The End of Nostalgia

Review by Ted Wilkinson

The End of Nostalgia: Mexico Confronts the Challenges of Global Competition by Diana Villiers Negroponte, Ed., The Brookings Institution: Washington, DC, 2013, ISBN 978-0-8157-2494-0, 208 pp., $24.26 paperback, $14.55 Kindle edition.

In this book Diana Negroponte has amalgamated six expert assessments of Mexico’s role on the world stage today and added her own conclusions.  The result is an ambitious and thoughtful survey of issues and opportunities and a valuable resource for analysts and students.

One has to wonder about Dr. Negroponte’s choice of title. Is this a bid to be judged by the same high standards as Francis Fukuyama’s now famous essay on the “end of history” in The National Interest in 1989, or Moises Naim’s brilliant recent book on “The End of Power”?

In fact, the end of nostalgia is a pretty good epithet for what’s underway now in Mexico—a new government’s effort to shed the unwholesome legacies of the “dinosaurs” of the Partido Revolucionario Institucional (PRI)* who ruled for most of the 20th Century.

It’s true that the last two previous PRI presidents, Carlos Salinas and Ernesto Zedillo, were modernizers who sought to raise standards and look outwards so as to legitimize Mexico’s admission into the OECD, the developed countries’ consultative group, but even their administrations were tainted by high-level corruption.

Now, after a hiatus of 12 years, the PRI is back in power, and an ambitious and politically seasoned president is trying to advance a package of reforms, towards which his Accion Nacional (PAN) predecessors had managed no more than a sputtering start.

President Pena Nieto has two major new advantages. First, the three major Mexican parties agreed on a pact in December 2012, after the election, to support key reforms in principle in the legislature, where no party has a majority.  Second, his PRI party controls 21 of the country’s 32 governorships, which helps enhance his political base for the implementation of reforms.

He also has to contend with one significant vulnerability that no modern president can escape—the ability of opponents to mobilize anti-reform activists at a moment’s notice.  Pena Nieto has already had to contend with this in mid-2013, when dissident teachers protesting the education reforms that were enacted almost unanimously by the legislature throttled traffic in Mexico City for months.

Dr. Negroponte’s contributors draw on their expertise to project the changes that are needed and politically feasible.

Education expert Armando Chacon observes that the education reforms—teacher evaluations, elimination of union featherbedding, etc.—while direly needed, will only be effective if conscientiously carried out.  Experience has shown that ambitious Mexican legislative goals often go unfulfilled, for want of the administrative capacity to implement them.

A healthy continued economic growth rate is an essential underpinning not only for education reform, but also for progress in all other areas.  Harvard fellow Arturo Franco finds economists puzzled that Mexico’s sound financial management in recent years hasn’t led to faster growth. One major plus for Mexico is its closeness and access to the U.S. market, where over 80 percent of its exports are destined, but it’s a mixed blessing: Mexico’s GDP took the biggest hit of all during the 2009 recession, when its GDP fell six percent. Since NAFTA, while manufacturing has increased, Mexican agriculture has lost an estimated one million jobs due to cheap U.S. imports, principally corn.  Franco identifies other factors that have held Mexico back: the need for better transport facilities; excessive costs paid to monopolies; inadequate credit; low labor education and productivity; and widespread insecurity, which has discouraged foreign investment and is estimated to have cost as much as one percent of GDP.

Looking specifically at trade, the Woodrow Wilson Institute’s Chris Wilson notes that trade between Mexico and the U.S. grew fastest in the years 1993-2000 (17.3 percent annually), and slowed to 4.5 percent from 2000 to 2008, largely due to the “thickening” of the U.S. border from post – 9/11 security enhancements. Mexico is rising steadily in global competitiveness indices, but needs to work together with the U.S. and Canada to open export markets further, particularly in the current Transpacific Partnership negotiations.  In the context of the agreed U.S.-Mexico goal of “building at 20th Century border,” both countries need to work to reduce the long access delays at ports of entry and to expedite and streamline customs procedures. In the longer run, better-synchronized rules of origin and/or a common external tariff would make it easier for small and medium industries to export.

The Wilson Center’s Mexico Institute Director Duncan Wood addresses the critical energy reforms that are now before the legislature, together with closely related fiscal reforms to increase government revenue. To what extent can PEMEX be relieved of its role as the “cash cow” of the Mexican government, so as to free up resources for exploration and to restock Mexico’s depleted proven reserves? Alternatively, to what extent can foreign oil giants be lured into investing in deep-sea oil ventures with promises of profit sharing, to the detriment of Mexican nationalists’ sacrosanct sovereignty over its own natural resources? Over the longer term, Wood notes that Mexico can also foresee exploitation of major shale gas reserves and could become a “superpower” in nonconventional areas—solar, wind, geothermal and biofuel energy.

Of all the issues that Mexico faces, security problems are regrettably the ones that get the most attention in the US.  Despite the surge in criminal organization murders, which peaked in 2011, government veteran and analyst Eduardo Guerrero points out the legislative accomplishments of the Calderon administration: constitutional reform to institute oral trials with adversarial procedures; a public security law to coordinate national, state, and local police; a law making kidnapping a federal offense (as the U.S. did in 1929 after the Lindbergh kidnapping); a money-laundering law.  Towards the end of his tenure Calderon adjusted his goal of arresting the leaders of the criminal organizations, which many believed was proving counterproductive, and focused more on the most violent groups, in particular the “Zetas.” Pena Nieto has continued the shift in focus, but regional pockets of lawlessness persist.  Guerrero lists a number of palliative measures that the government might pursue, but clearly the most essential ones are vetting and professionalizing police forces at all levels so that they can achieve public trust, which remains as low as ever in Mexico today.

How can the US help in this process? Negroponte traces the development of the Merida Initiative, which originated with Presidents Bush and Calderon and provided U.S. helicopters, inspection equipment, computer support, and training to Mexico in view of our common interest in countering criminality.  In tandem U.S. agencies multiplied law enforcement liaison channels.  Over time the focus of U.S. assistance has shifted almost exclusively to training, and under Pena Nieto law enforcement cooperation has been channeled through a “single portal” in the Mexican Secretariat of Interior (Gobernacion).  “Beyond Merida” goals have been broadened to include modernizing border operations and building crime-resistant communities. Given the changing circumstances, Negroponte questions whether the “Merida” security focus is still the best rubric for the U.S. administration to seek funding for disaggregated U.S. assistance to Mexico.

Finally, former Deputy Foreign Minister Andres Rozental surveys the increasing “intimacy” of U.S.-Mexican bilateral cooperation, lamenting that remaining problems “are often much more visible and troublesome than the many positive aspects of our partnership.”  The central themes for Mexico’s reform process are ending corruption and impunity, dismantling the  “political, social and private sector monopolies” that diminish Mexico’s competitiveness, and modernizing the country’s energy sector.  Mexico’s interests in the U.S. include comprehensive immigration reform, prospects for which were so brutally crushed a decade ago by 9/11, and for a U.S. response to growing Latin American calls for refinements in our anti-narcotics policies that reflect the spreading tolerance for marijuana. Rozental stresses the importance of implementing the many unfulfilled recommendations of bilateral studies for improving U.S.-Mexico border functions, and looks towards a strengthened NAFTA, the TPP and G-20 cooperation as pathways to promote mutual welfare.

For those who have also read Alfredo Corchado’s “Midnight in Mexico: A Reporter’s Journey Through a Country’s Descent into Darkness,” published in June, Negroponte’s excellent analysis may provide an antidote. Mexico has a lot of work to do, but there’s ample recognition of what’s needed, a good bit has been done, and the political will is there to carry the process forward.  Despite his gloomy title, even Corchado admits that: “ …I still am in love with Mexico…and haven’t stopped believing…in the promise of a new day.”

Footnotes

* After years of turmoil, the party settled on an oxymoron in 1946 for a name to satisfy everyone and justify its monopoly on power: “institutional” for those who wanted stability, and “revolutionary” for those who sought change.

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