Bush's New Friend in Mexico

By Tim Padgett / Mexico City

Unlike a lot of the pugnacious leaders Latin America is known for, Felipe Calderon doesn't look the part of the tough guy. The new President of Mexico is short and bespectacled, an owlish lawyer and economist who evokes technocrats like Michael Dukakis. When he visited Mexican troops battling drug gangs in western Michoacan state earlier this year, Calderon donned an olive green army jacket and a five-star general's cap and was later photographed in a military Hummer. That incongruous image conjured unflattering comparisons to the tank ride that doomed Dukakis' U.S. presidential hopes in 1988. But Calderon has not only weathered the ridicule; he has thrived on it. Elected with just 36% of the vote last July, his approval ratings have climbed to nearly 60%.

Calderon's act is going over well in Washington too. After 100 days on the job, he is emerging as President George W. Bush's anti-Chavez--a conservative counterweight to a resurgent Latin American left led by Venezuela's gringo-bashing President Hugo Chavez. Leftists won seven of 11 Latin presidential elections last year, and Calderon beat his left-wing opponent, Andres Manuel Lopez Obrador, by only half a percentage point. Losing Mexico, the U.S.'s third largest trading partner, would have sunk America's foundering influence in the region. Instead, when Bush arrives in the Yucatan on March 12 for a summit with Calderon to discuss the hemispheric issue most urgent to the U.S.--illegal immigration--his host will be a rare ideological soulmate in America's backyard.

Despite his wonkish appearance, Calderon is a savvy operator. Born into a provincial, lower-middle-class family, he won scholarships to top Mexico City schools, earned degrees in law and economics and later received a master's in public administration from Harvard. His father, a schoolteacher, helped found the National Action Party (P.A.N.) in 1939, but the party was shut out of power by the dictatorial Institutional Revolutionary Party (P.R.I.), which ruled Mexico from 1929 until 2000. The elder Calderon left the P.A.N. in the 1980s because he felt it had abandoned its Roman Catholic ideals of social justice for a narrower pro-business ideology. Felipe was relatively obscure until 2005, when he upset the P.A.N.'s anointed candidate to win the party's 2006 presidential nomination. He later overcame a double-digit deficit to defeat Lopez Obrador. "Calderon is an up-by-the-bootstraps story and has always gone against the odds," says political analyst Federico Estevez of the Autonomous Technological Institute of Mexico. "To a lot of people, that's what Mexico needs at this fragile stage of its democracy."

Calderon has smartly gained presidential footing by launching a military assault on Mexico's horrific crime problem, which includes drug traffickers who have been tossing rivals' decapitated heads into streets and nightclubs. But his biggest challenge is bridging the country's epic gap between rich and poor. Almost half of Mexico's population lives in poverty--a big reason that so many are flooding the border to work in the U.S. Keeping more Mexicans at home will almost certainly require Calderon to rein in, if not break up, the entrenched monopolies that suck vital investment from small and medium-size businesses.

That won't come easily to Calderon. Political analysts say the title of his 2006 book, The Disobedient Son, reflects not only his defiance of the P.A.N.'s honchos but also his perceived divergence from his father's social-welfare philosophy. Calderon has long advocated laissez-faire policies, and he relied on the support of Big Business to get elected. In an interview with TIME last fall, Calderon conceded that he needs to "reduce the power" of monopolies and create "more competitive market conditions." But as President, he has yet to offer anticipated legislation to fix problems like the country's feckless tax system or its antiquated, state-run energy infrastructure.

He needs to act soon. The year 2010 marks the nation's bicentennial, and many fear that if Mexico doesn't hit the road to real development--especially a higher-wage economy--during Calderon's presidency, the country may face yet another century of Third World malaise. "If he wants to be a relevant President, he has to transform Mexico," says Luis de la Calle, a former trade undersecretary and prominent business consultant.

Calderon acknowledges that Mexico's "open wound" of massive labor migration will top the agenda when he meets with Bush on March 13. He has talked of a desire for the two countries to "think creatively about new programs for job opportunities" that would halt migration at its source, deep inside rural Mexico, instead of at the border. Despite his strong start, Calderon has a lot to prove. "We're still exploring Calderon," De la Calle says, "and I think Calderon is still exploring himself." Mexico's future will be defined by what he finds there.