http://www.sptimes.com/2006/06/25/World ... Mexi.shtml



Economy stars in Mexico's vote
Mexicans who ask whether they’re better off than they were six years ago head to polls Sunday.


By DAVID ADAMS, Times Latin America Correspondent
Published June 25, 2006

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QUERETARO, Mexico — The narrow colonial streets in the heart of this historic city are a vivid reminder of Mexico’s rich cultural heritage .


But these days, tourist sights aren’t the only attraction.


This arid region about 150 miles north of Mexico’s capital hums with industrial activity, from auto-parts manufacturing to food processing. Thanks largely to a decade of free trade, Queretaro has seen an explosion of well-paying manufacturing jobs.


“We have been very fortunate,” said Beatrice Hernandez, a 31-year-old legal assistant lunching in a shady plaza. “Our government has worked hard to create jobs here.”


As Mexico gears up for national elections July 2, the ruling National Action Party, PAN, is hoping that economic progress in cities such as Queretaro will carry it to victory.


The only problem is that large parts of Mexico have yet to see the same results.


“If only all of Mexico looked like Queretaro,” said Desiderio Morales, a Mexican pollster. “Unfortunately, there’s a great deal of frustration that living standards aren’t improving.”


The failure of the probusiness PAN to meet expectations has opened the door to a determined challenge from Mexico’s left-wing Democratic Revolutionary Party, PRD.


Whoever wins, the result will be almost as important for the United States as it is for Mexico. The economies of the two neighbors are now so tightly bound by the 12-year-old North American Free Trade Agreement that economic performance in one country has a direct impact on the other, including migration flow.


As voters study their options, Mexico finds itself at a crossroads, sharply divided over two very different visions of this country of 107-million people, and what its economic priorities should be.


On the one hand, the PAN’s presidential candidate, Felipe Calderon, a fresh-faced former energy minister, adamantly stakes the country’s future to more free trade and closer integration with the United States. A conservative lawyer from Morelia, another attractive — and relatively wealthy — colonial city west of the capital, Calderon says he will be “the employment president.”


Meanwhile, with equal vehemence, the opposition PRD insists the country is on the wrong track. Its candidate — a charismatic former Mexico City mayor, Andres Manuel Lopez Obrador — rails against the rich, saying current economic policy offers little for Mexico’s struggling working classes. Instead, he advocates greater social spending to raise living standards for “the good of all.”


Six years ago, Mexico appeared to have made a clear choice for the free-market policies offered by the PAN. The 2000 elections dramatically ended the 70-year reign of the Institutional Revolutionary Party, PRI, one of Latin America’s most corrupt and authoritarian regimes. President Vicente Fox won with a strong mandate for open government and free trade .


But since then economic progress has been sluggish. The economy has grown by barely 2 percent annually, delivering fewer new jobs than the PAN promised. In desperation, millions of Mexicans continue to seek employment in the United States.


The PAN insists only greater economic opening and foreign investment will enable Mexico to succeed in the competitive global economy.


“I want to open doors,” Calderon, 43, told an enthusiastic crowd at a rally in Teoloyucan, part of the urban sprawl that surrounds Mexico City.


“Other candidates offer to give away money that doesn’t exist. But people tell me they don’t want charity, they want jobs,” he went on.


“He wants to create a modern country,” said Rosa Martinez, 48, who sells bonsai plants at a local nursery. “That’s what we all want, so no one has to go to the United States and look for better jobs.” Her four children, she said proudly, are university graduates with good jobs.


Mexico’s economic news has not been all bad.


“The economy is much stronger today than six years ago,” said Luis de la Calle, an economist and former government trade negotiator.


De la Calle points to figures showing that poverty has dropped from almost 70 percent in 1996 to around 45 percent. Interest rates are at a historic low — 9 percent — while consumer confidence this year hit a record high. For the first time ordinary Mexicans have access to mortgage loans, sparking a housing boom.


These days the more prosperous Mexican cities are peppered with every imaginable U.S. franchise, from Starbucks and McDonald’s, to the Home Depot, Wal-Mart and Costco. While some may complain about the foreign invasion, no one can argue with cheap prices and the variety of affordable goods Mexicans now have access to.


Another overlooked fact, he said, were trade figures demonstrating that Mexico is beginning to compete with China more successfully in the U.S. market. Mexican exports to the United States are currently growing faster than China’s, up almost 20 percent over last year.


Perhaps nowhere is that more apparent than Queretaro. Since the PAN won the local municipality as well as the state governorship in elections nine years ago, the city has earned a reputation for good government and economic progress.


“We are like a bubble of social well-being in the country around us,” beams the city’s mayor, Armando Rivera, a 41-year-old economist.


For the past three years since he took over running the city, Queretaro has been named Mexico’s best run municipality in recognition of its low crime, efficient bureaucracy and good public services.


The result has been a steady stream of foreign companies — from American car parts manufacturer Delphi, to food giant Kellogg and electronics giant Samsung — setting up shop in the growing number of industrial parks ringing the city.


Queretaro’s success has created one problem, the mayor says. Due to the availability of jobs Mexicans are flocking to the city in search of work, especially from the poorer south, creating a strain on social services.


That is the main drawback of free trade. Economists point out the severe economic dislocation it has created between relatively prosperous industrial cities in the north — which profit from their proximity to the border with the United States — and the rural south which remains mired in poverty.


A son of the south himself, Lopez Obrador, 52, is a longtime social activist from Tabasco, an oil-producing state that remains a backwater. After working his way up in the PRI, he broke with the party to help found the PRD in 1989.


Considered a leftist rabble-rouser by his critics, Lopez Obrador has been a thorn in the side of the PAN ever since he won election as mayor of Mexico City in 2000, the same year that Fox won the presidency.


His social programs made him a hero in the city’s poorer neighborhoods, neglected by previous governments. His administration distributed free school supplies to students and undertook a series of large public works projects, providing much needed jobs.


He is perhaps most revered among the capital’s senior citizens thanks to an unprecedented social welfare program for the elderly, comparable to the American food stamp system. Under the scheme residents over 70 are entitled to about $65 worth of free goods, except alcohol, which can be obtained using electronic debit cards.


“I owe my well-being to (Lopez Obrador),” said Manuel Molina, 82, a white-haired PRD supporter who joined tens of thousands of Mexico City residents one morning this month to form a human chain through an upscale neighborhood.


Walking with the aid of a cane, Molina said he retired from a brewery without a pension after 32 years. If Lopez Obrador doesn’t win, he worries the welfare program for senior citizens will be abandoned. “He has to win; otherwise how will I live?”


Lopez Obrador has pledged to expand the elderly pension program nationwide. He says he will finance it by slashing the salaries of state bureaucrats, including his own, and trimming government waste.


While critics say the program smacks of populism, many also recognize that it fills a much-needed gap in the country’s social security system, which offers no safety net for millions of Mexicans who work outside the formal economy.


“He understands the needs of ordinary people,” said Lorenzo Meyer, a Mexican historian and political analyst. “Those are his roots and he never lost touch.”


For all the talk of improving living standards, the candidates offer little detail about their economic plans. Instead their campaigns have increasingly resorted to personal attacks as polls show them running neck and neck in what promises to be the closest race in Mexican history.


While the PAN seeks to paint Lopez Obrador as a dangerous radical, the PRD has hit back trying to undermine Calderon’s squeaky-clean image with allegations of influence peddling and tax evasion by some of his relatives.
“It’s a genuine contest,” said Meyer. “For us that’s new. It’s not pretty but it’s good for democracy.”


The outcome is less uncertain in Queretaro where industrial growth exceeds twice the national average. The local chamber of commerce estimated 10,000 new jobs were created in the city this year alone.


Local polls show the PRD with only 16 percent support compared to 53 percent for the PAN.


“If our success could be replicated in other parts of the country, the (national) election wouldn’t be so close,” said Rivera. “There are imbalances. That is the challenge this country faces.”


David Adams can be contacted at dadams@sptimes.com.



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