Mexico's victor vows bold reform By Henry Tricks in Mexico City
Vicente Fox, Mexico's surprise president-elect, has signalled plans for bold liberalising reforms to the country's economy including opening up Pemex, the state oil monopoly.
Mr Fox, whose victory in Sunday's national elections ended 71 years of rule by the Institutional Revolutionary party, was also expected to assure investors that the central bank would remain independent and that Mexico would deepen its commitment to the North American Free Trade Agreement.
He said he wanted to undo the seven decades of "cronyism" of the PRI. He said he would apply the strictest criteria in filling jobs "to make sure we get the best men and best women this country has for each of the positions. It's a little bit like we do it in companies."
Mr Fox's convincing win - seven percentage points clear of his nearest rival - drew applause in financial markets, with the Mexican stock market rising about 6 per cent and the peso gaining 3 per cent against the US dollar. Interest rates eased.
In an interview before Mr Fox's victory, Eduardo Sojo, his chief adviser, said the candidate would soon promote extensive reforms in Mexico's jealously guarded energy sector. The message was aimed at portraying the rough-spoken Mr Fox as a committed reformer, prepared to take on vested interests coddled for decades by the PRI.
Mr Sojo said that, before taking office in December, Mr Fox would ask Congress to scrap restrictions on the full privatisation of petrochemical plants. The plans for Pemex were to turn the tax-burdened giant into a more nimble company without what he called "the baggage of a monopoly". "Pemex should be able to act like any of its competitors, in terms of its tax regime, its [ability to] acquire capital, and in sales. It could issue shares."
Throughout his campaign, Mr Fox repeatedly denied he planned to privatise Pemex. Nationalisation of oil in 1938 was a watershed for the PRI, when it cast itself as a defender of Mexican interests against foreigners.
Mr Sojo said the central bank would have its authority strengthened by taking full control of the management of exchange rates.
He also said the incoming government would work on tax reform proposals to be included in its first budget in December, saying it would favour "selectively" eliminating exemptions on sales taxes rather than raising income taxes. It would also increase spending to poor Mexicans without disrupting public finances.
Mr Fox won 42.82 per cent of the vote compared with 35.66 per cent for the PRI's Francisco Labastida. A left-wing alliance was third with 16.55 per cent.
Mr Fox's centre-right Alliance For Change (PAN) also appeared likely to be the largest party in Congress, which would bolster his chances of pushing through tough reforms. His immediate economic challenge is to preserve a stable environment and prevent Mexico from a repeat of the post-electoral currency crises that have plagued it for 25 years.
Investors are watching for Standard & Poor's, the US rating agency, to join its rival Moody's and raise Mexico to investment grade. S&P has said smooth elections and a commitment to energy sector reform would encourage it to upgrade Mexico.