SINGAPORE (Reuters) - Mexican President Felipe Calderon said on Tuesday he hopes to push through labor reforms needed to create jobs and boost economic growth, but was not certain if the proposals will pass Congress before he leaves office.
Earlier this month, he sent a new proposal to liberalize the country’s antiquated labor laws to lawmakers as he sought to fast-track the legislation before leaving office at the end of November.
The proposed labor reform could be a litmus test of how incoming President Enrique Pena Nieto’s Institutional Revolutionary Party (PRI) and Calderon’s conservative National Action Party (PAN) cooperate in the new Congress, which lasts three years.
Calderon also plans to push through fiscal transparency laws to ensure greater accountability in government.
“I don’t know if I will get a positive answer from Congress, but I hope that if Congress keeps the law, I will get at least one answer,” Calderon told bankers and business executives in Singapore, noting it could take up to a month to get an answer.
“I am proposing to the Congress that any public tax revenue will be tracked for the people since the very beginning to the very end. That is possible today at Federal level because we are supporting transparency but that is not possible, not yet, at local level,” he said.
Mexico’s labor laws needed reform so that young people and women can work in the most favorable conditions, he said.
“Mexico, in order to complete this transformation toward a more competitive economy, needs to provide for its significant labor market,” he said, adding that more than 1 million people were entering the labor force every year.
Turning to the global economy, Calderon said the outlook had improved from a year ago although there were still many risks. He also said that governments needed to keep a cap on spending despite economic weakness.
“The public deficit is like a one-shot gun. Once you fire it, you have to take measures to reload and of course stabilize public finance. The big mistake of several economies during this crisis was that they forgot this little dictate,” he said.
He added that Italy and Spain, unlike Greece, were capable of resolving their problems although the euro zone countries needed to act quickly.
“Countries like Italy and Spain have enough economic strength to honor their commitments... We are talking about a problem of liquidity but if you don’t act quickly you could convert a liquidity problem into an insolvency problem,” he said.
Mexico, Latin America’s second-largest economy and the chair of this year’s G20 summit, has been attracting investor attention in recent months despite its widely publicized problems with violent drug gangs.
In August, Nomura predicted the country could overtake Brazil as Latin America’s number one economy in 10 years.
The country has benefitted from a recent rush of new factory announcements, with Italian tire maker Pirelli, Volkswagen’s luxury car unit Audi and U.S. carmaker Ford Motor Co announcing new investments.
Mexico’s peso has risen about 7.5 percent against the dollar so far this year.
Reporting by Kevin Lim; Editing by Jacqueline Wong