Mexican president, Felipe Calderon, wants to increase private investment in the struggling energy sector that would provide for a total of $20 billion in development funds for Pemex, Mexico’s state-owned petroleum company. Calderon states that the investment is necessary for Mexico’s development for the coming decades. The measure would provide funds towards modernization with $2 billion going towards exploration efforts and $13 billion on production.
Calderon’s energy reform proposal will need the PRI’s full support in order for it to pass since his party (PAN) lacks a majority in congress. The PRI have said they are open to talks on revitalizing Pemex but want the legislation to be part of a wider bill that would allow for economic competitiveness and to keep monopolies from forming. A 2/3 congressional majority is needed for a constitutional change that would allow for privatization. Currently, there is some internal division within the PRI over the energy reform.
Getting a 2/3 majority presents a sizable problem that may result in gridlock as we discussed in class. Going back to the first post, it can be said that the PAN has 41% in each house, but needs 67% and will, therefore, need the support of all PRI members in order to get this passed. This will prove to be difficult considering that term limits as well as lack of re-election cause Mexican politicians to be more shortsighted than those in the parliamentary system who would be more willing to support long term policies in order to secure party predominance in future elections and therefore, the politicians’ own seat.
More information can be assessed at http://uk.reuters.com/article/oilRpt/idUKN2255089720080122?pageNumber=2&virtualBrandChannel=0&sp=true
1 response so far ↓
monicapachon // January 29, 2008 at 8:06 pm
Indeed, PAN is faced with a big problem. The PRI has always defended the position that petroleum should be in “state hands”. Changing that position might cost them in the future – and it is doubtful that there is any agreement within the party to support that bill.
Regarding the reelection ban though — it would seem that legislators would not be as short-sided, due to the party’s control over the legislator’s careers -. We could discuss this in more detail.
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