Mexico's new president faces many challenges
Mexican President Enrique Peña Nieto arrives for a photo opportunity after meeting with Democratic members of the House in the Rayburn Room at the U.S. Capitol Nov. 27, 2012 in Washington, D.C.
Mexico has a new president. Enrique Peña Nieto announced major economic initiatives as he was inaugurated over the weekend.
On the inside of the festivities, Peña Nieto’s first day on the job was all cheers. Outside, rioters opposed to Peña Nieto and his PRI party charged official barriers and threw Molotov cocktails. Police fired rubber bullets and exploded tear gas canisters.
Protesters are irate about pervasive corruption and think Peña Nieto will bring more of the same. Business student Fernando Matias said bribes are a regular part of life.
“I have to pay like 10 pesos every 15 days to pick up the garbage,” he said. Ten pesos is about $0.75. “That is not very much for me,” Matia said. “But maybe that can be very much for other people.”
And that’s one of many services that should be free. The group Transparency International estimates the poorest households in Mexico spend a third of their income on these bribes. Duncan Wood of the Woodrow Wilson Center said this corruption causes U.S. firms to think twice about investing in Mexico.
“They come in and they want to invest but it's just too difficult because you have to bribe too many people or you have to grease too many palms,” Wood said. And he said Mexico’s economy is still virtually closed to foreign investment in many industries.
“We need to change the rules because we need more competition in the telecommunications market for example,” said Javier Oliva, who teaches political science at the National Autonomous University of Mexico. Oliva said he pays about $300 a month for cell phone service with a company that commands about 70 percent of the market in Mexico.
“All the Mexicans, we are victims of the monopolies,” Oliva said.
Peña Nieto has signaled reforms could be on their way. And the Wilson Center’s Duncan Wood said that’s important because greater competition means Mexicans won’t have to spend so much on basic services.
“Two good reasons why Mexicans should be richer,” Wood said. “They’ll buy more of our goods and we won’t see so many migrants crossing the border.”