Two weeks after the escape of Sinaloa cartel leader Joaquin "El Chapo" Guzman from a maximum-security prison, the political, security, and economic problems for President Enrique Pena Nieto have yet to bottom out. An administration that has shied away from confronting narcotrafficking, public corruption, and violent unions now finds itself struggling to implement its laudable agenda of national modernization because of a lack of public confidence in all levels of the Mexican government.
Now the first round of offshore oil auctions intended to open the energy sector in Mexico to private capital have fallen far short of expectations, adding to the government's woes as it wrestles with a political and security crisis.
The price of arrogance
In 2014, the recapture of Guzman, one of the world's most dangerous and notorious drug traffickers, was trumpeted as a dramatic achievement for the Mexican government. At the time, Pena Nieto opined boldly that another escape by Guzman would be "unforgivable"- and, now, he may be proved right.
Arrogance about the Mexican state's ability to keep this notorious criminal behind bars precluded El Chapo's extradition to the United States. Mexico's powerful Secretary of the Interior, Miguel Angel Osorio Chong, was so emphatic in February 2014 about the government's desire to keep el Chapo in Mexico that the U.S. State Department waited a year to request that he be turned over for trial on pending drug charges. However, the Mexican people knew better; a poll at the time found that 70 percent of respondents believed that El Chapo would escape again. Now, the Mexican government is left picking up the pieces of its security strategy, which was already discredited badly by the scandalous mass murder of 43 students in 2014 and a series of bloody battles by brazen gangsters in virtually every corner of the country.
Ironically, since taking office in 2012, Pena Nieto has set aside his predecessor's so-called war on drugs to focus on social and economic reforms -- particularly on the modernization of Mexico's energy sector. Last week, that legacy project suffered a major setback when international investors showed little enthusiasm for bidding on the rights to explore and exploit Mexico's energy resources. Of the 14 blocks offered by Mexico, only two generated interest from the private sector. Mexican authorities expected an investment of approximately $18 billion for this first round of offerings, but only $1 billion in bids were generated. Contributing to these disappointing results were the drop in global oil prices, uncertainty in international markets, and statist economic policies that discourage investment and hurt Mexico's middle class. In the last three years of former president Felipe Calderon's term (2006-2012) the economy grew at an average of four percent. In the first three years of the Pena Nieto administration, the economy has grown an average of 1.7 percent. Further, since 2013, the Mexican peso has lost 20 percent of its value.
Pena Nieto heard of El Chapo's escape while en route to a state visit in France. In a hapless bid to minimize the issue, the president continued with his visit and dispatched Osorio Chong back to manage the crisis. This careless decision may have been a subtle but profound signal that Pena Nieto has personally concluded that his administration, despite having three years left in office, is effectively over. Already besieged by personal and political corruption scandals, security crises, a lackluster performance in mid-term elections, and the slow but steady unraveling of his structural reforms, the escape of El Chapo may have been the coup de grace to the president's ability to govern.
The time to salvage his personal image and the credibility of his administration may have passed. However, Mexico cannot function without a president until 2018. Unless Pena Nieto is prepared to sink to ignominious depths in Mexico's history, he must break out of the constraints set by his party bosses and act boldly to deal with corruption, violence, and economic stagnation in order to salvage his presidency.
Perhaps Pena Nieto cannot live up to the expectations he set for himself. Maybe he will not manage to return the country to the levels of economic stability, security, and productivity achieved by his predecessor. However, getting the country out of the mess that it is in today is the inescapable responsibility of one man: Enrique Pena Nieto.
(AP photo)
