Transcript of Interview with Former Mexican President Felipe Calderon

This is the partial transcription of an interview with the former President of Mexico Felipe Calderón conducted by Fernando Berdion Del Valle and Chrissie Long on March 25, 2013.

Q: You were a student at the Kennedy School in 2000. How does it feel to be back at Harvard?

A: It feels very good. I’m very glad. In a certain way, I have a passion for public service. All of my professional training has focused on public service. I studied law, economics and public administration somehow thinking, “How can a person better prepare himself to serve?”

I had a wonderful experience at the Kennedy School because I already had a certain amount of experience, especially in the Congress, and with the PAN. Afterwards I was able to sharpen skills and reflect. As soon as I finished, I began another stage of my public career.

Returning twelve years later is a fantastic opportunity to learn again – to learn from the good experiences, from the bad ones, and to share that experience in order to further professionalize public service – particularly public service in Mexico and in other Latin American countries.

In addition, I believe that everyone in life has certain sanctuaries, or particularly special places. For me, the Charles River is one of them. So I feel very happy to be here.

Q; Do you remember any professors that had an intellectual impact on your when you were at the Kennedy School?

A: I was very lucky to have very good professors. In economics and public finance, I remember Jeffrey Frankel well – a great professor who is still here at the Kennedy School.

It was a very interesting time. The Latin American economic crises of the ’80’s had taken place. The crisis in Asia had just happened, as well as the crisis in Mexico, the “Tequila Crisis.”  Frankel’s class was very interesting because it was helpful in understanding everything that was going on.

Around that time, people talked a lot about the convenience of a single currency – globally or regionally. People talked about how there should be only three currencies: the Yen, the Dollar and the Euro. The Euro had just been implemented, and it was very promising. I remember the tremendous pressure there was in Mexico for a single currency – that only the Dollar would exist throughout the Americas, particularly in North America. People said that the Argentinean experience with the currency board had been wonderful. Ecuador and El Salvador went directly to “dollarize” their economies.

I remember defending my thesis that having your own public policies had its disadvantages, but so does relying on the policies that you don’t control. Twelve years later, there is no doubt that there cannot be single currencies, and the Euro was the “big question mark” of last year.

I was surprised. In spite of all that I learned, I didn’t expect my leadership class with Dean Williams to be so instructive. The course material was completely new to me.

Q: What will be the primary theme of your work at the Kennedy School?

A: Basically, the Angelopoulos Leadership Fellowship allows for me to organize, with the highest academic rigor, my experience in government, including the most important public policies and decisions. I will participate in seminars with students, I will write about the Mexican government, and I will give some lectures too.

Q: Are there any particular public policies that you would like to highlight at Harvard? Any policies that are less-well-known in the United States, for example?

A: Yes. The topic that has dominated international public opinion, sadly, has been the topic of violence in Mexico. It’s a fact. But there are very successful public policies that we implemented, and that somehow were minimized or weren’t given their deserved consideration because they have been overshadowed by the issue of security.

One key program was universal health insurance coverage. I believe that Mexico is one of the first developing nations to achieve universal coverage. That is, every Mexican at the moment has access to a doctor, access to a hospital and access to care when he/she needs it. Of course, there are differences in quality and regional differences, but basically it’s an impressive work of infrastructure. I believe we built more or less 1,200 new hospitals and clinics in the country, and we re-built another 2,500.

But above all, more than the infrastructure was the system that we designed: the Seguro Popular. We created a system of personal affiliation; therefore the coverage in Mexico grew from about 52 million people to 107 million people, out of the 110 million of Mexicans recorded in the 2010 census.

The Seguro Popular gives a person the right to receive preventive medical attention and treatment. It covers a very wide baseline of diseases, some very complex. For example, it covers all cancer treatment for all types of cancer for children under eighteen years old. It covers breast cancer, cervical cancer, prostate cancer – a long list. And the insured person can go to a public clinic and request service. These are basically clinics sponsored by state governments. The federal government pays a fee to the state systems and with these resources they can render services to the population. This system turned out to be very effective. There are likely things that still need to be fixed but…

Q: As President, were you involved in the management of universal coverage?

A: Yes. One of the things you learn at the Kennedy School is that one of the most difficult decisions is to establish priorities. We established that priority for, what I would say, are basic philosophical reasons.

The government I headed had five axis. One is security and rule of law – more than security rule of law. (The topic of “rule of law” is the key question. It’s not narcotrafficking – it’s judicial certainty.) Second is a competitive economy that creates jobs. The third is equality of opportunity. In coming up with our own objectives, we asked, “What is the great equalizer among people?” Or the opposite: “What signals the greatest social differences and the greatest injustices between people?”

In reality, the greatest injustice is that money could determine who has the right to live and who doesn’t. That’s the reality of healthcare. If you don’t have money and that prevents you from taking your child to the hospital, or of taking care of yourself, that is the worst injustice. There can be many other injustices, but the fact that your life is on the line is the most serious one.

In reality, the greatest injustice is that money could determine who has the right to live and who doesn’t. That’s the reality of healthcare. If you don’t have money and that prevents you from taking your child to the hospital, or of taking care of yourself, that is the worst injustice. There can be many other injustices, but the fact that your life is on the line is the most serious one.

So we decided to prioritize equality of opportunity in education and health. In this case, healthcare had greater success. And there is an element of popular philosophy too. In Mexico, there is a saying “health comes first.” Indeed, when your child is sick you are likely to sell everything you have – sell the house, mortgage the house, ask the loan shark for a loan, if it means taking your child to the hospital. This aggravates poverty and inequality. Why? Because the poorest people sell the little they have and go into debt for a catastrophic event. The Seguro Popular, on top of providing a health benefit in itself, provides an insurance against the risk of a catastrophic economic event.

I gave very clear orders to increase the budget. In fact, the budget for the Seguro Popular increased six times …almost doubling each year. If I had left that to the inertial bureaucracy, for example, everyone defends their turf, they reach a friendly understanding, and there are only fragmented, marginal gains. The fact of having a budget several times larger allowed the program to serve as a massive development program.

Q: Do you believe that the Mexican model can be replicated in other Latin American countries?

A: Yes. It can be replicated. It depends on many variables. I believe that, in general, the government paying for the health insurance of the poorest Mexicans is an effective model that should be replicated. Not only in Latin American countries, but also in developed ones. The truth is that it’s unbelievable that there are very rich countries that are still not able to provide health security to all their people.

Q: Currently there is a debate about this topic in the United States.

A: Yes. The fact that in the United States there are millions of people who, if they get sick or have an accident and they don’t have money, they simply, as we say in Mexico, “can’t make it.” I don’t want to opine on the American system, but it’s an amazing systemic failure.

Q: Currently, Congress is considering reforms to the immigration system. Do you have an opinion about what elements should be included in the legislation?

A: Very vaguely. I also want to be very respectful. First, it’s important to understand that immigration is a social and economic phenomenon that cannot be abolished by decree.

It’s a textbook case of economics. Economic development is explained by two factors: labor and capital. Next, you have the case of two economies: One economy, the Mexican one, is labor-intensive while the other, the American one, is capital-intensive. One economy is younger than the other (the median age in Mexico is 26) and it happens that they are neighbors sharing 3,000 kilometers of border.

It is impossible for the factors of production not to integrate. I wish that the integration would take place in Mexico. But the fact is that the flow is normal. The flow derives from the needs of people and of the economy. It’s a phenomenon that cannot be halted by decree, and pretending to stop immigration by decree has been a mistake that has cost Mexico and the United States dearly. So reform should recognize this reality. It should bring people “out of the shadows” who are working and paying taxes to American society and contributing to American prosperity.

Second, there is the question of innocent people. Specifically, there are children who were brought illegally by their parents, but through no fault of their own. There is no reason to penalize them for acts they did not commit.

Third, the United States has to find economic opportunities. The name of the game in the 21st century in the economic realm is competitiveness; it is productivity. The United States will not be competitive if its products are more expensive or of worse quality than the rest of the world. The way to gain competitiveness is to make the labor market more flexible; that goes from agriculture to the services sector.

Why were the apples in Washington state not collected in 2011? Because immigration enforcement was so strict, and since immigration was actually decreasing, they were left without agricultural workers. Wide sectors of the United States are clamoring that they be allowed to hire workers. The apple-farmers of Washington State don’t have anyone to pick their apples. They have had to reduce the productivity because of a shortage of labor.

Two more elements: The law has to have the correct incentives. I know that I must be very cautious, and I wouldn’t know what to suggest, but the law should not reward those who take advantage of the system. It should reward those who work responsibly.

The net annual rate of immigration of Mexican workers has been zero since 2010, three years in a row, mainly due the recession in US, but also because the improvement in opportunities for more people in Mexico. For instance, we created 140 public, free tuition universities and expanded 100 more.

Finally, reform does not contradict having a more secure border. On the contrary, I also ask for a more secure border with Mexico. I want to see the day in which we end all human trafficking, all drug trafficking and all the traffic in laundered money that goes from one side to the other. The traffic in persons and drugs comes from the South, but the traffic in weapons and laundered money comes from the North. Therefore, border enforcement can be stricter when the law is more in accordance with reality.

Q: If academics and public policymakers understand these realities, why is it so difficult to reach an understanding between the US and Mexico?

A: Honestly, the Mexican and American governments are more in agreement than most people think. The truth is that we share an understanding. I had the opportunity to speak with President [Barack] Obama. We essentially agreed on the majority of issues.

The problem is Congress, and the reason is that decisions depend on votes from constituencies. In politics, often votes count more than reasoning. Why do votes count more than reasoning? Because in the moment of casting your ballot in the congress or on the street, there are many other factors than the reasoning itself. Basically, politics is a confluence of emotions.

One emotion clearly linked to the national sentiment is resistance or anxiety with anything foreign, and that’s understandable. We Mexicans have it with respect to Americans and Americans have it with respect to immigrants. There is a natural or spontaneous resistance to anything foreign. In a time of crisis, with high levels of unemployment, any suggestion of a foreign worker brings with it an emotional feeling of threat. This means that many people avoid even discussing topics of immigration.

Also, there are forms of media and many interests that have taken up the task of preventing reason from blossoming over emotion. Because, in the end, it’s lucrative in media terms: it’s very profitable to stoke and exacerbate anti-immigrant sentiment. It’s a very easy way of amassing television audiences.

Q: If you could change one decision of your administration, what would it be?

A: That is one of the things I’ll reflect on here at the university. I think that all of the decisions were made according to the best information we had at the time. I believe that we would have been more energetic demanding responsibility from local governments.

A large proportion of the policies in the area of security (Mexico being a federal system) depended very much on the actions of the state governments. As time went on, we realized that some were working but the great majority was not doing practically anything. For example, on the subject of security, the federal budget doubled, or more than doubled, in six years. In real terms the state budgets, on average, did not increase at all. In fact, in some states, it declined in real terms. [Local governments] weren’t a priority. Perhaps there was a way to engage them more, as a way to demand more responsibility.

Q: And on the issue of security and drugs, what is the solution?

A: Well it’s a very complex topic. The important thing to understand is that there are two issues. One issue is drugs. The other is security. My priority was the security of Mexicans, not the fighting of drugs. It’s very difficult to understand in the United States because here since President Richard Nixon coined the term, all the focus was on the “War on Drugs.” And always, when people asked about Mexico, the question was about “the war on drugs.” And that wasn’t my focus. My focus was security. Obviously, they are very correlated – cartels and insecurity – but you have to determine the priority. So the first solution is to distinguish the two. My goal was to protect Mexican families by fighting crime, and not a “war on drugs.”

Second, I believe that the solution for security lies within the strategy we adopted, which was a comprehensive strategy. You do have to fight the criminals, but even more important than fighting criminals, you have to rebuild law enforcement agencies and institutions by cleaning out and building police forces that are much more competent and reliable, among other things because we don’t have them. And third, it is key to rebuild the social fabric, creating opportunities for jobs, health, education, recreation and prevention of drug addiction, particularly among the youth.

On the issue of security, I insist that what you have to do [first] is confront the criminals so that they don’t displace the state. In the end, the criminals were displacing the state. If the government should levy taxes, criminals were levying taxes through quotas for extortion. If the government is the one that should institute laws, criminals were instituting laws in many communities. If the government should monopolize the use of public force, the criminals sometimes exercised public force superior to the local government. So you have to confront the criminals. You cannot opt for letting them do whatever they feel like. Second, you have to institute new institutions, because the ones we have in a large part of Latin America are rotten. Third, and more important than all of this, you have to reconstruct the social fabric.

Q: And legalize marijuana?

A: I believe that that has to be one of the options that are explored. In fact, the presidents of Colombia, Guatemala and I presented an initiative in the United Nations, in October of last year so that the U.N. could completely reassesses the topic of drugs. It’s clear to me that if there is no global solution, it can be worse if isolated actions are taken. For example, if marijuana is legalized in Mexico, but not in the United States, or the other way round, there is a problem. If United States doesn’t do anything and other countries try to do something, it can worsen the situation, because you will have the incentive of very high profits for acts that continue to exist on the black market in the United States, so everyone will operate from Mexico. It’s a complicated problem. But drug policies have to be examined at the global level.

For drugs you have to cut off the flow. How do you cut off the flow? There has to be a creative solution on the part of the United States. Or you put more police on the border, not just guarding the border for migrants but also guarding that money doesn’t escape from here. Or you commit yourself to a national policy to change the culture of consumption of drugs the way you did with cigarettes.

It’s very odd, but there are many universities here (of course not at Harvard) where smoking marijuana is something very cool. But if you smoke a cigarette you are some kind of repulsive criminal. American culture doesn’t do its part. Look at movies. Look at this movie Ted. It’s a funny movie about a little bear…Well, there, marijuana is portrayed as an enjoyable, friendly activity.

Q: There has been criticism from students and journalists that the energy with which you enacted your policies contributed to the rise in violence. How do you respond to those criticisms?

A: Basically you have to carefully examine what is happening in Mexico and in Latin America. In the case of the region, the violence is following a phenomenon of clashes between criminal organizations. It is not responding to what the government does or ceases to do. There are states in which government has made the decision to hold back criminals, and there is violence, which is Mexico’s case. There are states in which the government has decided not to do anything with criminals.

In specific regions, in fact, the violence precedes actions by the government. That is, it’s not the case that there is violence because the government intervened; the government intervened because there was uncontrolled violence.

I believe that the worst strategy is to not do anything. In my opinion, what has caused the violence in Mexico is having abandoned citizens, having let the criminal organizations grow, and having allowed them to take control of communities.

If there had been an effort to reform the police and confront them ten or twelve years ago, we wouldn’t have had this problem. I affirm that this is a time bomb that sooner or later was going to explode, and it exploded. Neither the deaths nor the violence began with me, nor have they ended when I left. Why is that the case? Because the criminal organizations that were permitted to take hold of wide swaths of territory are clashing.

In the old Mexican political culture, there was the rule of “don’t ask, don’t tell.” I won’t bother you because this is a federal crime and I’m the governor of some state along the border. You give some cash to my campaign. I won’t interfere with you, you won’t interfere with me. We’re happy. Those same actors tried to apply the old culture to the new business model. But the old culture no longer applies.

At the heart of it, what they reproach me for is having enforced the law. It is not having negotiated with the criminals. Because they say, “No, you shouldn’t have interfered.” What is the message behind that? “Calderón’s mistake was in attacking the criminals. His mistake was enforcing the law.” They are convinced that the right thing to do is not to attack them. That is the culture that permitted our countries [to] turn into battlefields.

Let me tell you something: either you enforce the law, or change the law if you don´t like it. But you cannot avoid your duty as President, as somebody suggests.

One last comment: You have to understand this phenomenon in the framework of the current economy. Mexico was a very poor country that was exclusively a country that exported drugs. It was a drug trafficking nation only.

Mexico stopped being a poor country. It has poverty but it is not so poor anymore. It is clearly a middle-income country. It’s a country where practically 99 percent of households have electricity, more than 90 percent of households have potable water, where out of 112 million residents, there are 90 million mobile telephones.  It’s a country where almost half of all families have a car. In my government, for example, we built one out of every four homes currently standing. There are 24 million residences and 6 million were built in my tenure – a little less, because some were refurbished, maybe 5.

The point is our country, Mexico, began to be not only a country of production but also a country of consumption. People began to consume furniture, cars, houses, food; but they also began to consume drugs. And what does this have to do with violence? When you are only a drug trafficker, your logistical objective is to control a single route and one point-of-access on the border. It’s to bribe the police along the route and bribe the American authorities that are on the route (because you can’t explain this without the American side). When you are, in addition to being a drug trafficker, a retailer, your logic model changes completely. You not only have to control, for example, a highway, you need to control the entire city, like in Ciudad Juarez.

The business of a retailer is very different from the business of an exporter. What do the most famous retailers do? Coca Cola or Coors Light? What they do is they control all the points of sale. [They try to be] the only beer served at a stadium. Or it’s Pepsi or Coca Cola. You won’t find both. Therefore, what you do is expel the competition. Only that here you do it through marketing or arranging very strong exclusive agreements, etc. What do criminals do? They expel the competition in an extremely violent way. This is a relatively new phenomenon, because before there was no market there. Now there is a market.

Q: Finally, what would you like your legacy to be?

A: I believe that my term in office was an exciting era of change in Mexico. We were successful in reforming the nation’s public health care system as well as many sectors of the economy. Mexico became more competitive in the global marketplace and if additional reforms are completed that I proposed, I think the nation’s economic progress will continue.

In fact, Mexico has four years of continual growth at rates above 4 percent on average, with an unemployment rate below 5 percent, so I believe that a good future is in store for Mexico; this can’t be understood without looking at all that we did in the area of economic policy. Even in the area of security, although the night is very dark right now, we confronted criminals and began to transform institutions. It was a time of change for Mexico. And, if proposals are continued, Mexico will be a nation at peace.

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