MEXICO CITY — President Enrique Peña Nieto has chalked up major victories in his first year in office, but the next few weeks will mark a crucial period that might define his presidency and Mexico for decades to come.
Since he took office a year ago, Peña Nieto has made little, if any, headway in cutting back the runaway drug-related violence that has wracked Mexico for much of the past decade. But he has shed his once-all-powerful party’s authoritarian image and ushered through major proposals to reshape society in a push to modernize Mexico.
As Peña Nieto enters his second year in office Sunday, political observers say Mexico has never seen a president attempt to change government in such significant ways so fast. Peña Nieto’s government has seized control of the schools from the once-powerful teachers union, set in motion the dissolution of monopolies, revised tax and labor codes, and moved in principle to relax his party’s grip on the political system.
Still awaiting action in the country’s Congress by the Dec. 15 end of the session, however, is a proposal to open the energy sector to foreign investment, a change that jangles the core of nationalist identity dating to Mexico’s modern formation and has sparked protests.
“The overall impact of the energy reform could literally transform the country and the economy,” said Benito Berber, senior Latin America strategist for Nomura Securities.
In a research note, Berber said the passage of the energy proposals would have an immediate effect on manufacturing, electrical generation, the petrochemical sector and other sectors of Latin America’s second-largest economy.
Attracting foreign investment to the ailing energy sector, a pillar of the Mexican economy, is considered crucial to ramping up sluggish growth of about 1 percent this year.
Growth might hit only 2.5 percent next year. Experts blame the slowdown on uncertainty over the reforms and on slow government spending.
Peña Nieto, in a nod to those who fretted last year over the return to power of his Institutional Revolutionary Party, or PRI by its Spanish initials, has touted in recent days the now-crumbling political consensus that allowed him to move fast.
A day after taking office last year, Peña Nieto announced an alliance with the two main opposition parties — the National Action Party, or PAN, the center-right group that had held the presidency for the previous 12 years; and the Party for the Democratic Revolution, or PRD, a leftist group.
The alliance, known as the Pact for Mexico,
held for a year but broke apart last week when the PRD announced that it was bolting because the government hadn’t listened to its view that the state oil giant, Petroleos Mexicanos, should be given greater autonomy rather than bringing in foreign energy investors.
While the PRI could pass the energy reform with the support of just the PAN, the apparent dissolution of the Pact for Mexico might portend a period of turmoil.
