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Last Updated: Thursday, 7 September 2006, 03:53 GMT 04:53 UK
Tightrope awaits Mexico's Calderon
By Duncan Kennedy
BBC News, Mexico City

He has a bachelors degree in law, a masters degree in economics and a masters degree in public administration, the latter from Harvard.

Felipe Calderon
Mr Calderon has emerged victorious from a controversial election

On paper, if anyone is qualified to see his country through its current political and economic problems then it is Felipe Calderon, the next president of Mexico.

First, the politics. President-elect Calderon has politics encoded into his DNA.

His father was a founding member of the National Action Party (PAN), which has ruled Mexico for the past six years and will now do so again for the next six.

Mr Calderon, the son, led the PAN's youth movement and was standing for his first elected office by his mid-thirties.

As president, Mr Calderon will need all his political experience to survive.

Political skills

The numbers are certainly more favourable than they were for the current president.

Vicente Fox has battled throughout his time in office to get Congress to pass his reforms.

But, without enough MPs, he has been blocked at every turn.

A Calderon presidency may fare better because the PAN now has most MPs in the lower house, though not an outright majority.

That will require Mr Calderon's political skills to form alliances with smaller parties and even with the PRI, the country's former ruling party.

Stunts and sniping

The other political challenge is, of course, the left-leaning Andres Manuel Lopez Obrador.

Obrador supporters
Mr Lopez Obrador's supporters oppose the poll result

As leader of the PRD, he has brought thousands of people out onto the capital's streets claiming he was robbed of the presidency by fraud.

The potency of a long term Lopez Obrador opposition is hard to gauge. He has spoken of setting up his own government.

It would not have executive power, of course. But, depending on its form, it could be a focal point for disgruntled Mexicans.

It might try to disrupt successive Calderon initiatives, literally by blocking roads.

Much of this could be dismissed as stunts, but if it goes on and gains traction with a frustrated public, then all the sniping could start to sap the confidence and energy of a new administration.

To his credit, Mr Calderon has been shrewd enough to recognise the potential for trouble.

That is why in the past few weeks he has subtly adapted his rhetoric.

He speaks less now about privatising companies and opening up the country's oil industry and more about the social deficiencies ingrained in the country.

Above all, he has promised to tackle the country's poverty which sees one-in-five Mexicans not eat properly through lack of money.

Unpredictable revenues

Under President Fox, there were attempts to improve health and pension care for the poor.

Mexican illegal immigrants are deported from the US
Mexican illegal immigrants have continued to flow into the US

But Mr Calderon will have to go much further if he is to politically neutralise the assaults by Mr Lopez Obrador.

Yet he won't be able to achieve the changes he seeks and needs without making huge structural changes. Which brings us to the second issue, the economy.

First the good news. Mexico is doing relatively well. Growth stands at around 4% this year. Inward foreign investment is at a record five-year high.

But low wages and high unemployment have helped drive six million people over the border into the United States in the past six years looking for a better life.

A report out this week by the United Nations Population Fund says that money sent back by people living in the United States to Mexico now stands at $21bn (11bn) a year, the country's second biggest source of income after oil.

It sounds impressive, but you can't build a country on the unpredictable revenues of desperate individuals.

And Mr Calderon understands that. He knows that Mexico groans under the weight of inefficiency and bureaucracy.

In one small personal example, I had to sign my signature no less than 12 times on separate sheets of paper just to open a bank account.

Brutal realities

Mr Calderon realises he will have to confront private monopolies and powerful unions.

He has spoken of the need to allow Pemex, the state-owned oil company to open up to the private sector to tap the country's reserves of oil.

He has also become a fan of the now-fashionable idea of a flat tax.

Mexico's personal and corporate tax evasion levels are eye-wateringly high, starving the nation's coffers of badly-needed investment funds.

Mr Lopez Obrador promised to put millions of Mexicans back to work with huge public works programmes building houses and railways. Mr Calderon has not gone that far down the road of social adjustment.

But for the sake of peace and progress he may have to swallow hard and trim some of his more free market, conservative ambitions, whilst at the same time drag this habitually under-performing country into the brutal realities of a globalised world.

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