After the Deluge

Luis Rubio

A Palace of Versailles guide once said that Louis XIV built the palace, Louis XV enjoyed Versailles and Louis XVI paid for it. Mexico is at a stage in which President López Obrador is enjoying the economic and financial structure bequeathed by his predecessors, those damned neoliberals. The key question after the 2024 election is over is how to pay for what’s been done, and for what hasn’t been done, during the current administration to begin constructing something new and functional with an eye to prosperity and development.

In all the governments I have observed, what distinguishes the current presidential term is the absence of a project for the country’s development. Some of the prior administrations’ strategies were too ambitious, others merely ideological; in some what was noteworthy was the absence of ambition, while others were unreal for their unviability. But none lacked a schema oriented toward greater prosperity and better life levels.

For President López Obrador development is achieved virtually by osmosis: his government concentrates all the power and the rest comes to pass automatically. Instead of strategies, investments or legislation, what there has been here is a narrative devoted to nurturing an electoral base and three investment projects that not only are not ambitious but that also do not entertain any strategic sense or for the regions where they have been installed. This is about a political project, that is, one of power, and not one of development.

Beyond the excuse supplied by the pandemic to justify everything not done and undone, the evolution of the current administration that little by little draws closer to its end has been possible thanks to two decades of building institutions that yielded a financial structure for stability, a comfortable debt profile for the treasury, funds and trusteeships for cases of emergency, periods of recession or natural phenomena.

The administrations preceding the present one occupied themselves with strengthening the foundations of economic stability to avoid relapsing into the crises of the past that destroyed everything –families, savings- in their wake. Without those antecedents, the current government would never have been able to divert so many resources that once were committed to the promotion of investment (infrastructure, the generation of electricity, etc.) in the direction of its favorite clienteles. Because although the president holds forth on austerity, the latter does not exist: resources continue to be spent, only now the criterion is electoral and political profitability, not economic development.

Thus, the most generous prospect that can be computed for the future is that, at the end of 2024, only one presidential term would have been lost and nothing more. The most optimistic calculations inform that the economy will return to the 2018 level toward the end of 2024, when the population will have grown by several million Mexicans. And those are the optimistic calculations.

Today the imperative is to place ourselves in time at the first of September, 2024, the next president’s inauguration day, to start to envision the panorama that awaits Mexico, as if that day Louis XVI were to take possession. In addition to depleted coffers, but hopefully public finances not in crisis mode, all of that for having squeezed those finances to the utmost with the disappearance of the stabilization funds and various trusteeships, the country will find itself with a new government without useful instruments and with a great crisis of confidence.

Whoever the president may be, man or woman, in 2024, their options will be very limited for at the least three reasons: first, because no one will enjoy the vast support that the president achieved in 2018 nor will they be able to count on possessing his abilities or history for preserving the base that their predecessor created. None of the obvious precandidates, on both sides of the aisle, enjoys that exceptional situation. Second, the present-day government will have exhausted the entire fiscal space -resources for undertaking projects- which will obligate them to procure novel wellsprings of financing for even the most elementary governmental operations, without even thinking about matters as urgent and imperative as the security of the population.

Finally, the third reason that the options will be strained is the other side of the coin of President López Obrador’s administration: just as he built and nurtured a broad electoral base, he alienated the rest of the population. Instead of uniting, he divided and polarized, exacerbating the environment to the point of provoking impulsive and visceral reactions by those who supported him as well as by those who ended up hating him. The person assuming the Mexican presidency in 2024 will have to deal with that contradiction and start springing into action to build bridges, diminish tensions and develop institutional and sustainable sources of support. As in the old PRI system, the next government will have no alternative other than to reproduce the pendulum of yesteryear: correct the damage and start over.

This will be the main challenge: the great virtue of the NAFTA was that it furnished reliable sources of confidence that transcended the sexennia. That vanished due half to Trump and half to López Obrador. The prodigious task will be to find or erect a new platform that guarantees certainty, blunted by this government so distraught about the immediate (the electoral) but disdainful of the transcendent, development and peace.