Economy & Business - July 2003

Mexican political and economic commentators say that if Mexico is to avoid an economic smash in the second half of the year, the government needs to do more than rely on cheerleading from President Fox and his wife, Marta Sahagún. There are increasing calls for a cabinet shake-up, at least to show that the government realises that new ideas are needed and that the steady-as-she-goes policies have failed. 

One leading commentator, Enrique Quintana, is almost apocalyptic. He says that unless the government can show that it can deliver reform in congress over the next couple of months, the prospects for the remaining three years of President Fox's administration are bleak. 

The prospects for even a fiscal reform, which the government botched in its first year, look remote. Each of the main parties understand something different by the term. 
The PRI seems to think it is more efficiency; the PRD that the government will stop committing so much money to the bank bailout agency, Ipab; while the PAN is still hoping to extend VAT to food and medicine under the reform umbrella. 

Groups outside congress are even more divided. Businessmen expect reform to lead to a clampdown on the informal economy. The unions want higher taxes on the middle classes and the rich.

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