Mexico Parties to Evaluate Pact for Reforms After Election

Mexico’s opposition parties said they’re evaluating the future of a multi-party accord to pass economic reforms after alleging foul play by the administration of Enrique Pena Nieto in local elections.

“We have to evaluate what will happen with the pact,” Jesus Zambrano, the head of the opposition Democratic Revolution Party, or PRD, said yesterday in an interview broadcast on Milenio TV. The ruling party acted with “political savagery,” he said.

Both ruling and opposition parties declared victory yesterday in a close race for governor of the northern state of Baja California, with preliminary results being tallied late into the night. Mexicans voted Sunday in 15 states to pick mayors and local lawmakers as well as a new governor of Baja California.

The elections have heightened tensions among political parties that are in the midst of negotiating key energy and tax bills to be presented and voted on this year, as scheduled by the so-called Pact for Mexico. The aftermath of the elections may have an impact on the political and reform agendas of the second half of the year, according to JPMorgan Chase and Co’s chief Mexico economist, Gabriel Lozano.

Going forward “there will be a more complicated political environment,” said Sergio Luna, chief economist at Citigroup Inc.’s Banamex unit. “The pact will enter a more delicate stage in terms of negotiations and the capacity for consensus.”

When asked about alleged irregularities, a press official with the Institutional Revolutionary Party, or PRI, referred a Bloomberg to statements by the party’s president, Cesar Camacho. Camacho said today that his party had been the victim of irregularities by opposition groups, including members who blocked voting stations.

Vote Buying

Luna said after the elections he remained “moderately optimistic” that political parties will be able to overcome their differences and push through economic reforms.

The pact stalled in April after the opposition alleged Pena Nieto’s PRI arranged to buy votes using government funds in the state of Veracruz. The groups patched up differences by creating measures to ensure the July 7 election would be free of vote rigging as part of an addendum to the pact.

Many of those measures weren’t followed, the opposition National Action Party’s secretary general Cecilia Romero said in an interview after the elections. “There were very grave omissions on the part of the government and its party with regard to carrying out the addendum,” Romero said by phone from Mexico City. “We have to do an evaluation of the election results, of the irregularities and the behavior of the parties” to decide how reform negotiations will progress, she said.

Romero added that as long as the pact “serves the country” her party will remain a member.

Baja California

The PAN has led Baja California state since 1989, when it became the first governorship to switch hands from the PRI that had ruled every state for six decades.

Considered one of the last PAN bastions, a close race threatens to further strain the Pact for Mexico by causing post-election disputes, Lozano said in a July 5 interview.

If the PAN hands over power to the PRI candidate in the state, Fernando Castro, it will give the ruling party more leverage to push through economic changes, Victor Espinosa, a political scientist at the Colegio de la Frontera Norte in Baja California, said in a July 5 telephone interview from Tijuana.

PAN candidate Francisco Vega, who ran as part of an alliance with the PRD, was backed by Senator Ernesto Cordero, who has split with the more conciliatory PAN leadership, Espinosa said.

Pena Nieto has pledged to pass this year bills to break the government’s monopoly on the oil industry and boost tax collection in efforts to double the pace of growth. He’s managed to broker an accord with major parties to push these reforms through congress.

The PRI enjoyed single-party rule for 71 years until the PAN won the presidency in 2000, only to lose to Pena Nieto in 2012.

Violence

Disputes of another kind have also dogged the elections.

At least four candidates and politicians were killed in the run-up to the race in Oaxaca, Chihuahua, Veracruz and Sinaloa, states where drug cartels have long sought to gain influence with local officials. Sinaloa is the home state of Joaquin “El Chapo” Guzman, Mexico’s most-wanted drug lord.

“It’s very probable organized crime groups are trying to prevent some people from gaining office, either because they think they’ll act against their group’s interests, or because they think they’re aligned with a rival gang,” Jorge Chabat, a political scientist at the Center for Economic Research and Teaching, a Mexico City-based university, said in a July 1 interview.

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

To contact the editors responsible for this story: Andre Soliani at asoliani@bloomberg.net; Carlos Manuel Rodriguez at carlosmr@bloomberg.net

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