VZCZCXRO5412
RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #1124/01 0611430
ZNR UUUUU ZZH
R 021430Z MAR 06
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 9348
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE

UNCLAS SECTION 01 OF 04 MEXICO 001124 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/MEX, WHA/EPSC 
STATE PASS USAID FOR LAC:MARK CARRATO 
TREASURY FOR IA MEXICO DESK: JASPER HOEK 
COMMERCE FOR ITA/MAC/NAFTA: ANDREW RUDMAN 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV PGOV PINR MX
 
SUBJECT: IN TELEVISA FORUM, ANALYSTS JUDGE CANDIDATES 
PROPOSALS AS RADICAL (AMLO), COHERENT (CALDERON), AND VAGUE 
(MADRAZO) 
 
 
------- 
SUMMARY 
------- 
 
¶1. (SBU) Mexican broadcaster Televisa created a TV program 
in which a group of well-known and respected analysts and 
think tanks study and comment on various proposals made by 
the three main presidential candidates.  The analysts 
concluded that none of the proposals of the three 
candidates would pose major risks to the countrys economy, 
but found Andres Manuel Lopez Obrador (AMLO) to be somewhat 
radical, Felipe Calderon coherent, and Roberto Madrazo 
unclear and redundant.  End summary. 
 
---------------------- 
DIALOGUES FOR MEXICO 
---------------------- 
 
¶2. (SBU) Televisa, one of the two main broadcasters in 
Mexico, produced a show called Dialogues for Mexico aimed 
at analyzing the various proposals made by the three major 
presidential candidates.  Televisa created a technical 
committee that analyzed the proposals sent in writing by 
the candidates.  The technical committee is made up of 
twelve prominent analysts and intellectuals, including Luis 
Rubio, President of the Center of Research for Development 
(CIDE), Luis de la Calle, former NAFTA negotiator and 
current Director General of a consulting firm; and Jesus 
Reyes Heroles, CEO of Associated Economists Group (GEA). 
The candidates answered a questionnaire on the economy, 
combating poverty, education, health, public security, and 
legal certainty.  The candidates were also provided time to 
present, in different shows, their proposals to a panel of 
three members of the technical committee.  A group of 
analysts and specialists in different areas of public 
policy then commented on the candidates proposals. 
 
--------------------------- 
AMLOS CONTRADICTORY OFFERS 
--------------------------- 
 
¶3. (SBU) Andres Manuel Lopez Obrador (AMLO), of the Party 
of the Democratic Revolution (PRD), tried to assuage 
concerns over his position on state intervention in the 
economy.  He said he believed in a balance between the 
governments social responsibility and the countrys 
development needs, and between public and private 
investment to accomplish this.  To the relief of those who 
were questioning whether AMLO was going to be more like 
Brazils Lula or Venezuelas Chavez, AMLO mentioned that 
Mexico could learn from Chile, which has a strong record of 
economic development and social justice. 
 
¶4. (SBU) However, AMLOs various contradictory statements 
ements 
and unclear proposals that seemed to focus on vast 
government spending programs have some worried.  In a 
comment typical of AMLOs contradictory statements, he told 
the analysts that he would say yes to globalization, but 
as long as national producers were protected.  AMLO stated 
that he would promote transparency first by respecting the 
law, second by providing information to the public if 
requested, and third by making government officers 
earnings and assets public.  A lynchpin of AMLOs plan is 
to generate savings of up to 1.5% of GDP by eliminating 
corruption and waste in government expenditures.  AMLO said 
he would also eliminate many high-level government jobs for 
a savings of MP 100 billion (hes not clear as to whether 
this figure is included in the 1.5% figure he has also 
cited).  Analysts challenged AMLO, saying that elimination 
of 8,000 government positions (analysts estimate of the 
potential number of high-level jobs to be eliminated) would 
) would 
yield savings of just MP 16 billion, even at MP 2 million 
per job per year.  AMLO responded, implausibly, that the 
other MP 84 billion would come from eliminating benefits 
and privileges. 
 
¶5. (SBU) AMLO would like to channel these savings to 
poverty-reduction and public works programs.  AMLO has 
focused much of his attention on economic development in 
southern states.  Among his ideas is a plan to plant a 
 
MEXICO 00001124  002 OF 004 
 
 
million hectares of trees in order to stop importing wood 
and provide employment in communities in Oaxaca, Chiapas, 
Veracruz, Tabasco, Campeche, and Quintana Roo.  In 
addition, AMLO would invest heavily in infrastructure in 
the southern parts of the country.  Another AMLO priority 
will be the continuation of his pension program for senior 
citizens and scholarships for the working poor. 
 
------------------------------------------ 
AMLOS ENERGY, TAX, AND PENSIONS REFORMS 
------------------------------------------ 
 
¶6. (SBU) When asked how he would reduce energy prices and 
d 
how he would compensate Pemex for mandated reductions oil 
transfer prices (the price at which Pemex Exploration sells 
crude oil to Pemex Refining), AMLO was unclear and 
responded that he would construct refineries to stop 
importing gasoline.  On the fiscal reform issue, AMLO said 
he would restructure the government, eliminate corruption, 
combat existing tax evasion, and bring the informal economy 
into tax compliance by simplifying the procedure to collect 
taxes.  Taxpayers would be audited through a random 
mechanism.  Then, he would summon a democratic forum to 
examine how to reform fiscal policy (disregarding the 
recommendations generated by the National Fiscal Convention 
that took place two years ago, most of which were ignored). 
AMLO also plans to help ease the public pensions crisis by 
eliminating pensions for former presidents.  AMLO is 
confident that he could reform the Mexican Social Security 
Institute (IMSS) pension system and federal government 
workers (ISSSTE) pension system by reaching agreements with 
unions and workers, something the current administration 
has failed to accomplish. 
 
------------------------------ 
CALDERONS FIVE MAIN PROPOSALS 
------------------------------ 
 
¶7. (SBU) National Action Party (PAN) candidate Felipe 
Calderon has based his campaign on five themes: rule of law 
and public security; a competitive economy; equal 
opportunities for all; sustainable development; and a 
transparent and democratic political system.  For Calderon 
the priorities would be the rule of law, infrastructure 
with new highways and a housing program using public and 
private resources, and health and education services for 
everyone.  To make the economy more competitive, Calderon 
favors: private investment in the energy sector; a lower 
general flat tax rate for consumption and income, 
eliminating tax exemptions; and a more flexible labor 
market.  To accomplish needed consensus in Congress, he 
would create a coalition government and will work on an 
alternative agenda that doesnt need Congressional 
approval, in case he cannot pass needed reforms through 
Congress. 
 
¶8. (SBU) Calderon expressed to the analysts his belief in 
free markets.  While he acknowledged the governments 
regulatory role, he would like to reduce the regulatory 
burden on individuals and businesses.  To combat poverty, 
Calderon would increase spending on health, education, 
infrastructure, telecommunications, and basic services for 
rural areas, using increased revenues to be gained through 
comprehensive fiscal reform.  He would continue Foxs 
successful social programs and has pledged to maintain 
macroeconomic stability. 
 
------------------------- 
CALDERONS PENSION REFORM 
------------------------- 
 
¶9. (SBU) Calderon proposes individualized pension accounts 
for government employees, a proposal that has been on the 
table during the current administration, but has failed to 
 to 
pass congress.  He will negotiate with unions, but has made 
it clear that the national interest was above the narrow 
interests of unions.  Calderon proposes to raise the 
minimum retirement age as one means of addressing large 
pension shortfalls.  He would also study possible 
contingency plans to provide health services, should health 
 
MEXICO 00001124  003 OF 004 
 
 
care workers strike against modifications to their absurdly 
generous contracts. 
 
------------------- 
MADRAZOS CHALLENGE 
------------------- 
 
¶10. (SBU) Institutional Revolutionary Party (PRI) candidate 
Roberto Madrazos big challenge is to convince voters that 
his party has changed and that the PRI is serious about 
fighting corruption.  To stimulate the economy, Madrazo 
proposes comprehensive fiscal reform, combined with 
increases in public investments.  His main economic 
proposals are infrastructure investments combining public 
and private resources, investment in R&D, and a clear 
fiscal policy (whatever that means).  Madrazo promises to 
to 
control public deficits and inflation.  Like AMLO, Madrazo 
praised the Chilean model to combat poverty and said he 
would continue Foxs housing program. 
 
------------------------------------ 
WHICH REFORMS WOULD MADRAZO SUPPORT? 
------------------------------------ 
 
¶11. (SBU) In his written proposal Madrazo mentions 
structural reforms, but when analysts questioned him about 
the PRIs reluctance to support those changes in Congress, 
he alleged that PRI lawmakers didnt pass such reforms 
because they didnt see a long-term vision from Foxs 
administration.  Madrazo said he would support labor and 
energy reforms, but failed to elaborate more on his 
proposals.  Madrazo didnt address how he would gain the 
support of unions (largely PRI creations and long-time PRI 
supporters) to pass needed reforms.  On pensions reforms, 
he would maintain gained privileges, but would modify the 
regime for new workers. 
 
------------------------------- 
ANALYSTS COMMENTS ON PROPOSALS 
------------------------------- 
 
----- 
 
¶12. (SBU) The analysts agreed that despite the written 
documents sent by the three candidates and the interviews 
held, the three candidates proposals are still very 
general and lacking in detail.  Felipe Calderon has been 
the most explicit and coherent, while AMLO has been the 
most radical, stating that the current economic model 
should be modified.  Madrazo has preferred playing it safe, 
remaining vague while trying to portray himself as 
centrist.  Calderon clearly favors free markets, while AMLO 
supports greater state intervention in the economy. 
Madrazo purposely avoids elaborating further on his 
positions so as not to offend any potential voters. 
 
¶13. (SBU) Calderon is in favor of the big structural 
reforms, while the other two candidates focus on less 
controversial changes.  None of them clearly explains how 
he would finance their proposed investments in 
infrastructure or on what projects and how they would 
combine public and private resources.  To raise government 
revenues Madrazo and Calderon propose better tax 
administration, while AMLO bets on the elimination of 
corruption.  All three candidates agree, unsurprisingly, 
that the economy needs to improve.  The most comforting 
conclusion of this exercise is that the analysts didnt 
find any major risks to economic stability in the 
candidates various proposals and answers. 
 
------- 
COMMENT 
------- 
 
¶14. (SBU) This Televisa-led excerise was useful in 
providing a relatively unbiased airing and assessment of 
the candidates proposals.  However, the conclusions 
reached were not particularly surprising.  Sadly, a central 
conclusion that the proposals all lack needed details is a 
fact of modern campaigns around the world.  That none of 
the candidates, based on their responses, poses a risk to 
 
MEXICO 00001124  004 OF 004 
 
 
economic stability is encouraging, but not necessarily an 
optimistic assessment.  This conclusion will likely most 
help AMLO as he is the candidate most criticized for 
policies that may be destabilizing for the economy.  End 
nd 
Comment. 
GARZA