Thread: Pandora's Fox

http://www.investors.com/editorial/issues01.asp?v=4/16



Monday, April 18, 2005

Pandora's Fox

Mexico: America's neighbor to the south could be poised for a political crisis in the next year, revolving around its presidential race.

How it got to that point, with prospects of a radical leftist walking off with Mexico's presidency, is in its lack of leadership.

Just five years ago, Mexico seemed poised for a new era of reform and growth. The 2000 election of Vicente Fox marked a sharp break from 71 years of crony, patronage and mercantile politics.

Under Fox, a former Coca-Cola executive and a popular governor of Guanajuato state with a record of market-friendly policies, a modernizing of Mexico's economy seemed a sure thing.

Early on, Fox's presidential campaign was loaded with talk of privatizing Mexico's oil industry, dollarizing its economy, attracting foreign investment, strengthening property rights and making it easier to start businesses.

Fox has disappointed Mexico's voters. His talked-about reforms got bogged down in poll-chasing and congressional squabbles. And he didn't take on Mexico's powerful unions. Worse still, he pursued ersatz economic reforms for real ones, at U.S. expense.

Fortified by NAFTA and soaring oil prices, Mexico's economy is hardly a basket case. It's posted five straight years of low single-digit growth. GDP is expected to come in at 4.2% in 2005, with interest rates fairly stable. And there's a small budget fiscal surplus.

But below the surface, there are major problems. For one, developing countries have to do better than low single-digit GDP growth. And Fox's economic strategy of encouraging Mexicans to go to the U.S. illegally is also hurting.

This year, according to Mexico's central bank, Mexican workers will send $20 billion home from the U.S. â€â€

[quote]Maybe Fox should begin thinking about just how toxic his policies are, especially those on illegal workers in the U.S. â€â€

Early on, Fox's presidential campaign was loaded with talk of privatizing Mexico's oil

His campaign was loaded alright. Loaded with bs. And it hasn't went away. It is difficult for me to imagine a bigger bozo than Foxie.
Anything is possible.