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What is worse than an "imperfect democracy?" A "perfect dictatorship", which is the way Peruvian novelist Mario Vargas Llosa described Mexico under the seven-decade rule of the Institutional Revolutionary Party (PRI), when elections were held regularly but their results were pre-ordained. Mexico's perfect dictatorship was destroyed last year when Vicente Fox, the candidate of the National Action Party, won the presidential election. When he took office on Dec. 1st he replaced it with a far more complex and volatile system which he defines as "democracy as an agent of development," promising results that people "will be able to taste."
But he has to deal with the fact that Mexican people's political taste has been blunted by 71 years of the PRI's nationalistic populism. The PRI still retains 40 per cent of the popular vote, 19 of 31 gubernatorial seats and simple majorities in both the federal Senate and lower house. This is changing and may change even further. In the last six months the PRI has lost gubernatorial elections in two states and its sole victory-last October, in the state of Tabasco-was annulled on the grounds of fraud.
Internal reforms, which most PRI members agree are long overdue within their party, are now looking urgent, with 14 state elections scheduled this year, including four for state governor. Many important party members have recently resigned. They say they have become disenchanted with the party, which, instead of adapting to Mexico's democratic transition, has fallen back on its old political tricks to maintain its hold on power.
The numerous departures have exposed the bitter infighting that has virtually paralyzed the party since it lost the presidential elections. Party hardliners have been unable to forgive Ernesto Zedillo, the former president, and his followers for the defeat, suggesting a split in the PRI is a possibility-some say inevitable-as traditionalist party members, who would like to return to the PRI's popular, nationalist roots, remain locked in a bitter battle with liberal technocrats over who will be the new party leader.
The PRI is also suffering politically from the increasing data available on the extent of the corruption of their successive presidencies, which was always popularly perceived but never independently quantified. Recent studies estimate that the cost of corruption in Mexico amounts to 9.5 percent of Gross Domestic Product, which compares with the 6 percent of GDP assigned to public education.
In an effort to symbolize his fight against corruption from its roots up, last month, as he stood at the U.S.-Mexico border to welcome countrymen returning for Christmas from jobs in the United States, President Fox warned Mexican police and customs officials, in the kind of language he has used like a machete on the conventions of Mexican politics, to stop their holiday tradition of stripping cash and gifts from hard-working migrants to let them through.
"For those of you living in the past, let me tell you we will not tolerate breaking the law," he bellowed at the officers, words that got big play all over Mexico as a metaphor of what the new government is trying to achieve in its fight against corruption.
On another front, Fox is struggling to fulfil the high expectations generated by his historic victory. Lacking a majority in both houses of Congress, he has to negotiate with the PRI and the Democratic Revolution Party (PRD), a leftist splinter of the PRI, to secure approval for his political and economic reform agenda.
In his first year in office Fox plans to open up the electricity sector to greater private investment, enact tax reform, and update labor and trade union law. But other immediate economic issues have a greater priority. A couple of weeks ago Mexico's currency dropped to its lowest point since June 2000, underlining investor concerns that the fast-growing economy is in for a sharp adjustment as the U.S. shows continued signs of declining growth.
"It is dangerous for Mexico to continue growing very rapidly while its most important economic partner is entering a period of substantial decline," said Gray Newman, chief Latin American economist with Morgan Stanley Dean Witter in New York. "It means the adjustment will be even more abrupt."
Aware of this problem, Fox intends to tighten fiscal policy in 2001 to target a fiscal deficit of 0.5 percent of GDP. Given his likely spending cuts and the slowdown forecast for the U.S. economy, Mexico's GDP growth should decelerate to 3.5 percent in 2001 (from 7 percent in 2000), rebounding slightly in 2002, to 4 percent. But it won't be easy to rein in GDP foe this year when growth for the last quarter of 2000 is estimated to have been a strong 6 per cent or more.
In the political arena Fox's first challenge will be to address the unresolved conflict in the southern state of Chiapas, where seven years ago armed rebels-the so-called Zapatistas-spilled out of the jungle in what they claimed was a fight for improved rights.
Mexico looks closer than ever to crafting a peace deal with the indigenous group. Since taking power seven weeks ago, Fox has moved quickly to show his willingness to meet the demands of Zapatista leader Subcommander Marcos for returning to the negotiating table. He has pulled troops from three army bases in the conflict zone, and officials signaled this week they would clear soldiers at four more points to meet one of Marcos's terms. In a bid to meet the other two conditions, Fox supported the release of 17 of some 100 Zapatistas held by the government, and he sent to Congress the 1996 San Andres accords laying out rights for Mexico's 10 million indigenous peoples.
But Fox will have to watch closely for the political fallout of his actions. Some Mexicans question whether Fox is giving away too much too soon to jump-start the peace process, fearing his concessions to the rebels might actually reignite violence and discord in the southern state. "So far he's given pretty much everything the Zapatistas wanted and they haven't given any concessions," said political commentator Sergio Sarmiento. "Giving away every bargaining chip at the beginning puts him in a very difficult situation."
Claudio Campuzano (claudio-campuzano@hotmail.com) is U.S, correspondent for the Latin American newsweekly Tiempos del Mundo and editorial page editor of the New York daily Noticias del Mundo. He writes weekly for World Tribune.com