In The Wings

FORBES – Luis Rubio

“The calm after the storm”, says a popular refrain.  And the calm in this case could be brief: after a year of politico-legislative effervescence, the calm creates an exceptional opportunity, perhaps unique, to advance the governmental agenda no longer in the abstract and on occasion sketchy terrain of politics, but rather in the concrete scenario of quotidian reality, where it really hurts. To date, however contentious the reform process has been, everything has been restricted to the ideological. Now the battle for interests begins.

Undeniable, the success of the government in advancing its legislative platform, in the constitutional dimension. In the process the president displayed solidity, prudence, flexibility and impressive discipline. From its conception, etched into the Pact for Mexico, the strategy has proven to be implacable and the president did not follow it dogmatically but instead, as shown by the contrast between the fiscal reform and that of energy, it adapted itself along the way for the sake of achieving its core objective. The applause that it has garnered in the world press is not for naught.

What’s paradoxical about the point in time is the contrast between that optimistic applause from the outside and the pessimism, or at least skepticism, holding sway in the interior of the country. The explanation is simple: Mexicans know that the letter of the law hasn’t got much to do with the day-to-day reality. Consequently, more than pessimism, what there is in Mexico is incredulity: it must be seen to be believed. And in Mexico seeing means implementing.

In comparison with highly institutionalized societies, in Mexico a good political operation (something unusual in the last decades, which is why last year’s achievements stand out so much), allows great reforms to be carried out. The speed with which the energy reform was ratified would have given a collective heart attack to the entire society of Denmark, where a constitutional reform can dally for up to three years and few are successful. Accordingly, in a weakly institutionalized society such as that of Mexico, good leadership has the opportunity to achieve fundamental transformations, but also to revert them, which feeds the skepticism.

In this context NAFTA is exceptionally brilliant precisely because it’s the only thing that hasn’t changed in recent decades. Opening and liberalization have been “modulated”, many subsidies have been reintroduced and the present government proposes raising –publicly and consciously- deficit spending for the first time since the nineties. These ups and downs generate cynicism and uncertainty among the population because they imply breaking political commitments. But not NAFTA, which because of its international moorings, is exactly the achievement sought. It is crucial not to ignore these factors, above all because of the contentiousness that can ensue on implementing the reforms already approved.

In legislative terms, the next step will be more transcendental. While a constitutional reform is significant in an abstract sense, the one that establishes the rules of the game for investors lies in the secondary laws, a matter that will proceed this year in Congress. For many analysts, that process is a mere formality because it does not require legislative alliances with the PAN and/or the PRD. However, given the historical nature of the PRI,  –a party steeped with deeply rooted private interests- absence of the opposition parties implies carte blanche for those interests to act, directly or indirectly, to adjust the legislation to their advantage. In this regard, the process is infinitely more sensitive and relevant this year. The details that finally appear in the legislation will be those that determine the measure of its success.

It seems probable that the government had calculated that it had to put its legislative agenda forward in the first year to be able to start harvesting in the following ones. Its calendar has an electoral logic (achieve exceptional results at the moment of the mid-term elections), which implies employing all of its resources –such as the expenditure and its infrastructure projects- proactively. Perhaps what they didn’t bargain for was the fireball of Michoacán and, potentially, with how complex the secondary energy law could become. No one should minimize or underestimate how fraught with difficulty political management will be in 2014 above all because, as Mike Tyson said, “A well-aimed blow can thwart the cleverest plan”.