Under Peña Nieto, Mexico’s reforms revitalize nation

REFORMER: Mexican President Enrique Peña Nieto gives his second state-of-the-nation address earlier this month at the National Palace in Mexico City.
REFORMER: Mexican President Enrique Peña Nieto gives his second state-of-the-nation address earlier this month at the National Palace in Mexico City. AP

For a democracy as old as the United States, our politics have become discouragingly small. With most of our political leaders — dedicated public servants as they are — having adopted an all-or-nothing approach to governing, Congress often struggles even to pass yearly budgets.

I and colleagues from the growing “No Labels” movement have argued that, without a renewed commitment to cooperation and principled compromise, making the serious, structural changes necessary to meet our nation’s long-term challenges will remain a political impossibility.

Those disillusioned by the gridlock of our own politics, however, needn’t look far to find a more hopeful example. As we have stagnated, our neighbors to the south have done anything but. Under the leadership of President Enrique Peña Nieto, Mexico has spent the last 20 months reforming virtually every element of its economy and civil society.

In the process, President Peña Nieto has established himself as one of few global leaders capable of elevating a vision for his nation’s future over the petty squabbles of its present.

It is for this reason that the Atlantic Council — whose board I chair — has just awarded President Peña Nieto its prestigious Global Citizen Award. That Peña Nieto has earned such recognition only two years into his term as president speaks to just how transformational his tenure has been.

Peña Nieto took office in December 2013 and has since moved from one reform to the next.

▪ First came comprehensive education reform, which put more technology in Mexico’s classrooms, instituted national testing standards and created a legal basis to reward teachers based on merit, not seniority.

▪ Telecommunications reform reduced costs and expanded Internet access to Mexicans.

▪ A restructuring of Mexico’s financial markets, combined with an overhaul of the nation’s tax code, have boosted capital access and created the efficient, easy-to-follow tax system that reformers in the U.S. have been after for years.

▪ Then, earlier this year, Mexico passed a landmark reform of its energy and electricity sectors, which for decades had slumbered under state control. Analysts predict this reform will create millions of jobs, as well as expand production and lower energy costs for Mexican consumers and businesses alike. Already, energy and financial companies — including many U.S. firms — have lined up to begin investing.

The most decisive element of Peña Nieto’s tenure, however, was what the president did first. Before passing any legislation, Peña Nieto reached out to his fellow politicians in Mexico’s three fiercely adversarial political parties, who agreed to put aside partisan divisions and pursue a common reform agenda. By cultivating relationships with his political rivals — something we need much more of here in the United States — Peña Nieto developed the reservoir of trust and political capital he would need to draw upon in the months ahead.

Draw upon it he has. Every reform presented its own unique obstacles and political risks: tax reform was a balancing act between Mexico’s right- and left-wing parties; telecommunications and energy reform required sustained, forceful leadership to push legislation through a divided Congress; for the education overhaul, Peña Nieto vigorously took on unions and other recalcitrant elements of his own political coalition.

There should be no illusions that the ideological differences within Mexico’s politics simply disappeared. Every reform faced robust, sometimes virulent opposition in Congress, and some political alliances have not emerged intact. Mexico’s three political parties remain rivals, and will aggressively compete for every office in next year’s mid-term elections.

Nevertheless, the Mexican people have seen the faith they placed in their president rewarded. The reforms of the last 20 months will bring concrete benefits to Mexicans of all incomes, backgrounds and political allegiances.

A stronger job market will boost Mexicans’ earnings and reduce the incentive to emigrate to the U.S. in search of work. Increased revenues from tax reform, along with royalties from Mexico’s reinvigorated energy sector, will generate billions of dollars each year.

And the benefits of a revitalized Mexican economy will extend far beyond Mexico herself. The United States in particular will benefit from increased economic growth south of the border, as a rising Mexican middle class, with more money in their pockets, will spend more on U.S. goods and services.

Mexico’s newly liberalized energy and telecommunications sectors will spur outside investment, boosting revenues and stock prices for U.S. companies in industries ranging from technology to natural gas to finance.

Fully realizing the benefits of these reforms — and, if necessary, improving them — will require sound management and political skill. Other steep challenges remain ahead, as well: President Peña Nieto has yet to fully subdue the drug cartels who threaten public safety in many of Mexico’s states. The 2,000 mile border between Mexico and the U.S. remains porous — an urgent but unresolved issue that confronts both our nations.

However, the results thus far are clear: Mexico’s reform agenda is not yet complete, but for his leadership, political skill and already-lengthy list of accomplishments, President Peña Nieto deserves our recognition. His ability to advance much-needed reforms is a lesson for our country at a time of deep polarization.

Jon M. Huntsman Jr. is chairman of the Atlantic Council. He is the co-chair of No Labels and served as governor of Utah and as the U.S. ambassador to China. He was a candidate for the Republican presidential nomination in 2012.