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Mexico news weekly, Dec. 13

Posted by The Generals on December 20, 2012, 5:58 pm

Subject: Mexico News WEEKLY December 13, 2012

Mexico & Nafta

MEXICO: Peña Nieto takes the plunge

President Enrique Peña Nieto moved decisively onto a collision course this week with arguably Mexico’s most powerful woman. Peña Nieto’s predecessors have quailed at the prospect of challenging the authority of Elba Esther Gordillo, who has kept a tight grip on the country’s education system for 22 years at the helm of the teachers’ union Sindicato Nacional de Trabajadores de la Educación (SNTE). Peña Nieto, however, tabled an education reform proposal to congress which would undercut her power and haul the teaching profession into the 21st century.
Peña Nieto signalled his intentions early by appointing a combative education minister, Emilio Chuayffet Chemor, who has grappled in the political arena with Gordillo before, and by including a reform to improve the quality of education within the ‘Pact for Mexico’ which he signed with the leaders of the country’s three main political parties the day after his investiture on 2 December [WR-12-48]. The fact that he decided to present education reform as the very first of the myriad ‘commitments’ contained in the ‘Pact for Mexico’ shows the importance he attaches to it to drive Mexico towards the status of a developed country.
During his inaugural speech Peña Nieto said that “the foundation for transforming Mexico is education”. Upon signing the reform, he said that an essential component of it would be freeing teachers from “discretionary criteria” by means of a professional recruitment service. He refrained from mentioning Gordillo directly, but he was clearly alluding to the overbearing influence of the SNTE, which currently controls teacher recruitment and training in Mexico, where positions can be bought and where there are lifetime, and even hereditary, posts – which the reform seeks to eliminate. That such deeply anachronistic practices still exist gives an indication of the challenge ahead for Peña Nieto to modernise the education sector and haul Mexico off the bottom of education league tables produced by the Organisation for Economic Co-operation and Development (OECD).
The reform would also see the national institute for educational evaluation (INEE) become fully autonomous, overseeing a meritocratic system of promotion. The national statistics institute (Inegi) will set about rectifying a serious statistical anomaly – the lack of accurate data for the number of schools, teachers and students in the country. School canteens will also be supplied with food from local producers in keeping with one of the less-heralded ‘commitments’ in the Pact for Mexico (as high as number two) to modify Mexican law to ban junk food in schools in order to combat obesity.
Striking while the iron is hot
Peña Nieto moved swiftly to table the education reform because there is every chance that the cross-party consensus for decisive reforms embodied in the ‘Pact for Mexico’ will dissipate in the coming months (possibly as early as this weekend if the leadership committee of the left-wing Partido de la Revolución Democrática [PRD] is revamped in its party convention).
Overhauling the education system has the full support of Jesús Zambrano, the incumbent president of the PRD, who attended the presentation of the reform in the anthropology museum in Mexico City. He said the reform amounted to “a true education revolution” for a sector which had become like “booty” for the trade unions with state and federal governments held hostage by the SNTE.
The president of the Partido Acción Nacional (PAN), Gustavo Madero, also backed the reform, which the PAN, while in government, lacked the political will to pursue, in part because the Partido Revolucionario Institucional (PRI) enjoyed a cosy relationship with Gordillo. In this sense Peña Nieto’s first reform is also an important symbol of his determination to shake up the old PRI.
Politicians from all three parties turned up for the event at the anthropology museum. Conspicuous by her absence was Gordillo herself. Gordillo is the de facto leader of the Partido Nueva Alianza (Panal), which has 10 seats in the 500-strong lower chamber. These would be enough to grant the PRI a majority in the lower chamber but Peña Nieto is clearly more intent on driving his reform agenda for now than restricting his scope for action by means of an alliance with the Panal to secure a narrow majority (see sidebar).
Panal reaction telling
In what looked like an effort to feign nonchalance, the coordinator of the Panal in the lower chamber of congress, Lucía Garfias Gutiérrez, said the SNTE would not be opposed to any reform which sought to improve the quality of education in Mexico, and would welcome some of the changes proposed by President Peña Nieto. She called for a broad debate of the reform proposals. In a sign of the likely tone of such a debate, she added that the evaluation of teachers proposed by the government should be extended to officials in the education ministry, up to and including the education minister.


Mexico & Nafta


MEXICO | Introducing austerity measures. On 10 December President Enrique Peña Nieto presented a new austerity plan that his government will look to implement starting next year in order to preserve Mexico’s hard-earned macroeconomic stability and to promote a new policy of budgetary discipline that will help further promote Mexico’s economic development.
The first of these measures was introduced via a presidential decree published in the official gazette which introduces an across-the-board 5% reduction in the salaries of all mid and high-ranking federal public officials. The decree stated that the aim of the measure was to improve the use of public resources and that any savings would be reassigned to some of the government’s other priority programmes such as those that “promote economic development, social security and education”.
In addition the decree also states that all federal government dependencies must carry out an overview of their operational structure and spending in order to come up with a plan to make better use of their resources and look for efficiencies as well as other potential savings in non-priority areas. According to the decree this may include the possibility of adopting a recruitment and promotion freeze next year and/or redundancies.
The federal government dependencies must present their savings proposals to the finance ministry (SHCP) no later than 30 January 2013, after which the SHCP will provide the final set of measures that are to be adopted by each dependency. This will then be presented to congress so that it can ensure the validity of the proposed measures.
The decree concludes by stating that “This administration has the firm objective of obtaining results in the short term with the adoption of these measures in order to continue improving the functioning of government”.
The publication of the decree coincided with the start of the debate over the 2013 draft budget to congress. The draft budget is for M$3.9 trillion (US$306bn) with a projected economic growth rate of 3.5% based on the assumption of an oil price of US$84.9 per barrel.
Peña Nieto has vowed that his government will adopt a “zero deficit” policy when it comes to the federal government’s budget and has asked congress to keep this mind when analysing the proposal that will first be debated by the chamber of deputies, which has declared itself in permanent session until the proposal’s approval.
Despite the possible constraints that this may bring the proposal is moving quickly amid the current positive political environment reigning in congress. On 12 December the chamber of deputies’ finance commission approved in general the revenue side of the draft budget which called for a 5.1% general increase after making only minor adjustments, increasing the proposed revenue by M$25.7bn by adjusting the projected oil price to US$86 per barrel and by calculating that improved tax collection measures would bring in an additional M$13.1bn.
Significantly for Peña Nieto the proposal to consider an increase in the value-added tax (VAT) and personal income tax (ISR) rates, to be determined by congress, in case of any shortfalls in the budget, was also approved.

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