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RENEE MONTAGNE, HOST:

Mexico's president has been in office nine months. But as NPR's Carrie Kahn reports, he is still dealing with chaotic protests in the capital, intractable levels of violence, and a less favorable economic outlook than predicted.

CARRIE KAHN, BYLINE: President Enrique Pena Nieto campaigned on the promise of creating a modern and prosperous Mexico. And according to his appraisal, he's done just that.

(SOUNDBITE OF ADDRESS)

PRESIDENT ENRIQUE PENA NIETO: (speaks Spanish) Hoy queda claro, hemos optado por la ruta de la transformación.

KAHN: Wearing the presidential sash, with his trademark gelled pompadour and telegenic delivery, Pena Nieto says he has taken the country on a transformational path - demanding and arduous, yes, but necessary for Mexico's prosperity. Times have been tough for Pena Nieto lately. He was forced to postpone his address by one day and move the venue to the secure grounds of the Presidential residence.

Far away from thousands of striking teachers who have taken over the expansive square in front of the national palace where most state of the union speeches are given. The teachers have been dogging Pena Nieto for the past two weeks, bringing much of the capital's already chaotic streets to a stand still in protest of his education reform plan.

(SOUNDBITE OF SIRENS)

KAHN: They've clogged the streets, blocked access to the airport, forced the cancellation of major soccer events, and just this last weekend skirmished with riot clad police in front of the Congress as lawmakers voted on a national testing plan to evaluate poor performing teachers. Preschool teacher Anna Allida Vazquez, who's been camped out downtown for the past week and a half, says first Pena Nieto goes after the teachers; next will be the country's oil and other valuable resources.

ANNA ALLIDA VAZQUEZ: (Speaks Spanish) La verdad es que estan vendiendo nuestro territorio...

KAHN: She says the truth is he is going to sell our territory to foreigners and someone has to take a stand. Jorge Chabat, a professor at a research center in Mexico City, says Pena Nieto cannot back down now.

JORGE CHABAT: Basically, his whole agenda of reforms is lost. I mean, he cannot allow to lose this fight against the teachers.

KAHN: Chabat says he risks looking weak just as he moves to introduce even tougher reforms from revamping the tax code to opening up the state owned oil industry to foreign investment. Pena Nieto has embarked on an aggressive reform agenda - successfully overhauling the nation's closed telecommunications industry and changing the way teacher's are hired and fired, long under the control of the unions.

He's also nabbed some major names in the drug world, including last month's capture of the head of the ultra violent Zeta cartel and says he's reduced homicides by nearly 20 percent since taking office. But he's facing a tough economic outlook. The government recently cut growth projections by more than half to a paltry 1.8 percent by year's end.

And there is a growing armed citizen's movement in states where police are unwilling or unable to protect residents from violent organized crime gangs. Pena Nieto says he respects citizens' rights.

(SOUNDBITE OF ADDRESS)

NIETO: (Speaking Spanish)

KAHN: But he said the government will not tolerate people taking the law into their own hands. Despite the challenges ,Pena Nieto insists Mexico's moment as a modern and prosperous democracy is coming - a line he often repeats while traveling up and down the country.

(SOUNDBITE OF SPEECH)

NIETO: (Speaking Spanish) Ahora es necessario mantener el animo construtivo y seguir adelante...

KAHN: Now is the time to keep our spirits high and move forward, said Pena Nieto. A path the new president has found to have more bumps and complications since taking office. Carrie Kahn, NPR News, Mexico City.

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