Six years ago, Mexico lived one of the closest elections in
its history, when Andres Manuel Lopez Obrador, and the actual President, Felipe
Calderon, where contending for President of Mexico (Figure 1).
Figure 1
.png)
At that time, Andres Manuel’s (PRD) proposals were not
necessarily prudent from a fiscal and monetary policy perspective, which was
reflected in a lack of confidence from foreign and local investors. In this
context, the MXN (Mexican peso) and other asset classes deteriorated closer to
the elections (Figure 2).
Figure 2
But this time around things are quite different. The three
main political parties have “market friendly” proposals regarding economic
growth and fiscal stance (at least they aren’t as radical as 6 years ago),
which makes any deterioration in Mexican financial markets unlikely, whatever
the outcome is. Furthermore, Enrique Pena Nieto (PRI) leads the polls with a
wide margin (Figure 3), making any “surprise” a very low probability event,
even taking into account voters that remain undecided.
Figure 3
.png)
What is most likely is that
Mexico is going to lose another 6 years. Incumbent political parties will
continue to block the urgent structural reforms that are needed (Security,
Fiscal, Political, Energy, etc.) whilst parties in power will continue to tackle
the problems only in the short-run, given the reluctance of parties to absorb
political costs. Mexico is now benefiting because of its low-cost manufacturing
structure, but the big challenges that Mexico has faced during the last decades
are yet to be overcome. Hopefully I am mistaken, and our country will not once
again be an example of mediocrity.
If you are interested, here are
the links to the three main presidential candidates for the 2012 elections:
Good Luck finding a good
candidate!
