A number of weeks ago I happened to be visiting some friends in the Coahuila state of northern Mexico, just in the run-up to yesterday’s midterm, regional elections. Let’s just say you’d have to be living in a very deep hole to forgo the propaganda for its PRI governor candidate, Rodrigo Medina de la Cruz. In fact, between PRI’s luminous billboards and the beehive of Oxxo convenience stores, I had little trouble directing a taxi driver to distant locations in the city of Saltillo by pure landmark (psss, GPS, for what?). Well, it paid off.
After quite unsettling results in 2006, PRI yesterday gained critical traction nationwide, but specifically in Mexico’s federal congress, pulling rank among a divided legislature. It now carries 36% of its seats, allowing them to slingshot president Calderón’s party, PAN (27%), with the working consent of the minority party, PRD (12%). The result is a rather uncharacteristic power share in a traditionally unilateral Mexican government.
For a concise and introspective brief on the shifts implications for the Calderon’s administration, check out Alberto Saracho’s analysis on America’s Quarterly blog, reporting from Mexico City. One particular point that drew my eye came in lieu of the national budget:
Government efforts to improve the level of tax collection—one of the lowest such rates in Latin America—will also be affected by yesterday’s vote. Although it was not widely publicized, the PAN has been working with the executive to approve changes in the fiscal law that would improve public money collection. This was on target to go through after the elections, but its future may now be in doubt since one of the PRI’s main campaign promises was to not raise taxes. Either way, a solution must be found to find new revenue streams for the federal government—recent reductions in oil prices and the worldwide recession have hampered the government’s ability to obtain resources for to pay for basic functions.
Yea, a faltering tax base might pose a bit of a challenge to match cartel revenue in the billions of dollars and reign in a throbbing economy– amid shrinking remittances from abroad, a reeling tourist industry, and oh yea, the lack of technical investment in Pemex. Ouch.