Mexico’s Fox — or Chicken?

Initially, it all looked so good for Mr. Fox, almost too good. A new, conservative Republican government under former Texas governor George W. Bush was about to take office in Washington. Even Mexico's currency and financial markets were tranquil in the face of a true democratic transition, allowing for the first presidential succession process in a quarter century to occur in Mexico without a financial crisis.

President Fox's relationship with Washington started auspiciously, with a state dinner at the White House, high-level meetings between the two governments and broad, ambitious statements about making progress on a range of issues from immigration to narcotics control to trade.

It seemed to Mexicans that the United States was finally paying attention to their priorities, in part because Mexico had an attractive, pro-business and pro-U.S. leader who cultivated personal relationships with President Bush and his team.

Now fast forward to the current time. It is not only because of the sudden shift in U.S. priorities following 9/11. Fox is now widely viewed as a pro-gringo, lame duck who was ultimately shunned by Mr. Bush. Mexico’s loss to the United States in the World Cup symbolizes the current relationship, where a once independent-minded Mexico is now clearly subordinated to and largely ignored by the U.S. Goliath.

Why did this rapid shift in perception occur? Truth be told, President Fox's political problems don't start in Washington, but rather in Mexico City. The former Coca-Cola executive and governor of Guanajuato state came to power based on his popularity with voters — not because of a political machine.

Yet, once in office, he had to lead a system based on three established political parties — the former monopoly party, known as the PRI, the left-wing PRD and the conservative PAN. Each party controls roughly a third of Mexico's congress.

Since Mr. Fox has not been able to forge a working coalition with either of Mexico's opposition parties, political stalemate has developed. Even the members of Mr. Fox's own party, the PAN, don't always support Vicente Fox in the national legislature.

In this regard, it is useful to remember that, during the 1990s, Fox and his contemporaries were considered northern "barbarians" by the PAN's ossified and captive leadership in Mexico City.

As a matter of fact, the moderate Mr. Fox — a descendant of émigrés from Catalan — is considered a radical by some in the PAN. After all, this is a party that began as a vehicle for Catholic, anti-communist conservatives opposed to Mexico's Marxist revolution.

Yet, he and other northern governors demonstrated that the PAN could govern and solve problems. While the popular Mr. Fox gave the PAN electoral credibility at the national level, he was only grudgingly accepted by other PAN leaders — largely because of his ability to work with the PRI and PRD.

For example, in Guanajuato he kept experienced PRI bureaucrats in place — and worked with other parties that are anathema to mainstream panistas.

Fox joined the PAN in the 1980s, inspired by the charsimatic PAN reformer Manuel Clouthier, known as “Maquio,” who died in a suspicious car crash in 1989.

Always the outsider who is more popular with Mexican voters than with Mexico City's incestuous political class, Mr. Fox remains an outsider today — even within his own government.

He ran as a reformer under the PAN banner in 2000, but took power as the head of a political movement, the Alliance for Change, rather than a single party.

By trying to be inclusive of all of the political constituencies that supported his victory in 2000, he created an unwieldy executive branch that spends more time debating internal turf issues than handling the nation's priorities.

Mexico thus finds itself at a crossroads. On the one hand, the present situation is an improvement over decades of single-party rule prior to 2000. On the other hand, Mexico is stuck in a political stalemate that only a decisive election can resolve.

Fox has seen his domestic agenda thwarted, primarily by the PRI led by former Tabasco Governor Roberto Madrazo. Mr. Madrazo is the PRI's leader in the Mexican congress, an ally of former President Carlos Salinas — and a man who looks like a major contender for the Mexican presidency in 2006.

To give but one example, when Vicente Fox recently tried to resurrect his proposal to open Mexico's state oil industry to private investment, Mr. Madrazo simply replied that the PRI would not be considering the proposal — effectively killing the idea before it even began.

To be sure, this political stalemate is not at all helped by the fact that the Mexican economy is still in recession after six negative quarters. Neither does it help that the peso is still 20% overvalued, despite the U.S. dollar's recent weakness. As a result, Mr. Fox is in a tough spot.

His advisors see one hope to salvage his presidency: Win a decisive margin in Mexico's mid-term elections to be held in 2003 — when control of both houses of the national congress will be contested.

These sources believe that Fox will return to the campaign trail early next year — to ask Mexico's people for renewed support.

Mr. Fox's supporters hope that a rebounding economy and public weariness after three years of political gridlock will translate into a strong mandate for the last three years of his sexenio. (Mexico's presidents are limited to one six-year term in office.)

Unfortunately, this strategy may be derailed by some of the very same problems that have hamstrung his present government.

First and foremost, this time around Mr. Fox and his "allies" within Mexico’s PAN party must run on their own record — instead of against an entrenched PRI ruling party. Most Mexican observers seem to agree that he has few accomplishments to show for his first two plus years in office. Thus, he may have trouble painting the PRI and PRD as "obstructionists."

Also, there are major scandals plaguing both Fox's PAN and the PRI regarding campaign finance shenanigans. This keeps Mr. Fox from attacking the PRI for past dirty tricks.

One recent report details how a former PAN governor from Nuevo Leon brazenly demanded a multi-million dollar commission on a government project. The report illustrates powerfully that the corruption is a non-partisan activity in Mexico — as well as the United States.

Of even greater concern to voters is Mr. Fox's refusal to investigate the alleged corruption surrounding former President Carlos Salinas and his brother Raul, what Mexican columnist Carlos Ramirez refers to as "narcosalinismo." When he ran for office, Mr. Fox made investigating past crimes a key plank in his presidential campaign.

"The days have become weeks, and the weeks are becoming months, and still Vicente Fox remains paralyzed by the past," wrote Sergio Aguayo in the Mexico City daily Reforma early in Mr. Fox's term.

"Will there be a truth commission?" asked Aguayo, the former head of Mexico Human Rights Commission, in reference to a promise made by Fox during his 2000 campaign.

Despite periodic reports about "debate" inside the Fox cabinet concerning the propriety of pursuing past crimes, the Fox government shows no inclination to disturb the corruption of Mexico's recent history.

Indeed, despite repeated requests for assistance from the Swiss government, which has investigated Raul Salinas and others for years, the Fox government refused to make Raulito available to the Swiss magistrate for a deposition.

The second issue facing Mr. Fox's strategy for a political come back involves political discpline. Much of the PAN leadership, including some senior members of his cabinet, are more interested in building their own political careers than in supporting the success of the Fox government.

Made up of a wide variety of political activists from across Mexico's political spectrum, many Foxistas are not even nominal members of the PAN.

Die-hard panistas such as former Nuevo Leon governor Santiago Creel, now Secretary of Government, should be helping Fox work to assemble support from Mexico's Congress.

Instead, say insiders, most of Fox’s department heads spend their time fighting over their roles in the crowded cabinet and shrinking budget resources. If Vicente Fox wants to win a new mandate in 2003, he must immediately appoint a chief of staff — a Mexican version of George Bush’s Karl Rove — with the power to manage the government's workings more effectively.

Despite these high hurdles, the possibility remains that Mr. Fox is successful in taking his case for a PAN majority to the Mexican people next year.

Then, he would have the legislative majority he needs to govern effectively. However, if he fails, then Mr. Fox is likely to go down in the history books as a mere transitional figure in Mexico's progress toward true democracy and the rule of law.

But whatever happens to Mr. Fox in Mexico's evolving political scene, the United States has a lot to worry about. Almost without anybody noticing, Washington may find that it has missed a tremendous opportunity to work with one of the most pro-U.S. leaders in Mexico in generations.

Whether you blame this lost opportunity on Middle East terrorism or other factors, it remains a great loss to both nations.

— Christopher Whalen is a New York based writer and investment banker.