President reaffirms reform agenda

Speaking to an invited audience at the National Palace, President Felipe Calderón reaffirmed his 10-point ‘Agenda for Change,’ as he marked the start of the second half of his government. His most extensive remarks were devoted to the need to strengthen public finances. He said that despite addressing the immediate shortfalls in the 2010 budget, “the truth is that we are very far away from a solution to the structural problems that confront the Mexican State.” He called again for a broad debate on fiscal reform and a second round of energy sector reforms. He also repeated his call for a political reform “to generate the conditions that will enable us to overcome the institutional paralysis that has blocked the country from reaching agreements on fundamental issues.” (Presidencia 11/28, Universal 11/29)

Supreme Court declares SCT regulations for granting radio and TV concessions unconstitutional

The Supreme Court, by a vote of 8-2, declared that the SCT regulations issued in January 2009 by President Calderón were unconstitutional. These regulations gave the Secretary of Communications and Transportation the exclusive power to award, extend, or revoke radio and TV concessions. The Court found that this power belonged to Cofetel, the telecommunications regulator, and could not be assigned to the Secretary (though Cofetel is part of the SCT). Columnist Miguel Ángel Granados Chapa wrote: “This counterfeit introduces yet another conflictive element in the topsy-turvy panorama of radio and TV, where the competitors are constantly litigating to avoid the application of norms that are disadvantageous to them.” (Universal 11/23, Reforma 11/28)

Expenditure budget passes

The budget commission of the Chamber of Deputies unanimously passed the 2010 expenditure budget at 4:30 am, after failing to meet the midnight legal deadline. PRI coordinator Francisco Rojas postponed four times the meeting of the full Chamber of Deputies, as factions within the party negotiated the reallocation of funds between the states and to different programs. The full Chamber is expected to vote on the package today. The final compromise was reflected in a basket of Ps. 96.6 billion of resources to be reallocated, an increase from the original proposal of Ps. 85 billion. Total expenditures were pegged at Ps. 3,176 billion – only marginally higher than the proposed budget sent by the Government.  One of the items that emerged from the congressional negotiations was the requirement that the Ministry of Finance present to congress an austerity plan by March 15 for longer-term improvements in the use of public resources. PRI deputy Sebastián Lerdo de Tejada explained, “We can’t ask the citizen to tighten his belt and not demand that the … executive, judicial, and legislative authorities do the same.”

The Templo Mayor column observed: “Almost everyone is content with the slicing up of the budget pie. The priistas are congratulating themselves because they … tied the hands of the federal government and got millions and millions as a gift for their governors. The panistas are also jubiliant; despite the dark warnings, at they end of the day they salvaged the resources for the three [social] programs dear to Felipe Calderón: the leafless Proarból, the coveted Oportunidades, and the supercharged Seguro Popular. (Excelsior 11/16, Universal 11/16, Reforma 11/16)

Poll: Approval ratings for President, PAN fall to lowest levels since taking office

Mitofsky’s monthly national survey shows that support for President Calderón, while still high, declined 4 points from September to October to match the lowest levels of his administration. The President had a 58% approval rating, and 40% disapproval. At the same time, party identification with the PRI increased from 25% in May 2009 to 31% in October, while identification with the PAN fell from a recent high of 25% in January 2009 to 17% in October.  (www.consulta.com.mx)

President renews attack on private sector

In an interview aboard the presidential aircraft en route to Singapore for the APEC summit, President Felipe Calderón blamed the private sector for the failure of the government’s original tax proposal. “The business community acted with complete liberty: they were very critical of the government and broadly criticized the package. … This weakened the possibilities [for passage],” he said. Columnist Salvador García Soto noted: “The President’s verbal bombshells … confirm what we have been saying for several weeks: the relation between the Chief Executive and a good part of the private sector, above all the most influential names, has deteriorated to the point where it has become public. … A reflection of this distancing is that many of the principal captains of industry have started to build bridges to groups in the PRI.”  (Reforma 11/12, Universal 11/14)

Calderón booed

The President was booed by fans at the inauguration of the new soccer stadium in Torreón. The video was widely circulated on You Tube.  TV Azteca, which broadcast the game, lowered the volume on the crowd noise to minimize the rare public show of disrespect for a sitting president. “The lusty booing that President Calderón received … is revealing of the enormous black mark that the people have put as their response to the fiscal reform. It has not passed unnoticed by society that the incapacity of the Calderón administration to put the brakes on government spending and the ease with which it decided – once again — to lay on the people already hit by the recession a higher tax burden, considered unjust and disproportionate,” said columnist Manuel J. Jáuregui. (Reforma 11/12, 11/13)

President blasts private sector over taxes

In two separate speeches, President Felipe Calderón vehemently attacked the private sector for its opposition to the fiscal program, alleging that the largest groups “rarely” paid taxes: “What seems to me unacceptable is that the giant corporations demand that the government cut spending, and the government cuts it; that they demand that the government tax food and medicine for the poorest, but … on average they pay only 1.7% in taxes. This cannot be! I am not asking for sacrifices. … I am asking that the companies also pay, even if just a part, of the taxes that the Mexican people need,” he said. Columnist Sergio Sarmiento said that Calderón’s ‘economic mentors’ seemed to be former Presidents Luís Echeverria and José López Portillo. Sarmiento also claimed that Calderón’s math was bad and that tax payments by large corporates were 26% of pre-tax income, “more than in other countries.” (Milenio 10/30, Reforma 11/2)

Calderón orders Luz y Fuerza liquidated

As the country celebrated the 4-1 victory over El Salvador that guaranteed Mexico a slot in next year’s World Cup competition, President Felipe Calderón ordered the military to secure the installations of Luz y Fuerza del Centro (LFC), the state owned electrical utility that serves Mexico City and surrounding states, and signed a decree liquidating the company. LFC operations were taken over without incident by CFE, the other government owned utility. In a televised speech, the President said, “Unfortunately, most of the resources that [LFC] got from the hands of the Mexican people didn’t go to improve service, but to pay onerous labor privileges and perks, which were getting worse year by year. … There weren’t any other options, since time and resources were running out.” The president emphasized that privatization was not in the cards, and that a new state-owned company would be created. While the takeover had been anticipated, the timing took most, including the SME electrical workers’ union, by surprise. SME leader Martín Esparza vowed to fight the liquidation “to the death” through legal actions and protest marches.

Poll: Presidential disapproval rises

click to enlarge

A Berumen/El Universal national poll showed that while overall support for President Calderón remained high, those expressing disapproval increased from 18% to 27% since June.  The overall presidential evaluation dropped to 6.7 (out of 10) from 7.0 in June. Those saying the country was on the wrong path rose to 44% in September from 36% in June. The President continues to command strong support from voters who identify with the PAN and PRI, while approval/ disapproval rates were equal among PRD supporters and independents. (Universal 9/21)

click to enlarge

Cabinet changes announced

President Calderón announced three cabinet changes to start the second half of his sexenio. All three slots are areas where changes were expected.

Arturo Chávez Chávez was nominated to become Attorney General. (This post requires Senate confirmation.) He replaces Eduardo Medina-Mora who will go to the foreign service. Chávez is a law partner in the firm of Diego Fernández de Cevallos, has been Undersecretary of Government, and—most controversially—was Attorney General in Chihuahua when the scandal of the missing and murdered women in Ciudad Juárez first came to light. Chávez was forced to resign in 1998 after the Human Rights Commission issued a highly critical report of the investigations into the murders.

Juan José Suárez Coppel was named to head Pemex in place of Jesús Reyes Heroles. Suárez Coppel was CFO of Pemex during the Fox government and chief of staff in the Ministry of Finance under Francisco Gil Díaz.

Agriculture Secretary Alberto Cárdenas was replaced by Francisco Javier Mayorga, who held the same position at the close of the Fox administration. (Universal 9/7, Excelsior 9/8)