Thread: Vicente Fox: Looking Back, and Ahead

http://www.businessweek.com/globalbiz/c ... 863102.htm

MARCH 10, 2006


NEWSMAKER Q&A

Vicente Fox: Looking Back, and Ahead
With the clock ticking on his term, Mexico's President talks about the achievements of his administration and the challenges to come


With just nine months left in office, Mexican President Vicente Fox shows little sign of slowing down. Even though Mexico's constitution bars him from seeking a second term, Fox, 63, has been barnstorming the country, inaugurating highways, housing projects and factories along the way (see BW Online, 3/10/06, "The Fox in Winter").

BusinessWeek Mexico Bureau Chief Geri Smith accompanied Fox on a four-state swing through northwestern Mexico. The following are excepts from their conversation.

How is Mexico different today than it was in 2000 when you became the country's first opposition-party President in nearly a century?
I inherited a government that was very disorganized, with a lot of corruption in many areas, very inefficient, with a heavy bureaucratic overhang, with institutions that were bankrupt or losing money such as [government banks] Banrural, Nacional Financiera, and Bancomext, and with institutions that were totally corrupt, such as the federal judicial police and the attorney general's office. So there was a lot of work involved in reorganizing and reinventing many things.

The first part of my government was spent trying to achieve a peaceful transition, with political, economic, and social stability, and we achieved that. Today, we have a true democracy in Mexico. We have a strong economy, with the best economic indicators in our history. The U.S. prime rate is the same as it is for Cetes [Mexican treasury bonds]. This had never happened in our history. Last year, inflation in Mexico was lower than in the U.S. That's a powerful message of the stability and solidity of our economy. We inherited a government with a significant budget deficit and now, in 2006, we're in balance.

That's why we're seeing historically high investment in infrastructure -- in highways, bridges, airports -- and in housing and energy. This has been possible even without raising taxes…. My government hasn't stood around doing nothing because the political opposition has blocked laws and reforms. We've found creative ways to advance in energy, housing, and highway investment, thanks to economic stability, fiscal discipline, and links with private investment.

Public safety is a big concern in Mexico, especially along the border with the U.S., where there seem to be daily shoot-outs between drug trafficking gangs and the police.
The most difficult problem, and the one I'm unhappiest with, is security. It's a daily battle, a daily war. We have shaken up our institutions, we have chased out the corrupt elements, we have worked closely with U.S. security agencies, and we have nearly doubled the budget [for law enforcement and other aspects of public security], but we have barely been able to contain crime.

The real battle is against organized crime and drug trafficking. In recent months, we have seen a true war among the cartels to annihilate each other. I believe that's because we have been successful [in fighting them]. We have managed to put the majority of the big cartel leaders in jail, and we are going to extradite them [to the U.S.].

The U.S. Congress is currently debating several immigration reform proposals. Do you think there's a chance one of them will win passage in this U.S. election year?
Yes, I do. This issue isn't new -- it has been around for 100 years. But I think we're finally very close to having a decision. For the first time, there are several very solid bills before the U.S. Congress.

I especially like the Kennedy-McCain bill because it incorporates elements that I have been discussing with President Bush for these past five years. It would mean that those who are working in the U.S. would have their labor rights and human rights respected. And we could reach a [bilateral] agreement for a future flow of workers -- orderly, legal, and secure.

You've been criticized for saying recently that in 10 years the U.S. will be "begging" Mexico for more workers. Can you elaborate?
Demographics are changing rapidly in Mexico. Mexico has already gone through the difficult phase of high population growth, and now we're moving quickly from a situation of having a young population to one that has many more retirees. Mexico's population was growing 1.4% annually in 2000, but by 2005 it was growing just 0.99% a year.

The U.S. already has an adult population with many retirees. I daresay that in 10 years, the U.S. will need many more, young, strong, productive workers from Mexico, and we aren't going to be able to let our young people go north because our economy is going to need them.

Still, there's a lot of opposition in some U.S. circles to an immigration accord that includes a guest-worker program.
This is a decision that Congress will have to make.... Clearly, there are people [in the U.S.] who are against it. There are xenophobic people who want to build a wall, who want the army to patrol the border. But there are many others, including U.S. businesspeople, who need and are hiring [Mexican] workers.

We are two democracies, we're partners in NAFTA [North American Free Trade Agreement], we're neighbors and friends, and we should be able to find intelligent solutions. I'm optimistic. All the signs I see make me think that we're nearing...an agreement that will greatly benefit the U.S., because it will help its internal security, and that will help Mexico as well.

I think that if this is viewed with a long-term perspective, and if the members of Congress think about what's going to happen demographically in 10 years, we can find a favorable solution that will be win-win for all.

What's Mexico willing to do to make immigration reform and border security work?
Mexico will keep working to create job opportunities for our people here in Mexico. That's why we're promoting the maquiladora factories along the U.S. border, because they provide a cushion for people who are thinking of crossing the border to the U.S. -- they can just stay there to work instead of crossing. Right now, we have a deficit of 100,000 workers in the border maquiladora industries that we need to fill.

None of us like to see Mexicans go to the U.S. -- they don't go because they want to, they do it out of a desire to improve their lives. Our Mexicans are much happier eating tortillas here in Mexico than eating hot dogs there. Many in America understand this well -- it's a country of immigrants. Like the Irish, the Polish, and the English who arrived in the U.S. and the pioneers who settled out West, the Mexican migrants are creative people with an immense desire to improve their lives.

At the beginning of your presidency, U.S.-Mexican relations were quite good, but they soured after 9/11. How do you view relations now?
The relationship is stronger than ever. You have to understand that it's very complex. We have a 2,000-mile-long border crossed by 1 million people a day. We're commercial partners, and so many problems arise and we resolve them. My friendship with President Bush is as strong as ever. That's why we can deal with the differences that come up. It's true, we had differences over the issue of Iraq, but the relationship didn't fall apart.

Last year I saw Bush three times. We talk by telephone. U.S. priorities changed after 9/11 and the issue of security and terrorism became No. 1, so I had to accept that there was very little attention [from Washington] for a while. But now we're back [to normal]. I will see President Bush in Cancun at the end of March and we will talk then. Along with the Canadian Prime Minister we will move ahead on the Partnership for Prosperity, which goes beyond the commercial relationship and takes into talks on [co-operation] on financial systems, security, energy, and technology.

There's some disappointment that Mexico hasn't approved new reforms that would make the country more competitive, so it could grow faster, as the Asian economies have done.
A mature economy the size of Mexico's could grow at rates of 5% to 6% a year, but for that we do need the structural reforms to revamp taxation, energy, labor, and pension-system laws. For now we're growing at 3.5%.

Don't forget we're a minority government. My party doesn't hold a majority in the Chamber of Deputies or the Senate and only has eight of the country's 32 governorships.... I believe we have gone through a process of cultural change in these five years, and I hope that in the next presidential term, the relationship between congress and the executive branch will be on better terms. [But] the next government elected probably will not have more than 36% of the [popular] vote, so it will be very important for the parties to reach agreements if we want to grow faster, so that we can improve education or combat poverty.

Spreading development is something that takes several presidential terms, but if one [holds] public policy steady long enough, it will bear fruit and development will arrive. To me, that's the biggest problem facing Latin America today. Each government comes into office and invents new development models -- they move to the right or to the left and always appear to be experimenting. Very rarely does public policy remain constant.... Which countries are the exceptions? Chile and Mexico.

Quote:
Fox's quote:"I especially like the Kennedy-McCain bill because it incorporates elements that I have been discussing with President Bush for these past five years. It would mean that those who are working in the U.S. would have their labor rights and human rights respected. And we could reach a [bilateral] agreement for a future flow of workers -- orderly, legal, and secure."
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Nothing "orderly, legal, and secure" will ever come out of a such a lawless Country.