Mexico today  – February 2,  2021

The paradox of power is old and well known: the greater power one has, the more its misuse is overlooked and, consequently, the greater the risk of it being abused. The Mexican economy grew for several decades in the 20th century due to the fact that government was the steward of political stability and for almost two decades maintained a healthy economic strategy befitting Mexico’s -and the world’s- circumstances at the time. When the Mexican government abandoned those principles in the 1970s, the economy collapsed. The contrast between those two moments explains the nature of the problem facing Mexico today and why the path chosen by President Andrés Manuel López Obrador (AMLO) will not prove more obliging than back then. Like López Obrador today, the Mexican administrations in the 1970s also implicitly attempted to carry on a “regime change”.

 Concentrating power is useful only if you know where you are going and why. It seems clear that by systematically eliminating checks and balances, president López Obrador intends to recreate the Mexico of the 20th century when things worked well. He does not realize that those conditions answered to a specific moment in history. López Obrador is not attempting to destroy independent government agencies regulating Mexico’s energy sector or access to public information merely for the sake of eliminating “unnecessary” checks and balances, but because he believes -like his predecessors of the 1960s- that he himself can be the steward of Mexico’s destiny. The problem is that López Obrador is behaving exactly like the Mexican presidents of the 1970s, minus fiscal deficit considerations. The lesson that López Obrador learned from the 1970s is not that the country’s political stability and economic certainty were obliterated, but that the Mexican administrations then overreached in fiscal matters. In a nutshell, López Obrador aims to recreate that 1970s era, but without financial excesses.

The outcome will be no different, except that the agony will be drawn-out. Political power in 1950s and 1960s Mexico was highly concentrated in the presidency. However, these in office back then knew that any breach to stability and certainty would translate into severe economic cost. Mexican presidents back then didn’t cater to their whims via rigged or sham referendums, as López Obrador is doing today, but rather negotiated their actions and decisions with actual powers in society, like anywhere else.

Power in Mexico during the 20th century was concentrated, but not arbitrary. That changed in the 1970s due to the sudden appearance of increasing resources in the hands of the executive. These resources came first as a product of the availability of foreign debt and, later, by the promise of huge resources that would be produced by the recently discovered oil fields in the Gulf of Mexico. Those two factors, debt and oil, changed Mexico because the presidents of that time felt they could do as they pleased without consequence. But the consequence was a decade of recession and almost hyperinflation in the 1980s. It also resulted in an enormous difficulty for the Mexican administrations of that decade to regain the confidence of citizens, investors and businessmen, without whom the economy (the Mexican and all the others ) cannot work. President López Obrador wants to recreate the part of that history that suits him, disregarding the attached cost. Today, the Covid-19 pandemic crisis has inexorably accelerated those costs.

This blindness has led president López Obrador to make decisions that stand to reason in his stunted vision of Mexico and the world, and to close himself off from today’s enormous challenges. It’s easy for López Obrador to think that he can disband independent government agencies such as the Federal Institute for Access to Public Information and Data Protection (INAI), the Energy Regulatory Commission (CRE) and others. However, dismantling each one of those institutions would be a step towards economic and political catastrophe. These independent government agencies were founded in recent years not because the previous Mexican Presidents liked them, but because they were the only way to confer certainty to citizens. Every time López Obrador destroys an independent agency he alienates a sector within Mexico’s economy or society and increases uncertainty. Mexico lives in the paradox of the certainty of uncertainty. Progress under such conditions is impossible.

Mexico faces formidable challenges, ones that a government should ponder and anticipate to avoid and overcome pitfalls. Worse, several of them will prove particularly demanding for an administration such as López Obrador’s guided by so many dogmas and prejudices. Energy is a case in point: the world is slowly weaning itself off oil. Meanwhile the Mexican government here expects that the state-owned oil company (PEMEX) to work magic.

Exports are by far the greatest engine of the Mexican economy and our main export are cars and automobile parts and components, an industry which is quickly abandoning fossil fuels. What does the López Obrador government foresees on this issue? Which leading energy, electrical, or automotive companies is it seeking to attract to invest in Mexico?

Going forward there are other questions the Mexican government should ponder. What does it see happening in U.S.-China trade relations? What is Mexico doing so that companies and industries having to leave China see the country as a feasible alternative option? And not least importantly: How does the López Obrador administration anticipates its relationship with the new Biden administration in the US? What geopolitical risks does it perceive? In short, does the López Obrador administration care about the future or -knowingly or unknowingly- is Louis XIV its sole role model?

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI).  A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition.

 Twitter: @lrubiof

https://mexicotoday.com/2021/02/02/opinion-government-and-power/

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Luis Rubio
Mexico today  – January 27,  2021 

“It’s  in the United States’ best national interest for Mexico to become a prosperous country,” Lieutenant General Brent Scowcroft, former National Security Advisor under President George H. W. Bush, told me when I interviewed him for a book on NAFTA’s 20-year anniversary. Back in 1992, the signing of the NAFTA treaty  was perceived in the U.S. as the dawn of a new era in the U.S.-Mexico relationship. NAFTA also entailed a moment of radical change in the way Americans perceived themselves. It was a moment of elation in which the entire establishment reveled. Now, Mexico finds itself once again in a new era, with a new U.S. president that has no margin for error.

Throughout the 20th century, Mexico chose to follow its own path, far from its northern neighbor, so much so that achieving U.S. recognition of the governments emanated from the Mexican civil war was itself an epic feat.

By the 1980s, the U.S. saw Mexico as an anomaly: a country that had not finished resolving its own problems and crises, and that kept its distance. Mexico, for its part, had experienced sudden shifts in its economic policy, fallen into increasingly acute financial and foreign exchange crises and spent years in recession and on the brink of hyperinflation, all due to excessive indebtedness in the 1970s. Rather than adapt to the changes that had taken over the productive world in Japan, the U.S. and Europe, Mexico exhibited a singular lack of clarity regarding the course it needed to follow to achieve its development objectives.

Sometime in the late 1980s, the Mexican government completed an in-depth review, acknowledging for the first time in decades that the financial and economic problem was a product of its responsibility (irresponsibility, in fact) and began to implement a series of reforms capable of transforming the country’s reality. One of those changes was in the relationship with the U.S.

The new Mexican approach crystalized in NAFTA —a mechanism to promote investor certainty— was perfectly aligned with the U.S. geopolitical logic. The problem was that what Mexico was willing to do in the following years did not meet U.S. expectations. Mexico did not see NAFTA as the beginning of a transformative era, but as the end of a process of pared-down reforms. With the end of the Cold War, Americans, for their part, moved on to other issues, largely forgetting about Mexico.

All this eventually led to a clash of perceptions. For Mexico, NAFTA was a lifesaver that allowed a return to economic growth, albeit one it did not fully exploit. In the U.S.’ view, Mexico squandered NAFTA as a lever for transformation, ending up mired in a sea of ​​corruption, human rights violations, and institutional weakness. The expected cross-border integration of education and services never came about. The U.S. disappointment that followed was no small thing, and lingers to this day.

Twenty-five years after NAFTA, Mexico has improved in countless ways and achieved a financial stability that stands in stark contrast to the chaos that preceded it. However, the country’s fundamental challenges -poverty, regional inequality, a dismal justice system, violence, and crime (much of it linked to the U.S. through drug trafficking) and, above all, an incompetent government- remain. In practice, NAFTA’s success allowed Mexico not to have to transform itself.

Mexico’s lethargy translated into growing U.S. desperation which led to developing projects aimed at forcing Mexico to carry out a complete overhaul of its institutions. That’s to say, the context of Joe Biden’s arrival to the White House is not favorable to the old Mexican political system that President Andrés Manuel López Obrador has been recreating for the past two years. A system that he is strengthening minute by minute. The accumulated U.S. disappointment will inevitably have practical expressions that do not fit well with the distancing and contempt shown by the current Mexican government toward Biden. The pretense that the depth of interconnection between the two countries can be ignored free of cost or consequences is absurd. Disregarding the shared U.S.-Mexico interests is even worse.

Today, there are two key factors in the North American region that will determine Mexico’s future.

The first factor are the tensions within American society itself, largely the result of technological change, economic globalization, and the information age. Although Mexico is not the cause of these changes, it is a key player in them, reason why Donald Trump made us a scapegoat. The end of the Trump era does not, however, entail the end of strains that already existed and that he capitalized on. In a rational world, this would lead Mexico to develop of a strategy of rapprochement, with the U.S. people and government, to try to ease these sources of conflict. The opposite of what President López Obrador is doing now.

The other key factor is the conflict between the U.S and China. Mexico has a great opportunity to attract much of the North American investment currently concentrated in China. However, that would require a strategy politically, economically, and radically unlike the one undertaken by the López Obrador administration. Inexplicably, Mexico faces once again the possibility of missing its next great development opportunity for the sake of following a series impoverishing 1970s economic dogmas.

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI).  A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition.
Twitter: @lrubiof

https://mexicotoday.com/2021/01/27/opinion-mexico-seen-from-the-us/

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Luis Rubio
Mexico Today – January 19, 2021

This will be a decisive year for Mexico. It provides a last chance both for President Andrés Manuel López Obrador and for the Mexican opposition. The clash between the two forces will determine if Mexico continues adrift or finds its way out after a terrible performance by both in these past two years. President López Obrador’s own warped preconceptions and ahistorical prejudices won’t help matters.

The factors that will determine this year’s fate are very clear. What is not evident is the shape they will take, how the president reacts to them, and how much present circumstances are aggravated as things unfold.

The great imponderable overall will be the social consequences of the pandemic and vaccine politics. To date, López Obrador has appeared to be decidedly unruffled, assuming that his combination of transfers of money to his political clienteles and his cautious management of public finances will suffice to avert a major crisis. None of that, however, addresses the monumental issue of Mexican unemployment and corporate bankruptcies unleashed by the pandemic. The Mexican government is clearly not to blame for the pandemic but it’s also undoubtedly true that the responsibility for remedying its economic damage lies in its hands. This responsibility is magnified by what López Obrador’s government failed to do at the onset of the pandemic and for disdaining both the virus and the Mexican population. The dogged reality is about to set in.

A second crucial factor that will shape 2021 is a political one. López Obrador’s MORENA party coalition is a highly unstable entity since its inception, compounded by the agendas of dissimilar groups and the natural interests of the 2024 presidential candidate hopefuls. The MORENA coalition merged groups, forces, and interests of the most varied origin, ideology, and objectives, a necessary condition to win the Presidency two years ago. However, the internal rifts, the conflicts at play, and the sheer absence of institutionalization entail that managing this complex entity is virtually impossible, impinging already on its alignment of candidacies. Although everyone wants to win, the internal rifts between groups -many of them of radical origin- will inevitably gain strength little by little. They will consume a good part of the president’s time and energy in the foreseeable future, with potentially dire consequences.

Corruption will be a third crucial theme this year. Disgust with corruption in Mexico was perhaps the core factor that conferred López Obrador with winning legitimacy in 2018. However, his government action has done nothing to curb corruption, as illustrated by countless examples within the administration itself and across MORENA. The only obvious thing is that while Mexico’s ruling party changed, traditional practices remained. In addition, the onslaught against López Obrador’s predecessors will more likely lead to a day of reckoning when his own six-year term ends than to successful legal prosecutions. This realization will incrementally weigh heavily on the spirits of MORENA’s leaders, beginning with the president himself. In the absence of a strategy for eradicating corruption at its roots, the government will be as exposed in the future as its predecessors are now, if not more. Revenge won’t be pretty.

Fourth, and notwithstanding the substantial political headwinds mentioned above, the President’s popularity remains high, which could translate into a less damaging result at the polls than in mid-terms ever since votes are tallied well in Mexico, say around 1997. In every subsequent Mexican mid-term, the party in office lost ground, in some cases dramatically. All in all, it is impossible to see a repeat of the 2018 blowout both because of the natural erosion suffered by incumbent administrations not to mention the challenging economic conditions Mexico will probably face come June. Beyond López Obrador’s popularity, it is impossible to ignore that even in 2018 the parties supporting his candidacy did not come close to winning 50 percent of votes in legislative races. Even a small erosion in voters preferences could imply radical changes to the political landscape.

Finally, although everything in MORENA is about retaining power and preserving internal peace in order to win Congress, internal contradictions are so colossal that the great element of cohesion, López Obrador, will find himself under pressure from all sides. At such a moment of economic and social emergency, Mexico will suffer more polarization, conflict, and poor decisions instead of harmony and peace. None of this will help the López Obrador administration, let alone the country.

The past suggests that MORENA’s future will not be rosy when the midterm election happens June. Much will depend on what the López Obrador government and the Mexican opposition do, of course. The administration has the upper hand and the outlook would be less negative if it overcame its own counterproductive hang-ups, adopted more sensible economic policies in response to a calamitous crisis, and curbed its divisive rhetoric. Yet, the clock is ticking. For their part, if Mexico’s opposition parties nominated candidates to Congress likely to win with a credible and hopeful narrative (and if they refrained from cannibalizing each other as in the state of Puebla in 2019), the result would yield them opportunities for a better future after 2024.

https://mexicotoday.com/2021/01/19/opinion-here-we-go/

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI).  A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition.

Twitter: @lrubiof

Luis Rubio
Mexico Today – 12 enero 2021

  Conflict is the essence of politics, since it is politics that allows for conflict to be addressed and processed. The most fundamental difference between societies facing conflict lies in how they resolve it, not in the very fact of its existence. Last week, Washington showcased the two sides of conflict: explosion and resolution. “The measure of a country,” wrote John Kampfner, “is not the difficulties it faces, but how it surmounts them.” How do Mexicans live up to that measure?

Trump was never a normal president. Since his presidential campaign, he has shown himself to be a challenger of established norms and institutions. He’s recently dedicated himself to denying the electoral outcome, mobilizing his followers to attempt to force a change in the result, even inciting them to forcibly take control of the U.S. Congress, an institution which, with grandiloquence, has come to be referred to as the “sanctuary of democracy.” In doing so, Trump broke with the essence of democratic politics, which starts from the principle that all participants accept the rules of the game. Like Mexican president Andrés Manuel López Obrador, Trump only accepts rules that favor him—and yet, the chaos Trump provoked in the U.S. Capitol did not last more than a few hours. By the following morning, Joe Biden had been formally declared president-elect, and numerous news outlets, including many favorable to Trump, had called for his resignation.

Behaving like a vulgar, Third World strongman who privileges loyalty above all, Trump surely envisioned that his party and the people he had nominated or supported for various positions would come to his rescue. In recent weeks, what has been shocking—though normal in a country with strong institutions that transcend the individuals who inhabit them—is the way conflict has been processed and eventually surpassed.

The list of those who worked to nullify Trump’s legal and political challenges is revealing insofar as it was mostly Republicans who put an end to Trump’s pipe dreams and malicious tactics. It was largely Trump-appointed judges who rejected his attempts to eliminate votes state-by-state through the courts. It was Trump-appointed Supreme Court justices (on whom Trump presumably pinned his hopes for protection) who rejected his calls for salvation. It was the Trump-backed Republican governor of Georgia who refused to be cowered by the president’s’s pressure. It was the Republican leader of the Senate, Mitch McConnell, who opposed the maneuvers that Trump demanded to prevent the certification of Biden’s victory. It was Tom Cotton, one of the most hard-core Trumpists, who openly condemned Trump’s actions, perhaps indicating that, once he leaves, Trump will not be as threatening to Republicans as many imagine. And finally, it was Vice President Pence, perhaps the most submissive and loyal of Trump’s collaborators, who adhered to the constitutional rule that put the last nail in the coffin of Trump’s presidency. To end the violent attack against the Capitol, police and the National Guard did not hesitate to fulfill their responsibility to restore order, thus allowing the legislative process to proceed.

In the U.S. electoral process, noisy and conflictive like few others, the winners were institutions and all those responsible actors who adhered to the rules of the game, because doing so is the essence of democracy and of their duty. Despite Trump’s pressure and tantrums, even some of his closest allies distanced themselves.

The contrast could hardly be greater: In Mexico, for at least the six years between 2006 and 2012, López Obrador paralyzed Mexican politics and prevented his party, the PRD, from participating in legislative debates. Today, his only mission seems to be eliminating anything that hinders his lust for power, even if doing so implies impoverishing the population, and particularly those who, with their votes, made possible his ascent to the presidency. His collaborators, past and present, have behaved as loyal servants to his cause, never privileging institutions and the greater values of the country’s development. The contrast is striking.

Mexico is about to start an electoral process for the renewal of its federal Chamber of Deputies, 15 state governorships and hundreds of municipalities and local legislatures. The president has shown utter disregard for the rules of the game, most of which were tailored-made for him after the 2006 election. He is determined to win the elections at any price, violating all norms and principles, not only of democracy, but also of fundamental civility. It is no longer just—as AMLO famously said after losing the presidential election in 2006—“to hell with your institutions”: now, it is to hell with the country.

It’s reminiscent of former Chinese Premier Zhou Enlai’s phrase: “All under heaven is great chaos. The situation is excellent.” López Obrador first causes chaos and then turns it into opportunity. Unfortunately, in contrast to our northern neighbors, in Mexico there are no institutions that can resist the pounding and not enough officials who are willing to hold them up. López Obrador has Mexico on tenterhooks. Trump tried a similar course, but U.S. institutions blocked him. There is a huge difference.

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI).  A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition.

Twitter: @lrubiof

https://mexicotoday.com/2021/01/12/opinion-contrasts/

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Luis Rubio

The virus and the potential conclusion of the health crisis depends, ultimately, on science, which, hopefully sooner rather than later, it will produce the drugs to deal with it or the vaccine to suppress it. There’s hardly any serious laboratory in the world that is not dedicating enormous resources to achieving these objectives, but these are processes that are unpredictable by definition as they follow the scientific method of trial and error, learning from what does not work.

Discovery, the essence of science, is an inherent component of human nature and precedes by centuries the formal processes of scientific research that exist today. Thinking of the end of the year, here are some ideas about discovery that I found striking.

The unknown is the largest need of the intellect

Emily Dickinson, 1876

Evolution has arranged that we take pleasure in understanding: those who understand are more likely to survive

Carl Sagan

There is something fascinating about science. One gets such wholesale returns of conjecture out of such trifling investment of fact

Mark Twain, 1883

“Read to live,” says Flaubert somewhere in his letters, and where else does one live if not in a house of straw, signs, and symbols made from the shaping and reshaping of a once-upon-a-time. History is a record of events (kingdoms lost and battles won, cities built and churches burned), but it is also the compost heap of human civilization; the finding of the present in the past, the past in the present, is the stuff of which our lives, our liberties, and pursuits of happiness are made.

Lewis H. Lapham

A few years ago, as Your Highness well knows, I discovered many things in the heavens that had been invisible until this present age. Because of their novelty and because some consequences that follow from them contradict commonly held scientific views, these have provoked not a few professors in the schools against me, as if I had deliberately placed these objects in the sky to cause confusion in the natural sciences. They seem to forget that the increase of known truths, far from diminishing or undermining the sciences, works to stimulate the investigation, development, and strengthening of their various fields. Showing a greater fondness for their own opinions that for the truth, they have sought to deny and disprove these new facts that, if they had considered them carefully, would have been confirmed by the very evidence of their senses.

To this end, they have put forward various objections and published writings full of vain arguments and, more seriously, scattered with references  to Holy Scripture taken from passages they have not properly understood and that have no bearing on their argument. With the passing of time, the truth that I first pointed out have become apparent to all, and the truth has exposed the difference in attitude between those who simply and dispassionately were unconvinced of the reality of my discoveries and those whose incredulity was mixed with some emotional reaction…  It is not as easy to change one’s view of conclusions that have been demonstrated in the natural world or in the heavens as it is to change one’s opinion on what is or is nit permissible in a contract, a declaration of income or a bill of exchange.

Galileo, 1615

At the beginning of 1595, Johannes Kepler received a sign, if not from God himself then from a lesser deity surely, one of those whose task is to encourage the elect of this world. His post at the Stiftsschule carried with it the title of calendar maker for the province of Styria. The previous autumn for a fee of twenty florins from the public coffers, he had drawn up an astrological calendar for the coming year, predicting great cold and an invasion by the Turks… Johannes was charmed with this prompt vindication of his powers… O a sign, yes, surely. He set to work in earnest on the cosmic mystery…  He had not the solution, yet; he was still posing the questions. The first of these was: Why are there just six planets in the solar system?  Why not five, or seven, or a thousand for that matter? No one, so far as he knew, had ever thought to ask it before. It became for him the fundamental mystery.  Even the formulation of such a question struck him as a singular achievement.

Graz, 1595

Most misunderstandings in the world could be avoided if people would simply take the time to ask, “What else could this mean?

Shannon L. Alder

The scientist is not a person who gives the right answers, he’s one who asks the right questions.

Claude Levi-Strauss

Life is filled with unanswered questions, but it is the courage to seek those answers that continues to give meaning to life. You can spend your life wallowing in despair, wondering why you were the one who was led towards the road strewn with pain, or you can be grateful that you are strong enough to survive it.

J.D. Stroube, Caged by Damnation

I cannot help fearing that men may reach a point where they look on every new theory as a danger, every innovation as a toilsome trouble, every social advance as a first step toward revolution, and that they may absolutely refuse to move at all for fear of being carried off their feet.

Alexis de Tocqueville, 1840

Happy New Year!

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Luis Rubio

Once when he received an important recognition, Sean Connery explained that, on coming from a modest background, the great opportunity in his lifetime presented itself when, at five years of age, he learned to read. Reading was one of the great opportunities in this year of the virus. Here go some other books.

There are few matters as controversial as politics in the U.S., especially when it is about its impacts on the rest of the world and, particularly, on Mexico. The convulsions that that nation has undergone in its foreign policy in recent years are transcendent precisely because this is a question of the sole superpower, the one that built the post-war order and that, during these years, has done everything to undermine its foreign policy instead of reconstructing it under novel circumstances.

Among my readings of this year two stand out in singular fashion in this respect: in Why Are We Polarized? Ezra Klein embarks on a meticulous, profound and convincing analysis on the causes and dynamics of the present polarization in the U.S. Tracing the structures and fractures that characterize the party system reveals how each of these has been maximizing their positions, converting social or personal identity into the major differentiating element, to the point that they represent irreconcilable postures. What the author does not explain is how it is that the stances that are self-evident for the followers of one party are have the effect of alienating the followers of the other, as occurred with Obama and Trump, respectively

In United States in the World, Robert Zoellick describes the patterns that have guided the foreign policy of his country, with notable emphasis on the constraints that have shaped decisions in the matter from its Independence. In addition to narrating the history, Zoellick incorporates an interminable series of anecdotes, specific disputes and states of affairs that not only render attractive the reading a text of such analysis and depth, but also absorbing. The final part of the book, written in the light of Trump’s last hurrah, is particularly relevant for Mexico in that the author discusses the transition of NAFTA to T-MEC, situating it within the context of North America. The book ends with a quote from de Tocqueville that highlights the general tenor: “The greatness of America is not in being more enlightened than any other nation, but rather in her ability to repair her faults.”

Samir Puri*, an ex-functionary of the British Diplomatic Service,  devotes himself to analyzing the empires that crumbled in the XX century, but that left in their wake unresolved conflicts, some insoluble, which mark the XXI century. Throughout the work Puri studies the geopolitical dynamic between Russia and the Western nations, the changes that the African continent is undergoing and the sources of conflict that distinguish countries like India to the region of the Middle East. In conventional terms, Puri discards an easy reconciliation between China and the European nations or the United States, as they are cheered on by objectives to a substantial extent contradictory. He accentuates the conflict between the U.S and China, concerning which he anticipates “an era of interplay between many post-imperial visions, evident in everything, from geopolitics to commerce and inter-cultural exchanges. Rather than the future being Asia, it will feature more two-way streets of reciprocal influence between different nations.”

What explains the different configurations and histories of democracy in distinct civilizations? There are many studies that compare Europe to Asia, but few delineate the differences of origin. In an extraordinary book, The Decline and Rise of Democracy, David Stasavage sets forth a fascinating hypothesis: States developed as democracies or autocracies depending on the strength or weakness of the governments that emerged around the world from their initiation. Democracy had a tendency to proliferate where there was a weak government and simple technologies: where there were no strong institutions, above all a bureaucracy capable of collecting taxes, the governors required the consent of the population, as occurred in diverse regions of Europe. Contrariwise, where the central bureaucracy was stronger, as in China, consent was not necessary, which gave rise to the ascent of autocracies. One of the most interesting cases in point that the author relates in his work is the difference between Tlaxcaltecans and Aztecs, attributing to the former an early democracy in the face of the autocratic centralism of the latter.

In The Economy of Extortion, Luis de la Calle makes clear the manner in which diverse mechanisms, customs and ways of conducting public affairs in Mexico constitute a ballast in that they impede productivity from escalating, diminish the appeal for companies to grow (above all informal ones) and sentence the country to underdevelopment. Extortion, says the author, is nothing other than corruption: the abuse of power for personal gain and it manifests itself at the moment that a self-appointed street valet extorts to “keep the car from coming to harm” to the bureaucrat who presses for a bribe or to union leaders who threaten a strike by their union members. What is captivating about this book is the diversity of forms in which extortion rears its head and its consequent social, economic and cultural impacts.

*The Great Imperial Hangover

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 Luis Rubio

 I ended the year reading a book nearly unique in its genre, and extraordinary in its transcendence: the history of two revolutionaries as seen by their daughter. Daughter of Revolutionaries, by Laurence Debray, tells the story of her parents prior to her birth and throughout her life, and what she relates is not something about which her progenitors would be proud. When the priorities are war and lust, personal prestige and political influence, the daughter always remains marginalized. There is no more brutal, direct and indisputable –and agonizing – indictment than that of a daughter and the Debrays end up in a bad way. That said, the book imparts exceptional details of two extraordinary lives, from the incarceration of her father Regis in Bolivia when Che Guevara attempted to ignite the revolution, to the majesty of her grandparents and the equally fantastic story of her mother, Elizabeth Burgos, with glimpses into Fidel Castro, Hugo Chávez and the goings-on of the French government.

One of the best books that I read this year was “The Conservative Sensibility,” by George F. Will, a commentator who has for decades written in newspapers and provided commentary for television. Historically conservative, this volume would appear to be his intellectual legacy in which he abandons a great part of the premises of U.S  conservatism to confirm himself as an integral liberal, but not one, in the North-American libertarian fashion, in which one decides to distance oneself from civilization but rather, contrariwise, as one convinced of the importance of functioning in the real world, diagnosing problems, proposing solutions, criticizing governmental acts and being active in the central disputes of the ideas that characterize a society.

In Institutions, Inequity and Systems of Privilege in Mexico, Cuauhtémoc López Guzmán, an academician at the Autonomous University of Baja California, pens a splendid essay on the incomplete transition in which Mexico became mired. One paragraph sums up his argument:  “Corrupt government, rent-seeking entrepreneurs, and violations of the Rule of Law in Mexico are the result of a predatory institutional order instituted from Colonial times for pillage. The existence today of rival substitutes for the leader should have ended the corruption, but everything seems to indicate that substitution of those in government (alternation of parties in the presidency) has not changed dishonest conduct, in that the opportunities for enrichment and privileges remain unaltered.” The book is especially relevant now that the three main political forces have occupied the presidency without it changing the system of privileges an iota. The problem lies elsewhere.

Christopher Caldwell* writes one of the best analyses that I have read on the political change that has portrayed the U.S. in recent decades. The heart of his line of reasoning is that the so duly celebrated legislation in matters of Civil Rights of 1964, which freed the Black people and opened a new era toward the equalities of opportunities, also planted the seeds of division and alienation that took place some decades later and that exerted an effect on marginalizing the White male in particular. A very sophisticated historical explanation of the gap thrown open by that legislation and that, half a century later, materialized in the form of Trump. A doubtlessly controversial analysis, but highly interesting and enlivened in the manner in which the politics of identity and the consecration of the rights of and budgets for the minorities created a new minority that ultimately rebelled in 2016 with the election of Trump.

Nadia Urbinati** asserts that populism is a new species of representative government, founded on a direct relationship between leaders and those who they define as good. In contrast with traditional representative democracy, where the winner of an election  represented everyone across the board, the populist kingpin exists to ignore those they considered their adversaries, thus pressuring the entire existing constitutional structure, which opened the door to authoritarianism.  The populism resulted from the growth of inequality, as well as the existence of a “rapacious oligarchy” that becomes an easy target in electoral terms. Its strength is that it breaks with the time-honored partitioning of social and ideological classes, but its weakness resides in that they end up plundering the same system that they attacked and that sustained them in power. Powerful polemic.

The New Class War*** by Michael Lind summarizes the perspective of the “forgotten” in the battle that has come to distinguish a good part of the world during the last decade. For Lind, the dispute is about the power of decision that has been concentrated in recent decades in a sector of society typified by their formal credentials (academic, bureaucratic or professional), which confers on their members an immoderate influence on the decisions. The solution lies in a pluralistic democracy, presumably one not impacted by professionals of any strain. A sentence sums up his practical proposal: the “four neoliberal freedoms” (the free movement of persons, goods, services and capital) should be replaced by the “four regulations.”

*The Age of Entitlement, ** Me the People, ***The New Class War

www.mexicoevalua.org
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Luis Rubio

There is no issue more critical for Mexico than the poverty that characterizes the country’s South. It is an issue that impacts Mexico’s entire national life. Southern Mexico is home to vast natural and human resources that cannot display the best of themselves. It is the place from where much of Mexico’s historic migration to the United States originates. The Mexican South is also the origin of a good part of the resentment that dominates national politics. There is not the slightest doubt that creating conditions for the development of the country’s South is a domestic priority. It is not just a matter of basic justice. Accelerated economic growth in the Mexican southern region would result in widespread benefits for the country especially in the context of the current economic recession. The paradox is that a successful strategy for the Mexican South would also be a source of certainty and of development for all Mexicans.

Mexico’s northern half (starting somewhere north of Mexico City) along with the Yucatan Peninsula, have grown at an average annual GDP rate above 5 percent and some cities in the region been growing above 7 percent for decades. In contrast, the states that form the Mexican South (Chiapas, Oaxaca, Guerrero, and some parts of Veracruz, Puebla, Morelos, and State of Mexico) have hardly changed from where they were forty years ago. Not only has the South not made progress: in relative terms, it has fallen behind dramatically. While the economy of  a state like Aguascalientes in the North has more than quadrupled in size during this period, the states in the South have remained nearly unchanged.

The López Obrador administration is not the first to be concerned with how to rescue the Mexican South, nor is it the first to design ambitious government programs to induce higher growth rates in that region. Since at least the 1970s, administration after administration have produced countless government programs aimed at generating higher growth rates. Nonetheless, the region has grown very little. Some of these past programs sought to create infrastructure. Others provided subsidies to the poorest families. Some administrations devised the idea of special development zones with tax incentives while other were just devoted to   strengthening electoral clientelistic networks. Unfortunately, there’s no reason to expect a better outcome with the current administration’s dogmatic line.

The López Obrador administration’s plan includes massive projects such as the Mayan Train and the Dos Bocas oil refinery. The most serious critics of the Mayan Train argue the lack of business rationale from the conception of the project. Specifically, they point that the train does not connect key points to make it not only a viable infrastructure project, but to turn it into a potential detonator of other investments. In addition, the train does communicate with tourist centers, the region’s main source of income. Meanwhile, the Dos Bocas refinery in Tabasco is being built at the worst moment when demand for gasoline is beginning to decline and when the state-owned oil company (PEMEX) is virtually bankrupt. Both the Mayan Train and the Dos Bocas oil refinery exemplify the problem with the López Obrador administration: they not only ignore the economic context but also there is no solid diagnosis behind them. They rather stem from the desire to do good but anchored in an idea of a Mexico that is long gone. But wishes are not realities. The economic recession and PEMEX’s dire situation threaten to further impoverish a region like southern Mexico that with good projects, could easily see much greater economic growth, especially if it industrializes agriculture, for which the area appears uniquely endowed. As the success of people from Oaxaca in Chicago shows, there is plenty creative capacity in that state. However, there is also an abundance of political, bureaucratic and social hindrances to development.

The case of Oaxacans in Chicago is crucial because it confirms that the problem is not one of capabilities or potential, but rather of realities at the local level. Put in simple terms, perhaps the most obvious difference between Aguascalientes and the southern Mexican states lies in the presence of myriad political bosses in the South who thwart development of people and companies. The realities of the Mexican South has also inhibited investment in infrastructure, making it impossible to attract, even under the best of circumstances, productive investment. The vicious circle of insecurity along with the presence of political, union, and teacher chiefdoms have held back not only progress but even actions by the Mexican government to develop adequate infrastructure as in other parts of the country.

People from southern Mexico are not different from the rest of Mexicans. We all need certainty to prosper. For decades, the North has enjoyed both legal and functional schemes, beginning with NAFTA, which generated huge opportunities. The North also could count with the government’s willingness to eliminate political obstacles to development, not only strengthening the but systematically raising average incomes. None of those elements has been present in southern Mexico, not even the most basic transportation infrastructure.

Instead of continuing to erode the sources of success of the northern Mexican states, the López Obrador government should learn from them and create sources of certainty and stability in the South.

* Luis Rubio is chairman of the Mexican Council on Foreign Relations (COMEXI) and of México Evalúa-CIDAC. A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition.
 Twitter: @lrubiof
https://mexicotoday.com/2020/12/16/opinion-south-vs-north/
www.mexicoevalua.org
@lrubiof

Luis Rubio

It comes as no surprise to anyone that the world is fast becoming dramatically complex. This is nothing new. During the past decade, all the world’s reference points of the last half century were eroded, called into question, or erased. What Mexicans are witnessing in their domestic politics has been taking place in the world at large. Just look at Brexit in Great Britain, the 2016 election of Donald Trump in the US, the far-right governments in several European nations, the attacks against the World Trade Organization (WTO) and the sudden rise of migration throughout the world and its repercussions for developed countries. All this happened even before the Covid-19 pandemic hit. Furthermore, sources of conflict have multiplied and many of the balancing agents -which at one point in time were numerous and also widely credible- have now practically disappeared. The context, one could say, has been altered or, to paraphrase Albert Einstein, “everything has changed except our way of thinking” .

Change affects all countries, but each responds to it according to its own set of circumstances, capabilities, and conditions. In some cases, their capacity of response depends on internal factors, in others on external circumstances. Electorates in many countries have tended to grow more polarized and to choose leaders previously unthinkable. Political systems that once produced weak governments, now make possible the emergence of “strong men,” even in countries with long and deep democratic roots and with solid systems of checks and balances. What seemed impossible not long ago is an everyday thing now.

In Mexico, we currently have a government with huge capacity for action that, however, has responded in contrasting ways to external phenomena. This was evident during the negotiation of the new USMCA trade agreement when it yielded to U.S. pressure very much like the previous administration did when talks started. Meanwhile, the Mexican government behaved with renewed activism when dealing with the crises in Venezuela and Bolivia. The administration has also being firm in its ludicrous reluctance to congratulate Joe Biden on his victory in the US presidential election. Countries act according to internal and external circumstances. The Mexican government has recognized its vulnerability vis-à-vis the North (the U.S.) while at the same time displaying rare confidence when dealing with the South (even enjoying domestic support despite political division).

However, one thing is how a country reacts to a particular situation and, a very different one, is to set a course of action. During the recent presentation of a policy paper (“Mexico and Central America: A Delayed Encounter”), the internationally-renowned migration expert Demetrios Papademetriou made two comments that are especially relevant for the present moment.

First, referring to migration but applicable to the entire world’s complexity, Papademetriou said that the problems the world is facing have a solution but that it requires cooperation among governments.  Thus, it is necessary for the parties to share a minimum of mutual trust. The problem, Papademetriou went on to say, is that no national government can currently count on the trust of its population and there is even less trust among national governments themselves.

It is not a surprise to say that the current Mexican government subordinated Mexico’s old foreign policy principles and practices (some praiseworthy, others less so) in order to preserve superior objectives like economic viability.  This was evident in 2019 when President Trump threatened to impose tariffs on Mexican exports to the U.S. if Mexico did not stopped the irregular flows of Central American migrants through its territory. Despite the criticisms, the López Obrador administration acted in the only way possible: ceding to Trump’s threats. The Mexican government did this less based on the asymmetry of power vis-à-vis the U.S., but rather thinking on the potential consequences for Mexican exports and on the peso exchange market, which would have destroyed Mexico’s economic stability in a flash.

Papademetriou’s second comment was about how  problems need to be addressed following a carefully conceived, developed and proactive strategy because, in his words, “when you play catch-up, you never catch up.” Solutions are the result of an action plan that responds to the specific nature of the problems. As much as migrant source countries might would want it (or for that matter the U.S. and Europe), altering demographic trends is something that by definition can only be measured not in years but in generations. I can only be altered in the long run. To put it simply: irregular migration cannot be eliminated altogether in the short run even if President Trump wanted it.

This is also true for Mexico. The problems that the country faces can certainly become even more acute if a belic conflict flares up in the Middle East, if Central America’s insecurity expels more migrants, if the China-U.S. tension continues endlessly or a myriad other factors beyond Mexico’s control. Some of these factors could be turned into opportunities like in the case of the U.S. trade tensions with China. But it could also be in the case of a new conflict in the oil-rich Middle East. This of course, as long as the current Mexican administration stops putting into doubt the country’s landmark 2013’s energy reform. Otherwise, Mexicans would end up just watching without being able to take action.

Crises are always sources of opportunity. However, in order to seize opportunity it is needed a clear willingness to change criteria, obsessions and dogmas. Today’s government deficit in Mexico is not fiscal, but rather political.

* Luis Rubio is chairman of the Mexican Council on Foreign Relations (COMEXI) and of México Evalúa-CIDAC. A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition. Twitter: @lrubiof

https://mexicotoday.com/2020/12/10/opinion-political-deficit/