Luis Rubio

The true transcendence of the North American Free Trade Agreement (NAFTA) was its exceptional character in the public life of Mexico. Although its economic impact has been extraordinary –constituting Mexico’s principal engine of economic growth-, its exceptional importance lies in the fact that it was conceived –and has functioned- as a means of affording confidence to investors. Before NAFTA existed, foreign investment did not grow due to its lack of a legal framework that guaranteed permanence of the rules. That is, NAFTA represented recognition by the political system that the existence of capricious regulations, expropriations without a justified cause and discrimination in favor of certain interests constituted insurmountable obstacles to the growth of investment. Its exceptionality lies in that the Mexican government accepted limits to its capacity for action when face to face with those investors and in this altered one of the core features of the so-called “system”.

In its origin, and in its original conception, the objective of initiating a negotiation of a North American business agreement was the creation of a mechanism that would bestow long-term confidence on the investor. The context within which that objective was procured is important: Mexico at the time was emerging from a stage of financial instability, high inflationary levels, bank expropriations and, in general, an investment regime that rejected foreign investment and typically sought to limit private investment. Although the respective regulations had been changed by then, foreign investors did not display an inclination to invest in the country as the government of the time intended. NAFTA ended up being factual recognition that the government had to take a much more audacious step to attract that investment.

The negotiation of NAFTA constituted a milestone in Mexico’s political life because it entailed a cluster of “disciplines” (as trade negotiators denominate them) that are nothing other than impediments to a government acting as it likes. Acceptance of this aggregate of disciplines implies the decision to self-limit, that is, to accept that there are rules of the game and a severe price to pay on violating them. In a word, the government relinquished power in order to gain credibility, in this case in terms of investment. And this cession of power permitted the country to generate an enormous growth engine in the form of foreign investment and exports. Without that ceding, the country would have had all sorts of difficulties these last twenty years. In contrast, through NAFTA (and the great aid of the monetary remittances sent by Mexicans residing in the U.S.) the North American economy became our main source of economic growth.

At present, while foreign investment continues to flow with regularity and incrementally, the problem confronting economic development appertains to the lack of confidence generated by the absence of reliable rules, and the permanence of the latter, within the country. That is, while NAFTA solved the trust problem for investment from the outside, Mexico’s current problem comprises the absence of confidence for the Mexican Everyman, including the domestic business and investor.

The lack of confidence arises from the fact that our governors can say yes or no based on their own personal, political or partisan computations, without concern for whether their decision might be in violation of the law. That circumstance is the one that makes Mexico a country dependent on one man, thus impeding the consolidation of plans, projects or careers, because everything is curtailed by the duration of the six-year presidential term.

What some cynical observer termed the “sexennial metric system” is a national reality that even the PANist governors did not transform. The propensity to reinvent the wheel and negate the merit of the whatever existed whenever a new governor comes on the scene has consequences in the most diverse ambits and exerts the effect of distancing the government from the society and rendering it triflingly responsive to its demands but, above all, generating an environment of assuredness that affects all decisions apropos to savings, investment and personal, family, and entrepreneurial development.

Mexico needs to avoid that provenance of uncertainty for Mexicans, just as NAFTA did for foreigners. Without the Rule of Law that creates sources of credible certainty, the country will be permanently impeded from functioning.

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@lrubiof

Luis Rubio

The elections are over, now comes the tallying. For some the elections went well, for others poorly, but all have to deal with the new reality. There are many important lessons to be learned.

A succinct rundown of what I observed in the elections and during the subsequent days is the following: in the gubernatorial races, except in  the states of Campeche and Colima, the voters penalized the party in power: it turns out that voting was much more productive for those who are upset than abstaining from casting their ballot or resorting to annulling it; the Morena (Lopez Obrador’s) Party was the big winner, followed hard on by the Verde Party; the PAN and the PRD are the big losers, both due to internal divisory turmoil; the PRI retained its position in Congress, emblematic of the capacity to buy and manipulate votes more than its having been abruptly overhauled. Today there are two actors in the arena that will surely compete between themselves in 2018: Andrés Manuel López Obrador (AMLO), and Jaime Rodríguez (Bronco), the new governor of Nuevo León elected on the independent ticket.

There are explanations for each of these factors, but what seems most important to me to emphasize is that the Pact for Mexico turned out to be lethal for the PAN and the PRD; it’s hard to believe that the result for the PRI in Congress reflects something distinct: except for the reforms eventually transforming the country and those parties capitalizing on that, the cost of the perception of paralysis and the sensation that the opposition disappeared is unfathomable.

Each party and candidate confronted particular circumstances but the result reflects a more sophisticated electorate than appeared to be so at first glance. In the state of Querétaro, for example, the voters made it clear that they wanted to avoid one party from staying in power, despite the exiting governor being popular and widely recognized. On the other hand, the elections confirmed that the average voter is willing to sell his vote and is honorable in complying with his part of the bargain: perhaps this is not praiseworthy from the electoral standpoint, but it speaks of a capacity, and above all a disposition, to comply with contracts and agreements, something not to be held at all in contempt in other ambits given the absence of an effective judicial system.

It may be that the paramount lesson that the elections reveal is that the country finds itself faced with a problem of essence: the political system doesn’t work. The voters may be increasingly sophisticated in their manner of casting their vote or messaging but that does not compensate for the dysfunctionality of the system in its entirety and its lack of representativeness, and that’s the crux of the matter.

Mexico has for decades been trying to change things so that nothing changes. Certainly, the economy has changed a great deal but, in the mode of Il Gattopardo, even the unmentionable has been done to preserve the old system’s benefits and privileges. While no one can deny the enormous advances on diverse fronts, the power structure remains the same, with the exception of the incorporation of the PAN and the PRD into the same ancestral corruption: everything has been changed so that nothing would change. Now the cost of this is visible by any reckoning.

The present government espoused the mantra of the last decades that a set of reforms was urgent and that these, in themselves, would transform the country. It was said that the problems were “over-diagnosed”; what was never said was that, in order for them to bear fruit, the reforms had to modify the power structure in general and that in each reformed sector. Today it appears obvious that what’s lacking is actual governing and that the reforms, necessary as they are, are not feasible in the absence of a government capable of   fulfilling its duty. The renouncing of the transcending reform, the educative one, is a flagrant example of the absence of vision and perspective or, at the least, of a huge perversion of priorities.

The heart of the matter lies in that it’s not possible to attempt to change the country as the current government vowed it would if the function of power as well as its distribution is not brought to the table. A reform of the country –the same in a specific sector as in general- cannot be carried out if the number one criterion is not to affect groups close to the power structure; and success in reforming cannot be attempted if the criterion underlying the reform is that of not altering the power structure. To reform is nothing other than affecting vested interests; if that is not wanted or cannot be done, the reform is impossible.

What’s to be done? I only see two possible scenarios. One is to continue pretending that nothing’s going on, that the electoral result legitimatizes that “strategy”. The other scenario, the coveted one, is for the political class to recognize the urgency to act.

The risk of doing nothing is the eventual collapse of the system: it could be that the total political arrangement would come plunging down (sufficient to observe Russia as an obvious illustration), that the anti-system watersheds that proliferate all over grow and become unstoppable, or that the current situation provokes the advent of a reactionary movement that undermines not only what has been achieved with so many hardships for so long, but that it returns the country to the (figurative) Stone Age. Venezuela no longer seems inconceivable.

What the political class and the government don’t understand is the “what for” of their function. Beyond their interests as a group, its work must come down to earth with regard to systematic and substantive improvements in transforming terrains such as productivity, legality, education and corruption. As long as this does not occur, the strident sound of the political downward turn will continue to erode the legitimacy of the system and the viability of the country. In addition to that of its own interests.

The present moment proffers –and demands- an exceptional opportunity for a great leader to transform the country. That leadership could materialize from the government itself or derive from some of the actors who have displayed their natural gifts and remarkable capacity for action and recovery. Whoever seizes that opportunity will decide the future.

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Luis Rubio

There are two indisputable facts in the results of last Sunday’s elections: on the one hand, the government’s party achieved maintaining its position in Congress, which constitutes a victory under any leveling device. On the other, there is wide-ranging evidence of grave social malaise at all levels, which the Nuevo Leon independent candidate and winner, “el Bronco” epitomized (76% disapprove of the direction the country is taking, according to BGC). These would seem to be incompatible and contradictory circumstances, but they are not. The combination is, instead, a faithful reflection of the intricate reality within which the country lives and breathes. The big question concerns what the government will do with its victory: Will it persist in its allegation of already having reformed the country and that all that’s missing now is to await the fruits ripe for the picking and that will appear on their own? Or, will the electoral result morph into the opportunity to construct a capacity of government that effectively renders it possible for its reforms to bear fruit? Although these appear similar, they are radically distinct projects.

It is not difficult to describe the picture of what transpired last week. On the strictly electoral side, intermediate elections, while each is unique, are always run by party hacks, whose machines bring the vote out at whatever cost and where the PRI enjoys an enormous advantage. That very political machine was what had made the PAN lose more than one hundred seats to the PRI in 2009, so it’s not surprising that it had the contrary effect on this occasion. It is also noteworthy that the PRI machine was assisted, in perverse fashion, by those promoting to annul the vote as a means of protest. That action had the effect of altering the denominator, thus adding to the PRI’s total congressional numbers. Paradoxes that are dealt by life: no one knows who he or she works for.

On the side of the anger and disgust, the causes are many and multiple, some objective and others psychological, but all count and, more importantly, they add up. For some the scourge is the insecurity, for others the taxes. For yet others, the flagrant corruption. For all, the governmental paralysis has been astounding and its coronation with the decision to suspend the educative reform appears to be clear evidence of a governmental system that doesn’t work. The state of Nuevo León summed up the dynamic that the country is experiencing because there a candidate turned the society’s anger into a campaign platform, the outgoing governor being the perfect example of what the population repudiates and reproves.

The problem isn’t new and isn’t the fault of the present administration. Columnist Félix Cortés cited the case of the votes cast for Cantinflas, who for decades was a means by which the population expressed its choler. What’s relevant here is, as Cortés argues, that the political class never understood, and paid even less attention to the profound message that the Cantinflas vote entailed.  That is, the problem is an old one but it’s piling up, and tends to mushroom as expectations accelerate, these multiplying by the instantaneous communication given free range by telephones and the social networks. In contrast with Spain, where there are, or where there are possible, alternative institutional mechanisms for channeling the uneasiness, in Mexico that route is virtually impossible, becoming a hidden threat to stability.

It is due to the latter that what the government decides to do with its triumph is transcendental. In view of its history to date, above all that of the past several months, one would expect that the government will declare itself the winner and close the door. From its perspective, it is easy to claim that the protesters of groups such as the State Coordination of Education Workers of Guerrero State (CETEG) or the National Coordination of Education Workers (CNTE) are mere rabble-rousers who have been repudiated at the ballot boxes; that businessmen who feel pressured by interminable requirements and by the absence of an environment that generates trust, are no more but a bunch of complainers who always exaggerate, in addition to being accustomed to evading payment of their taxes instead of getting down to work; and that opinion makers comprise a clutch of opportunists dwelling in ivory towers.

It would be easy to discount all of these, but that would not solve the key conundrum: would such a reading of events make it easy to conclude the governmental term in peace? It is ironic –and revealing- that, in this context, the government recently argued before the Organization for Co-operation and Development (OECD) that there are historical antecedents for the distrust and that this has gone on for decades. The government official was referring to Greece, but the argument is equally relevant for Mexico where the current government has bet on ever larger spending programs, a higher deficit and debt, precisely what brought about the financial crises of the seventies to the nineties.

Beyond the reasons for the electoral outcome, the reality of the country remains the same: an apparently uncontainable subversion in the South; a population without a future due to the lack of an educative system capable of endowing it with the capacity to compete in the world of globalization; an economy structurally incapable of producing high growth rates; a society beleaguered by insecurity and a government without a strategy to create a modern police force and a judiciary at all levels of government; an effete and dysfunctional system of government that does not govern, that does not satisfy the most minimal requisites of performance and that does not create conditions for the society to live in peace and prosper.

The election did bring about a stark dilemma: either the established politicians do it or the independents will. This is not something minor and the challenge is monumental.

No one can dispute the electoral result, but the dilemma persists: victory for what? To continue denying the population the opportunity to prosper? or to enforce the reforms and create a new platform with a view to the future? The former would guarantee that 2018 would prove to be the election of the agitators, whatever their colors. The latter would at least offer the population an opportunity of hope.

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Luis Rubio

The Mexican Army is characterized by a contradictory array of paradoxes. On the one hand, it is an institution that enjoys the greatest prestige and popular recognition that the country has to offer. On the other, with the possible exception of some police forces, it is the most criticized entity with respect to human rights. Over the last decade it has been involved in police work for which it is not prepared nor trained, while it has been prohibited from acting in highly dangerous zones, above all those characterized by intense guerilla activity. In addition, the military corps continues to exist under typical XX-Century political logic, incompatible with the ambience of transparency inherent in the era of globalization and ubiquity of information. The result of these paradoxes is that the Mexican soldier is commanded to give what he cannot, he is criticized for what is not his responsibility and a new legal and institutional structure has not yet been created that would allow him to enter fully into the XXI Century.

The challenge of the Army is not different from that of the country. Similar to the economy or to the government, the shackles of the past have impeded the Army from transforming itself into an institution compatible with the times we live in today. Just as there persists in the economy an enormous portion that is not competitive and just as the government operates within a framework of paternalistic practices and vetoes its own modernization, the Army suffers from the past and does not adapt itself to the present. The consequence of these circumstances for the government or for the economy is noted in unremitting poverty, pathetic growth rates and high unemployment. The consequence for the Army is that, in the words of a popular saying, it is sent “to war without a rifle” but with all of the responsibilities. Thus, the soldiers end up reviled, without the tools to act within the context that the society and the national and international human rights community expect from them.

I see two great issues here: on the one hand, an Army from which results are demanded without it possessing the tools or the formation that would be necessary to achieve these. The best example of this is that of obliging soldiers to perform police tasks for which they are not prepared. Being a soldier is not the same as being a policeman. No one should be surprised that this incompatibility generates unpleasant consequences. The U.S. experience in Iraq is exactly the same: the issue is not our soldiers but our politicians.

The second matter is that of the relations between civilians and the military. The authoritarian political system of the XX Century tied with a professional Army headed by its own military. Proof of the peculiarity of the political transition through which Mexicans have lived from the sixties is the fact that the formal relationship between civilians and the military has not changed an iota despite that at least the formal structure of our system of government has adopted democratic forms. The result has been prejudicial to the Army. In plain terms, the Army has been the scapegoat for an incomplete political transition, which has gone wrong.

The political transition produced the situation of the insecurity under which we live today.  We went from an authoritarian regime that controlled everything to an open system that lost all control. Security was maintained thanks to that an all-powerful federal government administered the criminality and exercised an iron hand on the society as a whole. The gradual collapse of the old system (which was not voluntary but rather the product of the normal evolution of society and the economy) was not accompanied by the construction of governmental capacity at the state and municipal levels. What the federal government used to do, nobody does now.

In the end, the Army was the sole institution with the capacity, power and resources to maneuver the abyss that the politicians created, thanks to their lack of vision and foresight. Deploying the Army to attend to problems of criminality was a quick fix that, however, did not reduce the distrust of the very politicians who ordered the soldiers to the field. The result was a mandate that was never clear, a responsibility that the politicians never assumed and an Army that had to carry out tasks for which they were neither trained nor prepared, all of this in the absence of an adequate legal framework. The Army followed orders because there was no alternative and it had no choice, but those who dispatched it to the front never planned, or constructed, the modern police force that should have replaced it. The Army was in the end left hanging.

The frail and incomplete democracy has hindered the consolidation of a new regime that redefines the relation between the government and the citizenry, which explains the persistence of innumerable authoritarian spaces. Inevitably the same ambiguity that exists in matters of relations between the political system and the citizenry is also observable in the relations between civilians and the military.

Blaming the soldiers for potential excesses is an atrocity that is the product of the convoluted environment that characterizes Mexican politics and its politicians. Events such as that of Tlatlaya (where the Army is accused of killing civilians) should lead us to construct a distinct political institutional structure that deals, once and for all, with the need for a proper structure of governance and security, the lack of which affects the country and that, inexorably, passes through the delicate and unjust nature of the relationship between civilians and the military and that the members of the armed forces endure every day.

Those who chastise the Army should ask themselves what the situation of security would be like without its presence.

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Luis Rubio

The achievement of stability and high growth rates after the revolutionary era was nearly miraculous and contrasted with the interminable South American dictatorships. Everything suggested that Mexico had procured a successful and permanent formula. It worked until it ran out.

But what is significant –and what was of virtue- of that era was the fact that the diverse components of the clockwork that made it work in general were in sync. The economic autarchy coupled with the authoritarian political system and the structure of vertical controls that was a key component of the PRIist system to keep the state governors in line. The scheme responded to the reality of the moment in which it was constructed –the post-revolutionary epoch, and, above all, the post-War era- and permitted the country to progress.

Of course, the fact that there was progress in some ambits did not imply that the system was free of contradictions. When these made themselves heard, the system responded: this was how it acted with (annulled) independent presidential candidacies when these presented and how it repressed guerilla movements and, towards the end of the era, the student movement. The preference was always cooption and that ever-so-PRIist tactic: subject the dissent to the general corruption of the system under the aegis that there is no greater loyalty than that springing from complicity.

The problems began when the contradictions stopped being minor and the traditional response no longer solved the problems. For example, without recognizing that it was a structural problem emanating from the evaporation of    monies to finance imports, President  Echeverría responded to the (very mild) recession of 1971 with a sudden and massive increase in public expenditure, breaking with all of the fiscal equilibria known until then. Fiddling with it “just a little” ended up undermining the old stability, destroying the confidence of the population and positioning the country on the threshold of hyperinflation.

The equilibria now broken, attempts at a solution eventually began, all of these conceived to preserve the essence of the PRIist system but in turn supplying the economy with oxygen: a flagrant contradiction, but logical within its context. Russell Ackoff, a U.S. thinker, wrote that “there are four ways of treating a problem ― absolution, resolution, solution and dissolution ― and the greatest of these is dissolution”. Of all these, says Ackoff, only dissolution allows eliminating the problem because it entails the redesign of the context within which it arose. That is, what Mexico required (and requires) was an integral transformation similar to that which today’s successful nations experienced –each on its own terms- such as Korea, Chile and, before the euro, Spain and Ireland.

What in fact was done was to attempt to respond to the problems by seeing to their most evident manifestations and trusting that those would disappear (“absolve” in Ackoff’s terminology). That is how it went through diverse political reforms as well as with partial and fragmentary economic liberalization. It was not that there was bad faith; rather, the ultimate objective resided in the preservation of the essence of the political system and its beneficiaries. Viewed from this perspective, the most emblematic of the electoral reforms (1996) was nothing other than going from a one-party system to a three-party structure, and not to full democracy. The expanded regime extended the benefits to new participants and created a scheme of competition that did not alter the essence of the old system, but only “democratized” it.

What it did not solve were the contradictions. One by one, these have come to wage an attack on occasion in creative, but always limited, ways. In one epoch the support was procured of “men-institutions”, responsible persons who understood what hung in the balance and who took care that the equilibria were not shattered (and there were –and there are- many more of these figures than one might imagine); in another epoch “autonomous” and “citizen” entities were constructed under the notion that the members of their boards would not lend themselves to shady dealings and that they would guarantee the seriousness and reliability of their actions in electoral matters, on issues of economic regulation and, most recently, in matters of energy. I do not dispute the logic, convenience or potential of this type of response, but it is evident that they have not been sufficient for solving problems that can only be solved with a much more polished transformative vision. They work while they work and then they begin to be costly. In any case, they depend on the individual person.

The elections are nearly upon us, the candidates and parties attack and counterattack each other but, save for exceptional cases, these do not offer attractive alternatives. In the case of the governorships, who end up being proprietors of the lives and souls of their entities, the difference between a good one and a poor one is absolute and that’s why the elections are so hair-raising. The majority only want to get rich or utilize each post as a stepping stone to reach the next one. As an old politician once told me, “some do their job but the majority devote themselves to constructing the next one”.

That’s what Mexicans have got to work with. In Miguel Hidalgo, in the Federal District, a peculiar case is unfolding: a rough-spoken but effective candidate, as only she can be, and without any ambition for another job, contending for the opportunity to govern the local government (which de facto finances the entire Federal District) but that has been badly managed and misgoverned for decades. Xóchitl Gálvez gets my vote because she is a straight-arrow person who is devoted to what she does and who does what has to be done.

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@lrubiof

FORBES – MAYO 2015

It would seem to be patently obvious that in politics there’s no worse evil than fighting reality, but that’s precisely what the government has been doing recently.  The government might like what the U.N. court reporter has concluded about torture in Mexico or not, but it can’t simply reject its investigation. Even if the analysis were mistaken, the worst strategy is that of categorical rejection: exactly the same management that it does with internal criticism, as if everyone were its enemy. Machiavelli wrote that “There are three types of intelligence: one understands things by itself; the other appreciates what others can understand, the third understands neither by itself nor through others. The first kind is excellent, the second good, and the third kind is useless”. In this matter, the government appears to conduct itself like the Machiavelli’s third definition.

In the eighties the country chose to integrate itself economically into the world but, in its first iteration, it pretended that it could be part of the international business circuits, attract foreign investment and technology but maintain its primitive ways of politics as usual internally. The contradiction was flagrant and led to interminable disputes in the most diverse forums. On one of his visits to Washington State in the U.S., for example, President de la Madrid breakfasted with the news of columnist Jack Anderson denouncing diverse cases of corruption in the de la Madrid’s government. The column could not have been worse in content or come at a worse time for inflicting severe damage on the visit before it had even begun. The government rejected the information with all of its vehemence, but did not achieve neutralizing the critics. The same happened with the murder of U.S. Drug Agent Enrique Camarena and the annual evaluation of Mexico’s cooperation in matters of narcotrafficking. Each case sunk the government deeper and deeper.

Beyond the indignation that that type of accusation aroused in our politicians, above all due to the moral superiority that they involve, it’s no secret from anyone that the country is enduring an infinity of cases of corruption, torture, police abuse, the incompetence of the judiciary, and lack of respect for the rights of the citizens. Similarly evident is that there are no easy solutions to these ills, even if there were the best will and strategy. What’s absurd is to pretend that these ills do not exist, that they are foreign to our reality.

By the time Carlos Salinas took over the presidency in 1988, the lesson had been learned. The great difference between the two administrations was not the general strategy but the recognition that it was impossible to maintain the fiction that the external world is distinct from the internal, that a dual discourse can be maintained or that the leak in the dike can be plugged with one finger. Instead of emphatically rejecting the accusations coming from the outside, Salinas opted for assuming them and at least pretended to solve them. That’s how, for example, the National Human Rights Commission came into being. Rather than confronting, he joined the critics, although in the final analysis the solution was nothing more than cosmetic. Viewed in retrospect, the true change was less one of essence –political modernization oriented toward creating a developed country did not take shape-, but the form was crucial because there was at least minimal congruence between the internal and the external discourse.

Thirty years later it appears that we have returned to the eighties, only that, as Marx said, the second time as a farce. I don’t know whether torture is practiced in the country nor is it obvious to me that fourteen cases would be sufficient for a summary trial or something in that respect; that said, it would appear infinitely more sensible, in this example, to request aid from the U.N. for combating the cases that do exist and the circumstances that produced them, rather than deny that reality and do battle with the community of nations. Worse yet, no member nation of the International Court of Justice and similar bodies can react in that fashion. It’s not logical and, worse, it’s counterproductive. A government should add rather than subtract before anything else.

The far-ranging issue is that we cannot return to the past nor can we deny the reality of the world in which we live, the latter entailing ubiquity of information and globalization not only of the economy but also of values and criteria. The longer the government takes to accept that that’s not the road to the future the worse the future will be for its own efforts and, above all, the economic and political performance of the country. These are not minutiae by any means.

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@lrubiof

                                                                                                                                 Luis Rubio

In public life, say politicians, nothing is more important than timing. An identical action or announcement can have dramatically different effects, depending on the moment that they are undertaken. That would not have surprised St. Augustine, who from the V Century had affirmed that “time is present in three facets: the present, which is presently experienced; the past, which is presently remembered, and the future, which is presently expected”. The problem in our era is that those three moments have been compressed, converting this famous “timing” into the most important variable of economic-policy management, if not, de facto, the only relevant one.

Easy enough to say, but the linchpin of the world into which we are entering is the time of our times. Before, time was a variable inexistent in the economic policies that for decades counseled the International Monetary Fund (IMF) and a Pleiades of economists. The logic at that time was simple and straightforward, but also static because that way it permitted a world that changed relatively little and not rapidly: it was possible to move from one point of equilibrium to another following a known set of policy measures. Economic policy followed a known formula, thus a reform’s taking more or less time to mature was irrelevant. That’s no longer true.

In the world of globalization and, above all, a world of mushrooming expectations, time is not only important: it’s the only important thing. David Konzevik argues that “expectations go by elevator while income growth goes by the stairs” and that incongruence entertains profound political implications, the very ones that explain to a good degree the uneasiness afflicting the country at present. Time isn’t important: it’s everything.

In this context, it’s naive to think that, in political and credibility terms, the results can wait without the people seeing tangible progress, not in macroeconomic numbers but rather, as Perón said, “in the most sensitive organ of the human body, the pocket”. In this world, the only way to make the contrast compatible between the speed at which expectations grow and the daily reality is with leadership capable of maintaining hope, that which there isn’t today.

The notion that time is not important, that it is an infinite resource and that things solve themselves is very attractive but fallacious and constitutes a phenomenal milieu for disruptive leaderships promoting miraculous solutions that they could never supply.

The problem of time becomes even more complicated with another change that is revolutionizing our reality: everything is known instantaneously. The combination of the ubiquity of information with such a poor economic performance and high unemployment angers the population and turns other issues into crucial breaking points: this is how corruption has become a revolutionary factor, rendering a lethal blow to the traditional political class. It is sufficient to observe the contrast between the responses given by the politicians of Brazil and Chile on the one hand, and by the politicians of Mexico on the other, to cases of corruption: independently of whether they have done it well or poorly, there they were obliged to respond; here the government thinks that a not-very-poor result in the upcoming elections will dislodge it from the hole.

The paradox is that, while the political class were able to respond to common claims (education, transport, health), it is practically impossible for it to eliminate corruption, because that’s what supplies the fuel for its activity. Worse, the pressure that the society exerts, above all through the social networks, grows not linearly but exponentially. Also exponential is the pressure to improve the living standards of the majorities that decide the elections; thus, the argument that it is possible to wait until things mature is an illusion. The only truth is the reality of today. This is the challenge to which the government must rise.

The great advantage, even if ephemeral and scarcely edifying, that Mexican politicians possess with respect to those of Brazil and Chile is that Mexico is a country infinitely less democratic that theirs. If Mexican politicians were to understand this factor and, above all, the fact that, as much as they’d like it to be, it is not infinite or immoveable variable, they could convert it into a transformative instrument. While the Brazilian and Chilean societies have corralled, each in its own way, their respective governments, forcing them to respond, in Mexico nothing’s happened. The Mexican government’s opportunity lies in anticipating this demand.

The government was paralyzed in the face of the events of Iguala in September, more the product of its own incapacity of response and its expectation that the electoral result would vindicate it and extricate it from the social contempt, than from the probability that the cases of corruption could bring in down, something not inconceivable in our Southern neighbors. Here it is evident that, however free the elections might be and however much the votes count, in Mexico a huge distance persists between the society and the government. That is, however much corruption there is, the risk of a top-level politician losing his job is risible.

The time of our times will end up eliminating that privilege, which sooner or later will disappear, a circumstance that confers the enormous opportunity of anticipating it. If the economic performance doesn’t change suddenly, what the government can’t do is pretend that time doesn’t matter and that it will be eternally protected from social pressure. Leadership and hope have never been more important.

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Luis Rubio

The complexity of Mexico’s political life, the violence, and the corruption, but above all the absence of a real debate on domestic problems, has generated a thousand and one diagnoses on the nature of our dilemmas. It would appear obvious that our essential problem is not corruption, violence or criminality, but the absence of a system of functional government: that is, the three levels of government and the three branches of government. This is not a matter of guilt, of the good ones or the bad ones, but rather of essence. The question is how Mexico is going to be governed.

Governing is the sum of leadership and structure. It implies rules of the game and limits of power, imposing the rules of the game equally on all unceremoniously.   Assuming the law as an obligation, not subject to negotiation or discretional application. No negotiation of reforms once they are approved. It implies recognizing that no reform will be successful if it does not advance in the terrain of legality. Therefore, to govern is to comply with the law and to make everyone else comply with it, without exception. This is not a typical PRIist characteristic but it is what the country requires.

One thing is to govern, that is to make daily life possible without brush-offs, and another thing is to create the conditions for that life to be better. The former requires permanent institutions and structures that function regardless of each administration. That is how the issue of security and justice, economic regulation and public finance should be. The latter demands great leadership to improve the daily reality. President Peña was a wizard in the second process, achieving the modification of the regulatory framework in prodigious fashion. Now comes the work of governing, which implies altering the status quo, removing vested interests and rendering the normative framework reality. Some of this is immediate, part takes time, but all of it requires enormous presidential leadership. President Peña has been exceptional in the approval of the reforms; now what is lacking is for their implementation to be equally successful.

From this perspective, there is no magic solution for our ills, but none of them can be solved without a functional government. In other words, all the reforms that one wishes for can be approved, but if these are not implemented, the country will go on the same as always. This is not a criticism of the present government or of any in particular. In former times a change could be imposed; now, without authoritarian structures, that is impossible. In this regard, the most important reform is lacking: that of the government, that of the power.

Beyond the philosophies of government and preferences in matter of public policy, what is essential about a government is not, or should not be, what changes from one administration to another, but instead what remains, that is, the basic State institutions. Among these are the police, the judiciary, and the capacity of regulation. That is, the essence of what it is to govern.

In Mexico we have confused the structural reforms required for the diverse components of the economy and the society to be viable, and the functioning of day-to-day things, including those reforms. This concerns two distinct affairs: one is changing what does not function, the other is creating conditions for everything to function. For example, one thing is there being an adequate structure for the population to be secure and another, very distinct one, is for the police to be reformed in order to reinforce or improve that security. There has been much discussion about the reforms but very little about how they are to be implemented. Changes do not happen on their own.

While the Constitution embodies a robust legal framework that reflects the distinct aspirations of the changing forces and political coalitions over time,   there has not been similar emphasis on the capacity of the State, that which permits governing. Today it is obvious that what was assumed to be a very institutional government in the old system was no more than an authoritarian system. The governing capacity was the product of control exercised through implicit threats, the PRI and co-option. Once those mechanisms began to falter, the system became –like the emperor and his new clothes in the fairytale- more authoritarian than institutional. David Konzevik sums up the dilemma in an exceptional manner. “The art of governing in a dictatorship is the art of managing fear: the art of governing in a democracy is the art of managing expectations”. That’s where Mexico is today.

A successful government in this era requires, before anything else, being functional. John Stuart Mill said in his brilliant way: “Progress includes Order, but Order does not include Progress”. The system was good in terms of order but, in the last decades, bad for progress. If Mexico wants to progress it will have to carry out a reform of the system of government that, in its essence, is a reform of the power. Without that there will be neither order nor progress which, although sounding Porfirian (1876-1910), does not mean that it is no less true.

Héctor Aguilar-Camín affirms that “the maturational time that they need (the reforms)… far outdistances the times and tribulations of the current government”. Obviously he is right: but this also can be a singular excuse to justify not making difficult decisions of implementation that entail altering the status quo. Time can be an excuse for simply kicking the can.

In the past it appeared impossible to change the law; today reforms seem easy. But they will only be reality when they are implemented, that is, when there is governing.  Everything else is fiction.

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Luis Rubio

How are the high-speed train to Querétaro and the brand new National Electoral Institute (INE) alike? Unfortunately, the similarity is less altruistic than is desirable. Some months ago, the Secretary of Communications went to Congress to defend the high-speed Querétaro train project, but as soon as he arrived at his office, he turned on his heel and announced that the project was suspended. The order had been issued from the top. His boss, employing his executive powers, had decided to cancel and the Secretary, being the subordinate, disregarded the evident contradiction and announced that the project was null and void.

The case of the INE was similar, except that the President is not, or supposedly is not, its boss. The issue at hand is the spot of the PAN in which the President’s trip to London with an entourage of (supposedly) 200 invited guests is highlighted. As soon as the spot materialized, the PRI protested: the INE conducted its evaluation and concluded that the PAN advertisement did not violate the established rules and rejected the protest, allowing the ad to continue to appear. However, the next day, the INE received a letter from Presidential Office in which the prohibition of the advertising spot was requested, to which the INE Board acceded, canceling its decision of the day before (an action later overturned by the Electoral Tribunal). The problem is that, in contrast with the Communications Secretariat, the INE is a supposedly autonomous entity. In this decision it demonstrated the limits of its autonomy.

The theme is not a new one. The Federal Electoral Institute (IFE), predecessor of the INE, comprised board members appointed for an eight-year term, but on two occasions the law was modified, which altered not only the respective legislation but also the Board’s composition. Thus, none of the Board Members at that time lasted the previously established eight years. It begs the question: Was the law modified to remove the Board Members? As there is no way to prove the opposite, one must, and can, conclude that at least the supposed autonomy was not a force to be reckoned with in removing them. That is, autonomy is only valid as long as it is not being exercised. In consequence, one might suppose that the present INE Board is acting to preserve their eight-year stint on accepting their subordination to the President.

The same phenomenon has been repeated in regulatory agencies (telecommunications and competition), which also have been modified frequently. Now there are even party quotas for the integration of the Supreme Court. The affair would be ludicrous were it not so grave and disturbing.

The conformation of autonomous organs was a creative idea for responding to the enormous credibility crisis that has battered Mexican society for decades. The objective was to create “islands” of credibility sustained by irreproachable Individuals who could “lend” their credibility and honesty to the society, conferring certainty on it in order for, at least in the specific ambit, there to be trust that things would be done well. The first case that I remember was that of the Human Rights Commission that, with ups and downs, has satisfied that mandate at least with some decorum. While it cannot be measured with the same yardstick, NAFTA was conceived with exactly the same rationale: confer trust on the investors that the rules would not change at whim.

The IFE, in the most conflictive matter, supposedly proved its relevance in the 2000 election, given that the PRI was defeated and the IFE testified to this without disputes breaking out. In retrospect, it seems evident that IFE of that time achieved the credibility that it did more because the PRI candidate, Francisco Labastida, and the then-President Zedillo had the integrity to recognize the election than because of the autonomy of the IFE Board. As soon as a later candidate disputed the results, autonomy wasn’t worth the paper it was written on.

The phenomenon is not attributable to the government, because every political class, of all of the political parties, is an accessory to the same thing: it is the parties that have created party quotas for these agencies and collegiate bodies; the political parties that have torn down the autonomous entities whenever they felt it convenient or expedient and it is they, with the collusion of diverse administrations, that have created absurd laws that exclude the citizenry from participation in politics, distancing their supposed representatives from the population and impeding the latter from freely expressing themselves on matters that, in a self-respecting democracy, would be an incumbency for the population before anyone else.

The Pact for Mexico, as important as it was for the process of reforms, was based on the explicit exclusion of the legislature, the alleged representative of the citizenry. That is, there wasn’t even the pretension of the reforms being approved by the representatives who, steeped in the old ways of the PRI, did no more than raise a finger. Worse, the Pact was accompanied by a structure of corruption for the benefit of all of its members, which explains to a great extent the massive loss of prestige   that all of the partisan institutes enjoy today. Were it not for the fact that there are explanations for each of these instances, one would think that the entire political project of the last decades has consisted not only of the obvious (change so that everything could continue the same), but instead to deceive the citizenry with the promise of a democracy that would never arrive.

Writer Erica Jong said: “Take your life in your own hands, and what happens? A terrible thing: no one to blame”.

That’s our political class to a T.

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 Luis Rubio

During his exile in Paris, Porfirio Díaz stated that “governing Mexicans is more difficult than herding turkeys while riding on horseback”. He must have known something about that after nearly thirty years of trying to do so. However, the fact that he lasted so long and the way that his administration ended is suggestive of the country’s problem that is yet to be resolved.

In his book The Politics of Mexican Development, Hansen states that the PRiist system was nothing other than the institutionalization of the Porfiriato. It was, in reality, a creative way of responding to the problems to which Díaz alluded that afforded the country decades of peace and some of economic development. It worked until the ship began taking on water, more or less simultaneously in economic as well as in political spheres: in the seventies the problem reached its limits and, despite much legal, constitutional and political maneuvering the problem’s still there.

The question of governance of the country continues to be the heart of the problem and is noticeable in all ambits: in the lack of security, in weak justice, in the perennial discontinuity of the economic policies, the high unemployment rates, and, in general, the lack of opportunities. If there were an effective and functional system of government, the country would not be undergoing the tribulations of instability, criminality and poor economic growth. The leading question is how to solve the riddle of governability: How can a political regime be created that is concomitantly functional and held accountable?

For years, the politico-intellectual mantra was that a series of reforms would be required and that these, almost by magic, would solve the country’s problems. Now that the Mexican Constitution has been reformed in so many articles that many say they no longer recognize it, one would suppose that we’d be poised on the threshold of development; however, none of that is happening. I do not wish to suggest by this that the reforms undertaken are bad or uncalled for. Quite the contrary: I believe that they can be profoundly transforming. That said, I am convinced that without an effective and adequate government system for the XXI Century the reforms are distinctly insufficient.

Three recent texts led me to reflect on the complexity of the problem and the shortfall of agreement on the nature of the solution. In sharp text entitled The Law of Cynicism*, Sergio López- Ayllón says that “we have a cynical justice system, saturated with rights and obligations without institutions backed by capacities to make them effective. Is it surprising then that we have a credibility crisis? If we want a credible Rule of Law we need serious laws”. In other words, the emphasis that our politicians have placed on the letter of the law has been wrong: our politicians trust that with changing the law the reality changes and their work has been satisfied. As López- Ayllón points out so well, the problem is not one of the laws in themselves, but rather one of structures that can make the Rule of Law possible.

Héctor Aguilarr- Camín** trains his analysis in another direction:  “the governability of a presidential regime largely depends on there always being an absolute congressional majority in the hands of one party, whether of the government or the opposition, so that this party would be clearly responsible for the decisions that Congress makes in all matters”. That is, our problem lies in the lack of concentration of power and responsibility, this after the current government achieved reforms that seemed impossible throughout the previous fifteen years, without any majority.

In an analysis on China*** David Shambaugh minutely examines the challenges that confront China’s political system, in good part because the excessive concentration of power –that has made that government so effective in economic matters over the past forty years- is giving rise to conflicts that appear to be increasingly unmanageable, in addition to limiting the potential of China to access technologies whose development depends in large part on an open political system.

Both countries, China and Mexico, face the challenge of governability in the era f the knowledge economy, which calls for an open but effective political system. There’s no doubt that creating a system of that nature is going to require the construction of institutions capable of enforcing the Rule of Law as López-Ayllón asserts, but also that it is essential to reconfigure the political system as Aguilar-Camín infers.

The challenge of the Rule of Law is enormous and, although there are cases of institutional construction in the world, no example is applicable just as is. What is clear, as the Chinese case illustrates, is that the solution does not lie in a monolithic government with tough party control. Rather, it seems to me that we should begin by understanding the incentives toward polarization that the present electoral system is generating, evaluating the achievements and errors of the successive reforms, –from1996 to date- in order to determine not only how to secure the best representation of the political forces and to avoid the abuses that each party has identified (correctly or not), the gist of all the post 1996 electoral reforms, but also how to construct governing capacity.

The emphasis of the last twenty years had been on addressing the grievances that stem from the PRI era. What is imperative now is to construct government capacity, together with institutional instruments in the hands of the society for it to exact accountability. The key question at issue is whether this can be constructed from the ground up or the inverse. The answer is not obvious.

*Universal Marzo 9, ** Milenio Marzo 24, ***WSJ Marzo 6

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