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LatinNews Daily Report - 14 June 2013

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Extraordinary congressional sessions secured

Development: On June 12 the three main political parties signatories of the Pacto por México – the ruling Partido Revolucionario Institucional (PRI) and the opposition Partido Acción Nacional (PAN) and the Partido de la Revolución Democrática (PRD) agreed to hold extraordinary congressional sessions in the next two months to discuss structural reforms.

Significance: The success or failure of the Pacto por México, the cross-party agreement over the major reform agenda proposed by President Enrique Peña Nieto, is a proxy for how well Peña Nieto is doing half-way through his first year in office. The latest scheduling agreement comes despite tensions within the Pact, associated with the run-up to local elections in 14 states due on 7 July.

Key points:

  • Given the scale of the challenges faced by the country, the Pact’s record to date is positive, with education and telecommunications reform approved by congress and now entering the implementation stage.
  • While the Pact survived the latest tensions over accusations by the PAN and PRD that the PRI has been illegally diverting state funds into its electoral campaign ahead of the July poll, it remains fragile: the PRD general secretary, Alejandro Sánchez Camacho, has described an addendum to the Pact, intended to guarantee electoral fair play in the 14 states next month, as an “elegant” agreement on paper which has already failed.
  • Congress normally goes into recess between 30 April and 1 September, a period in which it only convenes once a week (on Wednesdays). This year, however, the parties have agreed to hold two extraordinary sessions with daily meetings in the second fortnight of July and the second fortnight of August.
  • In the July session congress will discuss a new transparency law bill (which is supposed to create a national anti-corruption commission) and also data protection legislation. It will also try and conclude the bill to cap state-level public debt (state-level debt grew by 148% to US$32.5bn between 2006-2012) which has so far fallen victim to a jurisdiction dispute between the upper and lower houses. In the August session the aim is to finalise secondary legislation associated with the educational and telecommunications reforms.
  • There could be some serious horse-trading among Pact members in congress as they try to obtain other reforms that have not yet been scheduled for debate. In particular Peña Nieto wants to push through energy sector reform in the second half of the year to open up the state oil monopoly, Pemex, to private investment. While the PAN and PRD are interested in the Pact’s political reform proposal (in which they want to see the introduction of a second run-off round in the presidential elections, as well as the possibility of consecutive re-election for various positions), which is scheduled to be presented to congress by July.