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DE RUEHME #6184/01 3482231
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R 142231Z DEC 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 9914
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
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RUEABNE/DEA EPIC EL PASO TX
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UNCLAS SECTION 01 OF 03 MEXICO 006184 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KCRM SNAR SMIG ECON EINV KDEM PINR
PHUM, VZ, MX 
SUBJECT: PRESIDENT CALDERON SPEAKS TO ACHIEVEMENTS, 
CHALLENGES AFTER ONE YEAR IN OFFICE 
 
MEXICO 00006184  001.2 OF 003 
 
 
¶1.  Summary.  In a series of interviews commemorating his 
first year in office, President Calderon touted the creation 
of 800,000 jobs and singled out narco-trafficking as one of 
Mexico's biggest challenges.  The U.S. was assuming greater 
responsibility on drugs but needed to do more to reduce 
demand and tackle arms smuggling.  Calderon was pleased with 
Congress for having adopted pension, tax, and election reform 
and stressed the need for judicial, energy, and education 
reform.  He expressed concern about the emergence of 
personalistic regimes in Latin America and considered 
Venezuela's recent rejection of Chavez's referendum a "good 
sign."  At the same time, he worried about the animosity 
directed toward Mexicans in the U.S. electoral campaign.  He 
anticipated a slow down in the Mexican economy as a product 
of economic problems in the U.S. but was not fearful of an 
"economic crisis."  End Summary. 
 
800,000 More Jobs and Counting 
------------------------------ 
 
¶2.  Calderon was proud of his administration's record on the 
economy.  Notwithstanding a slowdown in the U.S., his 
government had created 800,000 new jobs in the formal economy 
in his first year ) the second highest number of jobs ever 
created in one year.  International reserves exceed external 
debt.  Fiscal reform passed earlier this year will allow 
Mexico to keep its public finances in equilibrium for the 
short term future.  As the U.S. remains the primary motor for 
the Mexican economy, Calderon allowed that Mexico faced an 
economic slowdown in the coming year but was not worried 
about a crisis.  Instead, he identified three alternative 
"motors" Mexico would rely on to generate economic growth in 
the coming year. 
 
-- Infrastructure Investment:  Mexico will increase private 
and public sector investment in infrastructure from 3 percent 
of GDP to upwards of 5 percent, suggesting Mexico would 
invest over $50 million more in the coming year to improve 
airports, highways, telecommunications, ports, etc. 
 
-- Housing and Tourism: Mexico would seek to develop sectors 
that don't depend as much on the U.S. economy such as 
housing.  It would also seek to tap more fully the potential 
tourism offers. 
 
-- Export Diversification:  Exports to the U.S. grew by 6 
percent last year and the U.S. remains Mexico's primary 
market.  However, Mexico needs to export to other markets 
including Europe, Asia, Latin America and the Middle East. 
 
Drug Trafficking: One of Mexico's Greatest "Dangers" 
--------------------------------------------- ------- 
 
¶3.  Upon taking office, Calderon remarks that he discovered 
the drug trafficking problem was far worse than he had 
anticipated.  Cartels operated with almost complete impunity 
and controlled territory throughout the country.  Whereas in 
the past traffickers had focused almost exclusively on moving 
drugs to the U.S. market, today, they target students 
providing them marijuana, cocaine, and methamphetamine for 
free as part of an effort to create a new generation of 
addicts.  There are reports that in some cities in the state 
of Veracruz drugs are sold in over 600 places.  And organized 
crime has diversified into other areas including kidnapping, 
extortion, robbery, and collecting fees from legitimate 
businessmen.  To facilitate their activities, criminal 
leaders work to displace the state including local government 
leaders and the police so they can effectively and 
strategically control territory. 
 
¶4.  How has Calderon responded?  He deployed joint operations 
made up of the military, police and prosecutors to go after 
traffickers, reclaim the upper hand and begin to recover the 
confidence of most citizens.  He claimed that his 
administration had placed over 15,000 individuals linked to 
organized crime behind bars and captured some 20 major drug 
lords controlling the cartels around the country including 
Nuevo Leon, Campeche, and Veracruz.  Government operations 
have also produced world record seizures of cocaine and cash. 
 In the future, he said that he intends to reach out to 
governors and mayors in developing a strategy to avail them 
greater support from federal security forces and expanded 
authorities to remove corrupt police officials.  Judicial 
reform would also assume an important role, giving judicial 
authorities the necessary tools to process cases more 
expeditiously and providing police the training they need to 
assume a wider role in investigating cases so prosecutors 
 
MEXICO 00006184  002.2 OF 003 
 
 
would have more time to convict criminals.  Attacking police 
corruption and establishing a platform for coordination 
amongst Mexico's security forces at all levels were essential 
to success. 
 
U.S. Needs To Do Its Part 
------------------------- 
 
¶5.  Calderon remarked that he felt the U.S. had begun to 
demonstrate a greater appreciation for its role in combating 
drug trafficking and was hopeful the U.S. and Mexico would 
soon be able to implement a joint strategy to tackle this 
problem together.  He thought that the U.S. could do more 
particularly on its own side of the border.  The U.S. remains 
the largest consumer of drugs and needed to do more reduce 
drug consumption.  He acknowledged corruption on the Mexican 
side that facilitated the movement of drugs but corruption 
was also a problem on the U.S. side and the U.S. needed to do 
more to fight it.  Weapons are sold in some 12,000 places in 
the U.S. along the border.  Enormous quantities are entering 
Mexico, many times traveling in conveys on highways.  The 
U.S. has the technology to detect these weapons both at the 
border and from airplanes.  Calderon said he wanted the U.S. 
to provide this technology to Mexico and without conditions. 
 
Reforms Transforming Mexico 
--------------------------- 
 
¶6.  Calderon described reform efforts as first steps in a 
process that aims to transform Mexico.  He applauded the 
Congress for its work on reform bills, singling out leaders 
from his own party PAN but also the PRI.  He spoke to the 
following reforms: 
 
-- Fiscal Reform:  Calderon expressed confidence the fiscal 
reform Congress passed in September would strengthen Mexico's 
fiscal base. 
 
-- Election Reform: Calderon described the election reform 
Congress also passed last September as an effort to foster 
reconciliation among Mexico's political parties.  He hadn't 
favored replacing members of the Federal Electoral Institute 
but considered it a concession worth making to "establish 
some consensus with respect to the rules for arbitrating 
elections." 
 
-- Judicial Reform:  As noted prior, he hoped the reform bill 
would give judges wider authorities to issue arrest warrants, 
facilitate the transition to oral trials, expand the 
investigatory capacity of the police, and contribute to the 
creation of databases on cars, fingerprints, and weapons used 
in the commission of crimes to facilitate thorough 
investigations. 
 
-- Energy Reform:  Mexico produces 200 million barrels of 
petroleum fewer than just a few years ago and is at risk of 
becoming a net petroleum importer.  He hoped Congress would 
move on legislation that would give PEMEX greater freedom to 
access the kind of technology and financing it needs to tap 
undersea reserves and expand production. 
 
-- State Reform: Calderon thought this reform bill should 
facilitate legislative work.  He conveyed his support for 
consecutive reelection of legislators and local officials 
which he thought would strengthen Congress and make them more 
responsive to the voters. 
 
-- Education Reform:  While we are not aware of a formal bill 
under consideration, Calderon spoke to the need for a 
fundamental transformation of Mexico's education system. 
Many powerful interests resist change and any reform would 
require collaboration with Mexico's teachers.  He signaled 
his support for awarding teachers whose students perform 
higher on standardized tests. 
 
Dealing with the EPR 
-------------------- 
 
¶7.  In response to a question about how to deal with the EPR 
in the face of two attacks on PEMEX pipelines over the last 
year and threats of new attacks to come, Calderon offered 
several lines of thinking.  First, Mexico needs to develop a 
sounder system for investigating attacks as the current 
system is antiquated.  Second, Mexico needs to foster a 
deeper democratic culture that will diminish the appeal of 
armed movements.  Third, Calderon maintained that while 
authorities investigated attacks on government property, he 
 
MEXICO 00006184  003.2 OF 003 
 
 
had ordered authorities also investigate what had happened to 
the two EPR members who apparently disappeared earlier in the 
year.  He noted the government had taken steps to strengthen 
protection of PEMEX. 
 
Calderon on Challenges in Latin America 
--------------------------------------- 
 
¶8.  Calderon expressed concern about the emergence of 
personalistic regimes in Latin America which he described as 
undemocratic and dangerous.  He described Venezuelans, vote 
to reject a referendum in the face of enormous government 
support for the measure as an enormous and historic step in 
preserving democratic values in Latin America.  He also 
congratulated Chavez for accepting the defeat.  Observing 
tension in relations between Uruguay and Argentina as well as 
between Colombia and Venezuela, he saw an opportunity for 
Mexico to assume an important role in reorienting discussion 
towards progressive values such as liberty, justice, 
democracy, the market place and investment, as well as the 
rule of law. 
 
¶9.  Signaling some displeasure with Caldron's remarks, 
Venezuela's Ambassador to Mexico Roy Chaderton visited 
Mexico's Foreign Ministry (SRE) seeking an explanation. 
Apparently Chaderton left satisfied with assurances by 
Mexico's Foreign Minister Patricia Espinosa that Mexico 
"respects the self-determination of the Venezuelan people as 
expressed at the polls and Mexico will respect the 
self-determination of the Venezuelan people and government in 
matters that are exclusively within its competence." 
 
Concern about Attacks on Mexicans in the U.S. 
--------------------------------------------- 
 
¶10.  Calderon also expressed concern about how in the both 
Democrats and Republicans were targeting Mexicans unfairly in 
the course of U.S. electoral debates.  The U.S. has serious 
economic and political problems.  It was wrong for U.S. 
politicians to believe closing its borders was going to solve 
its economic problems.  The problem was that the U.S. economy 
is not competitive.  It is financing a war that is putting 
the country only deeper into debt and displacing private 
investment.  Mexico is innocent in this matter and continued 
attacks on Mexicans will only hurt relations between Mexico 
and the U.S. 
 
¶11.  Comment.  Calderon was straightforward and precise in 
his remarks.  He repeatedly drew attention to his 
administration's success in creating new jobs, aware that his 
government's fortunes ride in large measure on its ability to 
expand economic opportunity for Mexicans.  He also keenly 
focused on the threat narco-trafficking poses to Mexico and 
his efforts to meet that challenge by strengthening law 
enforcement institutions and going after traffickers.  He 
recognized the importance of cooperation with the U.S. but 
stressed the need for the U.S. to do more both on demand and 
arms trafficking.  His frank remarks on Chavez drew GOV 
attention as they were tantamount to criticism of Chavez's 
referendum, but the Foreign Ministry averted controversy by 
reaffirming respect for Venezuelan "self-determination." 
Mexicans in Mexico are sensitive to attacks on Mexicans in 
the U.S.  In his remarks, however, Calderon went beyond just 
rejecting such attacks to suggesting the U.S. needed to 
reflect more on its own internal policies to resolve its 
economic policies.  Overall, Calderon, conveyed a strong 
command of all matters raised and projected confidence in his 
leadership and pride about his accomplishments.  End Comment. 
 
 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
BASSETT