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UNCLAS SECTION 01 OF 03 MEXICO 006570 
 
SIPDIS 
 
STATE PASS TO USTR FOR MELLE AND EIESSENSTAT 
STATE FOR A/S SHANNON 
STATE/INR/B 
NSC DAN FISK 
STATE FOR WHA/MEX, WHA/EPSC, EB/ESC 
DOE FOR INTERNATIONAL AFFAIRS KDEUTSCH AND SLADISLAW 
DOC FOR ITS/TD/ENERGY DIVISION 
FEDERAL RESERVE (CARLOS ARTETA) 
 
SENSITIVE, SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ECON ELAB PGOV PREL ETRD PINR MX
SUBJECT: CALDERON NAMES ECONOMIC CABINET 
 
REF A. Mexico 6516 
 
¶B. Mexico 6424 
¶C. Mexico 6065 
¶D. Monterrey 1361 
¶E. Mexico 6413 
¶E. Mexico 5810 
¶G. Mexico 6542 
¶H. Mexico 6067 
 
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SUMMARY 
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¶1.  Mexican stocks jumped 1.6 percent on November 21 after 
President Elect-Calderon announced his Economic Cabinet. 
Many of the members were expected, having worked on the 
transition team, and/or for the Fox Administration. The new 
Secretary for Telecommunications and Transport Luis Tellez, 
 
SIPDIS 
however, was a member of the PRI who worked for past PRI 
governments.  The only somewhat surprising choice is 
Secretary of Energy Georgina Kessel Q but she served as 
 
SIPDIS 
head of the Mexican Federal Regulatory Commission on 
Energy.  Together, the new cabinet represents a consistent 
message that Calderon intends to continue the policies that 
have led to Mexico's macro-economic success and stability. 
The cabinet includes some U.S.-educated members, including 
former Fulbrighter (Kessel) and at least one participant in 
a U.S. Embassy International Visitor Program (Tourism 
Minister Elizondo).  Since being officially named winner of 
the Presidential election in September 2006, Calderon has 
consistently called for economic reforms to create jobs by 
promoting public and private investment in infrastructure 
and undertaking fiscal, labor, energy, education and other 
economic reforms to improve Mexico's competitiveness (REFS 
A-D).  The key for the new cabinet will be to move beyond 
rhetoric and actually implement reform.  This would require 
tackling the monopolies, oligopolies and other special 
interests that have blocked reform in the past (REF E). 
Specific challenges facing each Minister are described 
below.  END SUMMARY 
 
¶2.  On November 20, President-elect Calderon announced his 
Economic Cabinet: 
Secretary of Finance, Agustin Carstens 
 
SIPDIS 
Secretary of Energy, Georgina Kessel 
 
SIPDIS 
Secretary of Economy, Eduardo Sojo Garza Aldape 
 
SIPDIS 
Secretary of Communications and Transport, Luis Tellez 
 
SIPDIS 
Kuenzler 
Secretary of Labor, Javier Lozano Alarcon 
 
SIPDIS 
Secretary of Tourism, Rodolfo Elizondo 
 
SIPDIS 
-------------------------------------- 
Agustin Carstens, Secretary of Finance 
-------------------------------------- 
 
¶3.  (SBU) Agustin Carstens' expected appointment as 
Secretary of Finance (Hacienda) will undoubtedly be well- 
 
SIPDIS 
received in the financial community, as he is known to be a 
solid economist and a skillful negotiator.  Carstens, who 
was the head of Calderon's economic transition team, has 
already begun work on his initial tasks of developing the 
new government's economic program and the 2007 federal 
budget.  When announcing Carstens' appointment to his 
transition team in October, Calderon noted that Carstens 
was charged with designing an economic program that would 
maintain macroeconomic stability and strengthen public 
finances in order to improve Mexico's competitiveness and 
generate jobs.  In accepting his appointment, Carstens 
pledged to work to boost employment and combat poverty. 
Carstens had earlier been quoted saying that in order to 
achieve faster growth and poverty reduction, successful 
integration needs to be accompanied by prudent 
macroeconomic policies and a deepening of structural 
reforms. 
 
¶4.  (U) Carstens was Deputy Managing Director at the IMF 
from August 1, 2003 to October 16, 2006 and an Executive 
Director at the IMF from 1999 to 2000.  Prior to taking his 
position as the Fund's Deputy Managing Director, Carstens 
 
MEXICO 00006570  002 OF 003 
 
 
was Mexico's Deputy Secretary of Finance.  He also held 
senior positions at the Bank of Mexico, including those of 
head of operations and chief economist, and he was an 
Alternate Governor for Mexico at the Inter-American 
Development Bank and the World Bank.  Born in 1958, Mr. 
Carstens received his BA in Economics from the Autonomous 
Technological Institute of Mexico (ITAM) in 1982, and his 
MA and Ph.D. in Economics from the University of Chicago in 
1983 and 1985, respectively.  Mr. Carstens has published 
many articles in leading journals in Mexico and abroad.  He 
is fluent in English. (See REF H for additional information 
on Carstens.) 
 
------------------------------------ 
Georgina Kessel, Secretary of Energy 
------------------------------------ 
 
¶5.  (U) In the press conference announcing her appointment 
as Mexico's first female Secretary of Energy, Georgina 
Kessel Martinez underscored the importance of the petroleum 
sector for public finances and said she world work for a 
significant modernization of the sector, preserve the 
national patrimony, and seek more autonomy for Pemex, the 
national monopoly, as well as improve the firm's 
operational capacity. 
 
¶6.  (SBU) Kessel's greatest challenge will be reversing 
Mexico's declining oil production (REF E) and addressing 
massive inefficiencies in Pemex.  The Mexican constitution 
forbids private or foreign investment in oil production. 
Absent fiscal reform to reduce the amount of Pemex revenue 
going to support the state budget, it is difficult to see 
how the firm can obtain the funds it needs for required 
investment to prevent significant production declines over 
the next five to eight years. Finding policy options 
(including possibly joint ventures and some foreign 
investment) that will bring in needed investments will be a 
key preoccupation. 
 
¶7.  (U) Kessel's most recent position, before being named 
Energy Secretary was as director of the Mexican Mint (Casa 
de Monedas).  She also served as the first President of 
Mexico's Energy Regulatory Commission, the CRE.  She has 
also served in the Mexican Secretariat of Finance/Treasury 
(Hacienda) as an Assistant Secretary for Investment and 
Privatization and at the Secretariat of Trade and 
Industrial Promotion, a precursor to today's Secretariat of 
the Economy. 
 
¶8.  (U) As an academic, Kessel taught for nine years at the 
prestigious Instituto Tecnologico Autonomo de Mexico 
(ITAM).  Starting her career as an office secretary in the 
travel industry, later she earned a bachelor's degree in 
economics at ITAM and won a 1980 Fulbright scholarship to 
Columbia University where she earned a Masters and PhD, 
also in economics.  The Fulbright panel considering her 
candidacy singled her out for leadership potential. 
 
¶9.  (SBU) Kessel worked with leading Mexican economists 
Enrique Davila and Santiago Levy to develop Mexico's "Plan 
Puebla Panama" that supports development of Southern Mexico 
and Central America.   This could suggest that the Calderon 
administration may retain the Fox team's Mesoamerican 
Energy Integration Plan (PIEM), an outgrowth of the Plan 
Puebla Panama.  Earlier key Calderon staffers had suggested 
that the incoming Calderon team would scrap the PIEM. 
 
--------------------------------------------- -- 
Eduardo Sojo Garza Aldape, Secretary of Economy 
--------------------------------------------- -- 
 
¶10.  (U) In accepting his appointment as Secretary for the 
Economy, Eduardo Sojo Garza Aldape promised to promote 
foreign investment and strengthen international trade in 
order to make Mexico one of the most attractive investment 
destinations in the world.  He also pledged to work with 
the Mexican Congress and other sectors of the country. 
 
MEXICO 00006570  003 OF 003 
 
 
During the recent presidential campaign, Sojo worked in the 
Calderon war room on economic policy issues.  Since the 
election, he has been Calderon's transition coordinator. 
Sojo is well-regarded in Mexico and brings with him a 
considerable amount of policy and academic experience in 
economic affairs. 
 
¶11.  (SBU) Sojo has pointed with great pride to the 
economic (and political) stability that the Fox 
Administration is bequeathing to its successor but has 
lamented its inability to gain congressional support for 
the sort of structural reforms necessary for a higher 
growth rate.  As Secretary of Economy, Sojo will be 
responsible for international trade, foreign investment, 
industry and commerce, small and medium-sized enterprises, 
and intellectual property rights.  Key challenges that Sojo 
will face include the implementation of Mexico's final and 
most painful NAFTA obligations (including corn and beans). 
Other challenges are strengthening the international 
competitiveness of Mexican industry, and diversifying 
Mexico's exports (at present, the U.S. takes approximately 
85 percent of Mexico's exports). 
 
¶12.  (U) Sojo served as Coordinator of Public Policy in the 
Office of the President during much of the Fox 
Administration, and had worked on Fox's transition team in 
¶2000.  Prior to that, he had been Coordinator of then- 
Governor Fox's Economic Cabinet for the state of 
Guanajuato.  Even earlier, he had been Technical Director 
and Short-Term Statistics Director of INEGI (National 
Geography and Statistics Institute). From 1979 to 1982 he 
performed a variety of activities as an analyst in the 
General Economic and Social Policy Bureau.  He has been a 
researcher and professor at the Monterrey Institute of 
Technology and Advanced Studies, and has authored numerous 
economic articles in various periodicals and reviews. 
Together with Nobel Prize winner Lawrence Klein, he 
published research on combined time series and econometric 
modeling.  Born January 9, 1956 in Leon, Guanujuato, Sojo 
earned his Bachelors in Economics from the Monterrey 
Institute of Technology and Advanced Studies, and a Masters