Bloomberg News

Mexican Leader Vows to Cut Crime, Deficit:'Time to Break the Myths'

December 01, 2012

Mexican President Enrique Pena Nieto took office today pledging to reduce crime, erase the budget deficit and spur competition in communications industries, where the world’s richest man has a near monopoly in phone service.

Wearing the green, red and white presidential sash, the 46- year-old president said in his inaugural address that he’ll create a national crime prevention program after more than 57,000 people were killed in drug warfare since 2006 under his predecessor, Felipe Calderon. He called for “austerity” in government spending while saying infrastructure investments should be accelerated.

“It’s time for us to break the myths and paradigms and everything else that has limited our development,” Pena Nieto said in an address at the National Palace. “It’s now up to us to take advantage of this platform to boost growth and achieve the most important economic objective -- improve the economy for Mexican families.”

Pena Nieto takes over a $1.2 trillion economy analysts forecast will grow 3.8 percent this year, more than Brazil yet less than Latin American countries including Colombia and Peru. He said his government will bring “21st century” development to Mexico, promising a wider social safety net, more passenger railroads and greater oversight of state government debts.

“The nation hasn’t grown sufficiently,” Pena Nieto said. “Mexico hasn’t achieved the advances that the people demand and deserve.”

Street Protests

Before the swearing-in, several hundred protesters fought with police at barricades around Congress, with rioters hurling bottle rockets and officers spraying tear gas to disperse them as eight people were injured, according to Mexico City Mayor Marcelo Ebrard. A group of marchers rammed a truck into a police barricade and separate protests along Mexico City’s main business boulevard, the Paseo de la Reforma, left dozens of storefronts shattered.

Pena Nieto’s Institutional Revolutionary Party, or PRI, ruled Mexico for 71 years until 2000. Opponents, including supporters of election runner-up Andres Manuel Lopez Obrador, have warned that Pena Nieto’s administration may return to the corruption and cronyism that marked the PRI’s prior rule.

As part of his economic agenda, Pena Nieto vowed to seek bids for two more over-the-air broadcast networks in a nation dominated by Grupo Televisa SAB (TLEVICPO) and TV Azteca SAB. He also said there should be more competition in the telephone industry, even as billionaire Carlos Slim, the world’s richest person who controls 80 percent of Mexico’s landlines and 70 percent of its mobile-phone lines through America Movil SAB, attended the speech.

‘Trapped Growth’

“We need to find a way to unleash that trapped growth potential in the economy, and that’s why those reforms are so critical,” said Alberto Ramos, an economist at Goldman Sachs Group Inc., before the speech. Investors are looking to see that the PRI “will be willing and able to reach across the aisle to achieve meaningful reforms,” he said.

Pena Nieto said all Mexicans deserve access to high-speed Internet and urged steps toward universal social security while saying his government will propose eliminating the budget deficit in 2013. Mexico’s Congress passed a budget for this year that forecast a deficit of 0.4 percent of gross domestic product.

The incoming leader also said he’ll send Congress a bill to increase oversight of state debt and push for a constitutional amendment to consolidate the criminal code.

Energy Details

The president failed to give details on his campaign plans to open up the energy industry, dominated by state-run Petroleos Mexicanos, to foreign competition. Crude production at the company has fallen for seven straight years and Pena Nieto had previously said he favored accelerated development of shale gas reserves and deep-water oil deposits.

Some of Pena Nieto’s stated goals are similar to ones pushed by Calderon’s National Action Party over the past six years, many of which were blocked by Pena Nieto’s Institutional Revolutionary Party, or PRI. Gustavo Madero, the PAN’s president, reiterated on Nov. 24 that his party will work with the PRI to achieve the overhauls that it worked for under Calderon.

“In a country’s life, six years is a short time,” Pena Nieto said. “But 2,191 days are sufficient to put down roots concerning what, starting now, should be our goals -- making Mexico a prosperous nation and one of opportunities and well- being for all.”

To contact the reporters on this story: Eric Martin in Mexico City at emartin21@bloomberg.net; Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net


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