Facebook-Fueled Protests Erode Pena Nieto’s Lead in Mexico

The main threat to Mexican presidential front-runner Enrique Pena Nieto in July’s election may prove to be a grassroots movement of students that started on social networking websites.

Students have filled plazas in major cities in the past two weeks, using Facebook and Twitter to organize marches against what they say is a media bias in favor of Pena Nieto. The students, many of whom were in elementary school when Pena Nieto’s Institutional Revolutionary Party lost power in 2000, warn that corruption that blossomed during the PRI’s 71-year rule could worsen if Pena Nieto is elected.

While the protests are unlikely to derail Pena Nieto’s presidential ambitions three weeks before the July 1 vote, they may cut into support for his party’s candidates running for Congress, said Antonio Crespo, a Mexico City-based political analyst. If elected, Pena Nieto, 45, will need a majority in Congress to approve proposals to overhaul tax and labor laws and allow private investment in the state-owned oil industry.

“The students are doing things Pena Nieto’s rivals haven’t managed to,” said Crespo, who is a professor at the Center for Economic Research and Teaching. “They are changing voter trends.”

Since the first major rally on May 19 drew 45,000 students to Mexico City’s historic downtown, according to the police, Pena Nieto has seen his lead in polls narrow. Benefiting the most has been Andres Manuel Lopez Obrador, 58, who opposes Pena Nieto’s plans to end Petroleos Mexicano’s oil monopoly and narrowly lost to outgoing President Felipe Calderon in 2006.

Televised Debates

Students, hailing from both public and private universities, have rejected any political affiliation and plan to hold their next gathering on Sunday, June 10, the day the candidates participate in the second of two televised debates organized by the electoral institute.

The protesters are demanding a third debate on June 19 organized by students. All of the contenders except for Pena Nieto have agreed to participate, while the front-runner said conditions do not exist for an impartial debate, Reforma newspaper reported today.

Pena Nieto had 35.8 percent support compared with 24 percent for Lopez Obrador in a poll of 1,000 registered voters taken June 1 to June 3 by Consulta Mitofksy. The PRI candidate’s lead was the smallest since campaigning began March 30 and is down from a 17.6 percentage point advantage in a poll published May 15, according to Mexico City-based Mitofsky.

Josefina Vazquez Mota, 51, of the ruling National Action Party had 20.8 percent support. The poll had a margin of error of 3.1 percentage points.

Rise of Obrador

The peso fell 1.6 percent on May 31, more than all 16 major currencies tracked by Bloomberg, to its weakest level since 2009 after Reforma newspaper published a poll that day showing Lopez Obrador within 4 percentage points of Pena Nieto and after the U.S. posted a disappointing jobs reports. It was the closest Lopez Obrador has come in any major poll.

Nomura Holdings Inc. (8604) in a June 1 report attributed Lopez Obrador’s rise to the anti-PRI movement ignited by the students, while saying it expects Europe’s debt crisis and concerns about global growth, not electoral politics, to weigh on Mexico’s bond and currency markets in the coming weeks. Mitofsky also attributed Pena Nieto’s drop in polls to the students.

Democracy’s Strength

An official with Pena Nieto’s press office who declined to provide his name in accordance with campaign rules said that the marches reflect the strength of Mexico’s democracy and that the candidate respects the views of all voters.

Lopez Obrador’s spokesman did not immediately respond to an e-mail request seeking comment. The candidate said June 6 that those who thought the election was decided “didn’t count on the young people,” according to the newspaper, La Jornada, referring to the student marches.

Yields on peso bonds due in 2024 have dropped 56 basis points, or 0.56 percentage point, this year to 6.11 percent, according to data compiled by Bloomberg. The benchmark IPC stock index is little changed over the same period. The stock market has risen 49 percent since Calderon took office Dec. 1 2006.

Mexico’s gross domestic product expanded an annual 4.6 percent in the first three months of the year, the fastest pace in six quarters. The country will grow 3.5 percent this year, the Finance Ministry estimates.

Grupo Televisa

The now nationwide demonstrations, inspired partly by protests in Spain and student marches in Chile, have taken aim at what they allege is favorable coverage of Pena Nieto by the nation’s dominant broadcaster, Grupo Televisa SAB. That is the same network that produced soap operas starring the candidate’s wife, Angelica Rivera, before they were married.

At one rally last month, young people held signs saying “Welcome to the Fifth Power: Social Networks” and wore cardboard cut-outs of television sets to poke fun at Pena Nieto’s media-driven campaign.

PRI allies initially said that those who jeered Pena Nieto during a visit last month to the Iberoamerican University were not enrolled at the Mexico City-based institution.

In reaction, 131 students posted a video on Google Inc. (GOOG)’s YouTube website of themselves holding up their IDs from the college. Protesters marching in solidarity with the 131 students call themselves #YoSoy132, a hashtag in Spanish meaning “I am the 132nd,” which has become the name of the student movement. A hashtag is a symbol used to mark a topic on Twitter.

Anti-PRI

Anti-PRI sentiment has also been stirred by U.S. federal prosecutors’ decision last month to file civil charges against a former PRI governor in the border state of Tamaulipas for allegedly taking millions of dollars in bribes from drug cartels and investing them in Texas real estate. The two cases were presented in San Antonio and Corpus Christi, Texas.

A poll of 1,000 people taken May 24-28 by Mexico City-based pollster Buendia y Laredo found that 47 percent of those surveyed support the marches, while 32 percent opposed them. The poll published in El Universal newspaper had a 3.5 percentage point margin of error.

Still, maintaining the same level of public support and organization will become more difficult if the movement begins to endorse specific policies, said Carlos Ramirez of Eurasia Group, a Washington-based policy analysis group.

Constitutional Amendment

Pena Nieto’s campaign chief, Luis Videgaray, in a May 30 interview, said that the candidate would push for a constitutional amendment to open to foreign investment oil fields currently operated by Pemex. The PRI needs to convince a two-thirds majority in both congressional houses to approve such legislation. Currently the party has a nine-seat majority in the lower house of Congress thanks to an alliance with the Green Party.

The PRI had 44.2 percent support among respondents asked by Mitofsky which party they’d vote for in the congressional race taking place the same day as the presidential vote. It was the lowest level of support for the party since campaigning began March 30.

Student leaders plan to vote later this week on whether to oppose Pena Nieto’s energy proposals. Crespo said that the students risk alienating voters if they lean more heavily in favor of Lopez Obrador as some are urging.

Even as summer vacation and the Mexican rainy season begin, organizers have promised more rallies and vow to stay active if they’re unable to block the PRI’s return to power.

“If Pena Nieto becomes the next president, we will surely be on the streets,” said Brenda Hernandez, a history student of the Mexican National Autonomous University who wore a pink #YoSoy132 T-shirt at a recent rally. “You can count on it.

To contact the reporter on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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