Politics: Old rulers gain with strategy of blocking reform

When the Institutional Revolutionary Party (PRI) lost the presidency in 2000, most political analysts believed that the defeat sounded the death knell for the party that had ruled for 71 uninterrupted years.

Less than a decade later, the PRI is once again the biggest force in national politics. In July, it cleaned up in the mid-term elections for the lower house of Congress, winning 237 of 500 seats. The result more than doubled its previous number of 106.

With the government’s National Action Party (PAN) reeling from the blow, the PRI landed another punch: on the same day, it won five of six elections for state governor, bringing the total number of states under PRI control to 19 out of a total of 32, including Mexico City.

“When the PRI lost the presidency, many of us thought that it was a spent force,” says Alfonso Zarate, a political analyst in Mexico City. “Now it is back.”

Indeed, the change in relative weightings leaves the PRI in undisputed control of what passes – and fails to pass – through Congress until at least 2012, when the centre-right administration of President Felipe Calderón ends its term.

So what can locals and foreign investors expect in terms of new legislation over the next three years?

Prior to the election, and when the opinion polls were already suggesting that the party would do well in mid-term elections, several investment banks believed the PRI would start to co-operate with Mr Calderón’s reform agenda.

The logic, so the theory went, was that election victory meant a good chance of the PRI returning to power in 2012, so it would be better to pass potentially politically costly reforms now rather than having to pass them under its own watch.

But to judge by the recent skirmishes in Congress over the 2010 budget, it is becoming increasingly clear that the party is prepared to undertake almost nothing in the way of structural reform – at least for the time being.

At the end of last month, as Mr Calderón and his team celebrated the lower house’s passing of the budget, PRI senators were already threatening to block the proposal, or at least certain aspects of it.

Political scientists say that the proposals, which included unpalatable tax increases, provided an irresistible opportunity for the PRI to gain short-term popularity by showing Mexicans that it was prepared to defend their interests.

Besides, argues Dan Lund, a political analyst and pollster in the capital, the presidential elections are still a long way off. “It is too early for the PRI to carve out a political strategy,” he says.

One reason for the party’s apparent lethargy is that doing very little has worked well so far.

For the past three years, the party has done only the bare minimum to assist Mr Calderón in his attempts to reform the oil sector and tax system, among other areas.

In the process, it has claimed to have defended national interests when objecting to certain reforms, and to have been a constructive opposition when collaborating.

Either way, it has emerged fortified at the same time that the president’s administration takes the knocks.

The second reason it is likely to hold back on collaborating with the reform agenda is that today’s PRI is structurally much more complicated than it has been for decades.

When the party held the presidency, there was a clear and simple line of command that ran from the top down through the party and out to the states.

The president’s word was carried out more or less to the letter, and he could also handpick his governors.

Today, however, the vacuum at the top has led to political fragmentation and a decentralisation of power further down the structure.

Mr Zarate says that one result of this fragmentation is that it is much harder to co-ordinate common party policy on key issues.

“The president used to control the state governors, but today the governors are independent,” he says.

“The party president now has to negotiate with them …they have become the true owners of the PRI in each of their respective states.”

Jorge Zepeda, editor of Mexico’s El Universal daily newspaper, goes even further. “The PRI as a concept no longer exists,” he says.

All this means at least two things: as 2012 draws closer, there could be a lot of infighting among the party’s new power brokers and presidential hopefuls, particularly between Enrique Peña Nieto, the popular and handsome governor of the state of Mexico, and Manlio Fabio Beltrones, the party’s powerful leader in the Senate.

The second consequence could be that Mr Calderón’s reform agenda for the remainder of his six-year term could be over before it has even begun.