Tuesday, November 18, 2014

#fueelestado: Mexico's Peña Nieto Struggles at Home, Abroad

Even in this polar weather, it's hard not to feel the rage boiling over in nearby Mexico.

In late September, 43 students at a teacher training school in Guerrero went missing. They had traveled to the town of Iguala to protest against government corruption. Investigations paint a grim story: eyewitnesses report that after violent clashes with police, the 43 were arrested and herded into police vans at the mayor's orders. Members of the same police force have since confessed to Mexico's Attorney General that they handed the students over to Guerreros Unidos (GU), a drug gang in southern part of the state. This month, GU members finally led authorities to the landfill where they killed the students and and burned their bodies. The remains are so badly burned that DNA analysis is expected to take weeks.

Anti-corruption protests have been raging throughout Mexico, from the Guerrero State Congress to the National Palace in Mexico City. The incident, along with multiple mass graves authorities uncovered in the search, highlights the brutal gang violence plaguing Mexico's rural areas. It also raises serious questions about corruption and the ties between gangs and politicians.

Firefighters arrive to try to extinguish several burning vehicles in front of the state congress in Chilpancingo on 12 November, 2014.

 The Economist

As President Enique Peña Nieto faces this roiling situation at home, he also finds himself burned by scandal abroad. This week, Bloomberg reported that Mexico abruptly cancelled a $4.3 billion high-speed railway deal with China Railway Construction Corp., a prominent Chinese construction firm. The cancellation followed the revelation that the unrivaled CRCC bid included Grupo Higa. Interestingly, Grupo Higa's boss also owns the credit firm financing Nieto's private, $7 million home. The cancellation is a significant blow to China-Mexico relations. Nieto himself has been trying to attract Chinese FDI in Mexico, and this collapsed deal is sure detract from his confidence-building measures.


Such scandals are undermining Nieto's legitimacy at home and abroad. As his international business relations suffer, Mexico seethes at his perceived indifference over domestic issues. Various analysts have called for reform in Nieto's Mexico, including anti-corruption, targeting crime and strategic security reform. Will such reforms be enough to save his faltering political career? Protests are already calling for his resignation, and the Chinese are unlikely to ever do business with him personally.

While change in leadership may put out fires temporarily, many of Mexico's underlying issues will remain. No matter who is in charge, Mexico's leader will need to enact significant changes in terms of corruption, which seems to underpin many of the current developments. Transparency in large-scale business deals and personal finance may be a good place to start. At home, incentivizing state security forces may cut down on ties to cartels, saving the lives of many and bolstering the leader's political credit. It's about time; the people of Mexico deserve it.

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