BUSINESSWEEK ONLINE : JULY 17, 2000 ISSUE
INTERNATIONAL -- LATIN AMERICAN COVER STORY The PRI May Tear Itself Apart (int'l edition) Vicente Fox's victory deals a withering blow to the Institutional Revolutionary Party (PRI), which for the past 71 years has ruled Mexico like a fiefdom. In one fell swoop, the party has lost control over the powerful executive branch and the billions of pesos in pork that kept labor unions, peasant organizations, and other interest groups loyal to the party. After winning 13 consecutive presidential elections, the PRI is now relegated to an unaccustomed role: an opposition party with greatly diminished powers. Can the PRI survive in defeat? Certainly, though probably not intact. The party still holds 20 of Mexico's 32 governorships as well as the second-largest bloc of seats in Congress. But the loss of the presidency will aggravate long-running tensions within the party. A war could break out between the grizzled old guard and the reform-minded technocrats who have held sway for the past 12 years. Several prominent Priistas have already jumped ship and joined the Fox camp. More are likely to do so over the coming weeks and months if Mexico's President-elect makes good on his pledge to assemble a multi-party Cabinet. One of those doing the recruiting will be Alfonso Durazo, a 27-year PRI veteran who quit the party earlier this year and endorsed Fox. ''We Mexicans want a President who makes decisions that go beyond a political party's own interests,'' says Durazo. VAST SWATHS. That's a concept many Priistas cannot grasp. Since 1929, the party has been synonymous with the state. But its fortunes began to decline in the mid-1980s when the first of a series of technocratic presidents began implementing free-market reforms that freed vast swaths of the economy from government control. Privatization coupled with fiscal austerity forced the PRI to cut back on patronage and social programs, the means by which it rewarded its faithful. For the old guard PRI leaders, Fox's win is proof that the reforms championed by the technocrats went too far. Now, the so-called dinosaurs are expected to try to reclaim control of the party. In November, the PRI will hold a national assembly to elect new leadership. Veteran PRI hardliners Manuel Bartlett, a former governor of Puebla, and Tabasco Governor Roberto Madrazo, who lost out to Francisco Labastida in last year's presidential primary, are expected to play an important role in shaping the party's future. However the drama unfolds, there's little doubt that the PRI will undergo change. Don't write this party off completely, though. The PRI has always managed to reinvent itself when faced with political crises. True, it has done so from a position of power. Now it must do so from the ashes of defeat. By Geri Smith in Mexico City _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Mexican Revolution (int'l edition) LATIN AMERICAN COVER IMAGE: Mexican Revolution TABLE: Challenges ahead for President-Elect Fox TABLE: Making of a President The PRI May Tear Itself Apart (int'l edition) ONLINE ORIGINAL: Vicente Fox on the Transition, NAFTA, Corruption, Drugs, the Economy... INTERACT E-Mail to Business Week Online

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