The World’s Toughest JobJuly 17, 2006 issue – This may be a long hot summer in Mexico, but the outcome seems not to be in doubt. Perhaps by only half a percentage point, possibly with huge demonstrations taking place through the end of August, with or without the vote-by-vote recount demanded by former Mexico City mayor Andrés Manuel López Obrador, Felipe Calderón will be declared Mexico’s next president by early September at the latest. If this writer had not also wanted the job at one time, he would, along with many others, tell Calderón that he really has nothing to celebrate. The conditions under which he will take office on Dec. 1 are about as adverse and complex as anyone could imagine, and the challenges he will face are practically insurmountable.The parties whose candidates also ran, and lost, will pose his first challenge. The PRI will hopefully disintegrate at long last, slightly more than half of its congressmen and senators defecting to the left, others to Calderón. But López Obrador’s PRD will support him to the bitter end (unless the party finds that it has to cut a deal with the new president in order to govern Mexico City effectively—it won the mayoralty of the capital with nearly 50 percent of the vote). Calderón has announced he will attempt to form a coalition government with his opponents. Yet while he will certainly be able to pick off a few former PRI members, particularly from former president Ernesto Zedillo’s administration, priístas in Congress are unlikely to go along with his attempts to implement the myriad reforms Mexico needs so desperately.The drawn out, incredibly expensive and unsubstantive campaign showed one thing—that poverty and inequality are the central issue facing the country. Mexico is too rich a nation to have so many of its people living in poverty. President Vicente Fox was able to reduce the ranks of the poor, but not enough. López Obrador convinced voters that this was the main question for Mexico, but they never believed he could solve it. Calderón almost did not address it, but understands it. The problem today is how to design and apply policies that truly reduce poverty, that are sustainable and cost effective, and that can count on a consensus in the Congress to fund them. Mexico has made significant strides in this field, since the Zedillo administration, thanks to the Progresa program, renamed Oportunidades under Fox. But the new president now has to move beyond this success and devise something far bolder and more far-reaching.Which leads directly to Calderón’s second dilemma. In order to confront these intractable issues, the new president has to make very tough decisions, as would any winner of the July 2 vote. The problem is that Mexico’s institutions are totally unsuited for decision-making. They were constructed more than half a century ago, under the 20th century’s longest-lasting authoritarian regime, and are totally dysfunctional under democratic rule. If they are not thoroughly reformed, reducing poverty and inequality, increasing competitiveness, and fueling economic growth will simply be impossible.Mexico is not like Italy, which does just fine, thank you, regardless of its rickety institutional scaffolding. Re-electing members of Congress and senators, who are currently limited to one term; establishing a system of referenda to amend the Constitution; creating a hybrid, semiparliamentary, semipresidential system to allow the president to govern with a majority, his own or the opposition’s; establishing a run-off for the presidential vote, so that Calderón’s successor is not similarly elected with only 35 percent of the vote; allowing independent candidates: all of these are fundamental changes that Mexico needs in order to wage its war on poverty.Solving the first problem could help Calderón resolve his second. In 1988, PRI dissident Cuauhtémoc Cárdenas in all likelihood had the presidential election stolen from him. Carlos Salinas, the official victor of that fraudulent vote, was unable or unwilling to work with Cárdenas, who wanted no truck with Salinas either. Today, Mexico’s elections are a totally different kettle of ballots: they are free and fair, appeals are possible, tallies are not managed by the government, and the vote is closely monitored by international observers.There is one similarity, though: Cárdenas can once again play a central role. Now nearly 72 years old but vigorous and lucid, he has excellent ties to and influence with all three parties. He has a chance to correct his and Salinas’s mistake of 18 years ago. If he supports Calderón in building a government of national unity with a strong institutional reform agenda, leaving for later the economic and policy decisions that separate the left from the right in Mexico, everyone can come out ahead. Calderón and Cárdenas are both from the state of Michoacán; they are like oil and water. But they need each other, and Mexico needs them both.