PRESIDENT CALDERON UNVEILS MEXICO'S NATIONAL DEVELOPMENT

UNCLAS SECTION 01 OF 03 MEXICO 002852

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E.O. 12958: N/A
TAGS: ECON BEXP SENV EAID PGOV EFIN EINV MX
SUBJECT: PRESIDENT CALDERON UNVEILS MEXICO'S NATIONAL DEVELOPMENT
PLAN

REF: (A) Mexico 2784

(B) 06 Mexico 6265
(C) 06 Mexico 6243


1. (U) Summary: President Calderon has announced a National
Development Plan for Mexico. The plan calls for extensive political
and economic reform covering a wide range of areas from security to
competitiveness to foreign policy and the environment. Although
many of the proposals have been pending through numerous Mexican
administrations, the Plan is another step in the Calderon
government's vision for Mexico. It will require hard policy
decisions and sustained work across many fields to be implemented
successfully over time. Post will follow up on the individual
portions on the Plan and report further via septels. End Summary


2. (U) On May 31, in a speech at the National Palace before Mexico's
top political, business and academic leadership, President Calderon
unveiled Mexico's National Development Plan for 2007-2012. Calderon
said the overall goals of the Plan are to ensure sustainable human
development so that all Mexicans have a dignified life; to reduce
inequality between the north and south of Mexico and between
Mexico's rural and urban areas; improve education in order to
develop future generations of Mexicans; ensure public security and
combat criminality; ensure a competitive economy that generates
jobs; and make Mexico a leader not only in North America, but in
Latin America, the Asia-Pacific, and Europe. Calderon said the Plan
calls for extensive political and economic reforms, and requires a
dialog between the executive, legislative and judicial branches as
well as between federal, state and municipal governments, and the
society at large. Many of these reforms have been pending through
numerous administrations.


3. (U) The Plan builds on Calderon's "Vision of Mexico in 2030
Project" that he unveiled in 2006 in a series of public fora held
shortly before his inauguration (refs B and C) in which he laid out
a vision of where Mexico should be in 2030, including that the
country should among the give largest economies in the world with a
GDP of USD 30,000 per capita (Comment: Mexico's GDP per capita in
2006 was USD 8135).

What's in the Plan
--------------


4. (U) The five "main directives" of the Plan are:

(1) Rule of Law and Security
(2) Competitive Economy and Employment Generation
(3) Equality of Opportunities
(4) Environmental Sustainability
(5) Effective Democracy and a Responsible Foreign Policy


5. (U) In his speech, Calderon said the Plan demands, among "many
other things," that Mexico do the following:

(1) Increase investment in infrastructure.
(2) Increase investment in human capital.
(3) Become more productive and competitive as a nation.
(4) Strengthen nutrition and nourishment programs.
(5) Provide universal health care.
(6) Improve education.
(7) Provide more financial options for family investments in
housing.
(8) Preserve natural surroundings and resources, including water
conservation.
(9) Invest in programs such as PROARBOL- that provides income for
those willing to care for and preserve forests and jungles.
(10) Increase use of renewable energy and clean technologies,
improvements in the quality of fuels, waste water treatment, and
solid waste management.
(11) Reduce corruption.


6. (U) The 194-page plan lists goals and strategies for all the

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above sectors, but many of these are general, rather than specific
actions. Post will be evaluating the separate parts of the Plan and
will report further via septels.

Security
--------------


7. (U) In line with the Administration's initial actions to improve
public security by launching surge operations in ten of the most
conflictive states and significantly increasing the security budget,
the Plan puts rule of law and public security at forefront of the
agenda under its first directive. In terms of judicial reform, the
Plan calls for the gradual implementation of oral trials, the
expedition of judicial proceedings, unifying a sole penal code,
reforming the federal penitentiary system, and combating impunity.
The Plan also justifies and anticipates the continued use of the
military to combat organized crime and narcotrafficking. In this
endeavor, the NDP calls for improving the technology and
intelligence-gathering capabilities of the armed services,
coordinating systems of intelligence, and police reform.

Effective Democracy and
Responsible Foreign Policy
--------------


8. (U) Consistent with President Calderon's governing strategy to
date, the democracy and foreign policy section of the National
Development Plan envisions an effective democracy with strengthened
government institutions, citizen-focused public policies, and
enhanced dialogue between political forces. The Plan calls for the
construction of a national agenda concerning the nation's
priorities, including political agreement around essential reforms.
Citizen participation in the design and evaluation of public
policies, and improved government transparency and performance
across the federal structure are considered key to a more effective
democracy. The Plan outlines an active and responsible foreign
policy designed to improve the quality of life of Mexicans inside
and outside the country. Migration remains a priority theme in
relations with the United States; Mexico also seeks to promote
international cooperation in counter-terrorism, counter-narcotics,
and efforts to combat trafficking in persons. The Plan also shows
that Mexico intends be a leader in Latin America, and to expand its
role in Europe, and Asia.

Competitive Economy
--------------


9. (U) The Plan sets out proposals to achieve sustainable GDP growth
of 5 percent per year and create 800,000 jobs by the end of his
six-year presidential term. The Plan states that without
Congressional support for proposals to boost productivity and
improve investment conditions, the economy probably would grow at
around 3.5 percent -- a rate the president described as insufficient
to allow the country to meet its developmental goals. Finance
Minister Agustin Carstens has said that the government will present
a fiscal reform before September, which will aim to raisQ tax
collections by 3 percent of GDP. The Plan aims to make the case for
a fiscal reform whose approval is not guaranteed because of the
fragmented nature of the legislature. Calderon has a reasonable
chance of securing passage of such legislation with the support of
the opposition PRI, whose new leader, Beatriz Paredes, may be
willing to negotiate. However, many observers expect that the
Calderon Administration will need to make significant concessions to
ensure passage.

Environmental Sustainability
--------------


10. (U) Central to achieving environmental sustainability is the
"responsible" participation of the Mexican people to ensure that
economic development and environmental preservation occur hand in
hand, rather than one at the expense of the other. The Plan calls

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for a holistic, cross-cutting approach, involving all political
institutions in Mexico, to craft policies in the priority areas of
water, forests, climate change, biodiversity, and hazardous wastes.
Enjoying pride of place is climate change. The Plan describes
"climatic stability " as a public good that is the responsibility of
Mexico and the international community to safeguard. Policy
recommendations in this area include preservation and replanting of
forests, increased energy efficiency, clean technology, and
implementation of Clean Development Mechanism projects. Calderon's
background as Energy Secretary under the Fox administration may give
these efforts particular momentum. (See also ref A).

Comment
--------------


11. (U) The goals in Calderon's National Development Plan coincide
with U.S. efforts in Mexico. Indeed, the Embassy is actively
working with the GOM in many of the areas. Somewhat long on lofty
rhetoric and short on specifics, the new National Development Plan
is another major step in the Calderon government's vision for
Mexico. Like many visions, it will require hard policy decisions
and sustained work across many fields to be implemented successfully
over time. Recent actions on pension reforms, and fiscal reform
initiatives already under negotiation show that the Calderon
Administration can successfully work with Congress and private
actors on needed policy changes. The Plan highlights again that
senior GOM officials understand well the breadth and depth of
challenges facing Mexico. The trick now will be to put it all
together in a real and coherent way.

GARZA