Mexico: Defeat for Fox, Victory for Democracy
January 9, 2002
Summary
Mexican democracy took a messy but important step forward in the latest federal budget battle as Congress outmaneuvered the historically dominant chief executive branch. Although the outcome of the debate may hurt the Mexican economy in the short term, the process in which the budget was decided bodes well for the ongoing development of a functioning, multi-party democracy.
Analysis
Mexico's Congress approved the 2002 federal budget Jan. 1 after 40 hours of intense debate that exceeded a constitutionally imposed, year-end deadline. Unlike it did with a decade's worth of previous budgets, Congress didn't simply rubberstamp the president's proposal; instead, it quashed most of President Vicente Fox's major fiscal reform initiatives.
The budget debate represents something of a watershed for Mexican democracy, installing Congress as a stronger counterbalance to the traditionally dominant chief executive branch. Mexicans should be seeing more and more political debate and compromise between the two political branches, and this will help to institutionalize Congress's power. In the long term, Mexico's political system will benefit from the healthier debates and a more balanced, multi-party democracy.
The short-term implications of the budget debate will be primarily negative. Many of the reforms Fox sought are necessary to upgrade Mexico's energy sector and attract foreign investment. State-owned oil company Pemex will have less excess revenue to put toward new investments, and potential investments that Fox had envisioned from foreign companies -- such as British Petroleum and Spain's Repsol -- may be more expensive or slightly less attractive, considering the country's credit rating and scarcity of domestic investment.
Related Analysis:
Mexican Economy Hindering President's Pledges
Constitution Hampers President Fox’s Ambitious Plans for Mexico
Mexico: The Prospects for the Coming Year |
