Monday, June 17, 2013

Resource Nationalism in Mexico

It has been in the works for quite a while, but it is still a big deal when the Mexican president declares that Mexican oil will no longer be a state monopoly.

Seven decades after his party seized fields from the predecessors to Exxon Mobil Corp. and Royal Dutch Shell Plc (RDSA), Pena Nieto is preparing for the return of international oil companies to arrest eight years of decline in crude output. An opening would probably be broad, from offshore drilling to shale fields similar to those that have revived the U.S. petroleum industry, Pena Nieto said.

This is an area rich for analysis. Lázaro Cárdenas' nationalization of the oil industry in 1938 is a landmark in Mexican political history, akin to the no re-election tradition that came out of the revolution. The debate to come will tell us a lot about the left in Mexico. Is it pragmatic, willing to take some privatization to--supposedly!--generate more funds for the state? Or will it assert itself more? Can it? This assumes that the center and right are generally willing to bring in more foreign presence, though maybe there are pockets of nationalism in the PRI or PAN (just as there are conservative currents of resource nationalism in other countries, even in Chile, supposedly a bastion of purely capitalist values).

It is also very reminiscent of the ideological flexibility of Peronism, where Carlos Menem did just about the opposite of what his party's founder/namesake would've done. In that case, of course, his policies actually prompted a return to Peronist traditions under the Kirchners. Peña Nieto's proposal is less radical than Menem's project, but the issue of party tradition is not trivial.


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