Posted December 11, 2006

Today, UNICEF criticized the new administration for attempting to cut the education budget in Mexico.  The 2007 Budget, which was previously lauded on this blog for directing a substantial amount of fresh resources to the health sector, appears to cut the education budget by over 1.2% from last year.  So much for an overall strategy of investing in human capital.

The Mexican education system is dismal.  Mexico has done relatively poorly on international standardized tests like the TIMSS, in spite of spending more than the OECD average on education.  And a national survey of sixth-graders in 2000 found that just over half of students even understand their teachers when they teach.  As in the United States, the teachers' union is extremely powerful, and as in the United States, there is considerable debate about whether giving the education sector more money is the way to fix what has gone wrong, given that the institutional incentives to perform are virtually non-existent.  

But recognizing the need for structural reform in the education sector is one thing, and attempting to starve the beast is another.  It seems likely that any attempt to reform Mexico's education system will involve more money, at least in the short term.  Or maybe not. But if the administration has a real plan for how to make these reforms that actually involves less money, we would all love to know what it is.

December 11, 2006

I will be posting a longer piece on Bangladesh soon, but couldn't resist the temptation to note yesterday's irony.  Muhammad Yunus, a Bangladeshi economist who has done more than anyone to spread the gospel of microcredit to developing countries around the world, received the Nobel Peace Prize alongside Bangladesh's Grameen Bank yesterday.  In his acceptance speech, he pontificated about the end of poverty, and, since poverty is, in Yunus's view, the root cause of terrorism and violence, the end of violence as well.

All very well, except back home in Bangladesh, troops were pouring into the streets to protect the interim president's home from violence.  The source of this violence, at least as far as I can tell, is a showdown between opposing political forces over the fairness of upcoming elections in Bangladesh, scheduled for January.  Since October, at least 44 people have died in political clashes in Bangladesh, according to the BBC. Today, four cabinet ministers resigned in protest over the use of the army to crush protests.

I am not sure Yunus is right about the "root cause" of terrorism, but one thing is for sure: Bangladesh has enough poverty and terror to go around.  Fortunately, as I will explore further in a future post, it also has a lot of ingenuity.  And that is one thing Yunus does know a lot about.

Posted on December 7, 2006

Last night, I saw a sneak preview of the new film, "Blood Diamond," which is the latest Hollywood attempt to shed light on the Dark Continent.  The film invites natural comparison with "The Constant Gardener" and "Hotel Rwanda," only because so few serious films are made about African affairs.  It is not as good as either, but it does succeed at providing a window into the bloody conflagration in Sierra Leone.

This is timely, since the conflagration in Darfur, Sudan rages on, now spilling into Chad, and violence continues to plague post-election Congo.  These regions- Sierra Leone/Liberia, Chad/Sudan and Congo/N. Uganda - have been the hot zones in the last decade or so of African strife. 

But while some civil wars continue, and others make it to Hollywood, the more old-fashioned tragedy of Zimbabwe continues to go mostly unnoticed.  Today, the UN reports that Zimbabwe has stopped issuing passports. Not because the regime is cracking down further. No-- because they can no longer afford to import the special passport paper needed to print the documents. With inflation at 1200%, unemployment over 70% and shortages of all major consumer goods, Zimbabwe continues to sink further toward the abyss.  The government's own assessments put the poverty rate at over 60%. Recent reports from refugee assistance centers in Johannesburg suggest that 15% of women escaping from Zimbabwe were raped before they escaped, usually by government cadres.

The irony is that Zimbabwe is a place that we, the West, the US, NATO, even the Europeans, could actually rescue.  It is an old-fashioned dictatorship, not a cauldron of civil war with a myriad of conflicting militias.  It is a place that, until recently, had considerable infrastructure, a strong farming class, and a cogent and democratic opposition that could have taken power, if only Mugabe had been overthrown.  Unlike Darfur, it would not have inserted us into a complex struggle between religions, and there would probably have been little resistance from the main opponents of a Sudanese intervention at the UN Security Council- the Russians and, most importantly, the Chinese.

Yet nobody has done anything about Zimbabwe.  There is no genocide, and so relatively little pressure to do anything from human rights groups, the only voice of reason in the Darfuri conflict, where they have only achieved marginal results at best.  Zimbabweans have the misfortune of being ruled by a leader with historically close ties to South Africa, which should have taken the regional lead on doing something about the mess.

But Zimbabwe doesn't matter to anyone.  Coincidentally, Leonardo DiCaprio's character in Blood Diamond was born in Zimbabwe.  But in the film, he calls it Rhodesia.  He justifies this disregard for changing times in Africa by arguing that, in Africa, nothing ever changes. TIA, he repeatedly says: This is Africa.  People have always been killing each other here, and they always will.  

But things do change in Africa. Zimbabwe was once an African success story.  Too bad those days, like the days of Rhodesia, are nothing but history now.    

Posted December 6, 2006

Well, there is indeed good news in the Mexican budget, at least for me and my colleagues who study health care policy.  While the appropriations for a number of areas (energy, communications, environment) will be slashed, savings from austerity measures (like the 10 percent salary cut) are headed to bolster the health system.  The president's budget is asking for a 24% increase in the health secretary's resources. 

My own interview with the new secretary of health before he was selected suggests that he intends to keep and expand the outgoing secretary's health insurance scheme for the informal sector, Seguro Popular.  With any luck, much of the 24 percent budget increase will go toward affiliating eligible Mexicans who still do not have access to the program.

The security budget is seeing an even bigger rise (55%), which may be necessary but inspires less celebration.  The real question with respect to security is not how much cash is going in that direction, but what institutional changes are going to be made to improve the quality of the security forces, and reduce corruption.  We'll have to wait until after the budget release to judge those innovations, should they be forthcoming.

Posted on December 3

Now that Calderón has successfully taken power, after an economistic oath-taking ceremony which clocked in at about 4 minutes, what's next?  100,000 people protested in the streets with alternadent Andres Manuel Lopez Obrador during the swear-in ceremony, but Calderón's star may finally be rising while AMLO's finally falls for good.

I personally think the President did the right thing by immediately cutting his own salary.  It doesn't matter how high his salary was, or even how much money it will save, but it sends the right signal: everyone needs to make sacrifices for the good of the country.  In the event, the 10 percent salary cut for top government officials is estimated to save about US$2.6 billion .  This is not exactly chump change. 

Contrast this move with the massive tax cuts which a newly minted and highly controversial President George W. Bush passed as one of his first initiatives, and you get a sense of the symbolic value of this move.  Rather than charge ahead with a highly polarizing and ideological agenda after a polarizing election, Calderón has chosen a gesture of humility.  Maybe he has a spark of creativity after all.

For now, though, the PRD continues to claim they are uninterested in negotiating with the new President.  The PRD's general secretary said today that unless Calderón recognized that he came to power through fraud, there was nothing to discuss with him.  Not exactly encouraging language.  On the other hand, the PRI's national leadership is emphasizing a need to work together on priorities like employment and security, key themes of the Calderón campaign.

Posted November 30, 2006
 

Now that Mexico's President-elect Felipe Calderón has named his entire immediate cabinet, it is worth analyzing it a bit.  President Fox only gave about 1/5 of his top 50 plus appointments to members of the PAN, his and Calderón's party.  Now that the PAN has had some experience in government, and with a more traditional partisan like Calderón at the helm, we might have expected that a much higher percentage of his top appointments would come from the party.  On the other hand, Calderón has made noises in the past about trying to create a coalition government of some kind, and he has expressed a desire to incorporate other parties into his cabinet.  
 

So how partisan is the new government?  The Mexican cabinet is divided loosely into thematic areas: the Economic Cabinet, the Social Cabinet, the Political Cabinet, and the Security Cabinet.  In addition, there are an additional 25 appointments which are part of the so-called "extended cabinet," which include the heads of semi-autonomous para-statals, such as PEMEX, the national oil company, and IMSS, the formal-sector social security institute.  Calderón has only named the appointments to the immediate cabinet as of today.
 

So what's the tally? (Most of the information underlying my analysis below is available here.) The Economic Cabinet has six members, listed below with their party affiliations.

Agustín Carstens (Finance)- non-partisan, ties to PRI

Georgina Kessel Martinez (Energy)- PRI (Salinas wing)

Eduardo Sojo Garza-Aldape (Economy)- PAN (Fox)

Luis Tellez Kuenzle (Communications/Transportation)- PRI (Zedillo wing)

Javier Lozano Alarcón (Labor)- PRI

Rodolfo Elizondo Torres (Tourism)- PAN

Note that the most important positions- Finance and Energy- went to PRI members.  Overall, 4 of the 6 are from the PRI.  Sojo and Elizondo Torres are holdovers from the last administration.  Everybody in this group has serious technical bona fides and/or time in office.  There are no neophyte party hacks.
 

Let's turn to the Social Cabinet.  Here again there are 6 members, listed below with their party affiliations.
 

Josefina Vázquez Mota (Education)- PAN (Fox)

Beatriz Zavala Peniche (Social Development)- PAN (Josefina)

Jose Ángel Córdoba Villalobos (Health)- PAN (Espino)

Alberto Cárdenas Jiménez (Agriculture)- PAN

Juan Rafael Elvira Quesada (Environment)- PAN

Abelardo Escobar Prieto (Agrarian Reform)- PAN

So the first thing that jumps out is that every single one of these appointments is a party member.  Josefina served at Social Development during the Fox administration and left to run Calderón's campaign.  Villalobos is a doctor and was formerly head of the Senate's Health Commission, but he does not have the kind of research pedigree that most health secretaries in Mexico have had in recent administrations. 
 

The Political Cabinet has four positions:

Francisco Javier Ramírez Acuña (Governance)- PAN

Patricia Espinosa (External Relations)- no party affiliation

Germán Martiínez (Public Affairs)- PAN

Juan Camilo Mouriño (Presidency)- PAN

Note again that we have mostly party faces, no surprise in the Political Cabinet.  The big disappointment here is Ramírez Acuña, who has a pitiful record on human rights and has been criticized internationally by, among others, Human Rights Watch for cracking down hard on anti-globalization protesters.  He will take charge at a time when there are already numerous complaints about human rights abuses in Oaxaca, where protests have been going on for months (though they may be winding down now).
 

Finally, the Security Cabinet. Again, four positions:

Mariano Francisco Saynez Mendoza (Navy) (Fox)

Guillermo Galván Galván (National Defense)

Eduardo Medina Mora (Attorney General) (Fox)

Genaro García Luna (Public Security) (Fox)

I do not have party leanings for these officials, but note that three had high level positions in the last administration and all four have long service records.

The bottom line? Everybody is from the PAN or the last administration, except for key figures in the Economic Cabinet. There, as during the Fox administration, the technocrats with ties to the PRI still rule.  Although some of these cabinet appointments may appear less than exciting, one thing that we may hope for with a relatively party-centered cabinet is more unity than Fox's government ever demonstrated.

But before we talk about unity, let's see if the President can even take over the office tomorrow.

November 28, 2006

It's three days until the new Mexican President takes office.  Maybe.  Today, the PRD, which has been threatening to prevent President-Elect Felipe Calderon from becoming president, came to blows (literally) with Calderon's party, the PAN, in the lower house of Congress.  You know things are bad in Mexico when the voice of reason appears to be coming from the PRI, the party which led Mexico's seven-decade long one-party dictatorship.  But today, it was the PRI's national president calling for calm, while the other big parties hurled tear gas and fisticuffs inside the House of Deputies.

Are things really this bad in Mexico?  On July 2, Mexicans voted in their first free election since the 2000 election which ended authoritarian rule.  Unfortunately, a significant part of the population did not think it was free. They poured into the streets of Mexico City to protest the victory of the PAN's candidate by a virtually invisible margin.  On November 20, the PRD's candidate, who lost according to the official tally, declared himself the "legitimate" president of Mexico in the city's main plaza.  The PRD has adamantly declared its intention to block the presidential transition.

Meanwhile, farther south, a standoff that is nearing its sixth month continues in Oaxaca.  There, a popular movement known as the APPO has joined hands with the teachers' union, perpetually on strike in Oaxaca, to demand the ouster of the state's authoritarian PRI governor.  President Fox first tried to ignore this problem, then sent a federal negotiator, then sent the federal police.  Now the protests are against both the federal police and the governor.  Downtown Oaxaca has been completely overrun by protesters and police for months, and the chaos has had ripple effects in Chiapas and Mexico City.  In solidarity, indigenous leaders in Chiapas put up roadblocks this month throughout the state.  And in Mexico City, bombs ripped a quiet night to shreds, destroying the PRI headquarters, as well as an electoral tribunal building and a bank.  Oaxacan guerillas claimed to be linking Fox's neoliberal policies, alleged fraud in the national election, and the hated PRI governorship in Oaxaca.

Crime is rampant throughout the country; and this week the World Bank released a report suggesting that the Fox administration largely failed to curb monopolies in Mexico, leaving a great deal of economic work for the incoming president if economic growth is to increase substantially.   (One paper which makes this point from a recent World Bank conference is here.)

With Mexico apparently on the brink, does the new President have what it takes to pull it back?  The jury is, of course, still out. But recent signs are not particularly encouraging.  Calderón has a skill which Fox did not have; he is a party man who understands the need for negotiation with Congress to get the country's business done.  But he has tended to rely so far on a strict institutionalist interpretation of events.  When institutions are stable and agreed upon, politicians that defend them are viewed as legitimate.  But when institutions are contested by a significant fraction of the population, a bit more imagination is needed.  So far, the President-elect has not demonstrated much of a spark. 

While he may be right to insist upon an inauguration at the Congress in spite of the PRD's threats to block him, he must also reach out to the PRD's support base with concrete policies.  His cabinet choices show little evidence of this.  He appears to have selected a mix of party insiders and people close to him.  Any serious president needs a serious economic team, and Calderón's choices appear to have passed the Wall Street test.  But to pass the Mexican Main Street test, the rest of the social and political team should be people who can cross the enormous divides in Mexican society right now.  By this standard, there is little obvious effort to reach out to the disaffected.  Nobody is happy with Calderon's choice for Secretary of Government, whom the PRD, building on international critiques, has labeled a "fascist."

Six years after the end of authoritarian rule, Mexico still has a lot of reforms to undertake.  Pockets of authoritarianism and corporate power persist.  Fox tended to make peace with these forces in order to achieve a stable transition.  Fine.  But now it is time to take the next step.  Local oligarchs and vested interests need to be tackled and equity-enhancing labor and social policies expanded.  Most of all, faith in the Mexican political system needs to be rebuilt- by a president astute enough to reinvent institutions, not simply rely on them.

J. Lakin

A November 13 NYT story reports the thrilling news that, in the past 13 years, life expectancy for patients living with HIV/AIDS has increased by 17 years. The bad news? The cost of keeping the average patient alive is now well over half a million dollars. However, the really bad news is buried deeper in the story. The remarkable statistic from the United States, as of 2003, is that just over half of HIV patients (55%) who need drugs are actually getting them. A 2006 UNAIDS/WHO study put US coverage levels in 2003 somewhat higher, at 71 percent, but still surprisingly low.

Most of the news we read in the papers is about how people in developing countries are not getting access to antiretrovirals (ARVs). A 2002 UNAIDS report found that only 4 percent of infected patients had access to ARVs in developing countries. However, developing countries demonstrate incredible variation in coverage levels for ARVs. The 2006 UNAIDS/WHO report estimates that, for example, Thailand reached 60 percent of those in need, and the average rate of coverage in the Latin American region as a whole is a very respectable 75 percent.

If we put the US in context, it looks more like a middle-income developing country than an advanced one. 2003 UNAIDS estimates for ARV coverage in European countries are all above 85 percent, with Germany (94.7%), Netherlands (96%) and Switzerland (95%) leading the pack. Why are so many Americans failing to get HIV treatment?