has called Lopez Obrador's economic
policies a danger to Mexico, and has compared AMLO to some
of the hemispheres most left wing leaders -- like Evo Morales
of Bolivia, Hugo Chavez of Venezuela, and the old man of
the Latin left, Fidel Castro of Cuba.
American-born pollster Dan Lund says Lopez Obrador is without
a doubt a man of the left, but much more in the mold of
European Social Democrats, and could be more accurately
compared with recently elected Michelle Bachelet of Chile,
and Nestor Kirchner of Argentina. Like those just mentioned,
Lopez Obrador sees more of a role for the government in
the Mexican economy and the daily life of the nation than
Felipe Calderon. The Calderon campaign, and its free-marketeering
PAN economic advisers want to continue to whittle away at
the traditionally big Mexican state. The PAN candidate has
been telling the country that he is the safer choice, pledging
to continue the Vicente Fox policies that have brought stability
to the Mexican peso, to interest rates, and government borrowing.
The Lopez Obrador campaign has in turn promised to live
within its means, paying for expanded government spending
on education, health, and infrastructure by cutting some
government employment, ending subsidies to some private
businesses, and by making sure the richest Mexicans pay
the taxes current law requires them to pay. There is agreement
from left to right that tax collection is lax, and that
government would be able to do a lot more with a higher
percentage of taxes owed really making it into federal coffers.
The last trading day before the election on the Mexican
stock exchange the market was steady, and slightly up for
the day and the week. It would appear that the market has
already factored in a possible Lopez Obrador victory. There
was a swoon in the major stock index in the spring, when
it began to appear that the PRD could win.
The peso was steady, and bonds weakened when the final
polls revealed the left win candidate had held his lead
going into the last week of campaigning. It's a small lead,
3 percent, within the margin of error. Analysts for Barclay's
and the Royal Bank of Scotland said the stock market and
the currency would not tank if Lopez Obrador wins a modest
victory on Sunday.
Both said that if the former mayor of Mexico City, who
raised old age pensions and increased spending on public
transportation comes to run the whole country with a strong
electoral mandate, there will suddenly be a better chance
that he'll be able to get his programs through. And if that
happens, capitalists in Mexico and around the world will
Think tank leader Luis Rubio told me the other day that
the reason Lopez Obrador was leading the presidential race
was that he was the only candidate who had successfully
diagnosed Mexico's economic problems and talked openly about
the tremendous gap between rich and poor here.
The only problem, Rubio continued, was that his proposal
to cure those ills would not work, and could possibly make
things worse. By contrast, Rubio said, Calderon had never
indicated that he understood the full scope of the country's
social and economic problems. But in Rubio's opinion, Calderon's
ideas were less likely to do harm, and might even work to
address the problems of the poor.
I asked if it was possible for the two work together?
Not only possible, he said ... necessary.
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