A note on AMLO
This is for our colleagues north of the border interested in our perspective on the election of Andres Manuel Lopez Obrador as President of Mexico.
Yesterday AMLO won the Mexican Presidency by a large margin, 30%, and by all accounts fairly. He was up against 3 other very strong, well-qualified and/or likeable candidates, so it was not a “lesser of evils” contest. Furthermore, his party, Morena, which he personally founded in 2011, took the majority in the lower legislative house and a near-majority in the Mexican Senate.
His victory is based on demand for change from the large number of Mexicans who live in or near poverty, who do not see access to decent jobs near their homes, and who live in localities literally without law enforcement and justice. AMLO is the candidate who most reached out to them, something he has been doing for the last 12 years since he left his role as Mayor of Mexico City.
Despite what seems to be a crystal-clear mandate to improve economic opportunities for Mexicans, there is concern about whether the change AMLO promises is real or simply about letting a new group of people call the shots. It will be important to watch what the new Mexican Government, which enters December 1, is really doing to correct imbalances in the economy. Are the solutions short-term or long-term, cosmetic or structural? Are they actually solutions?
Graciela Marquez, a economics historian who will become AMLO’s Secretary of the Economy, signals stronger iterations of policies already in motion. Look for initiatives benefiting rural populations. Infrastructure investment in the southeast, a gradually increased minimum wage combined with training for improved labor productivity, a return to Mexican-grown agricultural products, regional innovation centers, training to incentivize fiscal formality in business, and continuity or acceleration of education reforms, though probably not in exactly the same way they were set out in 2012. Some voters, though AMLO is considered culturally conservative, hope rural economic development could include taking a look at activities of the cartels, mainly drug trafficking, that could be legitimized.
Whatever form they take, if the changes are real, change is prone to generate uncertainty whether or not it is for the better. If the changes are superficial, perhaps that will preserve stability once the changing of the guard is done. However, in the case of merely a symbolic shift, or worse, a real-but-unproductive change of course, the new government would not be responding to its mandate. If Mexico continues to neglect its large population of people who are asking for help, it’s going to undermine the strides certain portions of the economy here have made since NAFTA. Meanwhile, if it complies with the mandate in a productive way, that will generate its own form of stability that is likely better than what Mexico currently enjoys.
Marquez notes that AMLO has emphasized to all cabinet members the importance of maintaining balanced budgets, though that does not guarantee Congress will budget responsibly. He also supports a better NAFTA. Regarding doing business in Mexico, our response is much the same as the answer we gave in early 2017 when the US Administration took office, which is that the more actively you and your Mexican counterparts collaborate in profitable business, the more you influence it and the less you leave up to the politicians. If money talks, the opportunities we are creating for each other should talk louder.
Links of interest: Graciela Marquez, AMLO’s to-be Secretary of the Economy, spoke at the Wilson Center in Washington this April; Mexico’s Messiah? a 2003 article by the late professor George Grayson of William & Mary. Professor Grayson got to know AMLO when he was writing the biography of him, Mexican Messiah.