[MEXICO] oil votes !!

Wednesday was the final state plebiscites on Mexican President Felipe Calderon’s energy sector reform, which would see more private participation in the oil sector. Votes have been held, or are planned, in 22 states, organised by the centre-left opposition Party of the Democratic Revolution (PRD), even though their legal status remains ambiguous -- Mexico’s constitution does not make provision for referendums or plebiscites, though they are allowed under local legislation.

Votes held so far have strongly opposed reform -- hardly surprising, given that turnouts have been low and those voting overwhelmingly have been supporters of the PRD. The party has claimed that the law is against Mexico’s constitution, which stipulates that oil must remain in the public sector, and has sought to stall debate in Congress. The government insists that plebiscites are non-binding, and their practical impact in the legislature will be relatively limited. Nonetheless, they will give the PRD -- and particularly its defeated 2006 presidential candidate Andres Manuel Lopez Obrador -- a strong argument to use in lobbying against the new law, as well as a focus around which to mobilise supporters, particularly in Mexico City. Large anti-government demonstrations now are likely, potentially targeting key infrastructure in the capital and triggering tense clashes with security forces.

Political wrangling
Despite protests, and plans for direct action by PRD legislators, it is through the ordinary channels of the legislature that the fate of energy reform will be decided. Indeed, while plebiscites and other PRD moves to stall reforms have generated headlines, the ruling National Action Party (PAN) has continued to negotiate with Mexico’s main opposition Institutional Revolutionary Party (PRI) over the details of reform:

  • The PAN does not enjoy an overall majority in either house of the legislature and needs PRI votes to pass laws.
  • Calderon’s strategy throughout his term has been to negotiate support for legislation before introducing it.
  • The case of energy reform is no different, but PRI support has wavered, as the party seeks to reconcile internal debates on the issue, and assert itself as a powerful political force.

The PRI in recent weeks has gained the upper hand in talks, introducing its own reform proposals, which are even tamer than Calderon’s already relatively limited proposals. Meanwhile, there is little prospect of Congress approving legislation in the immediate future, and delays make the Calderon administration appear weak.

Reform likely Energy sector reform ultimately is likely to be approved. While this will represent a triumph for Calderon, succeeding where his predecessor, Vicente Fox (2000-06) consistently failed, the PRI will succeed in extracting significant concessions from the government, both on reform itself and a range of other legislative initiatives. Calderon will also have spent a great deal of political capital on relatively tame oil sector reforms, at a time when other issues are increasingly pressing, such as:

  • rising murder rates as a result of drug gang activities;
  • the impact of economic slowdown on Mexican manufacturing; and
  • falling remittances from Mexicans in the United States to relatives at home.

Calderon’s victory may prove to be hollow, which could hamper the rest of his term, and his legacy beyond.

Source: Oxford Analitica

Blogalaxia: fotolog Technorati: Bitacoras:HidrocarburosagregaX:

No comments: