Mexico is still very much a developing nation. Reliable electric power and potable water are sometimes hard to find. In the capital, one of the world's most populous and polluted cities, the elite live behind barricades, protected from the impoverished by armed guards. Middle-class Mexicans have less buyin

But if Mr. Fox wants to meet his economic goals, he may have to change the way energy is produced and sold in Mexico. Demand is outpacing the supplies provided by state-run monopolies. To meet demand, $5 billion a year in new investments in electricity and $2 billion a year in natural gas may be needed for the next decade. "Everything starts with the need for economic growth, and to get it you need to make the energy sector more productive, and to do that you have to open it up to foreign investment," said Daniel Yergin, chairman of Cambridge Energy Research Associates, a petroleum consulting firm in Cambridge, Mass. (Sanchez). You have to get the gas and power from somewhere, afterall.

But nothing that Mr. Zedillo has done for Mexico economically may be more important than the way that he is giving up power. He became the first president of Mexico to create the conditions for truly free elections and a democratic transition of power. For decades, the economy, like every other institution in Mexico, was manipulated by the ruling Institutional Revolutionary Party (PRI). Every six years, each president played tricks to help his hand-picked successor win - artificially strengthening the peso, increasing the money supply, lowering interest rates, handing out a nationwide wage increase shortly before election day (Mari). This is especially relevant to the economy under the Salina's administration.

The departing president, Ernesto Zedillo, never addressed the huge structural problems of the state-run energy industries, which are inefficient and suppress competition, or of the justice system, which cannot control crime - a serious worry for foreign companies considering operations here even if they are optimistic about Mr. Fox. "He's going to have his hands full," said Peter E. Weber, vice president of Latin American operations for the FMC Corporation, a Chicago- based industrial and chemical company that does extensive business in Mexico. "Fox will have to address the crime situation, which has an impact on attracting foreign investment. There's an awful lot of work to be done in the micro-economy, the ability of industry and agriculture to compete on a global scale, improving the quality of education" (Burton).

President Zedillo, an economist trained in the United States, took office in 1994, inheriting and in some cases aggravating a series of financial shocks that staggered Mexico, including a banking crisis that may wind up costing citizens $100 billion. But he is in many ways keeping his pledge two years ago to hand over the presidency in healthy economic conditions, protected from the crises that have ruined the country over the past 20 years (Flores). Some of the success has to do with the trade and economic policies that Mr. Zedillo instituted during his first three years in office. Some has to do with what

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Approximate Word count = 1915
Approximate Pages = 8 (250 words per page double spaced)