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February 5, 2013
Some good and bad news from Mexico
Last week, I was speaking with a Mexican friend. He told me that things are going well in Mexico, as long as you don't run into violence on the way to the job interview.
Yes, the Mexican economy is doing well. Mexico is benefiting from some good economic stewardship, from Pres Zedillo in the mid-1990's to the very market oriented policies of President Calderon. Mexico has now had 3 consecutive presidencies without the kind of populism that the left preaches.
Furthermore, a good Mexican economy will keep Mexicans home, a big plus for our own immigration reform conversations.
Mexico joins Chile, Colombia and now Peru in implementing growth oriented policies, such as free trade agreements and encouraging foreign investment. They are success stories.
In Mexico, it looks like the new president is determined to follow the path of Chile too. So far, it looks like a "new PRI" is back in Mexico. The new PRI is doing what the right-center PAN could not do. It looks like the PRI is about to undress the country's biggest sacred cow - PEMEX.
President Pena-Nieto, the former governor of major state, is showing signs that he is "business friendly" and willing to tackle PEMEX by inviting foreign investment.
Of course, PEMEX has little choice. The bloated bureaucracy is out of control. Worse than that, Mexico won't be able to export much oil after 2016.
PEMEX is the biggest economic problem in Mexico. It is a "cash machine" for the party in power and ceased to be an energy company years ago.
On the bad side, violence has now reached Mexico City. It is no longer a problem on the border or "el norte".
My good friend Alfredo Corchado of The Dallas Morning News, one of the very best US journalists covering Mexico, put some bad news on our front page today: Mexico's drug violence epidemic moving closer to capital
This is really bad stuff.
Up to now, Mexicans have consoled themselves with the idea that the violence has not reached the big cities. Unfortunately, it has.
My guess is that President Pena-Pieno sent the wrong message to the cartels during the campaign. He criticized President Calderon's approach, or putting soldiers on the streets.
President Pena-Nieto said that he would train the police and put the army back in the barracks. I understand that but it's going to take years, as Colombia taught us, to put a capable police force on the street. In the meantime, only well armed soldiers can deliver the message!
Again, Mexico has a lot to be proud of, from exemplary elections to an expanding middle class but the leadership cannot let up on fighting the cartels.
Otherwise, the investors will go to Chile, Colombia or Peru, where they don't have to worry about getting kidnapped or attacked in the streets.
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