MEXICO CITY (Reuters) - Enrique Pena Nieto took over as Mexico's president on Saturday, promising to end years of violence and sluggish economic growth in a bid to redeem the party that shaped modern Mexico.
Returning the centrist Institutional Revolutionary Party, or PRI, to power, the 46-year-old Pena Nieto said the people had been let down during his party's 12-year absence and pledged a raft of changes to boost growth, create jobs and fight poverty.
"The state has lost ground in important areas. Lawlessness and violence have robbed various parts of the country of peace and freedom," Pena Nieto said in his inaugural speech at a ceremonial palace in the old center of Mexico City. "My government's first aim will be to bring peace to Mexico."
Pena Nieto takes command of a country that has been convulsed by the deaths of more than 60,000 people in violence between drug gangs and security forces during the six-year term of his conservative predecessor Felipe Calderon.
Calderon's National Action Party (PAN) came to office in 2000, but it never had a congressional majority and struggled to push through legislation it wanted to create jobs in Latin America's second biggest economy.
Memories of the PRI's unbroken 71-year rule are still vivid in Mexico, and the party was a byword for corruption, cronyism and vote-rigging by the time it left office.
Demonstrators sought to take the shine off Pena Nieto's swearing in, and several thousand protesters, mainly from leftist groups that supported Pena Nieto's main rival and oppose his reform plans, earlier massed outside Congress.
Police fired tear gas to disperse the protesters, who rattled metal barriers in a bid to disrupt the upcoming ceremony. Elsewhere, small groups of protesters threw Molotov cocktails.
"They have imposed an illegitimate president. There's lots of us here, this struggle is just beginning," said Frida, a 16-year-old student, her eyes stinging from the gas and wearing a T-shirt emblazoned with the image of a guerrilla leader.
Married to a popular actress, the telegenic former State of Mexico governor Pena Nieto won the July 1 election with about 38 percent of the vote, more than 6 points ahead of his combative leftist rival Andres Manuel Lopez Obrador.
Pena Nieto says he is committed to fighting organized crime, but has also stressed his main goal is to reduce the violence.
Having helped shepherd a labor reform through Congress since his election victory, Pena Nieto now wants to pass legislation to strengthen Mexico's tax base and allow more private investment in lumbering state oil giant Pemex.
"Mexico has not achieved the advances the people demand and deserve," Pena Nieto said. "We are a country growing at two speeds. There's a Mexico of progress and development. But there's another one too that's been left behind in poverty."
If he is successful, the reforms could help spur stronger growth and create jobs, blunting the allure of organized crime.
Annual economic growth averaged less than 2 percent under the PAN over the past 12 years, far behind many other Latin American countries. That record and the drug war violence opened the door for a PRI comeback under Pena Nieto.
Still, inflation has been kept in check, debt levels are low and growth picked up toward the end of Calderon's term, with the economy outperforming Brazil's in the past two years.
Pena Nieto's inner circle features several ambitious young economists and financial experts eager to prove the PRI can do a better job of managing Latin America's second-biggest economy.
For much of the PRI's reign, Mexico enjoyed stronger growth than the PAN mustered, but memories linger of default on the country's debts in 1982 and a financial crash in 1994 and 1995.
"It's very hard to believe in the PRI. They bankrupted Mexico," said construction worker Jose Luis Mendoza.
Supporting a family of four on 1,300 pesos ($100) a week, Mendoza, 29, said he was worse off now than when Calderon took office, and doubted his life would improve under the PRI. "The cost of everything has gone up - but my wage hasn't," he said.
Pena Nieto has pledged to put more money in Mexicans' pockets and shake up competition in a country where large swaths of the economy are concentrated in the hands of a few, like telecom billionaire Carlos Slim, the world's richest man.
But Pena Nieto has been vague so far about how he plans to create a more level playing field, and pollster Jorge Buendia said it would be foolish to expect radical change.
"Pena Nieto's not a reformist guy. He never has been," Buendia said. "He's an establishment guy and I don't think he's going to rock the establishment that much."
(Additional reporting by David Alire Garcia, Michael O'Boyle, Alexandra Alper, Miguel Gutierrez and Noe Torres; Editing by Kieran Murray, Simon Gardner and Vicki Allen)
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