by Luis Rubio
One hundred days to consolidate a power grab. That seems to be the rationale and, gradually, the reality. López Obrador arrived at the presidency with an agenda but not with a plan: the agenda is to backtrack on anything and everything that was built and created after 1982. The plan does not go further than centralizing power in order to recreate the old order and, maybe, to introduce reelection into the Constitution. This is no mere change of paradigm, it is the beginning of a new era, not necessarily for the good.
There is a clear vision behind López Obrador’s thrust, although it is somewhat of a caricature: the notion that the presidents of the 1960s were all-powerful and could get their way at no cost. He represents the revenge of the statists against the technocrats in the fight that began in the late 1960s and early 1970s over the direction Mexico should take when the economy began to falter. The economic side of the government argued for gradual liberalization; the political side, which won the day in 1970, argued for a greater role of the government in the economy. The strategy appeared to work, at least at the beginning; however, by 1982, the government had gone bankrupt and the country was burdened with an extremely heavy foreign debt. López Obrador has fond memories of that era, when the economy grew at close to 7 percent on average and there was no violence, but he dismisses the risk of leading to a similar financial crisis. Thus, he is plowing ahead at the fastest possible rate.
While the scheme is clear from the very beginning, the oddity of the moment is that he enjoys a level of popularity previously unknown in the country. He exerts an exceptional leadership, and people want to believe that things will get better; this combination has produced spectacular results. The flip side of the coin is that private investment is completely stalled, and the government is not trying to attract more. In fact, the president’s party is even threatening to limit foreign investment. Furthermore, by cancelling the construction of the Mexico City airport, new ventures in energy, and reneging on existing contracts, the damage being caused is exorbitant.
The financial situation at the start of 1982 was bad enough, but it took a turn for the worse, and became a full-fledged political crisis, when the government expropriated the private banks. It took Mexico at least two decades to recover from that blow, and it was only possible thanks to NAFTA, which created political and legal guarantees to overcome the fears among investors. López Obrador has not gone that far, but unless he corrects course, Mexico could end up in a similar position not too far down the road.
The views expressed here are those of the author.