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Friday, June 21, 2013

Mexico Oil Reform: Political Class and Society

La Jornada: Editorial

The president of the National Action Party (PAN), Gustavo Madero, highlighted yesterday that conditions are right for passing an energy reform in the coming months – specifically from September 1. The president of the Senate, Ernesto Cordero, said that the PAN legislators are willing to modify the Constitution, carry out a true reform in the energy sector and offer their full support to a radical energy reform – not a cosmetics reform.

Such statements are being made against the backdrop of Enrique Peña Nieto’s recent statements – formulated abroad by such outlets as The Wall Street Journal and Financial Times – that there is already an agreement in the framework of the so-called Pact for Mexico to liberalize the oil industry and allow private companies to participate in activities that the Constitution considers exclusive to the nation.

It is noteworthy that among the first to jump to the defense of the president’s comments are the representatives of the two factions that are currently fighting over the control of the National Action Party. This shows the party’s unequivocal eagerness to legitimize a new attempt to alter the public character of the national hydrocarbon industry. In hindsight, PAN’s alignment with the Peña Government’s energy reform is logical, given that this plan would essentially resume the project presented by the previous administration in April 2008. The binomial PRI-PAN’s support of an initiative such as this, coupled with the support of parties such as Ecologist Green and New Alliance, would presumably allow the latter to count on achieving enough votes to be approved.

Nonetheless, such promoters would be making a big mistake if they think that the legislative feasibility of the energy reform automatically equates to their political viability, especially when taking into account the opinion expressed five years ago by the majority of society regarding Calderon’s attempt at privatization. Beyond the opposition of leaders and political parties, if one thing was demonstrated five years ago it was the existence of a wide social attitude contrary to the privatization of energy, in general, and, particularly, of oil.

That attitude was expressed during the popular protests held in response to Andrés Manual López Obrador’s proposal and they forced there to be a wide debate in the Senate, in the course of which the arguments for privatization were systematically neutralized and rejected by numerous experts. Additionally, those expressions of protest, among which those of strings of women that dubbed themselves Adelitas stood out, made it necessary to carry out a national consultation that ratified the population’s backing of the national statute of the oil industry by overwhelming majority.

Returning to the present, note should be taken of the sudden and unannounced verbal radicalization of the PRD leadership. It is seamlessly going from uncritical adhesion to the Pact for Mexico, which is, after all, the political umbrella of the Peña reforms (energy included), to the announcement that the Aztec sun party will participate in the protests against the planned privatization of the oil industry.

Before even announcing and assuming legislative majorities and party consensus, the promoters of the privatization would do well to check the pulse of the society about an issue that in 2008 ended with the destruction of the initiative on oil presented by the then governing National Action Party.

It remains to be seen if, after five years, preferences and opinions of the citizens have changed on this issue or, on the contrary, the majority of the population still believes that the exploration, extraction and exploitation of crude oil must continue to remain exclusively in the hands of the nation. That being the case, the effort to transfer part of the hydrocarbon business and oil revenues to private parties would involve a dangerous disregard of the social pact, which is expressed in the last instance in the current text of the Constitution. This could open the door to a new crisis of representation and clearly unwanted national fractures. Spanish Original