Mexican presidential favorite targets monopolies

Reuters News
Posted: Oct 10, 2011 6:49 PM
Mexican presidential favorite targets monopolies

By Dave Graham

MEXICO CITY (Reuters) - The frontrunner to be Mexico's next president on Monday pledged to crack down on monopolies, boost the country's tax take and overhaul state-owned oil monopoly Pemex if he wins a 2012 election.

Outlining his economic priorities for the first time, Enrique Pena Nieto promised to maintain macro-economic stability, double spending on infrastructure and face down the challenge posed by India and China to Mexican firms.

The telegenic Pena Nieto, whose term as governor of the State of Mexico ended last month, is expected to run in 2012 for the centrist Institutional Revolutionary Party (PRI), which ruled Mexico for seven decades until it lost power in 2000.

The 45-year-old has a commanding lead over potential rivals for the July 1 vote, with a voter survey last week by pollster GCE giving him the support of nearly half the country, twice the level of his nearest rival.

The economy, which is recovering from the financial crisis more slowly than its Latin American peers, is expected to be a major campaign issue, alongside security, with unemployment at xx percent, still significantly above pre-crisis levels.

Unveiling a 10-point economic program, Pena Nieto said Mexico needed to redefine its approach to battling monopolies and seek to make the private sector more competitive.

"Only in countries that promote competition is there innovation, allowing the population to enjoy more and better quality goods and services, at better prices," he said in a televised address in the northern city of Chihuahua.

Many Mexican businesses are family-dominated and wield considerable power in their respective sectors, such as cement maker Cemex, bread maker Bimbo and telecommunications giant America Movil, owned by Carlos Slim, the world's richest man.

Revamping Pemex was also crucial to modernizing the Mexican economy, Pena Nieto said.

Pena Nieto said Mexico needed to overcome its fear of making the "necessary transformations within Pemex" to make the company more competitive. He did not offer details.

Since Mexico nationalized its oil industry in the 1930s, Pemex has been a sacred cow. Many presidents have talked of reforming it but changes have been few and far between.

Pena Nieto established his economic credentials in Mexico's most populous state with scores of public works encompassing the building of roads, schools and hospitals.

In his proposals, he pledged to ramp up spending on education and reduce the size of the underground economy. He also said he would push for a fiscal reform that would bolster the country's narrow tax take -- a concern for credit rating agencies -- and find ways of increasing bank lending.

Pena Nieto also attacked President Felipe Calderon's conservatives for their economic record, saying their decade in power had brought Mexico its lowest growth in years.

Still, sending nearly 80 percent of its exports to the United States, Mexico has enjoyed robust expansion in manufacturing and Pena Nieto said the country needed to pursue industrial policies which played to its strengths.

Mexico also needed a new trade policy "to compete with two protagonists of the global economy: China and India," he said.

Mexico's economy grew about 5-1/2 percent last year, its strongest performance in a decade. Growth this year is expected to come in at under 3.8 percent, slowing to 3.5 percent in 2012, according to a central bank poll.

(Editing by Paul Simao)