Hollywood Director Brings Mexico's Reforms Down to Earth

In Gravity Alfonso Cuarón brought Sandra Bullock safely back from space. Now he’s trying to save Mexico from what he considers a deeply flawed reform process.

In an open letter to President Enrique Peña Nieto, Oscar-winning film director Cuarón has summed up the uncertainties of Mexicans citizens in ten questions about the ongoing reform of the energy sector.

Alfonso Cuarón

 

The missive calls attention to concerns about the lack of information surrounding the reform; these issues include the timing of the reform, environmental impacts, contracts with the private sector, information asymmetries between the general public and the private sector, regulatory frameworks, fiscal regimes, and corruption.

Cuarón also blames propaganda and shallow debate in the legislature for the widespread lack of information in the streets: “If I am not sufficiently informed, it is because the government you lead has not shared with me—with all of us Mexicans—crucial elements that are necessary for us to understand ‘the extent and significance of these reforms.’”

In his last question, the director brings up two disastrous reform experiences led by the PRI (the president’s party): the bankruptcy of 1984 and the “arbitrary and opaque” reforms of the Salinas administration in the 1980s and 1990s. Both reforms proved to be useful for private interests but failed to help everyday Mexicans, generating social distress and division.

Cuarón does have a point. The reform was passed by an alliance between the ruling PRI and the previous incumbent PAN after an intense but brief debate within the congress, but with very little opportunity for citizens to learn about the proposed changes and fully grasp their long term implications.

Also, critical legal details that will determine the quality of the reform’s privatization process are still unknowns. Indeed, the reform changes three key articles in the constitution (25, 26 and 27) to allow private investment along the energy value chain, most significantly oil exploration and extraction, and electricity generation and commercialization. It also gives both Pemex and the Federal Electricity Commission greater autonomy. But the approved bill does not specify the timing for many of the proposed changes; it does not suggest a regulatory framework to strengthen the rule of law in the sector and does not reveal the specifics of the regulatory regime to which the sector’s public companies will be subject.

Cuarón is addressing deeply felt concerns amongst Mexicans, as this is a major move for a country that has depended on a state-run oil sector for decades and is now facing—with many uncertainties—its most important public policy shift since the 1930s.

Alonso Hidalgo is the information and communications assistant in the Latin America regional office of the Revenue Watch Institute – Natural Resource Charter.