Mexico: Now, the Hard Part
  Summary
  With nearly all the votes counted in Mexico, Vicente Fox has won 43.8 percent of the vote, as well as ensured the defeat of the country's ruling Institutional Revolutionary Party (PRI). However, Fox is unlikely to realize the public's broad, contradictory - and nearly messianic - hopes. Fox's coalition has failed to win a working majority in the Mexican Congress, and the ruling party continues to permeate the country's bureaucracies. Fox's own alliance is a contradictory mix of conservatives and greens. As a result, the president elect's six-year tenure is likely to be constrained by compromise.
  Analysis
  With 93 percent of voting booths counted by late Monday, Alliance for Change candidate Vicente Fox held 43.8 percent of the vote for the presidency, compared to 36.7 percent won by the ruling Institutional Revolutionary Party's (PRI) candidate Francisco Labastida. Fox's victory marks the first upset for the PRI since 1929. According to international observers, turnout was extraordinarily high and the elections were reportedly the fairest in Mexico's history.
  This turnout, however, will do more than pick the next occupant of Los Pinos, the presidential mansion. Also at stake are seats in the Mexican Congress, revitalized in recent years. Fox's coalition is reportedly winning elections for the Senate and Chamber of Deputies, though by a thinner margin. Preliminary results also show the National Action Party (PAN), one of the parties in the alliance, winning governorships in Guanajuato and Morelos while the Party of the Democratic Revolution (PRD) reportedly retained control of the Mexico City government. ________________________________________________________________ Would you like to see full text? stratfor.com ___________________________________________________________________
  After the euphoria of victory subsides, Fox faces the unenviable task of living up to the messianic expectations placed upon him. He will govern without a working majority in the Congress. Throughout the campaign, he has promised to be all things to all people. To Mexico's poor, Fox has promised to more evenly distribute the country's wealth, implement jobs programs and nearly double spending on education. To Mexico's business elite, the former Coca Cola executive promised to seek foreign investment and to remain committed to market oriented economic policies.
  Fox's greatest challenge will lie in his vow to stamp out the corruption that is endemic in Mexico. The PRI lost the presidency, and the majority in the Mexican Congress, but it is far from toppled. It is pervasive at all levels of national, state and local government; even presidents in recent years have had trouble getting bureaucracies and state governments to toe the line. Fox's next campaign - the one that will seek to root out corruption and spark economic reform - will crash headlong into this entrenched PRI rank and file. _______________________________________________________________
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  In addition, the Alliance for Change fell short of winning a working majority in the Chamber of Deputies, which under Mexico's electoral rules requires more than 42 percent. As such, the new president will be forced to consider compromise from the start; he will find his time absorbed in the task of coalition building, appealing either to the PRI or to the leftist PRD-led Alliance for Mexico. Preliminary results show the leftist alliance winning 19.1 percent of the vote in the Chamber of Deputies and 19.3 percent in the Senate.
  Fox also faces potential problems from within his own coalition, an unlikely marriage of his own conservative PAN and the Ecological Green Party (PVEM). His pro business agenda will be under close scrutiny from the PVEM. Fox has also vowed to form a broad-based administration, with representatives from all parties.
  He may have no choice. Without decisive control of Congress, and facing entrenched opposition at all levels of the Mexican bureaucracy, Fox has little choice but to compromise. His supporters, expecting dramatic change in reward for rejecting the status quo, are in for a disappointment.
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