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Puerto Vallarta News NetworkEditorials | September 2007 

Mexican Fiscal and Electoral Reforms Move Forward
email this pageprint this pageemail usAllan Wall - PVNN

Laws are like sausages. It’s better not to see them being made.
- Otto von Bismarck
After months of hoopla and horse trading, the Mexican Congress has finally approved reforms in fiscal policy and electoral law.

The passage of these reforms demonstrates the necessity of negotiations in the Mexican Congress. Long gone are the days of yore, when the Mexican Congress was a rubber stamp for the executive in a one-party state.

Nowadays the president has to negotiate. On the legislative side, each of the three major parties, the PAN (National Action Party), the PRD (Party of the Democratic Revolution) and the PRI (Institutional Revolutionary Party), has to give up part of what it wants to get something it wants.

Fiscal reform was (and is) a goal of the Calderon administration, while electoral reform was a goal of the opposition parties. So the opposition parties got what they wanted, and Calderon got what he wanted. Sort of.

So what’s the verdict on this fiscal reform?

U.S. investment bank Morgan Stanley calls it “a clear step in the right direction” and “a break from Mexico’s past of political gridlock.” Fitch Ratings has upgraded the long-term foreign currency credit rating of Mexico.

Nevertheless, the reform fell short of what it might have been.

Mexico-watcher George Grayson, a professor at the College of William and Mary, calls it “reform lite.”

Lawmakers fell back on a longstanding tradition of utilizing the oil monopoly PEMEX to bail out the government’s finances. A big part of the fiscal reform (opposed by the PRD) is a price increase for PEMEX gasoline. That means that ordinary Mexicans will be paying more for gas at the pumps, by January 1st at the latest.

This proves once again that PEMEX functions as a tax-collection agency for the Mexican government.

Yet according to the Mexican government’s own calculations, even including the gasoline price hike and other taxes, the fiscal reform will only yield an increase to the tax coffers of 1% of GDP.

That’s something, but hardly overwhelming.

The electoral reform is supported by the leadership of all three major parties, the PAN, the PRI and the PRD.

The electoral reform includes big changes in campaign advertising. It bans parties from purchasing air time on Mexican TV and radio stations. In place of paid ads, the reform stipulates that TV and radio stations are obliged to give free time for party advertisements. These would be in 2-3 minute slots in prime-time, from 6 p.m. to midnight.

Is this an improvement? Obviously Mexico’s media giants Televisa and Azteca oppose the reform, a Televisa spokesman referred to it as “Soviet-style politics to maintain the status quo.”

PRI Senator Manlio Fabio Beltrones, on the other hand, said "What are we defending here, a country dominated by advertising and ratings or the right of citizens to obtain information that helps to inform their decisions?"

Commentator Sergio Sarmiento, though, criticized the change and said it would make the campaigns more — not less — dependent on short sound-bite driven ads called “spots.”

The electoral reform also makes it more difficult for new parties to be formed. Despite their differences, the PAN, PRD and PRI (with their satellite parties) are not keen on allowing more parties into the fray.

Also, the electoral reform will expel all the current counselors on the IFE (Federal Electoral Institute) Board. That’s what the PRD wanted, as vengeance for ruling against them in the last presidential election. The PRI accepted the expulsion in order to keep the PRD on board, and the PAN accepted it to get PRI support for fiscal reform.

That’s how politics functions in the real world.

Completely absent from the electoral reform is a second round in the presidential election. That would probably be more useful than anything in heading off a 2006-type post-election contention.

The electoral reform amends the Constitution, and must be passed by 16 of the 31 unicameral state legislatures in Mexico. It looks like it’s going to pass. (The Mexican Constitution is amended much more frequently than the U.S. Constitution, and amendments are passed much more rapidly.)

All things considered, the reforms are a victory for President Felipe Calderon, who recently received a 69% approval rating in a Parametria poll. Hopefully, substantive (though more controversial) reforms in energy and labor laws will follow.

As for the fiscal and electoral reforms, consider a quotation from 19th-century German statesman Otto von Bismarck. It was Bismarck who remarked that “Laws are like sausages. It’s better not to see them being made.”
Allan Wall is an American citizen who has been teaching English in Mexico since 1991, and writing articles about various aspects of Mexico and Mexican society for the past decade. Some of these articles are about Mexico's political scene, history and culture, tourism, and Mexican emigration as viewed from south of the border, which you can read on his website at

Click HERE for more articles by Allan Wall.

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