March 28, 2012 / 7:40 PM / 7 years ago

Factbox: Mexican presidential candidates on the issues

MEXICO CITY (Reuters) - On July 1, Mexican voters elect a new president faced with the challenge of controlling drug violence and boosting an economy that is failing to create enough jobs to meet the demands of a growing population.

The law bars President Felipe Calderon from seeking a second six-year term, and the contest is being fought chiefly by three candidates: front-runner Enrique Pena Nieto of the opposition Institutional Revolutionary Party (PRI), Josefina Vazquez Mota of Calderon’s conservative National Action Party (PAN) and the 2006 runner-up, leftist Andres Manuel Lopez Obrador.

Following are details of their respective positions on the main policy issues.

DRUGS WAR

Calderon made an offensive against drug gangs the cornerstone of his administration. All candidates say they will continue this fight, but in different ways.

Pena Nieto has said he will take the army off the streets and replace it with a better organized police force. He is also in favor of incorporating state and municipal police officers under a single command - a proposal Calderon floated but failed to implement during his administration. Pena Nieto also wants to create new national divisions against kidnapping and extortion.

Vazquez Mota has promised to form a U.S.-style anti-drug czar to coordinate the fight against the traffickers. She also says she will not back down from Calderon’s confrontational approach, which has centered on deploying the army and marines.

Lopez Obrador has said he would withdraw army forces from the streets over a period of six months. He wants to focus on rescuing poor communities where many unemployed youths are vulnerable to the lure of gangs. As a remedy, he promises job creation schemes in Mexico’s most downtrodden neighborhoods.

ENERGY REFORM

Mexico’s constitution blocks private ownership of its oil resources. Calderon broke a taboo with a 2008 oil reform to open up the sector and allow private firms to bid for oil operating contracts. The first incentive-based contracts were awarded last year and more are on the horizon to exploit oil-rich deep waters in the Gulf of Mexico. All the candidates say they recognize the need for more change.

Pena Nieto calls for “audacious steps” to reform state-run energy giant Pemex, including increased private investment from foreign capital markets to boost exploration, production and refining capacity.

Vazquez Mota has raised the possibility of listing oil monopoly Pemex on the stock exchange - following the model of Brazil’s Petrobras - to help revamp the state-owned giant and attract additional investment.

Lopez Obrador seeks to expand refinery construction to reduce gasoline imports, which now cover around half of national demand in the world’s No. 7 oil producer.

ECONOMIC POLICY

Pena Nieto and Vazquez Mota have pledged to maintain the stable macroeconomic policies of recent years. Under Calderon, public finances were kept under control, helping the central bank avoid the inflationary shocks and sharp peso devaluations that periodically dogged the country in the 1980s and 1990s.

Lopez Obrador says he will respect the central bank’s independence and pursue the same policy. He told Reuters he hoped the bank would not just focus on inflation but also explore options to boost growth.

JOBS AND FISCAL POLICY

Pena Nieto says he would double spending on infrastructure projects and that a bigger public budget is needed. He pledges to boost Mexico’s weak tax take - a concern for credit rating agencies. A chief adviser said that could even include ending a value added tax exemption for food and medicine, provided a way to offset the impact on the poor can be found. Pena Nieto also wants to reduce the size of Mexico’s large informal economy.

Vazquez Mota and Pena Nieto have pledged to push for liberalizing the labor market, even though similar proposals by Calderon were stymied by PRI opposition in Congress, where no party has had a majority for 15 years.

Lopez Obrador calls for shifting the tax burden from individuals to corporations. He has said the country must reach 6 percent annual economic growth, and pay for school or jobs for 7 million youths within six months.

BANKS

Bank lending in Mexico lags that of its regional peers and the main parties want to see more loans to boost investment.

A Pena Nieto administration would cut the proportion of peso-based bonds Mexico issues and replace that funding with foreign currency debt in order free up bank capital to spur lending, his campaign said.

Vazquez Mota has proposed increasing support for small businesses by giving out more development loans.

Lopez Obrador says if banks do not lend enough money, his government will seek incentives for the creation of new lenders.

COMPETITION

All three candidates call for more economic competition, although progress during Calderon’s administration has been stalled by political standoffs in Congress.

A government headed by Pena Nieto would create special tribunals to handle competition disputes expeditiously.

Vazquez Mota says the debate about competition has focused too narrowly on the telecommunication sector, controlled by the world’s richest man Carlos Slim. She said shortly after winning her party’s nomination that 40 percent of basic food goods come from sectors with little or no competition, for example.

Lopez Obrador pledges to break up Mexico’s monopolies and press foreign mining firms for higher taxes and better wages. He also seeks to renegotiate the North American Free Trade Agreement, especially in areas related to agriculture, and contends that Mexico’s small farmers have suffered from competition with better-equipped U.S. agribusiness.

EDUCATION

All candidates pledge to ramp up spending on education.

Pena Nieto’s party, the PRI, has recently severed ties with the powerful teachers union, a long-time ally and opponent of past reform efforts. He proposes giving teachers incentives based on student performance.

Vazquez Mota, who previously served as Calderon’s education minister, struggled to limit the teachers union’s influence during her tenure. She did, however, earn points for helping pass education reforms that resulted in the first national teacher performance test, and mandating that raises and hiring be subjected to more rigorous evaluations.

In addition to increased investment in education, Lopez Obrador wants more scholarships for low-income students.

FOREIGN POLICY

Relations with the United States, the destination for 80 percent of Mexico’s exports, will be at the heart of the next administration’s foreign policy.

Pena Nieto’s campaign says he will work with Washington to ease Mexican concerns about the treatment of undocumented workers and U.S. worries about illegal immigration. His team is also pursuing a foreign trade strategy aimed at ensuring Mexico can better compete with other emerging market rivals like China.

Vazquez Mota said she wants her conservative party to strengthen ties with Latin America and she recently toured the region, where many countries are governed by left-leaning leaders.

Lopez Obrador says he expects strong ties between the United States and Mexico, adding that they should be based on economic development, not military cooperation.

Reporting By David Alire Garcia, Ioan Grillo, Mica Rosenberg, Dave Graham and Tomas Sarmiento in Mexico City; Editing by Kieran Murray

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