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Enrique Peña Nieto's 'economy first' strategy for Mexico would also help US

Mexico's President Enrique Peña Nieto, who took office on Saturday, wants to put the economy first, which will require addressing the onslaught of the narco mafia in a very different way from his predecessor. This new approach has great potential for Mexico. The US should embrace it.

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Since the agreement came into effect in 1994, exports to the US have become the main engine of growth for Mexico’s economy, inextricably linking both economies.

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Peña Nieto wants to go further: He wants to combine the strengths of the American economy with those of Mexico and Canada so as to make the regional economy much more competitive vis-à-vis the rest of the world.

The Trans-Pacific Partnership – a free trade zone still being negotiated between the US, Mexico, Canada, Chile, Peru, Australia, New Zealand, and several Asian countries – could be the perfect vehicle to advance along these lines, especially since President Obama, too, wants to boost exports.

Drug-related violence is also closely tied to the US. Most drugs that transit from or through Mexico are destined for the American market. The violence is concentrated in two regions: the US-Mexico border and along major routes from South America to the US, essentially the two coasts. Fixing this requires a radical build-up of state capacity (police enforcement and the judiciary) on the Mexican side and deeper coordination with the US.

As Peña Nieto tackles the economy, he must first eliminate the endless obstacles and red tape that make it difficult for investors and consumers to do business. He must follow through on his intentions to reform the energy sector, strengthen the government’s finances, and advance rapidly on infrastructure.

If he can integrate the domestic economy with the export-bound industrial plant, he can create more and better paying jobs. If successful, Mexicans will further import goods from the US and there will be much fewer Mexicans willing to move north.

Building a modern government must be part of the economic focus. Mexicans need a government that can guarantee its citizens security and safety, thus strengthening the foundation for the country’s development. The states’ responsibilities have to be defined, the federal government’s powers need to be clarified, and citizens’ rights protected and enforced. The country cannot prosper in the 21st century with a system of government of the 19th.

Peña Nieto understands that he needs to improve reality in order to improve expectations of Mexicans as well as of Americans. In stark contrast with his predecessors, he knows his party was given the exceptional opportunity of a comeback and that his party’s chances may be thwarted forever if he fails. That is an extraordinary incentive for any politician to get things done.

Luis Rubio is chairman of CIDAC, Center of Research for Development, a think tank in Mexico City and a writer of more than 40 books on Mexican politics and economics. He writes a weekly column for Mexico’s Reforma newspaper.


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