Newsmakers : Calderón Aide Takes Top Economy Job

 

 

Faced with the fallout from the US economic slowdown, Mexico’s president, Felipe Calderón, appointed former businessman Gerardo Ruiz to the country’s top economic post. The new economy minister is not only a 43-year-old industrial engineer and former auto parts executive but also a close Calderón political ally who managed his 2006 presidential campaign.

Ruiz, who was Calderón’s chief of staff before the promotion, faces some serious challenges ahead. The government predicts that economic growth will shrink to 2.25%-2.75% this year, from 3.2% in 2007. Automobile production is already down 2.8% year-on-year in July due to dwindling US demand. Remittances from Mexican workers in the United States dropped by 2.2% to $11.6 billion during first-half 2008, and the central bank predicts only 370,000 new jobs will be created this year, instead of the 530,000 initially projected. Inflation is expected to rise to 6% this year, the highest rate since 2001. High oil prices are keeping the economy afloat, with oil revenue exceeding the amount budgeted for first-half 2008 by $3.18 billion.

With the economy flagging, Calderón’s popularity rating is beginning to suffer. A recent poll shows his support fell from 62% in April to 60% in July, with 44% of respondents saying the economy has deteriorated. With former economy minister Eduardo Sojo blamed for not curbing inflation, Calderón made the cabinet shift in an attempt to contain popular discontent and, as some analysts suggest, increase his influence over the key ministry. Sojo was redeployed to head the national statistics agency.

Calderón is counting on Ruiz, who headed one of the country’s largest business associations, to help spark an economic turnaround or, at least, keep US contagion from spreading across the border. “He has lived and suffered the condition of businesses in Mexico,” Calderón said, “and he’s been on the other side of the counter.”