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Fox Factors

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Mexico’s new president Vicente Fox talks to Kamalakshi Mehta about the challenges that lie ahead and his plans for changing the nature of the presidency

Mexico’s new president has already broken a few records. Vicente Fox’s victory ended seven decades of rule by the incumbent Institutional Revolutionary Party (PRI) without provoking violence. In addition, the change in leadership took place with no sign of the sexenio (six year term) effect – the dreaded financial turmoil that coincided with the last four presidential handovers.

On the economic front, Fox has his work cut out for him. While the Mexican economy hummed along at a growth rate of around 7% in 2000, a slowdown in the US and a fall in oil prices will take the sheen off the country’s indicators. Fox’s team presented a budget to Congress that showed cognisance of this – the conservative spending plan contained proposals to lower the fiscal deficit and boost tax collection.

When Fox spoke to World Link, the 2001 budget had received approval on the revenue side, prompting the president to term it a “great signal” for his reform agenda. The final piece of the budget was approved by the opposition-led Congress two days later, on December 29. While this was undoubtedly a victory for Fox, the budget didn’t go through exactly as planned – the deficit target of 0.50% of GDP sought by the president was raised to 0.65% of GDP and some of the proposed measures against tax evaders were rejected.