It’s Fear…

Luis Rubio

The presidential strategy has been very clear: concentrate and consolidate his power. His expectation is that, on re-creating the schema of the strong presidency from one half century ago, the economy will automatically respond. The reality has proven to be quite different: private investment has contracted and the economy has decelerated, with a high probability of entering into a recession. To counteract this tendency, the government has recruited sympathetic businessmen, inciting the reactivation of investment. The objective is commendable, but inconsistent with the environment in which it occurs.

The nodal ingredient for achieving the growth of the economy is private investment. That is how the government understands it, thus its promotional activism; what these initiatives do not take into account, or recognize, is that there is no investment because everything the government has been doing has inhibited and impeded it. The problem does not lie in the logic of the investor –which is obvious and absolutely predictable- but in the governmental instigation to render this impossible on terrorizing potential investors.

During the last year, the government has devoted itself to destroying all the elements that make investment possible and attractive, beginning with what is foremost for the investor: certainty. The blue streak of attempts against certainty started with the cancellation of the new Mexico City airport and proceeded with barrages of persecutions without a judicial order, the daily announcement of new investigations, the approval of the Asset Recovery Law (Extincion de Dominio), which makes any person vulnerable and submits them wholly to the bureaucratic and political discretion of the head honcho of the moment. That is, the government has addressed itself to eradicating any source of certainty and to terrorizing precisely those whom the economy’s recovery depends upon and whose actions determine the rate of growth of the economy and, thus, any advance on the struggle against poverty, two of the promises of the president.

As if this were trivial, there is no morning newscast in which a source of certainty is not attacked: one day it was the Human Rights Commission, another day a journalist, followed by disqualifications of a certain entrepreneur. That is, there is a systematic creation of fear. In addition to the latter, the dismantling, intimidation or weakening of all instances of counterweights on the executive power –ranging from so-called autonomous organs, each relevant in its sphere of competence, up to the Supreme Court and the Bank of Mexico- constitute effronteries against certainty.

The interesting part of the rationale of the onslaught is that it replicates a past era, which contradicts all the beliefs and statements that, for more than a decade, have characterized Mexico’s current president. While AMLO vowed to wipe out corruption and strengthen justice, the president’s actions have gone in the opposite direction. Instead of addressing the deep causes of corruption through the strengthening of the justice system, the government has opted to reproduce the successful way that President Salinas acted. Nothing wrong with that, except that this is taking place in a very distinct context, in terms of the presidential project as well as the nature of the world economy three decades later.

Salinas procured the consolidation of his power in order to embark on a profound economic transformation.  Independently of the result, his acting opened spaces for him to confront unions, entrepreneurs and political leaders, with this gaining wide-reaching credibility among the population. The nodal point is that, behind the strategy of consolidation there was a strategy of economic development compatible with the world of the time. None of that is certain in the case of the government of López Obrador.

Within this context, it is inconceivable for private investment to grow, however many the exercises of promotion, invitations, pressures or squalid renegotiations. On the globalized planet of the XXI century, investment has no home:  it moves in an instant to where there are opportunities and, above all where there is clarity of course and certainty in this respect. The government’s game plan has advanced in the diametrically opposed direction.

History, said Marx, first repeats itself as a tragedy and afterward as a farce. Beyond the strange irony of mimicking the master plan followed by Salinas, the enemy AMLO most frequently alludes to, the onslaught undertaken by the present government entertains impeccable political logic, but crashes against a brick wall because it lacks a strategy that everyone –beginning with the investors- can understand.

Salinas acted in the context of the old political system: he imposed his mark with the detention of the drug lord la Quina and other public personages, in this manner acquiring credibility as a capable president and one willing to break with those opposing his project. Thirty years later, the government lacks a similar, long-range-future vision and project, and is working in a radically distinct political climate: now that same strategy sounds more like revenge, the opposite of the certainty necessary because it generates fear. In a context such as this, there is no way to expect private investment to materialize.