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>> and by bloomberg, a provider of multimedia news and information services worldwide. ♪ ♪ >> from our captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> charlie: felipe calderon is here. he is the president of mexico. mexico has a long and proud history stretching back thousands of years. it is america's neighbor, and the two countries share a complex and unique bond. after plunging into a deep recession in 2008, mexico is emerging as a country to watch. it is the second biggest economy in latin america and the seventh largest producer of crude oil in the world. it is threatened by drug cartels that cause so much violence. i am pleased to have president felipe calderon at this table for the first time. welcome. >> thank you, charlie. it's a pleasure for me. >> charlie: tell me where you

see mexico today. what are the challenges and what are the opportunities? >> mexico today, as you say, has a vibrant economy. we grew 5.5% and the growth in the first quarter of this year is more than 5% again. woe see are growing, mexico is generating jobs, we have created, last year, more than 850,000 new jobs in the formal sector in net terms. according with the figures this year, we have created 270,000 new jobs in 2011, so we are in a very good performance in the economic sector. the social sector, we are providing opportunities for the people. for instance, the health system. we are reaching universal health coverage by next year. that implies at the beginning of the century, in 2000, over 43 million mexicans had some kind

of social security or medicare, and today, 95 million mexicans have some kind of medical services. and we hope to reach universal health coverage by the end of my administration. and, of course, we have a problem related with organized crime. not only narco traffic but organized crime. we are addressing the problem. we are fixing that in three areas. we are facing the criminals. we are rebuilding legal institutions, and law institutions and we are working real hard in social prevention of crime. so i hope to see mexico in the future -- what are the opportunities? what are the challenges? of course, the challenge -- probably the biggest is the crime, and we are working really hard in that. i can see in the future, charlie, that mexico will have a

real asset in its security institutions in the future. if we keep reforming and strengthening the institutions, we will have a very different situation in the medium term. >> charlie: do you mean by that judicial institutions and law enforcement institutions? >> yes. for instance, we passed in congress our reform in order to establish in mexico trials like in the united states, and that will imply more transparency in trials, direct confrontation of the judges with the evidence, a new regime of protection of victims. we are, for instance, rebuilding law enforcement institutions at the federal level and i'm talking about the federal police. i'm talking about the attorney general's office. we are betting all the top officials at the federal level

and law enforcement agencies and with them we are starting to vet not only top officials but also medium- and low-level of responsibilities in law enforcement agencies. we are providing the state-of-the-art technology for our police forces at the federal level. and my goal and political challenge is to change -- or to do the same at the local level in the states. so i used to say that when mexico have had 32 police corps with new commanders and with new institutions and when mexico have 32 attorney general offices in the states of the union, we will be a very different country in terms of security, and that is the most important challenge. and the opportunities. >> charlie: do you have enough time to do that? you have six years. >> yes. >> charlie: as president. >> it's not enough time, when

you try to rebuild a nation like mexico, but as the people say, very long journey start with one step and we are making the first steps in order to do so, and we are making very strong work. actually, for instance, one of the legacies of my administration will be renewed federal police. for instance, we are recruiting young people -- professionals, graduated people. we are vetting them and we are allocating them in the intelligence office of the federal police so the police corps will be one part of the legacy and, of course, we are trying to do the same in the attorney general's office, and for that we have time. in order to renovate the states, it takes more time, but you need to start and that's exactly what

we are doing. >> charlie: you have to on the one hand fight a war and on the other build institutions because of the power of drug cartel money and other things. >> yes. >> charlie: the united states. tell me how the relationship is and whether you are getting enough support, in your judgment, from the united states -- especially in this war against the drug cartels. >> the relationship is very good, particularly with president obama and his team, and they are doing a very important effort in order to support us, but probably the main thing that we need is to try to explain, or understand here among american citizens, that it is not a mexican problem. it is a common problem. both countries and both societies must fight against organized crime. >> charlie: because the demand for the drugs comes from the united states. >> because the demand for the drugs comes from the united states, because the weapons of the criminals comes from the united states. let me tell you that in the four

years of my administration, we have seized more than 100,000 weapons. 60,000 of them are assault weapons, and 85,000 of the total weapons we seize were sold in the american territory, mainly in the gun shops on the border. so after the assault-weapons ban extinguish in 2004, we started to see tremendous increase in the power of the criminals due to this easier access to the american witness. so that's a very important thing where we need the support of the american government and the american congress and we have not yet, and that is important because those weapons are aiming today, against mexican innocents, mexican people and mexican authorities, but nobody can say will never happen that

those weapons aim against american citizens. >> charlie: look at the demand side of drugs. your pred seder, vicente -- your predecessor, vicente fox said if the united states legalized drugs, i think he principally met marijuana it would dry up revenues and the cartels would be severely hurt. you don't agree can legalization. >> let me tell you, i don't agree, but i am open to debate. that is clear for me. why? because there are economic arguments in both sides of the discussion. i understand that as the economic theory used to say, when you have a black market like in the case of drugs, you have some kind of overprice, and with that it is possible to fuel the activity of the criminals --

the more violent criminals. however, at least what we need today is a clear definition, because you have some kind -- you can see some kind of ambiguity between -- in some states you are legalizing, the states, at least 14 or 15 states are legalizing marijuana. there is a change in the culture -- only, charlie, only these expressions that the medical use of marijuana is causing tremendous damage in cultural terms. why? because for young people, it sounds like with medical use, marijuana has medical use, it is good for me. you can observe in the american universities that a lot of young people used to smoke marijuana but if you find someone trying to smoke a cigarette, it is like a capital sin, so it is a change in culture.

so what i'm trying to explain, either you enforce the law seriously and you prosecute the criminals acting here in the states -- the top guys, the drug lords -- you clearly establish a new regime in economic terms for drugs, a market solution for that. i don't agree it is the solution but the question is you cannot have in place both policies at the same time. >> charlie: are you saying that at some point you are open to the idea of legalization as a possible -- >> i am open to debate. but indicate, mexico is -- let me explain why. the relevant market for drugs is the american market. the market who is determining the price of drugs is the american market. if we start a terrible discussion in america about that -- and finally, any government or congress legalizes drugs will be useful.

why? because you will have all the down side of the problem -- for instance, is like you will give up the young people in the hands of the criminals and the hands of the addictions and at the same time you won't have the benefits of legalization. why? because the price will be determined for the market. i used to say instead of only having criminals from my own state, michoacan, we will have criminals fromming afghanistan, pakistan, and mexico will be a paradise for criminals. i am open to debate. i am not agree and i am not in favor of legalization. >> charlie: but you are open to the idea. >> but there is a rationality in economic terms that we need to discuss, and at the end we need to end the ambiguity in the

united states in which you have some states legalizing drugs and at the same time speaking a lot about enforcing the law. >> charlie: looking at what happened with uribe in his country -- what he did in colombia, is that a role model for you? or are you different in terms of what you are trying to do? >> we are different as country, but it's a very useful experience for us and we need to remind that the violence in colombia started in the 1980's. after 10 years of government of uribe, he got to reduce that violence. that is good for us. let me tell you that the violence in mexico started when the assault weapons expire in 2005 and after that rose very complex manner. however, i can see now some kind of stabilization in terms of

homicide and i hope to see in the short-term, even, that we can expect some kind of decline, so the curve in mexico could be similar to the curve in colombia but will be faster, if i can say that, cycle because we acted in a different -- we started to act against the criminals also -- just in time, if i can say that. >> charlie: why is it so hard -- obviously, it is -- obviously, there is a level of violence and a level of brutality that you can't imagine in terms of sledgehampers and in terms of decapitations and in terms of all kinds of tactics to spread fear but give us the nature of the enemy in this case. how they operate. why they're successful. why they can resist the army of mexico. >> let me tell you we are facing a complex phenomenon. probably in the past, the business of the criminals was

only related with the narcotraffic itself -- traffic of narcotics to u.s. was like an export business only. in order to maximize that business, the criminals tried to hidden their own activities -- you put the drugs in a vehicle in a very hidden way and try to cross the border, and that's it. now, according with the increase in purchase power of the mexican people, before nafta we have only $3,000 per capita income, and today we have probably $15,000 according with p.p.p. measures. >> charlie: per capita income in mexico is $15,000? >> yes, according with the purchase parity power, if i can say that -- without purchasing parity power consideration we

could be almost 10,000 but the fact is increased a lot after nafta, and with that we became a very important market for any single product or services. either vehicles, homes, or drugs, unfortunately. so the criminals preserve the old business of export to the u.s. but at the same time, they tried to go into retailing in mexico itself. >> charlie: they took the profits and put it into retailing? >> not only profit, but they preserved the old business -- traffic into u.s. -- but also, they started to try to sell drugs in mexico, retailing, and with that, the core of the business was absolutely different because in the old business, they tried to be in a very low-profile activities, and with the new business they try to control a territory -- a

specific territory. and with that, they started to fight each other, cartel versus cartel in a very violent manner. and exactly, they are trying to create fear and terror, and that is the reason why they became so violent. >> charlie: how much of the violence is cartel versus cartel rather than violence against innocents? >> we have some kind of estimation -- it's difficult to say that, but we are tracking all the homicides in the country and the specific legal parts are in the hands of the local authorities in the attorney general's offices, most of them, because it is a local crime, however, we are trying to research and follow all this violence and we have an original estimation that at least 70% of all of those homicides are the result of a fight of one cartel

against another cartel. another part are the public officers who guide this battle, like 4% and probably 1% of all victims are innocent people. however, is the most important part and we are sad about that. i don't want to go into the statistics because the life of one innocent people is more important, probably, than any other ones in this battle. >> charlie: and the corruption that money is able to buy is how deep? >> yeah. >> charlie: how much? >> is difficult to say, but on my understanding, the corruption arose in a very important manner. the local authorities. not only in some municipalities but also in some states -- local

police corps. >> charlie: is that the reason you have to use the army? >> is that the reason? because the local -- local authorities are not able to face the criminals. let me tell you, for instance, in chihuahua, in juarrez, it has been the worst -- in juarez, it has been the worst case in terms of violence in two hours. the federal police are acting almost as municipal police. i have federal police officers in the corners of ciudad juarez and we are reducing the violence in ciudad juarez, in an important matter. we used to have in the worst moment probably 18 homicides a day and we are reducing today, probably four homicides a day and we are reducing it still, but we need to apply the full force of the federal authorities, and it is not a

long-term solution. what i am urging the local authorities, you need to recruit your own police corps and you need to work rebuilding your own institutions and that is a failure right now because there is some kind of bad incentives. as long as president calderon is taking responsibility for my own duty, i can forget that. and i need to fix that. >> charlie: how are you going to fix that? how are you going to convince them that they have to be responsible and that a president cannot always be in charge of the local issues? >> i am pressing them, through the law, for instance, i presented an initiative -- a bill to the congress in which the local authorities must rebuild their own institutions by law. so i need to enforce the law. i have not enough instruments to do so but it is one part. second, public opinion, i need to persuade the people about where is the problem, so the problem is not by now the federal government. i am doing my best on that, but

we need to rebuild municipal police inquiries and we need to rebuild local police in the state of chihuahua. by the way, i have a good relationship and better koopgdz -- better cooperation with the actual governor of chihuahua, but the problem is there and the challenge is there. we need to rebuild local institutions in mexico. i have the same problem in tamaulipas. we have a new governor in tamaulipas. we need to reachap agreement in which, yes, i will support you with federal police, marines and soldiers, but -- certain time, but at the same time, you must rebuild your own institutions. you need to recruit new people and you need to establish some kind of vetting on your top officers and you need to train

them and you need to invest in them and you need to change your budget in favor of security. >> charlie: do you have enough resources to do the job that you believe has to be done? >> well, you have -- you never have enough resources to do the things that the government wants to do. that's the key of the economy. the economy is the art of the -- >> charlie: but it is true, as you know, and you understand this much better than i do, that there are people who will argue that you should tax the wealthy more in order to provide the revenue and to provide a safe environment for all the people, and if you don't have the resources, that's one step that you ought to do. >> actually, i'm trying to pass tax reform in mexico. at least, i made twice tax reform in mexico, and with a very expensive political cost, but i realized that i must do that. however, i need to face the

opposition of the congress because i have not majority in the congress, so i passed reform in 2007 and 2008 in order to establish a new tax on business, and 2009 i passed another reform and we got to increase 1% v.a.t. in mexico at very high political cost. i wanted to do more, i agree, and actually, i am reducing other areas of the public administration. for instance, i closed a very expensive and useful public company, luz -- it was difficult but i'm saving $5 million a year and applying that toward other things. since the beginning of my administration i have multiplied the budget for law enforcement agencies and probably, again,

the problem could be with local authorities because, on average, local governments in mexico have not increased their budget for security, which is irrational. so they need to do much more on that. >> charlie: the colombian model and president bush and the relationship he had -- are there things that the united states can do that you don't want them to do because mexicans would not want you to do? >> well, the relationship with the united states is complex for mexico, always, but let me tell you, by the way, one thing about colombia -- one thing about colombia. even with these marvelous work made by my friend, uribe, colombia still has today 38 homicides per 100,000 people, which is the double of the number of homicides in mexico because we have 16 homicides per

100,000 people, so we have less homicides per 100,000 people colombia or almost any other country in central america, but dmg i'm coming back to your question. in the case -- but -- i'm coming back to your question, in the case of colombia there was an agreement where the american soldiers could intervene in actions in the colombian territory, and in the case of mexico and the united states, we are talking about different bases of action so we can work together and provide intelligence and information each other and work together in order to train our people and even to get the support or some kind of surveillance instruments like planes or something, but we are not allowing that the american soldiers act in mexican territory. >> charlie: you said it's a complicated relationship with the united states -- between

mexicans and their sense of the united states. i saw recently there was something that anti-americanism or the feeling about america may have increased. is that -- how would you characterize? >> by traditions, the mexican people developed some kind of anti-american people. let me tell you that with nafta, that anti-american feeling reduced a lot -- probably -- well, i don't want to say numbers about that but that's a fact. however, that anti-american feeling increased in the recent years due to the antimexican feeling in the united states -- all these immigration bills in arizona and the expression of the radicals -- the rightist people here, very violent,

opplessive, very antimexican, there has been -- oppressive, very antimexican, there has been reaction in our society, 14 people were killed trying to cross the border last year -- mexican people -- and that kind of situations have been very painful for the relationship but now what we are trying to do, charlie, is to improve the public -- the public opinion about mexican people here in the united states, at the same time the public opinion about american people in mexico. >> charlie: tell us what you would want the american people to feel about people in mexico. >> that people in mexico are friends, neighbors and allies. >> charlie: share a border. >> share a border. share trade. >> charlie: right. >> millions of jobs -- american jobs depend on the demands of

mexican people. that the future is common and the only way in which we can find prosperity for american and mexican economy is working together through integration. that's the only way in which we can compete in a global economy, and in brief, that the mexicans are not the enemies of the american society -- are the friends. the allies. the neighbors. and i want to change that perception. and another thing. i don't want to be a president promoting migration. actually, we are trying to provide opportunities for our people in mexico -- jobs in mexico for mexican families. actually, the census of 2010 shows that the number of the population in mexico was larger than was reported -- we were expecting to be only 108 million people, and we are 112 million

people. why? because those four million people are people who stay in mexico instead to migrate to united states. so there are reasons in which the people decided to stay in mexico instead of emigrate. >> charlie: if you could write immigration legislation for the united states, understanding it is a highly political issue here as you have suggested -- >> yes. >> charlie: what would you suggest to us? what would you believe is the right thing to do? >> is difficult, but let me tell you what exactly i'm doing in migration legislation in mexico. first, we eliminate the criminalization of migration. so to be migrant in mexico is not a crime anymore, since three years ago. now we are passing in congress a new law in migration in which

any migrant will be considered a human being and it will have the opportunity not only to pass in mexico but also to stay in mexico and in a very fair and very clear conditions even to work in mexico. we are trying to switch the perception of the problem and understanding that migration is not all phenomenon -- i don't want to suggest any legislation for united states. i think that the dream act of president obama is a good one, and it will be very useful in order to fix the problem. of course, i would like to see that a lot of very brave, hard-working mexican people living in the states, living in the shadows as president obama say -- they can get an opportunity -- >> charlie: to become -- >> to become legal person in this country. i don't want to create any

incentive for more illegal migration but the fact is there are millions of people here providing services for old people in the american society, providing hard work, it is impossible to understand the prosperity of the american economy in the 20th century without mexican workers and it is impossible to understand the competitiveness that the american economy needs without mexican workers -- >> charlie: all those that are here, you think, should be given a pathway to citizenship? >> we all respect all those people working in -- with respect to other people -- working in an honest job and providing either services or work for the american society should have an opportunity to clarify their situation. >> charlie: what do you say -- every country views its borders as an important delineation.

how does a country protect its borders without offending people who might want to come in? >> i think that is possible. actually -- >> charlie: but building a fence is not? >> it's not exactly the most friendly expression. >> charlie: you didn't think that was a friendly gesture, did you? >> no. so was clear, you can consider your own case. many neighborhood in the states -- >> charlie: there is an expression in america -- >> if your neighbor started to build a fence -- it's not very friendly gesture. let me talk about other things. when i listen some american congressmen or people say, "well, we want safer border," i say i agree. >> charlie: so does the president. >> so i want a safer border. so i don't want to see a border in which the criminals are the

owners of the territory -- both sides of the border. actually, i'm suggesting to president obama to establish, for instance, in each line of the border, we can establish some kind of nonintrusive mechanism in order to detect drugs, laundered money, criminals -- >> charlie: you think that's possible? >> i think that's possible. >> charlie: you've got to work together. >> we need to work together, and the american government has the money to do so, and the technology. >> charlie: when vicente fox was elected, there was a sense that george bush -- president bush, 43, was going to -- and he said it, and the secretary of state said it -- mexico's friends. then the perception was that the united states got preoccupied in iraq after 9/11. >> uh-huh. >> charlie: and mexico sort of fell out of focus. do you feel that even today? that it's not a priority for the

united states? its relationship with mexico -- because it's fighting a war in afghanistan, it's trying to get out of chasing global issues, and its neighbor, next door, out of sight, out of mind? >> frankly speaking, charlie, yes. i understand. so you have another priorities and i used to think, well, i know you need to catch osama bin laden, but now it's done, so what is your next priority, no? >> charlie: and where are we on the line? >> talking seriously, mexico -- the relationship with mexico is today the most important relationship for the american society. that is absolutely clear. why? for several reasons. for security reasons. for prosperity reasons.

for social reasons. for cultural reasons. for strategic reasons. is there any better ally of the united states in the region than mexico? have you seen how is latin america right now? have you seen any other risk greater than the risk of the criminals acting in mexico with american weapons? so i think united states is solving its highest priority -- in this case, the war in afghanistan. i think that -- >> charlie: if you came to the president and he said, "my friend, mr. president, president to president, "what can i do for you? yes, we have not been focused on mexico, yes, i hear you, and the case you make for mexico's significance to the united states is important."

and then the president says to you, "so what do you want?" >> and i say, "well, i want, first, more cooperation in our common problem related with the fight against criminals. >> charlie: some interagency questions there. >> interagency but also weapons. weapons crucial. it's impossible -- not impossible but more difficult to fight this battle when your enemy is receiving hundreds or thousands of weapons on an annual basis. second, we need to look prosperity together, so your workers need mexican consumers and the other way around, so we need to liberalize even more the market. third, we both need -- and i admire you and applaud your effort in order to establish a solution for migration in the states, and we need to act

together in common challenges, not only immigration, not only security, but for instance, climate change -- i do believe in that. >> charlie: in fact, you're getting an award here in new york for your work in climate change. >> yes, and let me tell you, i am really sorry about what is happening today to a lot of mexican -- american citizens here in the united states with flood in mississippi river and others -- and tornadoes. >> charlie: you think that's connected to climate change? >> absolutely. so the worst flood in 75 years in the united states are more or less, but they are connected with climate change because -- i'm sorry for the expression -- the climate is changing. so we need to fight with that -- so look -- >> charlie: you were in, i assume, copenhagen, but i certainly saw you make a speech in cancun, which was a successor meeting to copenhagen, correct? >> yes.

>> charlie: why can't the international community come together? cancun was better than copenhagen but many say didn't go far enough. >> again, a very long journey start with one step, and we need to do those steps, and in cancun, it was not one step, it was a very big -- >> charlie: significant. >> significant. >> charlie: you think the international community is beginning to come together and understand that it can only be solved and addressed if it's done jointly. >> yes. the problem of climate change is that you cannot act only in one territory, so you have -- i don't know, emissions in indonesia with wood fires, or in united states with industry, or wherever, the consequences are in any part of the -- there are not clear economic incentives to act so the only way in which we can address this problem is

working together and now, the international community, at least started to realize that we must agree on several points and i hope that next step in south africa could follow these efforts but let me tell you, cancun made serious advances in several matters, even the commitments made in cancun are larger than the -- the quoto protocol are only commitments under developed countries and under cancun are commitments coming from developed and developing countries, so we need to move forward but the key issue is to explain to the people that all those tragedies that the american people are suffering today are linked to climate change and we need to work together. and i have an interest on that. you can see the hurricanes in the caribbean sea are kicking

mexico worse than ever, and honduras, and guatemala, and the people are suffering a lot, and one day you have flood in mexico, and the other year you have terrible fires like in the north of mexico and it is the same -- the same problem. >> charlie: what's your relationship -- your party is the more conservative party. what's your relationship with the business community? >> it's a very good one, with the exception that we are promoting antitrust legislation -- >> charlie: i'm coming to that. that's where i'm going. so carlos lima is the richest man in the world who has made billions in the cell phone business. >> carlos lima is the richest man in the world, i think, mainly because he's a hard worker. he's an honest man, in my opinion, and let me tell you, i do believe in antitrust legislation -- >> charlie: the message here is -- competition has to be -- >> competition has to be. we want free markets, free

competitions. we want to -- we don't want monoppolies and in order to do so, i will -- we don't want monopolies and in order to do so i will promote antitrust legislation, we are actioning more frequencies in telecommunication than ever to private enterprises, we are allowing more competition. several years ago only telmex was a player in communication. telmex used to sell -- telefonica, they are playing in mexico and the next thing is it is not personal. >> charlie: was he a political supporter of yours? >> a lot of people support the competition but is difficult because there are a lot of interests in congress as well. >> charlie: there were protests in mexico city seeming to be arguing that they felt like the

mexican institutions were failing them. >> yes. >> charlie: and that there was a sense of the president, you, had failed them. tell me how you see those protests and what you think it's about and whether you think it's significant and what does it suggest? >> well, first -- >> charlie: is it just political? >> no, it's not just political. i know that the people is suffering a lot. and i share their feelings, for instance. i do want mexico without violence as well. i want a mexico without criminals. i want a peaceful country. but i am working on that. with all my effort and personal capacity. i'm working hard to build the mexico i want, and if they say that there are failures in these

institutions, i say i agree. in which institution? that is the question. >> charlie: you have suggested that in some institutions there is corruption and a lack of confidence and that's one of the principal things you have to do. >> yes, and that's exactly the question i want to raise with them, talking directly. >> charlie: how will you do that? you're head of state. how will you communicate? what kind of -- protest in the street has a -- >> i invited the leaders of the promoters of the march to talk with me. javier cecilia, mr. bairn, and tell them what are your arguments, what are your suggestions? i want to express my solidarty with your movement but at the same time i want to explain to you what are the reasons for my side and what exactly my

government is doing and what do we need in order to improve the situation and i will say we need better police corps at the state level, and better attorney general offices. and i need your support and your civil society movement in order to press the local institution to rebuild their own performance. that's more or less the idea. one day, charlie, several times, i walked in the streets protesting about the situation in mexico because at the very end, i'm a citizen as well. i have three kids and i want a very different mexico for them, and what i have clear is i am doing my best effort, an effort that probably should -- or must be done before me -- several years or decades ago, but i'm starting with that. in that sense, i know that i am

doing my duty. another, they say, for instance, change the strategy. >> charlie: they do say that. >> i say, what do you suggest for that? some of them say, "well, you need more education." ok. i'm doing my best effort in education. i have created more than 90 new universities in mexico. more than 800 college oriented towards technicians aspects in four years. we have increased coverage for education at the university level from 24 to 30% of the population. so we are doing a lot. what else? well, you need to treat addiction as a health problem. yes. i did that already. under my administration, the personal consumption of drugs is not punished in criminal terms.

we are providing hundred of centers in order to treat addictions among young people and teenagers. we have multiplied by four the budget for treatment of addictions. what else? probably just say -- we talked about that -- legalize drugs. i say i have my point of view and there is no sense that mexico do that alone, and even with that, i think that is not a solution, but i am open to debate. so i want to talk with them and to find out solutions. >> charlie: that's possible. you're the president of the country. >> that is possible. >> charlie: if you say that here, and you have said that before, and it would seem to me it could happen tomorrow. it could happen next week. >> yes. yes. it did. >> charlie: and you consider it significant. >> actually, i made already that. i'm the first president ever in

mexico who responds to questions coming from the people -- the leaders. i open public debate with leaders of civil society about security. i have heard not only governors or legislators or judges but also mothers who lost their child, leaders, academic -- actually, i want to do so because for one president is very difficult to listen to people. all the time, you are listening to voice of your advisors. i want to listen to voices of people. >> charlie: let's talk about the idea of perception in terms of how people perceive things are going in mexico, cannin mexico and outside. several years ago, people started writing articles saying that mexico could be a failed state. i would assume nothing would infuriate you more than the presumption that mexico could become a failed state.

>> a lot of things i don't like about what people used to say about mexico. >> charlie: but that. is there any possibility that you're not going to win this battle against -- >> not at all. absolutely we will win and we will prevail, but of course, i'm talking about -- talking about failed state is absolutely absurd in our case. why? because mexico is a country which is working. and it is a very functional country. we have a vibrant democracy. we have three branches of power -- executive, legislative, judicial. we are independent of each other. but beyond that, we are able to reach agreements in the congress like antitrust legislation. we have educational system with 36 million students attending school every single year. we have a health system in which we are almost to reach universal health coverage in mexico, so we

will attend more than 100 million people with medical services. a goal that is not reached for a lot of countries including united states. we have a system in which we have business community. we have an economy growing, 5% creating more than 800,000 jobs a year. is that a failed state? not. >> charlie: should the presidency be more than one six-year term? >> no. it's enough, i think. you know very well the history, charlie, and you know, mexico -- >> charlie: that's enough. you go ahead. >> in the 19th century, a very popular military, porfirio diaz who was a hero in the war against the french, cinco de mayo and others started the

banner of re-election. he was president 30 years. and after him, another i admire so much, mateo, started a new revolution under the same banner, "not re-election." he was elected, he was president and he was killed two years later. and after, another members of the revolution under the same banner wanted to be president. he was president. and after, he reformed the constitution and he was re-elected and he was killed. so end of story. it's enough. six years. the re-election of the presidency is not a good idea. >> charlie: nafta. did nafta work? >> nafta worked a lot. it's a marvelous instrument that provides jobs for mexican and for american people. some have argued the following. they make this point. that mexico's future -- that a lot of -- there was a flow of

money to china because china could manufacture with a low cost base, and they are arguing now that that may be changing in china. and that one of the places where you might see the development of manufacturing is mexico. is that a real idea? >> absolutely real. yes. yes, indeed. actually, we are the best country for manufacturers in the world and i can prove to you -- >> charlie: ok, prove it to me. >> if you go to any store -- any -- i don't know, appliances store and you tried to find out a -- produced in china and produced in mexico, produced in mexico will be better and cheaper. it is clear, not only an

expression because as you say, something is happening in china. i don't know what could be in the past its advantage in terms of very low salaries, no unions -- i don't like that -- not democracy, but i respect that, but we have trade unions, free market and labor, democracy, and even with that we have more competitive conditions than china in some sectors, including manufacturers. why? it could be, charlie, for instance, logistical cost, due to the cost of the oil right now or others. it could be something happening in china -- i don't know exactly what is happening. probably salaries are going up. >> charlie: that's one thing. inflation. the fact is, today according with several advisors or several firms, mexico is on the top of

the advantages in order to produce manufacturers. actually, the lloyds bank and others are looking the advantage to produce manufacturers in mexico in order to export to the american market. >> charlie: here is an issue. this would seem to me -- i'm asking this as a question. there is this image of violence in mexico. on the other hand, there is a reality of mexico having a potential to create an enormous manufacturing base to create jobs and to do things for its own state and develop tax revenue and everything, but you can't -- can you make this happen unless you stop this? in other words, can you realize mexico's potential if you cannot -- >> we are working on that. we will realize the mexican potential and we are fixing this problem of violence and at the same time we are reinforcing our economic potential and providing

social services for the education and health -- >> charlie: what is the indicia of success? what is the metric for success? >> i think the quality of public institutions. as long as we persevere in order to rebuild police corps and attorney general offices in the states and at the federal level, that will be the measure of success because sooner or later, as in colombia happen, the violence will reach peak and then decline because the strengthen of the public institutions will be much greater than the criminal. that is happening already in mexico. however, we are probably in the worst part of this terrible violence -- again, a violence that is related more than the fight of one cartel against other than other reasons. now, we are fixing that, and let me tell you, charlie. in the future, mexico will

persevere in this policy, mexico will have an asset in its public institutions regarding good security, an asset in law enforcement agencies, and i am absolutely clear on that, i can see that. the problem is it's a very long-term goal, if i can say that, and the costs in the short term are very expensive. that is probably the reason why no much people before me wanted to do so. we are working. but talking about the potential, mexico, it's a growing economy. half of the mexican people are below 26 years old. we are a very young country. we have a demographic bonus in the sense that the active economic population is greater than the -- ♪ ♪ ♪

♪ >> charlie: funding for "charlie rose" has been provided by the coca-cola company, supporting this program since 2002. and american express. additional funding provided by these funders. >> and by bloomberg. a provider of multimedia news and information services worldwide.