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Mexico seeks to ease the market ahead of presidential vote
AP Photo/Guillermo Arias
National Action Party (PAN) Presidential candidate Felipe Calderon during his final rally Wednesday, June 28, 2006, in Guadalajara City, Mexico.By Patrick Moser
AFP
MEXICO CITY,
Petroleumworld.com 06 30 06
With three days to go to the presidential election, the Mexican government Thursday sought to ease market concerns fueled by electoral campaigns that have raised the specter of a ruinous economic crisis.
"Not only is there great stability in the Mexican economy, but also a markedly dynamic process, with high growth in employment, production, investment and consumption," said Finance Minister Francisco Gil.
Sunday's balloting is expected to be a neck-and-neck race between leftist Andres Manuel Lopez Obrador and conservative Felipe Calderon, with pollsters saying third place will go to Roberto Madrazo of the once mighty Party of the Institutional Revolution (PRI.)
During electoral campaigns marked by mutual mudslinging, both Calderon and Madrazo have warned that a Lopez Obrador victory would have ruinous consequences for Mexico's economy.
But Gil insisted that given the strong economic indicators "there is no reason to think a phenomenon of instability could emerge."
He cited economic growth of 5.5 percent in the first quarter of the year, an increase of almost 14 percent in non-oil exports and historically high reserves of 77.3 billion dollars.
While the economy remained stagnant for much of the administration of President Vicente Fox, the recent growth, which is projected to continue, could boost Calderon's chances on Sunday.
Calderon, of the ruling National Action Party (PAN,) lags a few points behind Lopez Obrador in several opinion polls, though some give him a slight lead.
He has pledged to maintain macroeconomic stability and attract new foreign investment in order to create badly needed new jobs and address pressing social problems.
Lopez Obrador, a former mayor of Mexico City and a champion of the poor, insists that maintaining the economic policies of the current government would serve only the better off, to the detriment of impoverished Mexicans who make up about half the 103 million population.
But Calderon, who is widely backed by the business community, claims the left-leaning populist would rapidly bankrupt the country with his ambitious social spending plans, which Lopez Obrador believes can be financed by battling corruption and slashing wages of top government officials.
The former mayor angrily dismissed the claim at his final rally in Mexico City's historic central square Wednesday night.
"We will work in a responsible manner, we will not provoke a crisis," he said.
Business leaders and a number of analysts are not entirely convinced.
Analyst and historian Enrique Krause calls Lopez Obrador a "tropical messiah" who firmly believes he has a deep bond with the people and can lead Mexico to a new era.
"And he has promised things that not even the Swedish government could deliver to its people," Krause said at a recent conference.
The leading business organization ran dramatic television spots warning of the risk of a massive economic crisis, stopping short of naming the leftist candidate. "You could lose your house, your belongings, you could lose it all," one of the spots claims.
Lopez Obrador expressed outrage over the spots he claimed were paid for by "white collar criminals" -- in reference to the better off Mexicans he claims get away with paying little or no taxes at all.
AFP 29 2147 GMT 06 06
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