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Giving The Pri A Run For Its Money (Int'l Edition)


International -- Latin American Business: Mexico

Giving the PRI a Run for Its Money (int'l edition)

Despite polls, Vicente Fox is still a long shot for the presidency

What a difference three weeks makes. Until recently, Francisco Labastida, the candidate of Mexico's long-ruling Institutional Revolutionary Party (PRI) looked like a shoo-in to win the July 2 presidential election. His chief rival, Vicente Fox of the center-right National Action Party (PAN), was languishing in the polls. Now, Fox is closing in on Labastida. The latest surveys show the candidates running virtually neck and neck.

Advantage Fox? Not quite yet. Four months remain before the election--plenty of time for the PRI to marshal its forces to crush the upstart Fox and retain its seven-decade-long grip on the presidency. To beat the PRI, Fox, a former Coca-Cola Co. executive, will have to spend heavily on advertising, beef up his grass-roots organization, and convince business that his pledge to wipe out corruption will be good for the economy. Fox must also persuade 10 other opposition parties to rally around him as the only candidate capable of beating the PRI. A tall order, since the parties don't see eye to eye on most issues.

A Feb. 21 survey by Reforma, a leading Mexican daily, showed Fox trailing Labastida by just seven percentage points, with 32%. In another poll, Fox was less than three points behind. Yet some analysts believe the favorable numbers reflect a brief pause in advertising spending by Labastida, rather than a realignment of political forces. Moreover, Fox's growing popularity is expected to galvanize the PRI and its countrywide web of followers. "If and when it becomes clear that Fox is a threat, we will see the PRI showing a level of discipline we haven't seen yet," says political scientist Denise Dresser.

The PAN's political apparatus is no match for the PRI's time-tested, turn-out-the-vote machine. Fox cannot even count on the full support of his party. He landed the PAN's nomination by default in December, because no other candidate opposed him. Since then he has quarreled publicly with PAN leaders, some of whom view him as a maverick who favors quick, dramatic change over the party's go-slow approach on reform. Fox says government should be run more efficiently, like a corporation. He advocates turning electricity generation, petrochemicals, and perhaps even oil production over to the private sector. He even boasts that he could end the guerrilla conflict in Chiapas in just 15 minutes, if given a chance.

To augment the efforts of the PAN, Fox has assembled his own grass-roots movement, Friends of Fox. The organization claims 2.5 million members. But most of them are politically inexperienced volunteers, more capable of extracting donations from upper- and middle-class voters than of barnstorming rural areas, which are the PRI's stronghold. And persuading Mexico's 40 million poor to vote for the PAN is tough, since many depend on the PRI for agricultural and educational subsidies.

Getting prominent businesspeople to endorse him is another daunting challenge for Fox. Those who have heard Fox speak say they like his proposals to cut government waste and wipe out corruption. And business has been critical of Labastida, saying his proposals are vague. They are also wary of his pledge to introduce industrial planning and improve income distribution.SIMPLE MATH. For now, companies are hedging their bets by contributing money and loaning out their corporate jets to both candidates. But they're still afraid to lend Fox the public support that could solidify his gains into a real lead. Just like Mexico's poor peasants, businesspeople fear losing government favors and their privileged access to officials. And small and midsize companies cannot afford to do without subsidized export credits or development bank loans. Fox claims he doesn't feel snubbed. "They feel pressured and afraid of the government," he says with a shrug.

In the end, Mexico's presidential election may come down to simple economics. Gross domestic product is set to grow by a healthy 4% this year. At present, there are no harbingers of the cataclysmic end-of-term financial crises that have marred three of the last four transitions. So Mexican voters, traditionally fearful of dramatic change, may be reluctant to switch allegiances now--even though wages are stagnant and the number of people living in poverty has increased. Fox's challenge is to convince them that their lot in life will never improve unless they boot out the PRI and try something new.By Geri Smith in Mexico City


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