Mexico's oil reform and public sentiment

McClatchy Foreign StaffDecember 16, 2013 

In this AP file photo, an oil worker works on a drill at the Centenario deep-water drilling platform off the coast of Veracruz, Mexico, last month.


An editorial in the Washington Post hails the passage last week of an overhaul of Mexico’s energy industry, saying Mexico is proving to be “a model of how democracy can serve a developing country.”

It’s a great example of how things can look very different from afar than up close.

What transpired in Mexico over the past week on the ground was far from an exercise in a citizenry fully debating and coming to a consensus on one of the most sweeping changes to the state in recent decades. Instead, it was a blunt show of political party discipline, fortuitous events and roughshod politics.

In the end, it may be good for Mexico. But in the absence of widespread polling on the issue of energy reform, I’d say politicians acted against popular sentiment. Indeed, that’s why some call it a third-rail issue in Mexico, akin perhaps to gun control in the United States. Sure, stricter gun laws might be effective in bringing down U.S. gun violence – but try ramming it past the voters. Moreover, while it may be good for Mexico, acting against popular sentiment also carries risks.

First, here’s a recap of what happened. The Senate spent barely two days debating the wisdom of opening Mexico’s energy industry to private investment, overturning a 75-year ban. The issue was sent to the Lower House, which held some 20 hours of debate and approved the measure along strict party lines last Thursday, with the backing of the ruling Institutional Revolutionary Party and the center-right National Action Party.

Within three days, legislatures in a majority of Mexico’s states also approved the measure. It is inches away from becoming enshrined in the constitution.

President Enrique Pena Nieto, who is on a state visit to Turkey, issued a statement from Ankara a few hours ago noting the “ample consensus that exists in the country” regarding energy reform and hailing state legislatures that have acted “very fast” to approve the constitutional changes entailed in the overhaul.

“This makes it practically already a constitutional reform,” Pena Nieto said.

He added that the reform would make energy “cheaper for the population in general, for industry, and this will permit us to become a more attractive and competitive country…”

In reality, despite heavy government spending on publicity hailing the benefits of foreign investment in energy, my feeling is that many Mexicans still have doubts. So here are the risks: If the populace does not feel the benefits over the next two or three years, discontent about the energy overhaul could meld with unhappiness over other issues. Social stability in Mexico is not a given.

Maybe instability won’t happen. Maybe energy reform will bring faster growth and new jobs to Mexico in a few years, palpably changing life for a majority. Whatever happens, though, what unfolded this past week was more an exercise in political engineering than an expression of the public will.

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