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A Conversation with Vicente Fox Quesada [Rush transcript; Federal News Service, Inc.]

Speaker: Vicente Fox Quesada, President, United Mexican States
Moderator: Peter G. Peterson, Senior Chairman, The Blackstone Group; Chairman of the Board of Directors, Council on Foreign Relations
September 15, 2005
Council on Foreign Relations

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Council on Foreign Relations
New York, NY

 

MODERATOR: (In progress)—to focus on a few things that might differentiate President Fox from his predecessors beyond his obvious stature, in every sense of that word as you will see. He comes to this position with a strong business orientation, which I think is the first in Mexican history and I think, Mr. President, your experience, which I will outline briefly, gave you a personal and profound grasp of the need for economic development throughout Mexico. He studied business administration at the Mexico City campus. He then went on to study for a diploma in upper management that were taught from—by professors from the Harvard Business School.

In 1964, he joined Coca Cola as a route supervisor in Mexico. From aboard a delivery truck, President Fox had the opportunity to see for himself Mexico’s most remote corners and thanks to his great efforts, he was promoted to president for Mexico and Latin America and he was the youngest person in Coca Cola’s history to occupy such a position. His loyalties to his previous employer was just demonstrated; I asked the President if he wanted a cup of coffee or something else and he—I will only say he demonstrated his loyalty. (Laughter.)

His legacy will certainly include the extraordinary achievement of building a strong alternative politically to the PRI party that had ruled Mexico for 70 years. He created a broad coalition of groups that had primarily felt they lived under the thumb of one party and created a cabinet that reflected that diversity.

Mr. President, a warm welcome to you, sir. We are delighted to have you. President Fox. (Applause.)

PRESIDENT VICENTE FOX QUESADA: Good morning. July the 2nd, 1942; birthday. July the 2nd, 2000; triumph of democracy in Mexico. July the 2nd, 2002; my marriage with Martha. So as you can see July the 2nd is an important date in my life. Remember very well, July the 2nd year 2000: big excitement in Mexico after 71 years of one single government—authoritarian government, non-democratic government—71 years after, joy in Mexico, excitement in Mexico. We won democracy. Democracy came to stay in Mexico. Democracy is becoming a way of life in Mexico and we Mexicans are enjoying democracy. We begin to see the end results of democracy.

It’s not been an easy path. I think Mexicans were well aware of this. It’s been hard this five years—difficult years. What we inherited then and what became our government program in the beginning of this new vision and the construction of this new architecture on this nation was based upon first the need to have democracy as a way of life, but not only for electing the leaders and governments in the country, but democracy as a practical, efficient tool to development, to the better being of people, to quality of life, to eradicate poverty, to distribute income.

Number two, an economy that has 30 years of one step forward and two steps back; an economy that did not have the capacity to bring in opportunities, jobs, income to families and people; an economy that did not improve the patrimony of Mexican families and that, on the contrary, frequently made these families lose their patrimony through devaluations, through high interest rates, through high inflation rates, which is the worst enemy of poverty. Inflation is the worst enemy of poverty.

So the need for a stability, the need for discipline in administrating public finances, the need for discipline in budget spending and thirdly, the need to invest in human capital to make sure that all people will have equal access to the resource or development, that each Mexican citizen would have the same opportunities to be in school up to the university level, that there would be equity of access to health public system, that everybody would have those opportunities. And this is what became our project, this is what became our government plan, these three points: transition to democracy as a way of life, economic stability, a solid economy to make sure that we protect people and families’ patrimony first and above all, and number three, human development—opportunities for a better life to each Mexican.

And we’ve been working hard these five years. I started with 84 percent approval on 1st of December of the year 2000; everybody was excited, everybody loved the president then. (Laughter.) I came down to 54 percent. That’s the lowest approval rate that I have had. By the way, we won with 42 percent of the votes and we are a minority government. My party does not control or have majority on either chamber. I governed with 20 seats out of 32 governors that are opposition governors. I governed with more than 80 percent of the municipal presidents that are opposition and this is a big challenge in Mexico to the future. How can we build in the system very strong incentives to reach agreements to be able to have a strong governability and a strong capacity to move the country ahead. I am back to 72 percent approval rating in my fifth year of government, so people and government, we are still working together. What I call green circle, which is citizens, we are still with a lot of optimism, hope, will to work, and build a better future for all Mexicans.

The economy is doing fine, growing at a pace of 4 percent, we wish it would be more, but we haven’t been able to get the structural reforms through Congress. We need badly four reforms. One is fiscal reform. Mexico has a fiscal system that generates only 12 percent of gross product. To compare, the United States is close to 30 percent of gross product, government’s fiscal income. Brazil is close to 30 percent. There’s very, very few countries in the world that are under 15 percent as total fiscal income to government, so we have lived out of oil, but oil prices go up and go down, it is very risky to depend on oil income to build up a nation. We Mexicans should be investing more in our country, should be paying more taxes, but opposition thinks that by keeping those low fiscal incomes are benefiting people when it’s exactly the opposite. Nothing is more harmful for people and for poor that we don’t have enough income to support a quality and equity education system, to support a health system that everybody has access to, to be able to invest in infrastructure, to be able to invest in our great source of income, which is energy.

It is very unfortunate that we sit upon millions—billions and billions of barrels of oil and we don’t have the necessary capital or financing to get it out and to use it to reduce poverty in Mexico, to use it to build up a stronger and more efficient education or health program in Mexico, so there we have a big, big challenge. The fiscal reform, the energy reform, the labor reform, and the public pension reform.

Public pensions are eating all the increase that we generally can generate under the actual fiscal system, so whatever we increase the budget, the first one who comes in and takes the share of increase is pension—public pension plans. We need to change them. I have been insisting for five years, all the bills and initiatives are right there in Congress, but opposition feels comfortable by not taking the risk, not having the courage to change things in Mexico for the better.

I still have, fortunately, 14 months and a half remaining. A lot of minutes, a lot of seconds to keep on working for these structural changes that our economy needs, but yet economy is strong. The economy has the best fundamentals ever. The economy is strong enough to keep Mexico moving ahead.

And a brief comment around NAFTA, this partnership we share with United States and Canada. It is a very strong partnership. We have a new vision. We are working to develop and construct that new vision among us, three leaders of the three countries and I think to my understanding that the vision is clear where we are going and we are going to further integrating, to further associating because this block of nations, this NAFTA association has brought in the largest market—consumer market in the world.

President Vincente Fox of Mexico with Council Chairman
Peter G. Peterson.

Mexico, by the way, is some ways, for any product that you can mention, among the very first 10 largest consumer markets in the world. It is a big market, the Mexican market and of course no doubt, that the U.S. market is the largest market in the world. So our association has sense and has logic, but now we are confronting challenges. U.S. economy is losing a lot of jobs to China, to Asia. U.S. automobile industry is losing share of market to Europe, to Asia and same is happening with Canada and same is happening with Mexico, we are all three losing to China and we decided we have to do something about that. We have to protect our jobs and this is the very basis of the challenge for the future competitiveness that we need. And we begin to see NAFTA corporations—NAFTA corporations that take advantage of the competitive advantages that each country offers, so they have one foot in Mexico, one foot in United States, one foot in Canada and they become competitive. They begin to see their way out of the market that we are losing, so we three governments are in this line of thinking and will be working towards making our three countries very competitive.

So in economy, I think that we are moving on the right direction. Finally, a word about security. There’s a lot of discussion about security in Mexico. There’s a lot of wrong information about security in Mexico. We do have problems, big, big, big problems on security, but fortunately they are clearly—very clearly defined in specific cities or various specific regions of Mexico and they have to do with organized crime and have to do with narcotrafficking. General standards, general crime indicators in Mexico are on the average equal to other parts of the world. And in most parts of Mexico, in most cities in Mexico, in most regions in Mexico you can go out and walk at night; you can have a very peaceful stay and visit. But we have, on the contrary, these other places where things are tough, where we are facing this battle to organized crime, where organized crime has challenged Mexican authorities and where organized crimes are killing themselves among each other on different cartels.

A city like Nuevo Laredo—we have there a very strong presence of federal forces, police forces, very strong presence of the army, very strong presence of the state police and we are going to win that battle. Believe me, we are going to win that battle. Crime has not over-passed the capacity of the state and the security institutions in Mexico, but the challenge of organized crime and the challenge of narcotrafficker is international. The market is here, is here in the United States—the big market—so every drug producer aspires to bring in the drug to United States because that’s where the big money is raised. So we have joint responsibilities on this battle against organized crime and narcotrafficking.

And Colombia—Colombia is a big producer of drugs and other countries as well as Mexico. Mexico is a big producer of drugs. United States is a big producer of drugs in matter of marijuana or chemical drugs and other things that are used today by our kids, so it’s a joint responsibility and we have to work to solve it.

This is why it is useless to blame each other. It’s useless for a U.S. governor in New Mexico, in Arizona to say that Mexico is insecure and what happens with the drug that crosses to Arizona, to New Mexico. How it goes from there to the market in the United States, who distributes, who sells, who raises the money that is used to bribe Mexican police there.

Fortunately, we have been successful and maybe all what we see today and all what is happening today is a product of success. We’ve had 15 big capos, big padrinos of cartels in Mexico that are in jail—are in Mexican jails. Claimed by U.S. Justice and as soon as we can get them out, will put them in the hands of U.S. justice and we are waiting for the supreme court to authorize that we can do that. Forty-eight thousand members of cartels, we have in jail in Mexico in this last four years and that’s why now the—(Spanish phrase)—the second level leaders of those cartels now are trying to occupy the spaces, are trying to occupy the place of the padrino, or the big guy, so we are seeing this war. But I end up this chapter of my message saying, we are going to win that war because we are doing all that is necessary to win that war in these specific cities.

Mexico then—and I repeat, has—enjoys good standards in relation to security, when we speak about the country as a whole and I guess this will give you enough information for hearing your comments, your questions, which I think is going to be the best part of this exercise and maybe that will take us to the issues, to the subjects that are of most interest to you, like it would be discussing about Latin America, what’s going on in Latin America or discussing about the issues that we were dealing with yesterday at the United Nations and these next days. You have then this information and I’m thoroughly at your disposal to participate.

Fortunately, our democracy has now granted to media absolute liberty, freedom of information, of communication, which we did not have for 71 years and, Jesus, press and media has really taking advantage of that! (Laughter.) They exercise their rights every minute of the day, so I’m very glad that media is here and press is here. And I thank you for your patience. (Applause.)

MODERATOR: Thank you very much, Mr. President. First, I might say that your approval ratings may be a bit lower than they have been, but I can think of many presidents, including one in particular, who might be thrilled to have your—(laughter). I’m not going to create any competitiveness here.

Mr. President, just 10 months from now, Mexico will go to the polls to elect a new president. From your unique perspective, having lead the country over the last five years, what lessons have you learned, what wisdom might you share with us, and what advice might you give the next president of the Mexico, whichever party he comes from, whoever it might be?

FOX: Well number one, for the first time in 20th century, in what has advanced this 21st century, the president does not know who the next president will be. (Laughter, applause.)

MODERATOR: That’s why I said whoever that might be.

FOX: But let me tell you, Mexico enjoyed 20 years in a row, from 1950 to 1970, that were very successful years economically speaking. No inflation, very low interest rate, a stability, no conflicts, no problems. And then we went through 30 years of inconsistency of one step forward and two steps backwards. And finally, we are back to 10 years, 10 years in a row, 1995 to 2005, 10 years of stability—political stability, 10 years of economic stability and discipline, 10 years of social stability to governments, to parties. The main common denominator is stability and it pays off; stability pays off. Stability is good for people—for people’s income. Stability is good for keeping your patrimony and this is what had happened these 10 years.

Mexican economy went from, 1995, $310,000 thousand billion U.S. dollars’ worth of gross product. We will end up this year with $700,000, more than double in 10 years. Per capita income went from $3,100 income in 1995. We will end up this year close $7,000 per capita income in dollars. We used to have the seventh place in per capita income in 1995—Mexico did—in Latin America—number seven. Today we are number one, by far, and today Mexican economy is the largest in Latin America and tenth largest in the world. Today Mexican economy and Mexican trade balance is going to end up at $400 billion. We buy 200 billion; we sell $200 billion. That’s as much as all of Latin America, those together.

And with those $200 billion that we buy and that we sell, you can imagine the amount of jobs that are created in United States and the amount of jobs that are created in Mexico because the 85 percent of our trade balance is with United States. That makes us partners. Mexico buys from United States more than what Italy, France, Spain—by the way, Zapatero is coming in a few minutes—Spain and Germany do together. Mexico buys more from the United States than those four countries together, so we are partners and I think we can build up a future associating ourselves.

The conclusion of what I have said is, stability is very important for the development of a nation. And maybe this is a weakest part of the problems in Latin America: inconsistency, changing from one alternative to the other one. We are very impatient in Latin America. In three years, we want results or else we need a new government or we need a new model—economic model—or we need a new something. Public policy now needs to stay for a sufficient time to be able to derive the benefits of this consistent public policy. That’s why I am so in love with stability as the very basic principle for development.

MODERATOR: Let me press you a little bit, you must look back on it and say, I learned some lessons. There are some things I maybe would have learned indifferently. There’s some things the next president has to do. Talk a little bit more about the things that have frustrated you in your achievement. You’ve achieved an enormous amount, but there must have been some things that you’ve pointed that you wish you could have done differently or more of, or something. I know that’s always difficult for politicians.

FOX: Well, the lesson is, it’s easier to sell Coca Cola than run a country. (Laughter.) The lesson is that people is lovely, that people is the best a country can have, that people is hardworking, that people is moved by its ideals, its dreams, its own internal power. And when you have people like we have in Mexico, where values are so strong, where values are part of Mexicans—as you can see, for instance, this 5,600,000 people that in that last four years left poverty because of their own effort, because of the will to overcome poverty. As soon as they have the opportunity, they just did it, they just overcame the situation of poverty. So that’s what I have learned: that the people is the best thing that a nation has.

MODERATOR: Okay. Mr. President, many in this audience has suffered the relentless boredom of listening to me talk over the last 20 years about the unsustainability of America’s senior benefit programs in the face of 77 million baby boomers retiring, beginning in a few years—the unsustainability of our Social Security and Medicare programs. I was interested to hear you say, that reforms and the public pension program would be a very high priority with you. As you know, there are many, many possible reforms whether in the benefit structure, whether in the payroll tax structure, whether our savings accounts, there is a whole area of possible reforms. If you had your dream, what would Mexico’s public pension program look like, however difficult it might be you achieve?

FOX: It would look like the private sector pension plan, which is a self-sufficient pension plan that people saves throughout their life of work, in an environment of stability and discipline where money does not erode—loses its purchasing power; on the contrary, that that saving becomes more and more throughout the year. So we just want to equal public pension plans to private pension plans. For instance, a private worker in Mexico retires with the average salary that he had in his last 10 years of work. A public servant in Mexico retires with 140 percent of the last salary of the last day that he has. (Laughter.) It’s a huge difference between one and the other. A public servant can retire today at 45 years of age and taxpayers have to pay his pension or his salary for 30 years or more because expectancy of life in Mexico is today close to 77 years, by the way very similar to United States, we have about the same expectancy of life.

So imagine, I mean, retiring at 45 years of age. It’s not possible to sustain those pension plans, that’s why they must be changed. And if you I have to choose among the four reforms—the structural reforms—which ones to take, I would take the four. The four are needed. (Laughter.)

MODERATOR: I take it then that you might want to move in a direction of a system similar to Chile’s with regard to private accounts that are outside the government’s hands.

FOX: Well, Chile has a system similar to Mexico.

MODERATOR: Okay. Excuse me.

FOX: Yes, it’s private accounts.

MODERATOR: I didn’t mean to -

(Cross talk.)

FOX:—pension plans on the private sector are with private accounts, yes. And we want to make public pensions also through private accounts. And by the way, as of the first of the year next year, we will put together and launch a pension plan for people that is not either working for private sector or for public sector, which is 50 million Mexicans, which is half of the population -

MODERATOR: My goodness.

FOX:—are not within either system, so we are launching a pension pan for those families that are outside of the social security system in Mexico and has the same characteristics. We’ll have a personal private account that will be interchangeable with the other two existing. It will depend on the capacity and the effort and the commitment of saving throughout her work life and then have that pension plan at the end. We would put some incentives to that, but mainly it would be self-sufficient. This will bring in a very strong drive for the saving systems in Mexico where this 50 percent of the population that right now is not under a system of savings towards a pension plan at the end.

MODERATOR: Mr. President, my final question, and we’ll turn to the audience. It is the conventional wisdom that a prime (ingredient ?) of reform is a change in U.S. immigration policy to legalize those who are here and to allow those who want to come to work here to get legal and jobs and work in openness and safety, but it has also been said Mexico needs to increase its own economic growth so that fewer Mexicans want to come here in the first place. Looking back on your five years, what would you say are, in order of importance, the most important things that Mexico needs to do to increase domestic growth, particularly in the south?

FOX: Okay, yes, that’s our obligation. We as a country must generate the opportunities that our kids need. It’s not very pleasant to a kid, 14-year-old, 16-year-old, to say goodbye to their families and start this adventure. They usually start by moving to urban areas. And most of those who leave rural areas find a way out in urban areas. When they don’t find that there, then they move to the border. And in the border, some of them—most of them would find a job at least temporarily. We have this machiladora system, which is on all border towns, which accounts for a million and a half jobs and growing—fortunately growing: growing investments and growing in the number of jobs they can offer. And finally some of them move to United States.

And I have to say that we must see migration as an asset, as an opportunity for both of our countries because U.S. is an aging population, a lot of retired people that needs a lot of support and needs a lot of services. Support and young energy generating a healthy economy that will have the capacity of saving so that those retired will enjoy their pension plans. And services because nurses and service people are highly needed. On the contrary, Mexico is a young population nation, have of a large youth, and that’s an asset. It’s an asset if we build in the opportunities and we ensure their education up to university level, and we’re working hard on those variables so that we can enrich this asset of youth that we have.

Things are changing in Mexico. We were growing at 3.5 percent population—was growing at 3.5 percent. Today, we’re reaching 1 percent. We’re down to 1 percent. So pretty soon Mexico will also even its total population, and so there is this opportunity for both of us to come up with a sound, intelligent, efficient, productive migration agreement. And fortunately, there are these initiatives already in U.S. Congress, like the Kennedy-McCain, which we like, which would be in good part an answer to the good management of this issue of migration. So we hope that it will keep advancing and we integrate further; we become stronger partners like we are becoming today. That’s what I expect. This is a very important issue on the bilateral relationship, and we hope we will have enough intelligence and matureness to see what we should do to the future now that we are partners—the three of us.

MODERATOR: Mr. President, I had never heard—I should have known, but I didn’t know that, that your population growth has gone from 3 percent to 1 percent. How did you achieve that? What were the programs that you went through?

FOX: Not the bills, but education and work because now that women can go to university in Mexico—they used to marry at 12, 14 years old in the past. They still do it in indigenous communities, but now those who are in university won’t marry until they’re 22, 24, 26, and if they can get a job, then you can certainly expect that they won’t marry before 24 to 26 years old. Education and work is key to reduce population, and that’s happening in Mexico. The year 2030, 2035, we will never—we won’t see again growth in population it will stabilize, however you say that, at the level of about a 130 million Mexicans. We’re a 105 right now. So we level of had a 130, 20-25 years from now. And so this is our last window of opportunity of using this energy, this youth energy that we have in Mexico, this next 15 years.

MODERATOR: Thank you, sir. Now let’s turn to the audience. The gentlemen over here. Yes, sir?

QUESTIONER: (Off mike.)

MODERATOR: Who are you, please?

QUESTIONER: Gabriel Guerra (sp). Two events in your administration affected the then good relations you had with the Bush administration. After September 11, the delayed reaction of your presence in the U.S. was noticed; and second, your decision not to back the U.S. at the UN Security Council on the Iraq question. Do you have any comments or regrets on any of these two positions you took?

FOX: No, absolutely not because our position in September 11 was of profound sorrow, profound solidarity with U.S. families and with United States as a nation, profound belief that democracies—those of us who believe in democracy, we should get together and fight terrorism with all what we have. So nothing to regret. On the contrary, I would exactly repeat our position.

And same, I would do in Iraq. Our conviction—our belief is in multilateralism. We don’t believe in one nation policiando—policing the world. We believe in United Nations doing the job in conducting peace, harmony, good relations among nations, avoiding conflicts, and having peace and authority to stop violence whenever it appears, to have peace and moral authority to bring justice to genocide and to human rights violations. And this is why we have worked so diligently from Mexico in this invitation of Kofi Annan to reform the United Nations, because we need a United Nations for the 21st century and we need it with those characteristics: authority, moral authority, capacity, and commitment to do the job that they have as a mandate.

The United Nation—the United Nations is ours, it’s everybody’s, and if we work all together, that would be the best vehicle for that purpose. I think United States will save a lot of problems to itself by chartering, supporting, giving all the capacities to United Nations in making that institution the conductor of world peace. We believe on that. We Mexicans believe in that. And me, as president, I have to interpret and listen to this belief—this Mexican belief.

MODERATOR: Mr. President, follow-up on that for a moment. What is your appraisal of the reforms so far in the UN, and what else would you like seen done to make it more effective?

FOX: It is a strong, a good step forward. A lot of things were agreed upon as of yesterday or day before yesterday that have to do with human rights, that have to do with peace activities in different nations that go into problems, that have to do with budget and administration of budget, that have to do with transparency and accountability on the running of the budget of the United Nations, that have to do with the Security Council. Those very, very light—the reforms there, spending to work more on the Security Council.

And one very important thing missing there is the case of disarmament: reduction or elimination of massive destruction weapons, atomic bombs—(inaudible). That chapter is not even included and we think it should be included—should be discussed and should be part of the reforms. So we are satisfied with where we have reached. Mexico has worked diligently. We invited 15 nations from around the world to join in on an effort to dedicate time and effort to analyze, to evaluate, to propose and to bring ideas to the table of the reform, and we saw a lot of what we proposed approved on this initiative as of day before yesterday.

MODERATOR: Questions on this side, anyone? Yes, back on there on the aisle.

QUESTIONER: Mr. President—

MR. : Now, tell—please identify yourself.

QUESTIONER: (Off mike.) Thank you. Mr. President, traditionally, Mexico has had very cordial relations with Cuba. During your administration, those relations became eminently more tense. What role do you think Mexico can play with respect to the current transition in Cuba?

FOX: There has been some changes in foreign relations, in foreign policy in Mexico. One has to do with human rights. Before my government, Mexico would never allow NGOs related to human rights to come to Mexico and to supervise or to evaluate. They were not allowed to come to Chiapas. My first act of government was to totally open Mexico to visitors of any kind, of any ideology, or of any subject. And we immediately—the 1st of December of year 2000, we started issuing visas and authorizations for these organizations to come to Mexico. And together with human rights, it’s democracy, but in the case of human rights in the case of Cuba, we’re only insisting that Cuba should be equally open to human rights visitors, to visit of the United Nations area of human rights. And so it’s just consistency of a policy that we’re following.

We don’t have anything against Cuba or anything against Cuba. On the contrary, as you well mentioned, we’re very close people. We’re very close in culture and music, we’re very closed on geographic location, and there’s a lot of excellent relationship between Cubans and Mexicans, so no problem there. It’s just a matter of those principles and trying to see not only in Cuba, but anywhere else in the world, the full respect to human rights. And maybe it’s because we didn’t have that on the past that we are so strong on the case of human rights.

MODERATOR: We have a question here, sir.

QUESTIONER: Jacob Frankel (sp), AIG. Mr. President, you started by noting important anniversaries that happened in July. Today or this week, 19 years ago, Mexico reached an important agreement with the International Monetary Fund on an economic program which was viewed to be very fundamental because it included oil prices and it’s a contingent and the like. Mexico was in dire economic crisis at that time—debt, inflation—and as you indicated, it’s part of the past. One of your predecessors said that the problem that Mexico has is that it is too close to America and too far from God. Without getting into the theological questions, in particular in the context of the current oil situation where oil price rise benefits Mexico and puts burden on the U.S., is this proximity to the U.S., does it have a downside, is it a possibility—is it some challenge that can be dealt with?

FOX: Yeah, in the past, there was always this struggling between IMF and Mexico in relation to debt, and it was because of what I mentioned: there was such a big disorder, indiscipline in the running of the budget. There was this race to get more debt and more debt and more debt. Part of that debt committed on 30-days’ term and lent in Mexico on 10 year’s term. It was unsustainable, and that’s why we had such a frequent, recurrent crisis during past administrations in Mexico.

Today, we don’t owe one cent to the International Monetary Fund—not one cent. And Mexican debt today is totally manageable, reaching down to no more than 10 percent of our budget where we have to pay for interest. And by the way, we have saved in this four years of government $30 billion U.S. dollars that we would have to have paid on interest to banks, and that money today is in building universities and building hospitals. And this is why I praise so much stability, and stability (phase out ?). So that’s why we’re taking very specific measures for next year.

Number one, we are prepaying all debt due for the years 2005, 2006, 2007 so that next government won’t have any problems and Mexico won’t have anything near an economic crisis or a devaluation or whatever. Number two, we’re presenting for the first time in years a balanced budget, even representing a budget with a small—(inaudible). No comparisons please, with—(laughter.) A balanced budget next year. We will only spend what we get, just like a mother would do—not to spend more than what you have so that we don’t indebt next generation. And number three, next year, we will equal one to one total reserves with foreign debt—on a one to one ratio. That’s a strong sign of confidence, trust and insurance to the future of Mexican economy. It’s important that we take those measures for that purpose.

MODERATOR: Okay. On this side again, we go back and forth. Yes, on the corner please. Please identify yourself.

QUESTIONER: Boldoff (ph) from Instep (ph). Thank you, Mr. President. What I am interested in are your views on how much of a priority it has been in your administration, and should be going forward for the forthcoming administration, to focus on the issue of corruption both in civil society, in government, and in the private sector as you plan out your policies and other things. Thank you.

FOX: I think that we, together with Congress, are taking the necessary measures to reduce and eradicate corruption. We inherited a culture—a culture on this matter, but today we have a law approved in Congress related to transparency an obligation to make every single information within government—to make it public. So now, it’s going to be very difficult to have corruption within federal government.

And this is a paradigmatic law. Very few democracies in the world would have that type of laws, and I am sure it will be a very strong tool in our fight against democracy. And the other one is all government purchasing, all government contracts are public—absolutely public, are in Internet, but are also participated by a social auditor named by business organizations, named by Transparency International or named by other NGOs. There’s always a society—a citizens’ participant on all solicitations and all public contracts. So the instruments are there, yet corruption is not finished. We still face corruption, but if we keep on using these tools, these laws, and we keep on punishing and bringing to justice those who do not comply, this will have to be much better in the future.

MODERATOR: Gentleman here has wanted to—yes?

QUESTIONER: Thank you. Thank you, Mr. President for coming here today. Because I’ve been very impressed—

MODERATOR: Excuse me, this is Ted Sorensen.

QUESTIONER: Oh, I’m sorry.

MODERATOR: And he can be utterly lethal. (Laughter.) I want you to be—I want to prepare you.

QUESTIONER: Thank you.

MODERATOR: Go ahead, Mr. Sorensen.

QUESTIONER: Thank you—Mr. President, yeah. Mr. President, because I’ve been very impressed by your record that you’ve outlined today and the qualities of leadership you’ve shown, I can’t help but reflect with a regret that in 14 months it may all go to waste. I don’t know whether it’s by law or tradition that Mexican presidents leave the country for a year after their term is finished or whether they’re all required to escape the law—(laughter)—but in any event I wonder whether you have thought what you might do at the end of your term. As you said a minute ago, it’s a big world, there are a lot of big problems out there, and you have some answers.

FOX: Well, I’ll be at home. I’ll be at home on the ranch as of the 1st of December, 1:00 in the morning, riding a horse. (Laughter.) But also Martha and I are planning to keep the foundation that she’s got to work for poor kids, to work for ill or sick kids, to work for education, to work for women’s equity, and maybe write a book, travel, and be close to my most loved nieto—(Spanish phrase)—be around with him. He likes horse-riding. He likes to go with me out to the hills, and that’s what we will do.

I have lived in that farm all my life. I have lived in that home all my life. I’m living there, and I will come back to live there for the rest of my days. I don’t like to live outside of Mexico. (Applause.)

MODERATOR: Mr. President, this is Julia Sweig who is our—David Rockefeller—Laurence Rockefeller fellow for Latin America, newly appointed.

QUESTIONER: Thank you. Welcome, Mr. President. It’s nice to you again. You said at the opening of your talk that you would like to speak about Latin America and I now direct the Latin America program here and would like to ask you to share with you—share with us your sense of what’s happening in the region. There’s many, many shifts that are driven both internally by some social forces, particularly in the Andean Region, that I think we need to pay attention to. In Venezuela, Mexico has played a role in the Group of Friends and the United States may ask that Mexico do that again and yet the dialogue, let’s say, about democracy in Latin America has not been as full and effective as it ought to be, and I’m wondering how you would suggest that we jumpstart that dialogue again. Thank you.

FOX: Thank you. I guess nobody can deny that Latin America has progressed at a good pace democracy in front of military regimes that we used to have. Economic discipline—if not as a strong as maybe some others would wish, Latin America is moving much more on discipline budgets, on low deficits, on reducing debt, and it’s begun to have a good pace of growth on its gross product: rates of 5 percent, 4.5 percent, 6 percent like Chile is doing, and so things are moving along.

If anything, I would recommend is consistency—is consistency, which I already mentioned in relation with stability and to public policy. We get desperate, maybe poverty is so bad that people just need quick solutions to the problems, but solutions come when you’re consistent, when you work with the same direction for long periods of time. Growth is not at the turn of the corner; growth comes from investment, investment promotes entrepreneurship, the creation of jobs. Creation of jobs should generate savings, and savings should be recycled through the circle again. But all of that takes time and that has to be done on a peaceful, harmonious, stability environment so that work of people can produce so that conquest of markets can be done, so that the investment can be established, so—and above all, education, and education pays out on the long-term. It’s not a short-term deal. So consistency, maturity of public policies, and democracy should bring us that, but it may be the main thing that should happen to Latin America.

This morning I was sitting with President Lagos, Chile, and that’s an example of economy, that’s an example of stability, that’s an example of well structure and strong capacities to the future. It’s an example of winning the battle against poverty and Mexico is now, with this last 10 years, building the same that Chile has built. We were talking about—we have our trade agreement and it’s working excellent, but again, we need to come to further agreements to integrate them. We need a strategic agreement that encompasses the fields of geopolitical, that encompasses regional development, that encompasses how we can connect more, that encompasses energy and security, that encompasses human capital building, that encompasses technology, so—and he’s in a hurry and I’m in a hurry. He will leave power next December or next—March of next year. I think election is December or next March. So we gave instructions this morning that for the 1st of December this year, we need that strategic document that could convert into a strategic vision of what Chile and Mexico should be doing together. And we’re going to go someplace in Mexico to a small place to spend one morning on reflecting about this document and approving it so that we have that guidance how to move to the future.

Latin America is building. It’s building its trade agreements and its blocs. Central America is moving on the positive direction. Guatemala and Salvador eradicating—erasing the border. Now, you don’t need a passport to go to from Guatemala to Salvador or from Salvador to Guatemala, and you don’t need to go through customs or you don’t need to lose all that time that we all lose. And they are integrating in a way like Europe did in the last 40 or 50 years. They are doing fine. CARICOM is now integrated. G3 is integrating Mexico, Columbia, Venezuela. (Inaudible) and Friends of Mexico is participating in all of these as an invited guest. And so if we don’t have the agreement of the Americas that we were looking for year 2005, that we decided in Quebec, Canada—that’s still far away from reaching that agreement, but in the meantime we have six, eight, regional agreements that are becoming stronger and stronger, so maybe in a few years we would just have to put those pieces together and have a continental agreement as we decided a few years ago.

So I’m optimistic about Latin America. We lost a lot of time in the 20th century: inconsistency; trying, improving new systems; inventing the wheel every three years, every six years; a lot of messiahs coming in and saying where to go and how to get there; and when development is so well-experienced now in so many nations that you don’t have to be finding nothing else but discipline, stability, hardworking, honesty, transparency, accountability, rule of law, and you move. You move. No doubt, you move.

MODERATOR: Mr. President, our President Richard Haass tells me the questions must come to a close. I have an announcement and a couple of very brief comments.

Following this meeting, the members of the Council and the members of the press should know that I believe you’ve agree to speak to the press for 10 minutes or so or to answer -

FOX: Do I have to? (Laughter.)

MODERATOR: Oh, the press here is very gentle and not—

FOX: I know, I know, yes.

MODERATOR: Yes, sir. Second, I want to assure you that this organization supports much of what you’re doing. I’d give a copy of our latest report, "Building a North American Community," that I believe, Richard, was done in conjunction with two counterpart organizations from Mexico and Canada—

FOX: Good.

MODERATOR:—and we’ll give that to your staff.

My final comment would be that I think listening to you, we all understand why your approval rate is as high as it is, so thank you, sir, very, very much. (Applause.)

 

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