Luis Rubio
In solidarity with José Sarukhán

 The preposterous is everywhere. Some indulge their preferences rather than embrace the reality. As happened to Kafka in the village of Zürau, where he wrote about the teeming mice in his sanatorium’s surroundings. He speculated on the urgency of attracting a cat that would free him from the mice, but that created a new circumstance:  Who would free him from the cat? Kafka’s absurdities are indistinguishable from those of AMLO’s Fourth Transformation (4T) and, above all, from those of his followers.

All of us Mexicans would like live in the perfect world, but no one seems willing to build it, because that would imply abandoning not only privileges, but above all the visions, when not the entelechies, of those who today are the essence of the status quo. AMLO’s daily narratives obscure the obvious: the narrative -and the preferences, above all ideological- are more prominent than the tangible reality and not only that of the Mexican in the street. The present is perceived, by both Tyrians and Trojans, as unsustainable. Hence it would be indispensable to understand where we are to know not what is desirable, but what is possible.

In the fiction of the morning narratives, the changes undertaken since 1982 comprised the product of a dogmatic zeal that altered -if not destroyed- the course of the nation. Everything was going well until the treacherous neoliberals came into power. (Near) hyperinflation, the dislocation of families and patrimonies never appear in the 4T narrative.

At the beginning of the seventies, the country experienced a radical change in the management of the economy. For two decades, the country had lived through a virtuous cycle of economic growth under iron-fisted political control. But both had begun to take on water. The grain exports, key for financing the importation of industrial goods, had started to decline from the mid-seventies. For its part, the 1968 Student Movement had evidenced the limits of PRI authoritarianism.

The solution advanced by the two heroes who inspire the President -Echeverría and López Portillo- was magic: public expenditure to satisfy one and all. The government can finance poor and rich, supporters and dissidents. Subsidies far and wide. Except that the solution was not to be so: the government ended up practically bankrupt in 1982 and every vestige of civility and confidence had been wiped out. Those presidents were incapable of understanding the forces to which the Mexican economy was subjected and, in a broader sense, the country in its integrity.

The world changed in accelerated fashion, but Mexico encysted itself in its natural refuge. Better to hide its head in the sand albatross-style than face the circumstances determining the fate of the country. Like today.

The so-called 4T project is sustained on a fallacy: the notion of the technocrats, the disparagingly denominated “neoliberals,” carried out a series of reforms on the economy of the country because it dictated to them their ideology or pure-and- simple corruption. The reality is simpler still: the country was adrift; the government was insolvent and the only way for it to recover its capacity -or possibility- of economic growth was by modifying the country’s economic structures.

While Mexico reveled in the lust for oil of the seventies -the era when today’s president was leader of the PRI in Tabasco State- the world was transformed. Instead of closed and protected economies, the planet, in industrial terms, came to be globalized, communications were revolutionized and expectations rocketed. Little by little, added value moved toward the processes of high intellectual content -software, brands, innovation, services, creativity, distribution- above manual labor.

Those functionaries, today reviled, devoted themselves to transforming the foundations of the development of the country -communications, infrastructure, energy, education, health- with the purpose of financing a sustainable platform for the future. Evidently there were errors, corruptive practices and abuses, but the objective was clear: to place Mexico in the proximity of the opportunities for development that were possible, and feasible, in addition to inevitable, in the XXI century.

At the end of four years of the 4T Mexicans find themselves facing the dilemma of always: how to achieve development. Except that today, they are in suboptimal conditions for achieving it. The destruction of institutions that the president has promoted entails consequences. The same is true concerning the dislocation that the public budget has endured: today everything is directed toward promoting presidential popularity and nothing toward the development of the country.  The next president will find himself or herself before an ill-starred panorama, with few opportunities to correct course.

The 4T acolytes swear and perjure -and insult- but they come unequipped with arguments to counteract the devastation taking place.  Today fear, uncertainty and alienation reign. Popularity, the fruit of a fictitious narrative, points in one, but the quotidian reality points in the opposite direction. Sooner or later the convergence of these will inevitably and inexorably point downward.

Nothing is written in stone about 2024, except the fiscal, moral and political bankruptcy brandished by the current government. This now begs the question of what or who offers a way out that is compatible with the world’s reality, not with the fantasies that the government weaves.

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@lrubiof

Luis Rubio

It is not clear whether they were betting on civilization, submission or, simply, on that material satisfaction would resolve other human aspirations, such as that of progressing, improving or participating in politics. The tangible fact is that Mexican governments from the sixties on have been betting that the Mexican citizen would endure anything without protest. In reality, it wasn’t a bad bet, except for that all those governments, including the present one, entertained a double agenda: they wanted things to get better but not so much as to alter their political projects.

The projects changed over time, but not the objective. Consciously or not, the objective always was control of the population; some wanted it to enjoy the sweetness of power, others merely to stay in power. But even in that there were levels: the reformers of the eighties and nineties did everything imaginable to accelerate the pace of economic growth; the current rulers prefer impoverishment of the population. A booming economy, the former calculated, would transform Mexico, creating a country increasingly like the successful nations of the world. In a country of the poor, bets President López Obrador, no one complains because they all depend on the government. Different projects, but control always at the ready.

The era of reforms began due to the fiscal crisis of 1982: the bankruptcy of the old Mexican State, sustained by ever more State-owned entities that served for nothing other than preserving power and enriching those running them. That crisis obliged the undertaking of a series of reforms to stabilize the economy and to make possible its return to growth. A frequently asked question during that time -coinciding with Gorbachev’s reforms of the former Soviet Union- was on the viability of carrying out economic reforms without analogous political reforms.

In the end, this mattered little. As books like that of Acemoglu and Robinson (The Narrow Corridor) illustrate but, above all, as does the most recent one by Guriev and Treisman (Spin Dictators), the fearsome Leviathan finds its own way of adapting, staying in power through presumably clean elections, largesse toward the population, and a moving narrative to obviate the commonly accepted democratic practices. What’s important, say Guriev and Treisman, does not consist of being democratic, but instead being seen as such. The prototypical examples charactering that type of tyranny in those authors’ perspective are Putin and Chávez. While they could have come to power via the democratic route, years later they would not pass that test.

The Mexican economic reforms did not achieve their integral purpose for three principal reasons, none of which appears in the catalog of allegations that procured the presidency for President López Obrador. First, the government abandoned its responsibility on generalizing the reforms: engulfed in the crisis of 1995, the government let the economy function on its own, without its engendering conditions for general prosperity. The modern part of the economy, fundamentally linked with the North American Free Trade Agreement (NAFTA), acquired an extraordinary dynamism, as portrayed by the states of Aguascalientes, Querétaro, Nuevo León, and other, mainly northern, regions. The rest of the country succumbed to organized crime, violence and the absence of justice and, in general, of government. Rather than the government adapting to the new economic reality, the government abdicated its responsibility and no one, outside of organized crime, has assumed it since.

Second, regardless of the number of reforms embarked upon in the economy, there was no advance in properly political matters. Mexico ended up with a strange hybrid: one of the most modern and competent electoral systems of the world confronted by a despotic government and with no counterweight whatsoever, as AMLO has demonstrated. This can be appreciated in all ambits:    from the private monopolies to the teachers’ unions or to the flagrant violation of the laws (e.g., the electoral ones) in recent times. The language of democracy is abundant, but the reality of tyranny has not varied: in any case, it has become more and more underscored, especially in the present presidential term. Finally, the combination of incompetent governments, the absence of legitimacy, the evidence of uncontainable corruption and violence have had the effect of driving away private investment, the sole source susceptible to raising the growth of the economy, generating jobs or improving incomes.

One of the constants in the writings of Thucydides (c.400 BC) is the fragility of civilization, the provenance of wars, social degradation, revolutions and disease. The Mexican governments of the last decades have had the effect of degrading the Mexican civilization and putting it at a grave risk. Before, at least the rhetoric promised advance; today, in place of progress, as was the wager of the reformer governments, the bet is generalized impoverishment. The despotic Levithan wants to stay in power at any price.

Lord Acton could not have said it better: “Liberty: Power over oneself; Opposite: Power over others.” It is in the hands of the Mexican society to decide which wager is most seemly for it.

www.mexicoevalua.org
@lrubiof
a quick-translation of this article can be found at www.luisrubio.mx

Luis Rubio

The roof was falling in, the leaks had disappeared and were replaced by holes more than 30 centimeters in diameter where the rain, snow and trash came through. One would think that this was about an abandoned property in the middle of nowhere, but it was one of the Mexico’s most important embassies abroad. Confronted by the inexistence of funds to repair the roof, the ambassador had gone ahead with the only alternative left to him: close the upper floor and pretend that the problem did not exist, aggravating the situation and making the later repair process much more costly. The notion that one needs to budget in order to maintain existing assets goes against the grain of Mexicaness…  Even worse if it involves planning for the future.

The deterioration of the country’s physical infrastructure is visible in all its ambits: it can be observed in the Mexico City Metro, in multiple condominiums throughout the country, in the scarcity of water in diverse regions, at the Mexico City airport, and, as illustrated by the case of the referred embassy, in many governmental buildings. The problem is not limited to the government: condominium owners are reluctant to pay the fees for the maintenance of the buildings in which they live.

The water crisis in the Mexican city of Monterrey laid bare an entire sewer of criticisms, political stances and attacks regarding the heavy users of the precious liquid. Crises always present opportunities to draw political advantage, but few take time to realize that this does not concern a situation that came about all of a sudden, but instead one that it is the consequence of not having done the work required, in this case, that of infrastructure, for decades. Since it cannot be seen, politicians prefer to circumvent the need for building capacity in anticipation of upcoming growth: everyone wants growth, but no one is willing to invest for it to be transformed into a great benefit for all.

A few decades ago, a comparative study was conducted[i] on water management in two similar cities -Phoenix and Tucson- both localized in a desert with very little access to natural water sources. The study arose from the extraordinary difference in water consumption per inhabitant that characterized two cities separated by little more than one hundred kilometers in distance.  While in Tucson an average 640 liters of water were consumed daily per household, in Phoenix average consumption was 1,040 liters. The difference lay in the management of the water: while in Phoenix water was seen as a human right, in Tucson it is considered a scarce resource. The inhabitants of Tucson pay dearly for their water, but they never confront problems of water scarcity, which does happen in Phoenix. The same is true in the northeastern Mexican state capitals of Monterrey, Nuevo León, and Saltillo, Coahuila, cities typified by like physical circumstances and geographies, except that in Saltillo water is never scarce. In Monterrey the administration of water is governmental, in Saltillo a company responds to the citizenry.

As the population grows (and, during these years, the economy less so), problems of infrastructure will increasingly beset Mexicans. More inhabitants imply more streets, more water, more communications, schools, hospitals, etc., all of which entails investments in infrastructure and funds for the maintenance and improvement of what already exists. However, none of that is evident in the criteria driving the annual governmental budgets or in plans for development. In technical terms, this is called entropy, i.e., the gradual deterioration that leads to disorder, the absence of predictability and, potentially, chaos. As Héctor Aguilar-Camín[ii] pointed out a few days ago, “the government’s decisions on the airports have placed Mexico City in a Kafkaesque dilemma: the more airports you have, the fewer airports there are that function.” Chaos.

The present government has distinguished itself by its total contempt for anything that could produce economic improvement for the population or the country, but the deterioration it inherited and that its apathy accumulates does nothing other than magnify the situation, as witnessed by the botched handling exemplified in its response during the pandemic. Rather than a coherent plan for modernizing the institutional structure of the health sector, the elimination of popular insurance in Mexico happened at the worst possible moment and without a duly articulated plan of action to replace it. The chaos that it caused was not particularly distinct to that of its predecessors, but its indolence exacerbated the predicament due to the government’s indisposition to act in the face of a critical situation. Lack of investment in basics and their maintenance.

When a (system of) government refuses to prevent these extremes, chaos becomes inevitable. Steven Pinker[iii] says this in an exceedingly clear manner: “Closed systems inexorably become less structured, less organized, less able to accomplish interesting and useful outcomes until they slide into an equilibrium of gray, tepid, homogeneous monotony and stay there.” Whoever watched the recent scenes of the Morena elections for its congress will appreciate this in its maximal expression…

                                                                Luis Rubio

Those who play with fire, goes the saying, get burnt. That is how the Mexican government is presently operating regarding the issue of the trade dispute with the U.S. and Canada. Of course, the government seeks to defend its vision of the electricity industry, the grounds for the USTR action, but the president’s natural tendency to politicize everything and to convert it into a wedge issue entails risks that he has clearly not evaluated.

As always occurs between neighboring nations, relations between Mexico and the U.S. entertains dual dynamics: that of the daily reality and that of their political leaders. The reality derives from the constant, growing and frequently conflictive interaction that takes place at every level of the vicinity. It has ever been thus and there is no doubt that it will continue being so in the future: the exchanges move in both directions and each moment is different; suffice to illustrate this with the fact that Mexico was key in sourcing arms to both sides in the U.S. Civil War.

Certainly, it would be possible to improve what exists were the ideal institutional arrangements in place, but dynamism does not depend on the moods of the political leaders; instead, it derives from the true forces of the economy and of the human exchanges. Trump attempted to cancel NAFTA and AMLO would prefer it not to exist, but both had to cope in the face of the inexorable reality.

The conflict of the moment concerns the politics of the current government in matters of electricity. The treaty in force, the US-Mexico-Canada Free Trade Agreement (USMCA), establishes that the parties must afford equal treatment to all economic agents, regardless of their nationality. It also impedes modification of the rules of the game without a negotiation taking place, in that the objective of a contract of this nature is precisely that of conferring certainty on the potential investors. In this regard, there is not the least doubt that the Mexican government has been modifying the rules in electricity matters, formally (with the law approved in 2021) as well as in practice, with the extorsion to which the Federal Electricity Commission (CFE) has submitted private companies, coercing them to cast aside private energy suppliers. What is up for grabs in the procedure initiated by the U.S. government and seconded by the Canadian one is whether Mexico backs down in these practices or is sanctioned through the mechanisms that the trilateral treaty foresees.

The rationale of having negotiated in the nineties and re-negotiated the North American Free Trade Agreement (NAFTA) during the last five years lies in having established the rules of the game that oblige the three governments to abide by procedures that exit and that are known by all. This happened because as soon as commercial liberalization materialized in the eighties, a massive number of commercial clashes was untethered. NAFTA was conceived to avoid those disputes, to facilitate commerce and to make possible bourgeoning productive-investment flows toward Mexico.

NAFTA was born from an understanding between Mexico and the U.S. with respect to the relationship, the future, and their coexistence, a condition necessary to institute a base of trust for two nations that one hundred thirty years ago prior had been at war.  The agreement consisted of the development of a common vision concerning the direction of the incremental interaction that had been coming into being and that was sustained in shared fashion until Trump arrived at the U.S. government and, two years later, AMLO at that of Mexico. Both would have preferred to annul the geography and the reality of the burgeoning exchange.

From the Mexican perspective, the key to the original NAFTA (1994) resided in the implicit political guarantee that the U.S. Government conferred on investors. It did not do this with charitable aims, but instead due to its recognition that U.S. national security would be strengthened by way of a good relationship with a successful and prosperous Mexico.

USMCA no longer enjoys that political element (except for services), therefore a commercial conflict at this moment could be devastating for the Mexican economy.

The disappearance of a common vision has implied the degradation of the mechanisms of interaction between the two countries, the growth of sources of discord between the governments and the increasing indisposition to address their problems in common. The conflict on electricity is potentially major due to three reasons: a) because of the enormous amounts of investment at play; b) because of the transcendence of energy for the long-term growth of the economy; and c) because of the energy transition that the world is undergoing and, in particular, that of the most prominent industry in Mexico, the automotive. If something comes out wrong in that negotiation, these factors could place the stability of the Mexican economy in doubt.

The Mexican government has two options: the ideal would be to take seriously the challenge that this entails devoting itself to negotiating an exit, as it did with the gas pipelines in 2019, before time -or the reality- wins out. The other option, its natural inclination, would imply distracting the public and persevering in its nationalistic rhetoric, literally in the face of the tremendous opportunity that the U.S.–China conflict represents for Mexico. Proceeding via the rhetorical and satirical route would be equivalent to playing with fire.

Unlike the pipeline issue, the point in time of the political cycle and the already unleashed process of presidential succession guarantees an immense volatility that in no way are of benefit to the government and even less so to the country.

www.mexicoevalua.org
@lrubiof

Luis Rubio

Paraphrasing Marx and Engels, a specter haunts the world, the specter of populism. This is a struggle among different models of development and ways of conducting politics. Today two models that embrace economic orthodoxy are head-to-head: the democratic-market model that characterizes most rich nations around the world, with the model of Chinese authoritarian capitalism.  But there is another dispute, that of the political leaders: there are heads of state who follow institutional rules (those which Weber denominated “legal domination”), while others have instituted charismatic profiles, whether of the Left or the Right (Trump, Bolsonaro, Chávez, Erdogan), all of which fall under the rubric of populism. Behind all this is a battle between two radically distinct modes of conceiving of the world and of adapting (or not) to the prevailing international and technological milieu.

The conflict presents itself at two levels: on the one hand, the yearning of innumerable politicians to break with the impediments imposed by the globalized economy and the constriction of the world due to the technological advance. On the other hand, the irrepressible logic of the decentralized production both far and wide, the pervasiveness of information and, especially, the revolution of the expectations deriving from the latter two factors. The key question that every political leader comes up against is whether there is really an option. Margaret Thatcher inaugurated the phase “There is No Alternative” (TINA) to explain the imperative need to reform the British economy. Whether or not one agrees with the philosophy of the so-called “Iron Lady,” the phrase that she employed sums up the nature of the dispute that still depicts today’s world

Ernesto Laclau* wrote that “normally it tends to be left to globalization to justify the TINA dogma and the most common assertation is that the fiscal constrictions that governments confront comprise the sole realistic possibility of a world in which the markets do not permit even the most minimal deviation from the neoliberal orthodoxy.” From this approach, Laclau proposes passing over the republican institutions to transform the reality.

So attractive is this overture that countless political leaders worldwide and of ideologies as diverse as those mentioned previously have attempted to pursue the route of breaking with the institutional framework as proposed by Laclau. Trump’s war cry was “drain the swamp,” a notion not distinct, in a conceptual sense, from what Podemos advocates in Spain or the Kirchners in Argentina, Correa in Ecuador or López Obrador in Mexico have procured.

The problem with voluntarist projects, those in which the ruler defies the orthodoxy and tries to ordain his own preferences and rules, is that these hit a wall, also known as reality. Mexico underwent severe crises in the past century precisely because diverse presidents felt free to do as they pleased. The same would happen were the government to adopt a collision course in the matter of the consultation on electricity that the American government has launched.

The phenomenon has worsened in the knowledge era for two reasons: first, with a couple of exceptions (such as Cuba and North Korea), the world has become integrated due to communications, which has rendered it supremely difficult for a country to abstract itself from the rest of the world. Formerly, when those circumstances did not prevail, presidents celebrated the entire production of automobiles or refined oil products in their nation, without any need to mention the global context. That is impossible today because there no longer are plants that manufacture the totality of a product and, more importantly, the population demands high-quality and immediate satisfiers. The idea that it is possible to ignore what is happening in the rest of the world is unthinkable not because of the pejoratively mentioned neoliberalism, but instead because the electorate no longer tolerates it; contrariwise, it expects answers here and now.

Laclau’s approach and that of his followers is very appealing in political and emotional terms, but all the same it is dysfunctional in the real world. The only certainty that can be stated of the voluntarist projects (those not constrained by the institutions’ strength, as in the case of Trump) is that these have been a disaster regarding economic growth and poverty reduction. Although many of the governing group consider the Venezuelan regimen a success, evidence of the disaster that is that country is overpowering. The rhetoric can be generous, but the reality is absolute.

As Jan-Werner Mueller has argued,** the evidence shows that citizens who sustain voluntarist-populist governments are not a Silent Majority, but rather a Vociferous Minority. Therefore, practically all intents at defying reality in the knowledge era end up badly. Bill Hicks, the late comic and grouch, dreamt of a political party for “people who hate people.” He just couldn’t get them to come together in the same room. The great egoist movement was undone by its central principle. Reality cannot be defied and that is what ends up terminating these unsustainable voluntarisms.

*Hegemonía y estrategia socialista; **The Myth of the Nationalist Resurgence

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@lrubiof

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.

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Luis Rubio

Disproportion, or the sin of pride, which the Greeks called hubris, consists of believing oneself to be more than other humans, failing to recognize and trespassing imprudently beyond the limits of our condition, forgetting one’s insuperable finiteness. This disproportion, or lack of moderation, says Aníbal Romero, includes disdain for the costs that the loss of the sense of scale can exact from others, in terms of anguish, pain and disillusion. A government devoted to capriciousness without an iota of concern for the tie-in between penalties and potential benefits is an inexorable example of disproportion.

Propensity toward disproportion is a constant in human nature. In The Iliad, Homer depicts the diverse forms in which Helene, Achilles and other personages lose their sense of reality. That is what occurs every time a government makes decisions according to myths, dogmas or preferences without repairing on the obvious: the resources it uses are not theirs. Governments utilize resources from the taxes they levy on the population; and they are, or should be, accountable to it. This clearly has not been the case of the present government of Mexico.

Governments, driven by their immense size, allocate their resources as they consider best, impacting daily life by commission but also by omission. The current government designed three emblematic projects whose cost should be measured in two ways: first, by the investment itself and the alternatives available; equally important it is indispensable to assess the consequences of the projects. There is no better example than the Felipe Ángeles International Airport (AIFA): the cost of constructing it, the cost of destroying the New Mexico City Airport (NAICM), which already entertained a nearly 40% advance, and the cost of having to build a new airport in the future because the combination of the two airports presently in operation, the AIFA and the Mexico City International Airport (AICM), is dysfunctional and, in any event, insufficient.

The government has distinguished itself by its opacity in the management of public investments, so all the available information leads to mere estimates, but published calculations suggest the following: the cost of AIFA was 5 billion dollars; the cost of demolishing the Texcoco Airport, including repayments to bondholders, borders on some 16 billion dollars. In addition to this, as all users of the old airport know, but that remains a secret for the President, is that sooner or later a new airport will be required to replace the present one (AICM) and that the new one will never be the one in Santa Lucía. The new airport will cost at least another 16 billion dollars. In sum, the president’s stunt will turn out to cost some 37 billion dollars.

Something similar happened with the Refinery and the Maya Train. The most recent estimates indicate that the Refinery will cost nearly 18 billion dollars and that the Maya Train will reach an amount of approximately 11 billion dollars. As with the airport, the calculation must be twofold: what the projects will cost and the potential benefits that the latter will come to supply. If current trends in matters of electric automobiles materialize, the best that could be expected would be that a refinery conceived to function for decades (the refinery that Pemex acquired in Texas was constructed more than a century ago), will operate for a maximum of 10 years: from the mid-twenties to the mid-thirties. That is, another enormous waste. The Maya Train constitutes a wager yet more rash, in that it does not even communicate the peninsula’s three important cities: it does not touch either Mérida or Campeche.

There are many ways to quantify disproportion, but the fundamental one is that deriving from dogmas, which never underwent any sort of screening process. I don’t know whether the Texcoco Airport was localized in the best place, but I have no doubt that the two airports existing today share the same airspace and therefore, do not add to, but rather subtract: a zero-sum game. All of this was to demonstrate Who Decides Here, as the title indicated of the book that the President placed near his armchair the day he announced the cancellation of the Texcoco airport. It’s all about power. Thanks to the absence of checks and balances, Mexican presidents wield enormous power during their term of office and exhibit a tendency toward the excesses noted herein, but none like the present one.

Arrogance and arbitrariness mix to produce not only excesses, but also devotion to each other, the best measure of hubris, that very Mexican capital sin so costly to the country throughout its history. For many years, today’s President criticized, with full legitimacy, the excessive cost of the bank rescue of the 1990s, estimated at around 12% of the GDP. The cost of his investment projects will tally close to 6% of the economy. The difference is that excessiveness in the past was the product of a poorly managed crisis; this one was intentional and self-inflicted.

President Benito Juárez portrayed beforehand the events that would take place about one hundred and fifty years after death:  “A democratic system and eminently liberal, such as that which rules us, has as its essential base the observance of the law. Not the whims of a sole man, nor the interests of certain classes of society, form its essence. Under a noble and sacred principle, it bestows the most perfect liberty, while repressing and punishing licentiousness… It is therefore evident that in the name of liberty it is never lawful to commit the least abuse”.

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Luis Rubio

The world of the last three decades was a historical anomaly: the end of the Cold War seemed to freeze the planet due to the existence of a superpower that made irrelevant the traditional zones of influence, where each regional power imposed its law. Regardless of the specific way the invasion of Ukraine ends, the only thing that is certain is that the so-called “world order” will have changed. We are at an inexorable turning point, just as President López Obrador goes to Washington.

Beyond sanctions and calculations about the end result of that conflict, what is directly relevant for Mexico is what will change in the US-Mexico bilateral relationship, be it with the Biden administration or with whoever follows it.

It is easy to underestimate Uncle Sam, as did the Japanese in 1941, the 9/11 terrorists, and the Russians in the Ukraine. Biden has not been a particularly successful leader, but it is not the person, but rather the superpower that he represents, that Mexico must deal with.

Seen from Mexico City, especially given the enormous capacity that AMLO seems to believe he has developed to influence internal decisions within the US, it is easy for him to imagine that he can impose his agenda on Biden, as he did with the Summit of the Americas a few weeks back. However, historical experience shows that betting against the Americans, as indeed the Mexican government has been doing, is not a very smart strategy.

In an interview when Russia began its assault on Ukraine, Natan Sharansky, a political prisoner in the Soviet era, explained Putin with the following metaphor. “The ringleader in the cell,” he said, wasn’t the one who was physically strongest but the one ready to use his knife. “Everybody has a knife, but not everybody is prepared to use it… Putin believes that he is willing to use his knife and the West isn’t —that the West can only talk even if it is physically stronger.” Putin has spent years assessing the West, especially the United States, and his reading of this led him to conclude that he could invade Ukraine and get away with it. The verdict on this is not yet in, but the fact of having conducted this invasion changed history and this entails enormous implications for Mexico.

President López Obrador is operating under the framework that existed prior to the invasion of Ukraine. Regardless of that nation, it is impossible not to recognize that the world will return to the logic of zones of influence where the world powers – two or three, depending on what turns out- will begin to make their priorities and preferences felt. What China and Russia have already been doing in their zones, each in its own way, will sooner or later be reproduced in the Western hemisphere.

Mexico is the first line of fire in this logic and will undoubtedly be the first to feel the weight of the power of the region. From the US perspective, Mexico has been adrift for years, especially in terms of security, but also because of its inability to solve elementary problems that impede the growth of its economy. For some time since the end of the eighties, when a series of seminal agreements were reached on the principles that would govern the bilateral relationship, the United States was an active and willing factor in supporting the long-awaited internal transformation, the NAFTA being the main fighting horse to achieve that goal. Over time, however, the lack of results and action on the Mexican side ushered in disillusionment in the US. which increasingly limited itself to guarding its border, abandoning the expectation that Mexico would achieve integral development as proposed forty years before.

AMLO has spent months provoking the US government, threatening and snubbing its president and, more recently, offending its population with the grandiose idea of ​​destroying the statue of liberty, one of the few symbols that still unites all Americans. I have no doubt that, geography permitting, López Obrador’s preference would be to distance Mexico from its northern neighbor, but since he cannot, he does everything possible to degrade and diminish the relationship, probably hoping to achieve the same goal, regardless of the cost.

Perhaps the president thinks that he has an inordinate ability to impose his preferences on the Americans, but everyone who knows them knows that, as a sometimes-reluctant superpower, they will sooner or later draw the line on him and impose their rules. Biden may not be able to force Mexico to confront the violence and extortion to which Mexicans are subjected or to improve their living standards, but, as Trump showed, the Americans will not tolerate one offense after another.

The president claims respect and speaks of sovereignty, but this is a chimera in the era of globalization. Respect, to exist, must be mutual and López Obrador has not been characterized by that virtue towards Biden. As for sovereignty, it is achieved and ever strengthened by turning Mexico into a great nation, not by its growing submission to organized crime and with the endless construction of barriers to economic development. The relationship with the US can help on both fronts, but not when the Americans are used as patsies.

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@lrubiof

Luis Rubio

 “The future is already here, wrote the novelist William Gibson, it’s just not evenly distributed.” The change that the world is experiencing is unstoppable and is taking place on all fronts, some benign, others exceedingly risky. In recent weeks a series has accumulated of news reports and studies that, taken together, present an overly complex scenario (and, in many senses, contradictory) that obliges one to visualize the potential of the alterations in the panorama that has come to materialize over the most recent months.

A first approximation to the changing scenario is that which China provides. If one were to extrapolate the tendencies of the most recent years, China’s economy will exceed that of the U.S. by decade’s end, to become the new pole of economic and, potentially, political attraction. A study presented in Visual Capitalist[i] illustrates graphically the way the world economy evolves, and the changes anticipated for the main world economies (and that, in passing, reveals Mexico’s growing deterioration on the international horizon, suggesting future problems).

The study is built on direct extrapolation and does not take into account two elements that could  modify these tendencies:    on the one hand, there is speculation around the world concerning the veracity of China’s official statistics;  on one extreme, there are those who maintain that China’s total population is sensibly lower than that previously estimated,[ii] which would lead to the possibility that, instead of growth, China is initiating an accelerated process of contraction. Of course, this would in no way change the extraordinary performance of the Chinese economy and its enormous potential, especially because of its great advance in matters of digital technology and artificial intelligence, which would place China at the world-leadership level in the most promising industries.

A second factor in this equation comprises the dispute over the way of governing that characterize the U.S. and China, the former with a dysfunctional democracy, the latter with an autocratic system that has been capable of dislodging from poverty hundreds of millions of its citizens. Behind the conflict between the two powers are evidenced the strengths and weaknesses relative to the two nations precisely when the pandemic has yet to be resolved, inflation starts to wreak havoc and the interminable debate persists on the viability of the Chinese political system. Ian Bremmer[iii] speculates in his new book on the possibility that one of the great myths of our times (the superiority of the U.S. political system vis-a-vis the superiority of the Chinese economy), ends up being the reverse of this: that the flexibility of the U.S. economy wins while the Chinese political system proves itself more robust and sustainable.

The third element in this panorama is that of the growing inflation, for which none of the western nations appear to possess a convincing answer, threatening to plunge the planet into a recession with no obvious way out. The recent performance of the financial markets further adds to this scenario, above all the extent to which this political moment is particularly delicate in the U.S., with legislative elections at the end of this year. The inaction of the Biden government, its dubious priorities in economic matters, and its colossal loss of prestige sharpen the intricacy of the moment.

The panorama is acquiring complexity in all ambits, which does not augur well for a tranquil future for Mexico. In the last two years Mexico has enjoyed an unusual situation not thanks to the government’s strategy, but rather to the generosity of the U.S. government.  On the one hand, our exports have multiplied thanks to the exceptional growth of the U.S. economy, creating an encouraging environment for the domestic markets; on the other hand, the transfers conferred by the U.S. government on its inhabitants to mitigate the harmful effects of the economic paralysis caused by the pandemic translated into a monumental growth of the remittances of Mexicans living in the U.S. to their families back home  (which increased from 1% to 4% of GDP). None of these phenomena is attributable to the Mexican government: strictly speaking, it has been the U.S. economy that has been instrumental in avoiding an economic and social collapse in Mexico.

This situation should be held up in contrast with the clouds that could be approaching for the world economy. For Mexico, the key factors of its economic stability are exports, interest rates in US dollars and the remittances.  A severe recession in the U.S. would pose a direct threat against these three factors, inverting the panorama that has characterized the economy in recent years.

The absence of a strategy of development, the unnecessary polarization and the alienation of the U.S. government as well as of investors desirous of diversifying themselves on confronting the conflict of the U.S. with China, now become a huge risk of recession and impoverishment, not exactly the panorama promised to Mexicans while the president was campaigning back in 2018.