According to a report by Bloomberg Businessweek, Mexico’s incoming President Enrique Peña Nieto “will be able to bring together members of his party and the opposition to pass laws opening up the oil industry to private investment.” The report follows a statement to that effect made by Peña Nieto’s top economic advisor, Luis Videgaray.
The president-elect is returning Mexico’s Institutional Revolutionary Party, or PRI, to power after a 12-year interlude that followed more than 70 years of uninterrupted rule.
According to Videgaray, Peña Nieto has “the conviction for the reforms, the political experience and the leadership of his party to push through the changes.”
Bloomberg reports that the incoming president also plans to simplify and expand tax collection with a new bill that would take effect by 2014, in order to further Mexico’s plans for a universal health care system. Although Peña Nieto has not yet decided how hard he will push for a constitutional amendment that would allow for private investment in Mexico’s state-run oil company, Petroleos Mexicanos, or Pemex, he is expected to at least rely on smaller legal changes to open up the nation’s oil sector to additional investment dollars.
The president elect also reportedly seeks to strengthen state development banks in Mexico real estate, such as Banco Nacional de Comercio Exterior SNC and Nacional Financiera SNC. This is expected to boost competition among the nation’s lenders, which will increase access to credit in Mexico. In addition, Bloomberg reports that “the markets also seem to have confidence in the new president,” and that bank lending in Mexico is already growing at a rate of around 15 percent, which is helping to drive growth.
“As governor, Peña Nieto never saw debt as a strategy to promote development in his state,” shared Videgaray. “This sets a precedent that there will be responsible management of public finances.”