Mark Stevenson
September 8th, 2009
Mexico eyes cutting 3 Cabinet posts for austerity
MEXICO CITY — Mexican President Felipe Calderon on Tuesday proposed eliminating three government departments and raising some taxes in a government austerity plan that will help free up some money for fighting poverty.
The eliminations, along with a Cabinet shake-up, are the biggest governmental changes since Calderon began his six-year term in late 2006. The president said the government will turn more attention to the poor amid one of Mexico’s worst economic downturns since the 1930s.
“In the difficult situation in which millions of Mexicans are living … in a country that faces serious needs, as Mexico does, the government should be synonymous with service, not privilege,” Calderon said in a speech before sending his 2010 federal budget proposal to Congress.
Under Calderon’s plan, the Department of Tourism would be rolled into the Economy Department, the Public Administration Department would be reduced to a comptroller’s office and the Agrarian Reform Department’s duties would be split between Agriculture and Social Development.
Calderon said employees’ rights would be respected, but gave no estimate on how many jobs might be cut.
Dropping the three departments and other austerity measures — which need Congress’ approval — would save an estimated 80 billion pesos ($6 billion) next year, Calderon said.
He said a tax boost and other changes could bring in an additional 100 billion pesos, which combined with the cost-cutting would free up the equivalent of 1.4 percent of gross domestic product to boost anti-poverty programs.
Finance Secretary Agustin Carstens told reporters later that the budget proposal aims to reduce government spending by a total of 218 billion pesos, or 1.8 percent of GDP.
The plan sent to Congress proposes a new 2 percent tax on consumer goods and higher duties on tobacco, alcohol and gambling, Carstens said.
Calderon also laid out part of his agenda for the second half of his term, saying he would push for changes to the country’s rigid labor laws and reforms in the energy, telecommunications and financial sectors.
On Monday, Calderon announced the midterm Cabinet shake-up — which included replacing Attorney General Eduardo Medina-Mora, who was leading the battle against drug cartels, with Arturo Chavez, a former prosecutor who served in the embattled northern state of Chihuahua.
Medina-Mora’s image was tarnished by corruption allegations against his top confidant, and there had been rumors for some time that he would give up his post.
The president said the change did not signal a relaxation in the government’s U.S.-supported offensive against vicious drug cartels.
But the all-out war has drawn criticism, with more than 13,500 people dying in unrelenting drug violence since Calderon took office in late 2006, and his party lost ground in midterm congressional elections in July.
The Senate still has to approve Chavez’s nomination.
Calderon also replaced two other Cabinet members Monday: Agriculture Secretary Alberto Cardenas and the director of the state oil monopoly Petroleos Mexicanos, Jesus Reyes Heroles.
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