Felipe Calderón marks four years of reform efforts stymied by Mexico drug war

The tenure of President Felipe Calderón, who is preparing to give his fourth state of the union address, has been marked by the brutal Mexico drug war and political infighting that's stymied reform.

Mexican President Felipe Calderón kicked off his presidency in December 2006 with an ambitious reform package. The can-do technocrat was going to tackle Mexico's entrenched corruption, disband its behemoth quasi-monopolies, and – most important – take the fight to Mexico's burgeoning drug cartels.

But in the fourth year of his six-year term, marked by handing his state of the union address to Congress today, it's become clear that the country's brutal drug war has sapped his administration's energy and that political infighting has squelched his reform agenda. Mr. Calderón will formally deliver his speech Thursday morning in a ceremony.

To be fair, Calderón is credited, more so than past presidents, with trying hard to push through energy, fiscal, and education reform. He scored a big victory early in his term in revamping the state-worker pension system.

IN PICTURES: Mexico's drug war

One of his boldest moves was the shutdown of the giant state electricity company last year that had long reigned over Mexico City.

Moreover, people still like him. He enjoys a 57 percent approval rating, according to a new poll by the Mexico City-based firm Buendia & Laredo. But the most necessary reforms in the country, observers say, have ultimately been so watered down that they have been rendered essentially meaningless.

"[Calderón] has a pretty tough road ahead," says Alejandro Schtulmann, head of research at the Emerging Markets Political Risk Analysis consulting firm in Mexico City. "There will be more reforms, but what we are going to see in the next couple years is a piecemeal approach."

As eyes turn to the 2012 presidential elections in a country where reelection is barred, Jorge Buendia, of Buendia & Laredo, has a less optimistic take: "[Calderón's] agenda is really dead."

All-consuming drug war

Even though some 28,000 people have been killed in four years, and political kidnappings are an increasing problem, most Mexicans understand that Calderón, who dispatched the military to fight drug cartels and has refused to back down, had little choice and they support his hard stance. He got a big boost this week with the capture of Edgar “La Barbie” Valdez Villarreal, alleged top member in the vicious Beltran Leyva cartel.

To render his war on drugs more effective, Calderón has pushed through judicial reform in hopes that rampant bribery and intimidation will no longer prevent the sentencing and jailing of hardened drug cartel criminals.

He has revamped public security, putting federal forces under a unified command, and is working to retrain and professionalize the notoriously corrupt cops. Just days before his state of the union address, about 10 percent of the federal police force was fired.

Both efforts have been criticized for being slow to implement and flawed in design.

"But you cannot reverse a culture of impunity overnight, or even in a sexenio [a six-year presidential term]," says Armand Peschard-Sverdrup, a Mexico expert at the Center for Strategic and International Studies in Washington. "You could credit the Calderón administration for positioning Mexico on [a more modern] course."

Watered-down reform

But his other reform packages have withered on the vine.

Take energy reform, which passed in 2008 with high hopes that Mexico could begin to reverse the dramatic decline in oil production that it faces.

Many say that without private participation in the sector, the state-owned company cannot reverse its fortunes. But the topic has been a political liability for anyone who broaches it and that was true for Calderón as well.

Calderón also promised to fight the oligarchies that hurt Mexico's economic competitiveness, but so far there has been little movement. In fact, according to the World Economic Forum's 2009 Global Competitiveness Report, Mexico is ranked No. 60, down five spots from the 2005-06 report. A new report comes out in September.

Unemployment, at between 5 and 6 percent, has grown, as has the informal economy, but Mr. Buendia says that Mexicans do not necessarily blame the president. The country fared better after this global recession – contracting 6.5 percent in 2009 – than it did during other economic crises.

Politics intrudes

Buendia says that while labor reform, for example, could improve the situation, many citizens blame other politicians as much as they blame the president.

The fact that Calderón has faced a polarized congress from the beginning – and does now more than ever – has meant that most changes have amounted to little.

"I think what has kept Mexico back is the political polarization of the Mexican elite," Buendia says.

Calderón bears some responsibility, too. He has been criticized for choosing loyalty over proven track records in naming – and renaming – the members of his cabinet.

"I think mostly he failed to have a team of competent and skilled individuals to address the immediate and pending reforms of the country," says Luis Rubio, head of the Center of Research for Development, a think tank in Mexico City.

IN PICTURES: Mexico's drug war