Unpopular Ruling Party Scrambles to Hold Onto Power in Mexico

(Bloomberg) -- A year is a long time in politics. But for the task confronting Mexico's ruling party -- to recover from rock bottom approval ratings and retain the presidency -- it may not be long enough.

That's why there's a sense of urgency about the party's national assembly taking place in five states this week. After ruling Mexico for most of the past century, the PRI has lost two of the past three presidential elections.

Now, a furious debate is under way about how to pull off a comeback win in the presidential vote in July 2018. Should the party bring in a candidate from outside its ranks, untainted by its perceived failures in curbing violence and graft? Or nominate one of its own -- if it can find someone not marked by corruption scandals that have engulfed many of its elected officials?

Finance Minister Jose Antonio Meade, who has kept his nose clean as a succession of politicians were swept up in scandals, is the main potential candidate that fits the first category, while Health Minister Jose Narro is one example of the second type. Ultimately, the decision will rest with the man whose dismal approval rating has hurt his party's chances to begin with -- President Enrique Pena Nieto, who may delay picking a nominee until early next year.

The PRI enters the race “at its worst electoral moment in history,” said Javier Oliva, a political scientist at Mexico's National Autonomous University. In a sign of its failings, both its options require creating distance from the president and building outside alliances, he said. “The PRI won't win on its own.”

The beneficiary of the PRI's failing support could be two-time presidential candidate for the left, Andres Manuel Lopez Obrador, who says he'll seek to halt private investment in the oil industry, put the domestic economy before the interests of foreign capital, and stand up to Donald Trump.

Back From Brink

Never has the nation's largest party held so few of Mexico's 32 governorships, and no president has dipped so low in the polls for at least two decades. In addition, 2017 is gearing up to be Mexico's most murderous year this century, while at least eight of the party's governors and ex-governors have been arrested or investigated on corruption allegations during Pena Nieto's rule. The president himself came under scrutiny after a government contractor built a luxury home for his wife.

With all of that baggage, the PRI still pulled off a narrow victory in the governor's race for the nation's most populous state in June. That's brought the party back from the brink and now analysts give it at least a slim chance in what's likely to be a three-horse race. Its rivals to beat are Lopez Obrador, a frontrunner in early polls, and the business-friendly PAN, the largest opposition party.

But it may once again need to count on a splintered opposition with independent candidates siphoning away votes, as it did in June's election in the State of Mexico. And it will likely seek its usual partners, including the Green Party, which has threatened to run alone in 2018 but may just be seeking deep concessions.

‘Fresh Face'

This is the first time independents can run for president and if enough of them do, the PRI could win the election with less than a third of the vote, experts say. Viewed in that light, Pena Nieto's approval of 19 percent may not look that disastrous. His ratings have been mired in the teens all year, though one recent survey showed him back above 20 percent.

Factions within the PRI are struggling to decide whether to let non-party candidates compete for president. In some respect this week's party assembly that culminates in Mexico City on Aug. 12 will be a battle for the ear of Pena Nieto, who will have the final say. While the PRI has reportedly opted to keep party rules that require its candidate to have been a member for 10 years, that won't apply if the alliance with the Green Party is maintained.

Party officials and analysts estimate there's a shortlist of about six or seven names, including Meade, the party outsider. But Pena Nieto has PRI members to choose from who aren't in his inner circle and haven't been tainted by corruption scandals, including Tourism Minister Enrique de la Madrid and Narro, the health minister. Education Minister Aurelio Nuno is also untouched by graft accusations, though his closeness to Pena Nieto carries the risk of association with the unpopular leader.

It boils down to who has the best chance of winning, and Pena Nieto will choose accordingly, said Alejandro Schtulmann of political risk consultancy Empra, based in Mexico City. “The important thing is to find a fresh face,” he said.

To contact the reporter on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net.

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Philip Sanders, Ben Holland