UPDATE 3-Mexico's Pena Nieto picks close aides for top Cabinet jobs

Fri Nov 30, 2012 8:49pm EST

* Right-hand man Videgaray appointed finance minister
    * Political ally Osorio Chong to be interior minister
    * Party chief Joaquin Coldwell named as energy minister


    By Dave Graham
    MEXICO CITY, Nov 30 (Reuters) - Mexico's incoming president,
Enrique Pena Nieto, picked close allies on Friday to head the
finance and interior ministries as he seeks to craft economic
reforms and reduce drug violence in Latin America's
second-biggest economy.
    Right-hand man Luis Videgaray will take on the Finance
Ministry, while Pena Nieto's close political ally Miguel Angel
Osorio Chong will oversee a more powerful Interior Ministry that
will be responsible for security in the new government.
    Their task will be to push through tax and oil reforms and
restore order in a country where over 60,000 people have died in
turf wars between drug gangs and clashes between cartels and
security forces under outgoing President Felipe Calderon.
    Pena Nieto, 46, who will be sworn in for a six-year term as
president on Saturday, is hoping to win over skeptics about the
return to power of his centrist Institutional Revolutionary
Party, or PRI. The party's reputation was marred by corruption,
authoritarianism and frequent allegations of vote-rigging during
its 71 years of unbroken rule that ended in 2000.
    "Honesty, results on security and a progressive attitude
toward the economy - that's what the PRI must show to convince,"
said Federico Berrueto, director general of Mexican polling firm
GCE. "And this Cabinet is aimed at getting results." 
    In contrast to Calderon six years ago, Pena Nieto did not
present his Cabinet and was not even in attendance as Osorio
Chong read the list of appointments without fanfare. The
incoming ministers then left without making statements.
    
    Seeking to build consensus across party lines, Pena Nieto
also gave jobs to Calderon's last finance minister Jose Antonio
Meade, who switches to the Foreign Ministry, and a former
leftist mayor of Mexico City, Rosario Robles, who becomes
minister for social development. 
    Pedro Joaquin Coldwell, who had been chairman of the PRI,
was named energy minister.
    Gabriel Casillas, an economist at bank Banorte, noted the
Cabinet had several members educated at prestigious universities
in Mexico and the United States, saying it should help enhance
the country's image in the eyes of international investors.
    "They have a lot of technocrats, but not just technocrats - 
people with experience in Congress and that's what we need for
reforms," Casillas said.
    The ministerial posts do not require ratification by
Congress, although the appointment of veteran PRI politician
Jesus Murillo as attorney general does.
        
    OIL AND TAXES
    The PRI has trumpeted its desire to pass legislation aimed
at stamping out corruption and creating more transparency, but
the main planks to its vision for a stronger economy are plans
to expand the tax base and reinvigorate oil monopoly Pemex.
    Videgaray and Osorio Chong will have to thrash out political
deals to boost Mexico's tax take, which is the lowest in the
Organization for Economic Cooperation and Development as a
proportion of gross domestic product.
    Supported by incoming Economy Minister Ildefonso Guajardo,
55, the two will aim to break with PRI tradition by allowing
more private investment in Pemex, a symbol of Mexican
self-sufficiency, which the party created in 1938. Since 2004,
output of the oil giant has slumped, calling its future into
question.
    Videgaray, 44, an economist with experience in the private
sector, ran the PRI's presidential campaign for the July 1
election and served as Pena Nieto's finance minister when he was
governor of the state of Mexico from 2005 to 2011.
    A protege of former Finance Minister Pedro Aspe, Videgaray
won the respect of political adversaries during his stint in the
state of Mexico and when he chaired the budget committee of the
lower house of Congress before Pena Nieto's election bid.
    Osorio Chong, 48, was governor at the same time as Pena
Nieto in neighboring Hidalgo state, when the two forged a close
alliance.
    Ulises Beltran, a pollster who worked in the last two PRI
governments, said Osorio Chong would be the main political
operator in the Cabinet, but was unlikely to seek the limelight.
    "Chong is a very discreet man, very low-profile," Beltran
said. "But he's efficient and very professional."
    Critics say he was sensitive to attacks during his time as
governor and often locked horns with the media.
    In the five-month transition between the election and the
change of office, Videgaray was the public face of the incoming
administration, with Osorio Chong working behind the scenes.