Jobs, Growth and Modernization

LF: What are your priorities?
VF: Creating jobs, without doubt. The market generates jobs and Nafta is proof of this. We also have to [consider] social responsibility. We will invest the budget mainly in education, which is a very good way to redistribute incomes. We will extend health programs. I have given instructions to all ministries that they give priority to Indians, rural communities, to colonias populares when they make their budget allocations.

LF: Mexico has grown rapidly, but incomes have scarcely improved.
VF: In the last 18 years there was no increase in the purchasing power of salaries. Each year, inflation was greater than the rise in salaries. Per capita income was $4,000 per year before and $4,000 per year afterward. And then, in 2000 we rose to $5,600 per capita. How? With 7% growth and a strengthening of the peso. Salaries began recovering in 2000 for the first time in 18 years and the same thing will happen in 2001.

LF: How can Mexico sustain this?
VF: This has to take place over long periods. Two years is not enough. The challenge for Mexico to use the four years of growth of over 5.5% in the last four years of Zedillo and in the six years of our [government], in which growth will average 5.5% to 6%. Within 10 years, [Mexico will see] a great reduction in poverty and increase in purchasing power and employment. It is important to grow and have public policies to distribute income. This is key: it is not enough to grow. There has to be redistribution.

LF: You say you are selling Mexico to investors. On what basis?
VF: The point we are emphasizing is that any company in any sector can export without tariffs to the US. And there is a similar free trade agreement with the EU. Mexico has the best combination of productivity, efficiency and the quality of and low cost of its labor, so really you can produce in Mexico at a great competitive advantage.

LF: There are still some restrictions on foreign investment.
VF: The only thing that is closed [to foreign investment] is oil and Pemex. Four big power plants are being built with foreign capital. In petrochemicals, there is one part that is open, the secondary petrochemicals industry, and there is a restricted part, the [older] primary petrochemicals industry. Natural gas is another great sector for investment. We will seek to open dry natural gas [deposits], which are not associated with oil, as a first step.

LF: Investors say corruption is one of their most serious problems. What are you doing to deal with it?
VF: We will end corruption in this country. It will take time and it will not be easy, but we have made a commitment. The whole government team is on a great anti-corruption crusade. Corruption has a very high direct cost that is sometimes estimated at 5% to 7% of GDP. It [affects] the image of the country. Investors seek security, rule of law and certainty. They [do not] seek corruption and impunity.

LF: What actions are you taking?
VF: First, leading by example. I think that when leaders demonstrate ethics and morality, this is a clear and obvious signal. That when orders are given, things are corrected. Unfortunately in this country, it was the leadership that sent the opposite signals. We will put in management indicators, we will make public information on each government office. I was the first president to make my register of assets public. We have opened the government up to Transparency International and any agency that has to do with corruption.

LF: Isn’t law enforcement weak because salaries are low?
VF: We will punish the corrupt and I ask you to come back in a year and see. The federal judges are getting paid very well. We are rehiring prosecutors and federal judicial police at twice the salaries they had before. I am taking all the measures on all the fronts to get a normal situation.

LF: What about corruption at Pemex?
VF: This has finished because now there are tenders that are transparent and they include private enterprise and civil society so they can be witnesses in the process. It is all over for those who got business [from Pemex] through corruption.

LF: How are you going to modernize Pemex?
VF: We will change the tax regime, which takes resources from Pemex and leaves no resources for investment, maintenance, for technology and vertical integration. [Pemex has] to expand and find more resources. We look at all the benchmarks and indicators and [Pemex] is far, far below the leading companies.

LF: Aren?t those guilty of corruption rarely punished?
VF: I can tell you that when corruption is present, there will be no impunity for anyone in the government or in any political party. Give me time. I am taking all the measures that a democratic government can take to stop corruption. We will extradite drug traffickers; the judiciary has authorized it.

LF: How about modernizing the machinery of government?
VF: This is important because before there was not a democratic government [here] that opens its books, that informs, that is accountable and asks society to supervise it. Experts from organizations like Transparency International know they can come here any time and examine anything they want to in this office.

LF: No party controls Congress. Won’t this cause uncertainty?
VF: Congress is divided, and this could cause uncertainty if there were fools in the government and we are not fools. I am open [to negotiation]. What clearer example of this can I give you than the [2001] budget? Everyone thought it would not pass and the country would be paralyzed, but it was passed with unanimity. Everyone thought there would be crises and devaluation with the change of government, but there wasn’t any special problem.

LF: How do you intend to end the Zapatista uprising?
VF: [Subcomandante] Marcos is coming to Mexico City. The previous government would never have allowed [this]. I see it as a great opportunity to resolve this problem, to integrate this group into political debate in the country.
 
LF: Do you still see yourself as a salesman?
VF: Yes of course. I enjoy traveling. I get tired of being here in the office.

LF: Your critics say you talk too much and do too little.
VF: It is they [who] just talk, talk, talk. It has been like that ever since I entered politics, but I keep going, going, going. People say things, but I just keep going, going.