Devember 20, 2013
The pace of reform in the Mexican Congress has been moving rapidly. Within one week, potentially revolutionary changes have been made to energy law and election law.
For years the question the oil question has been discussed in Mexico. Should the state oil monopoly PEMEX (Petróleos Mexicanos) open up to private, even foreign investment in profit-sharing enterprises?
On December 10th, 2013, such a reform passed the Mexican Senate, by a vote of 95 to 28. Two days later, on December 11th, it passed the Cámara de Diputados, the Mexican House of Representatives, by a vote of 353 to 134.
Politically, the reform is supported by the president’s PRI (Partido Revolucionario Institucional) party, the PAN (Partido Acción Nacional) although four diputados of said party voted against it and the Green Party Partido Verde Ecologista de México).
The energy reform is opposed by the PRD (Partido de la Revolución Democrática) and other leftist parties. Opponents want a national referendum on the issue and object to the manner in which it was passed in Congress.
In order to become law, the energy reform, since it involves constitutional change, requires the ratification of the majority of Mexico’s state legislatures. It needs to be passed by 17 of them. When that happens, it can be signed by the president into law.
The state ratifications followed very quickly. The first state legislature to approve the measure was that of Chiapas, with 32 votes in favor and only 4 opposed. Other states soon followed. As of 8:03 p.m. Standard Time on the night of December 14th, 13 states (Chiapas, Querétaro, Veracruz, Edomex, Hidalgo, Durango, Baja California Sur, Campeche, Sonora, Coahuila, Jalisco, Nayarit and Hidalgo) had approved the reform.
The energy reform allows foreign oil companies to help develop Mexican oil fields by means of production-sharing contracts.
If the ratification process proceeds in a timely manner, initial contracts under the reform may be in effect by the end of calendar year 2014.
The reform’s boosters are bullish on its economic benefits, while opponents attack it for giving wealth to foreign investors.
Besides the opening to outside investment, the reform also changes the structure of the PEMEX governing board. The board currently has 15 members, five of which represent the PEMEX union. These five are being removed from the board, bringing its membership down to ten, consisting of five government representatives and five professional advisers.
This major reform was followed by another reform dealing with Mexican election law. The “No Re-election” slogan has been an axiom of Mexican politics for decades, a response to the long dictatorship of Porfirio Diaz, in the late 19th and early 20th centuries. It was against the Porfiriato regime that the Mexican Revolution was originally directed.
The new reform, however, would allow the re-election of public officials, including members of congress, state legislatures and mayors. (Term limits would limit them to 12 years.)
However, the president, who has a six-year term, would still not be allowed re-election, nor would state governors.
Other parts of the political reform include allowing independent candidates not running as members of parties and the replacement of the current IFE (Instituto Federal Electoral) with the INE (Instituto Nacional Electoral). The measure also makes the attorney general office more autonomous.
In Mexico, political parties are publicly funded. This does not change, but under the new political reform law the threshold percentage of the vote required to receive public funding is raised from the current 2% to 3%.
The House approved this reform on December 6th and the Senate on December 13th.
Like the energy reform, this also requires the approval of 17 of Mexico’s state legislatures.
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If ratified, officials can be re-elected beginning in the 2018 election, which includes elections for president and the entire Congress. (Under current law, the entire Senate is replaced every six years and the entire House every three years. See Elections in Mexico and the US: Comparisons and contrasts).
These reforms are revolutionary in themselves, and especially revolutionary when you consider how they go against longstanding Mexican political traditions.
Notice that these reforms are being carried out under a PRI administration, the same party which established the state oil monopoly PEMEX and the No Reelection Law. It’s an example of the “Nixon Goes To China” principle.
The party that had the political credibility for establishing the policies was able to engineer the abolition of the same policies.
Of course, much remains to be done.
© 2013 Allan Wall - All Rights Reserved
Allan Wall recently returned to the U.S. after residing many years in Mexico.