Cabinet changes and new policies: will this boost Peña Nieto’s second half?

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    Enrique Bravo

    President Peña Nieto has completed almost half of his tenure. In what was the first major adjustment in his administration, he announced a cabinet reshuffle last week replacing eight secretaries and the heads of two federal agencies days before his third State of the Union address. The cabinet changes and new policy measures announced in his address set the tone for the next and last three years of his government.

    It is clear that the second half of Peña Nieto’s term needs to show results. After successful passage of a series of structural reforms (including energy, telecom, economic competition and education), the Peña administration has failed to create success stories that show tangible benefits from these changes. The political savvy of his administration, demonstrated during the negotiations to approve those reforms, was soon eclipsed by a series of events that altered the script of his presidency and seemed to put his team back on its heels. These include instances that highlight corruption (especially with alleged cases of conflict of interest within the president’s inner circle); insecurity (particularly with the Executive’s ineffectual response to the forced disappearance of 43 students in Ayotzinapa, the killing of civilians at the hands of the Armed Forces in Tlatlaya, and, as icing on the cake, the unforgivable —in the president’s words— escape of El Chapo from maximum security prison); and poor economic performance (low growth and a weakened peso). Even the first bid round for oil and gas exploration, the first phase of the historic energy reform, was a major disappointment.

    If the Peña Nieto administration hopes to ensure a positive legacy and keep the presidency for the PRI in 2018, it will need to deliver much more than it has so far.

    Cabinet changes in conjunction with new policies are therefore worth discussing. First, his team shuffling included many portfolios, but left out critical ones. President Peña Nieto designated José Antonio Meade — previously foreign secretary — a recognized economist and proven public official with technical expertise, as Social Development Secretary (at the helm of SEDESOL), Aurelio Nuño as secretary of education, and Claudia Ruiz Massieu as new foreign secretary. But Finance and Interior (SHCP and SEGOB) portfolios —critical for the economy, security, and political negotiations domestically— remain in the hands of the current secretaries.

    Second, in the context of this State of the Union, President Peña Nieto announced ten new policies designed to reinforce the administration’s current policy path during the second half of his tenure. They include putting forward five new bills, ranging from laws to strengthen the rule of law and the creation of new special economic zones, to the creation of a Secretariat of Culture. A few more measures are geared toward sustaining economic discipline and promoting investment, and improving schools infrastructure.

    Now that we know what Peña Nieto wants to do in the second half of his administration, and we know the team he plans to do this with, will his administration be able to innovate and find new ways to achieve their existing policy goals with this not-so-new team, and turn the wheel to deliver results? Are the new measures going to help the implementation of already approved structural reforms? Or is this much ado about nothing?

    Marco Morales

    Enrique’s post is thought-provoking and worthy of further discussion. But there is an additional angle to analyze these changes from: the old art of (political) tea-leaf reading. Such is the public language of choice of priistas, old and new.

    If the first years of the Peña Nieto administration have confirmed anything is that priistas will always be priistas, and that they only know how to operate under the rules they were groomed under. Hence, we may read cabinet changes not only as a statement about what needs to change and which aspects of the agenda to strengthen. We could, in addition, read it as a simple re-balancing of power engineered from Los Pinos in preparation for the succession, which is ultimately at the core of Peña Nieto’s legacy (or so the old PRI gospel reads).

    From this view, the most important aspect of cabinet changes is who remained in place. That is, notoriously, Luis Videgaray at SHCP and Miguel Ángel Osorio Chong at SEGOB. Both, considered frontrunners, but having faced a number of difficult episodes recently, and both heading two very different wings of priismo: the former, a practitioner and representative of the old ways; the latter a figure groomed in those same ways but representing a “new” generation within the party.

    Furthermore, bringing Aurelio Nuño to replace Emilio Chuayffet at SEP tells an interesting story about which generation is becoming less relevant in the Estado de México group that brought Peña Nieto into office. Even after Elba Esther Gordillo’s incarceration, teachers’ unions remain an important political force and a disruptive one in states that are key to PRI’s electoral strategy. So, SEP is not a minor position and its political leverage must not be forgotten.

    Perhaps, most importantly, allowing Manlio Fabio Beltrones to become a referee to this process as the new PRI president sends two messages: first, he is not dead in the succession process; but, two, he will have to rein in all other candidates early on if he is to have a chance of competing as well.
    There’s one additional fact that that seems to be underplayed when thinking about cabinet changes: José Antonio Meade’s transition to SEDESOL. Purposefully or not, he has followed a “Colosio-path” of sorts. Serving in SHCP during the Calderón years, it is inevitable that he forged alliances with a number of governors (the true barons of power in post-transition Mexico). Also, serving as Secretary of Foreign Relations, he’s one of the few figures with an international presence, particularly in Latin America. Now, at SEDESOL, he has at his disposal the cash-and-good distribution machine, with at least a couple of years to reap its benefits.

    He is one of the few cabinet members – and active politicians, for that matter – with a diversified portfolio among political stakeholders, international actors, and now voters. Furthermore, Meade is known for having very cordial ties with figures from all political forces in the country.

    In sum, then, recent cabinet changes can be seen as well as part of a strategy to not tilt the scale too much towards one pre-candidate, but also as means to balance it out and keep the process from derailing… at least, until Peña Nieto is ready to issue his presidential “dedazo”. Never in the last decade have “las fuerzas vivas del partido” carried such a literal meaning within PRI and the cabinet.

    If tea leaf reading this view, as well, cabinet changes were not designed with policy in mind. The issuing of the “Mexico Moment” demonstrated that perception – not policy – is the focus of the administration’s standing. And on this realm, the iron grip on national media remains, perhaps with some exceptions in print outlets. But we know how impactful those are in the general public. Foreign correspondents, for their part, have (finally!) broken the spell from Los Pinos and begun reporting more critically. But the question is: does bad reporting abroad – unknown to the general public in Mexico – have political impact? I’m guessing not.

    Carlos Ahumada Nerya

    Thanks to Mr. Bravo and Mr. Morales for such valuable insights.

    In my opinion, cabinet changes had more to do with boosting PRI’s possible candidates’ public exposure than with modifying the course of the country (changes in Hacienda or in Gobernación would had been a sign of the other). However, PRI will have little chances for 2018 if things do not improve in the remaining years of President Peña Nieto’s administration. That is precisely the reason why Mr. Meade was appointed to SEDESOL. Mr. Meade knows very well how to operate inside the Mexican political system, which provides him with better tools to achieve social goals that give the President an improvement in public opinion surveys. Higher public approval would make it easier for Peña Nieto to create the political consensus necessary for the implementation of structural reforms, and improve his party’s chances to compete in the next presidential election.

    President Peña Nieto does not have a favorable road ahead. With the recent publication of PGR’s investigation on Ayotizinapa and the results of the investigation on alleged corruption (Casa Blanca), the credibility of authorities continues to trend downward. In addition, the Mexican economy will face major risks next year such as the imminent increase in interest rates in the US, a slowdown in the Chinese market, low oil prices, and Pemex’s low production. Without a doubt, all these factors will affect Peña Nieto’s second half, which politically speaking is good news for opposition parties, in particular for Morena. In fact, President Peña Nieto warned during his third State of the Union address about the rise of Populismo, qualifying it as a fake solution. Morena leaders immediately declared that Peña Nieto’s statements reflect the strength of their party and the real possibilities they have for 2018.

    Personally I do not think the foreign media can have direct political implications in Mexico. Peña Nieto’s administration has put particular attention on attracting foreign investment by opening new markets for private competition and giving investors the attention they need. The only way in which the foreign media would have a political impact is by making a huge effort to emphasize the poor rule of law and the risk of investing in this context, leading investors to allocate their resources in another country, which I think is very unlikely to happen.

    Andrew Selee

    There was nothing dramatic in the cabinet changes announced by Enrique Peña Nieto or in the Informe (State of the Union), but they were provide a few clues as to how he expects to govern for the next three years and perhaps to his view for the 2018 elections. In the Informe he showed some recognition of the public discontent over the country’s economic and public security challenges, though without announcing any specific new measures to address these. In the Cabinet changes, he opted for continuity, putting a strong administrator (Jose Antonio Meade) in the Social Development Department (Sedesol) and one of his closest political advisors (Aurelio Nuño) in the Education Department (SEP). This suggests that he will pay close attention to these two areas of social policy, which are critical for the success of his presidency. Both of these appointments also appear to strengthen the hand of Finance Secretary Luis Videgaray at the expense of other elements of the PRI outside of the government, although the election of Manlio Fabio Beltrones to the leadership of the PRI preserves another sphere of influence for politicians outside this immediate circle.

    Overall, these changes suggest that President Pena Nieto will emphasize solid administration over new legislative initiatives over the next few years and place a special emphasis on the social agenda. Whether these efforts succeed may well determine how Mexicans evaluate his presidency.

    Politically, both Meade and Nuño will have a higher profile which may allow them to build a political future beyond the current administration. Several commentators have suggested that they might be presidenciables. While this is possible, it still seems unlikely, but they will certainly have greater public prominence beyond insider circles than they have had in the past.


    El análisis y los comentarios me parecen incisivos y correctos. Sin embargo, una dimensión que me parece importante resaltar tiene que ver con la evaluación retrospectiva de Rosario Robles al frente de SEDESOL, la falta de resultados reales en la Cruzada contra el Hambre, y en general lo que yo veo como un retroceso en la polìtica social. Meade es un administrador efectivo, pero tambien su tiempo como canciller le ha permitido entender que la imagen de Mexico no se va a reparar aunque hubiera un boom energetico (prospecto de todas maneras dudoso. En el exterior existe una conexión clara entre la falta de Estado de Derecho y los retos que impone la violencia sobre la administración y la agenda social. Y el sexenio hasta el momento no ha podido mostrar resultados en ese frente, sino al contrario millones de pobres mas. Esto vendria a ser un tema natural de campaña para 2018 y en contraposicion con la bandera de justicia social que antes pertenecia al PRI, hasta el PAN va a poder argumentar que en sus gobiernos hubo mucho mas preocupacion y resultados en el combate a la pobreza. La interpretacion más frequente que he visto sobre Meade al frente de SEDESOL es la premisa de que regresaremos al clientelismo del pasado y que se usara la secretaria como una maquinaria electoral. Pero tambien hay otra interpretacion (màs optimista) en la cual sus aspiraciones presidenciales serian mejor servidas con una revitalizacion de la vision de reformar la politica social en los años de Zedillo. Nuno y Meade en este sentido podrian destrabar el tema educativo y social dandole nuevo aliento a la administración, toda vez que no se vislumbra que las reformas estructurales traeran en el corto plazo alguna mejoría perceptible en el bolsillo de los votantes.

    PS. Aunque no se ha discutido, el logrolling de entregar Prevencion al Verde con el nombramiento de Arturo Escobar muestra cuan relegada se encuentra esta dimensión en la visión del gobierno sobre como crear sinergias entre política social y reducción de violencia. Este error terminara costando para cuando empiecen las campañas.

    Pablo Tortolero

    Thank you very much for your inputs.

    In my opinion, as Mr. Diaz Cayero points out, the naming of Mr. Escobar as undersecretary for crime prevention in SEGOB is a very telling one, as it ratifies the political payoff tradition that is ongoing between the PRI and some other smaller parties, puts an ominous character in charge of a crime-related office without any fear for sanction of any kind, and seems to confirm that the changes in cabinet and the decalogue and rhetoric behind the “Informe Presidencial” were only a façade for something more pressing, 2018. The acceptance of the citizenship’s discontent by the President was also in line with the PRI’s existing strategy when facing crisis thus far, trying to minimize the damage by avoiding any decisive action or over-exposure, yet acknowledging something went wrong. His mention of the threat of populism was also important, as it gave AMLO a head start at least in the rhetorical ground towards an election that will undoubtedly polarize Mexican society, maybe even more that in 2006.

    I believe that some of the key players to watch during the next three years are going to be outside the PRI, as the ruling party will surely try to keep pushing hard on the reforms, specially in the education and social fields, as seen with the changes in Cabinet and pressed by the latest data on poverty.

    For 2018, I would tentatively rule out for now Videgaray and Chong, because of their baggage and difficult portfolios they are working with right now. Manlio Fabio Beltrones or someone close to him, even Eruviel Avila may also be also in the mix. And then the wildcard would be Meade, who served as Secretary for both PAN and PRI. This leaves us with the players to watch, the Opposition, which was all over the “Mexican Moment” in the early days of President Peña Nieto’s administration, yet three years later when moment was over remembered they actually are an opposition to the Government and changed their strategy dramatically. It remains to be seen what will the renovated PAN’s strategy will be, and next year’s state elections will give us a better understanding of that.

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