Luis Rubio

Inequality is one of the most powerful grievances and complaints that President López Obrador has raised and that enlivens many in his base. There are good reasons for that, which does not mean that the president is advancing toward their diminution: rather, everything he does has seems to be oriented toward heightening it. Inequality comprises without doubt one of the characteristics of Mexican society but, instead of developing programs to resolve it, the government has devoted itself, as in everything that it does, to identifying the guilty more readily than the solutions. Better to transfer the responsibility than to assume the challenge of creating conditions for the phenomenon to diminish and eventually disappear.

The issue is not new. In recent years, the call to attend to inequality has been raised, in great measure, paradoxically, because headway in this matter has been substantial, but slower than people would desire. The paradox here is key because the president exploits social differences as an instrument of polarization without recognizing the nature of the phenomenon: the great majority of the population has gotten ahead in the last decades, but some much more rapidly than others. That is, the reforms that the president so resoundingly rebukes permitted nearly the entire population to rapidly improve their livelihood, but the fact that some became rich along the way generated expectations of swifter progress for all, which certainly has not come about. The question is why.

No less important is the focus for which the government has opted: in place of seeking to solve inequality, it has dedicated itself to putting its finger on supposed causes and guilty parties. Michael Novak said that understanding the roots of the backwardness and poverty is interesting, but more relevant yet (and, might I add, more powerful) is to ascertain the origins of the wealth. It is evident that it is politically profitable to find the guilty than to procure solutions, but what the president is doing is accelerating the inequality, impoverishing those who were already poor, but above all those who had been achieving sensitive advancement in their standard of living and their capacity as consumers, the most vulnerable part of Mexican society and, not a small irony, a sizeable source of electoral support for the president.

Three phenomena have occurred in recent decades: first, a large proportion of Mexican society raised their living standard and consumption capacity, the incipient middle class; second, the explosion of the Internet, social networks and, in general, the ubiquity of information, inciting a revolution in the expectations of the people: everyone sees who have become rich and they want to be and to have what they have, and they want it now. This wellspring of aspiration is also an enormous source of frustration, thus easy prey for traffickers in resentments; and third, another segment of society, particularly in the South of the country, has been left behind not due to a lack of aspirations or abilities, but more accurately to the cacique-like political and union bosses who impede prosperity in places such as Oaxaca and Chiapas.

The leading innovation of the Morena party and their leadership lie in their wishing to sort out these problems by impoverishing the whole population: better to raise taxes, expropriate, thwart the installation of new enterprises (and their consequent employees) than to clear up the structural causes of the inequality, which would entail the generation of novel growth sources, a more productive economy and one with better competition and less obstruction by dodgy politicians and  leaders who live off the permanent pillaging.

This debate is engaged in worldwide, in each case with its particular biases. For example, in the United States the idea is discussed of compensating for the evil engendered by slavery through making financial amends to the descendants of slaves. The ethical, moral, and practical dilemmas deriving from these approaches are immense and the reason why this issue has been on the stage for decades without advancing much. The complexity of coping with a fountainhead of such great bitterness, sufferings and passions is vast, but I bring up here this issue because there’s a gamut of innovative and creative solutions being proposed that could well be adopted in Mexico.

Instead of demanding that today’s citizens, who have nothing to do with the slavery of two centuries ago, pay reparations to persons who were never slaves, the idea is to engage in investments directed toward those enduring the inequality of the direst poverty, whatever its origin. Specifically, a widespread program is advocated for the construction of schools with the best teachers and living complexes for the most destitute communities with the express purpose of breaking the vicious circle of poverty–inequality–lack of opportunity.

In Mexico, the union and cacique mafias such as the CNTE, a teachers’ union, give themselves over to the preservation of ignorance, consequently to inequality and the lack of opportunity. Perhaps there is no worse vice than that of the inequality caused by these mafias who are also Morena-party operators and whose objective it is for the people to continue being poor, submissive, and ignorant. Inequality is the product of the system that Morena yearns not only to perpetuate but to strengthen.

www.mexicoevalua.org
@lrubiof

Coercion

Luis Rubio

“The compulsion to silence others is as old as the urge to speak” affirms Eric Berkowitz* in an extraordinary study on censoreship. For nearly a century the post-Revolutionary Mexican government suppressed freedom of expression, engaged in all sorts of efforts to censure the media, controlled the conversation and curbed the entry into the country of “dangerous ideas” that could call into question the legitimacy of the governments emanating from the Revolution. As this author says so well, censorship does not annul the expression that perturbs the governors, but rather transfers it to other media, creating “black markets” saturated with discussion, information, misinformation, conspiracy theories and an infinity of jokes and memes.  Symptomatic of our time is the fact that quips about the current Mexican president have been revived, just as happened in the seventies.

The matter of freedom of expression polarizes Mexican society. For some, beginning with the President, one now breathes an air of freedom without compare. And, of course, there is no doubt that President López Obrador employs and exploits his pulpit fully and freely. For others, however, the way that the President leads is nothing other than by the permanent intimidation of those whom he terms “adversaries.”

The polarization in this discussion is somewhat strange because we live in an era of the ubiquity of expression. The social networks permit every citizen to express themselves as they wish, with common sense or rare sense, with respect or irreverence, with correct spelling or not. More to the point, the defeat of the PRI in 2000 was accompanied by a radical change in the nature of the Mexican State, forever undermining the censorship troupes: irreconcilable enemies suddenly had access to all media, written and electronic, while the government not only lost the capacity of control, but also opted to not use it. Certainly, there was no lack of presidents and their “plumbers” who attempted to coax freedom of expression even after 2000, but the advent of social media rendered it impossible to return to the former age.  Many of those proclaiming that freedom of expression suddenly appeared in 2018 are the very ones who inhabit the world of the networks where expressions, affronts and conversations predominate outside of all possibility of control. Whoever doubts this should ask Peña Nieto.

In contrast with other governments, the Mexican used to distinguish itself (almost always…) by the subtlety of its methods, but it was never shy about employing others, which were more direct when, in its estimation, the circumstances justified it. The Student Movement of 1968 is vivid testimony of one of those moments. The government strove to control the flow of information because the objective was preservation of the post-Revolutionary legitimacy for which it engaged on the building of hegemony (through television and textbooks), as well as censorship in periodicals and other spaces.

President López Obrador is not a champion of freedom of expression, but his true intent and purpose is control of the narrative. His early-morning press conferences seek to intimidate, but above all to procure leadership in the conversation, to inform his followers, to establish the legitimacy (and illegitimacy) of issues important to him and to construct an ideological hegemony. Very much in the spirit of the seventies, he claims that it is possible to abstract the national discussion from what is taking place in other latitudes or that the data he produces and manipulates are the only ones possible. The problem is not whether he can achieve this, but that he has within his reach the instruments of coercion and extortion that can easily become effective hindrances to freedom of expression.

The question is whether, beyond the interminable spate of insults and counter insults that this generates in the press conferences and social networks, all this makes any difference. Freedom of expression is an inherent part of the national culture, as illustrated in the Posada graphics and the El Ahuizote newspaper during the Porfirian era: indirect means for sidestepping the censorship that now aims to reinstall itself through intimidation and disqualification. Needless to say, there are nations, especially China, that have attained enormous economic success without freedom of expression, but that was possible for them, at least during the time of Deng Xiaoping, with mechanisms that generated certainty and trust in the governmental proceedings, which is what generally occurred in the 20^th century post-revolutionary Mexico.

However, Mexico is not China, nor does it share its history and culture. In that context, without freedom and without sources of trust and certainty, the country cannot prosper. It is also not evident that the tactics of Xi Jinping of controlling everything, centralizing the power and perpetuating himself, are going to yield better results than Mao obtained during his epoch.

In an exchange at the beginning of the Russian Revolution, Lenin asked “Why should we bother to reply to Kautsky?…  He would reply to us, and we would have to reply to his reply.  There is no end to that. It will be quite enough for us to announce that Kautsky is a traitor to the working class, and everyone will understand everything.” That is the way of the current Mexican government: intimidate. Perhaps effective for control, but surely not for progress.

*Dangerous Ideas

www.mexicoevalua.org
@lrubiof

Luis Rubio

An ancient Chinese proverb argues that “when there is turmoil under the heavens, little problems become big problems, and big problems are not dealt with at all. When there is order under the heavens, big problems are reduced to small problems, and small problems should not obsess us.” Judging by the account furnished by John Rogin of the Trump administration, everything was done, consciously or not, to heighten the conflict, therefore making it unmanageable.

Chaos Under Heaven: Trump, Xi, and the Battle for the Twenty-First Century is a fascinating book that describes the dynamic within the Trump government, an administration characterized more by chaos than by organization and clarity of purpose. Trump’s team failed to find the way of turning the rhetoric of the president into concrete policies or of managing the diverse factions marshalled within his administration to advance (or impede) the consolidation of an agenda.

In the relationship with China, the central theme of the book, the only word that can portray what took place there is chaos, throwing open the door for the Chinese President to make headway with his own agenda, being as he was in full control of his government. Not by chance does Rogin begin the book with a quote from Mao that rhymes with the previously mentioned proverb: “There is great chaos under the heavens… The situation is excellent.”

Although the book refers to the strategy -if what occurred there can be called that- of the Trump government toward China, there are myriad commentaries and chronicles throughout the text regarding other matters that motivated the president and that create a window to observe his way of operating. Therein appear NAFTA, meetings with diverse presidents, the contempt of Trump for the ordinary citizen (his most solid political base), the logic of foreign intervention in U.S. politics, his disdain for the members of his own cabinet, and his tortuous fashion -instinctive and off the top of his head- of arriving at a decision on issues as complex and sensitive as the World Trade Organization (WTO), Taiwan, China, USMCA, North Korea, Covid, etcetera. Enormous disorder one would not expect from a superpower with a nuclear weapons arsenal within reach of its president.

Trump did not anticipate winning the 2016 election. His campaign was hinged on instinct, contrary to what electoral strategy professionals considered elemental, but it was successful because it matched the feelings of a broad segment of the electorate. That victory emboldened him to proceed with an agenda based essentially in his perceptions and mood of the moment. As Bob Woodward illustrates in Rage, instead of according their place to the professionals, he regarded their function with scorn and appointed or removed them from their posts constantly, frequently with great gusto, usually in a visceral manner.*

Thus, a highly institutionalized government ended up operating on two planes: that of the president’s spur-of-the-moment decisions, and that of a professional bureaucracy attempting to maintain a semblance of order. Between both extremes, the political functionaries (appointed by Trump) fought over controlling the agenda, while some accused others of being dominated by the “Swamp” or the “Deep State,” which is nothing more than professionals dedicated to doing what they always do: preserving the status quo, whether that is their intention or not.

Rogin’s account of the factions exercising control over the distinct moments of the administration is perhaps what is most valuable about the book. A group of amateurs in governmental affairs in charge of transcendental decisions and in permanent conflict, some for pressing Trump’s rhetorical agenda forward (like Bannon), others seeking to “correct” the president’s agenda (like Bolton), while still others strived to protect the status quo, above all in economic matters and those involving international trade (like Cohn, Mnuchin and Kushner). The latter, the president’s son-in-law, comes across as the meddler, lurching back and forth among his personal interests, saving his father-in-law from his worst instincts, concerning himself with the stock market and promoting some relevant international agendas. Surrounding all of this, during the first years of the administration, members of the military in strategic posts (such as White House Chief of Staff, Secretary of Defense and National Security Advisor) were able to sustain an outward appearance of order, as if they were the adults in a kindergarten.

The manner of functioning of the Trump administration was much worse than one could imagine. While some of its objectives were meritorious, most importantly that of breaking with the bureaucratic inertia that supposes that all that exists is good and warrants no change, Trump’s personality, his inexperience (and poor experience) did nothing other than create and magnify a perennial chaos that, nevertheless, engendered new realities, such as the conflict with China, the renegotiation of NAFTA, and the legitimacy of North Korea’s Kim Jong-un. Along the way, he destroyed crucial relations and deepened the internal conflict.

Most governments endeavor to resolve or manage the problems and conflicts that they encounter. Some try to change the world. Most do no more than stay the course, just barely. Trump, and others, like Mexico’s, end up by demolishing more that they build, enhancing the problems and rendering them unsolvable.

*Christopher Buckley’s Make Russia Great Again is an extraordinary comical version of the same administration.

www.mexicoevalua.org
@lrubiof

Luis Rubio

The dearth of statesmen in the world, argued Napoleon, is due to the complexity inherent in the function: “to get power you need to display absolute pettiness. To exercise power, you need to show true greatness.” Nearly three years after he assumed the presidency, it is evident that Andrés Manuel López Obrador does not understand (or does not accept) the difference: he stayed on the side of pettiness.

Rather than governing, which the President considers “very easy,” he has devoted himself to dividing the Mexican people, while simultaneously advancing an agenda whose essence is the elimination of everything that existed during the past four decades. His mode of acting is perfectly explainable, in that it includes two projects that are incompatible and at odds with each other. The presidential project point of departure is that the institutional development that took place in the past decades was a total failure.

The president is dedicated to the construction of his vision of how the country should work. In truth, it consists of the recreation of his historical memory: the presidency of the seventies, the Mexican nation’s golden era as conceived of by López Obrador. During that epoch, the presidency was, in that cartoonish view, almighty: the president could impose his will, which guaranteed the functioning of the country, the economy would grow and there would be order. Those of us who lived through the seventies know that the presidency of those times -Echeverría and López Portillo- was a source of infinite frivolity, the economy was running amok (actually, both presidents inaugurated the era of financial crises that later became an almost everyday occurrence) and it was precisely they who initiated the era of disorder that later turned uncontrollable.

A book on the Palace of Versailles affirms that “Louis XIV built Versailles, Louis XV enjoyed Versailles and Louis XVI paid for Versailles.” Something like that happened to Mexico in the mid-XX century: the era of “stabilizer development” allowed the economy to grow; the two previously mentioned presidents, known as those of the tragic dozen (two six-year terms of office), enjoyed what their predecessors had built; and the eighties was the decade during which Mexicans had to pay for the licentiousness and frivolousness (personal, political and economic) of those personages.

The eighties were a convulsive period: economic crisis, nearly hyperinflation, exacerbated debt, tremendous anger, mistrust, and repeated attempts to reestablish some semblance of order and stability in all spheres of national life. After several failed efforts to return to the era of stabilizer development, the government of the time ended with the understanding and recognition that such course of action was impossible and that the world -and Mexico- had changed in the interim. That which followed -the era of economic as well as political reforms- was unequal and partial, but without doubt reinstituted a veneer of economic and political order, although along the way control of territory and organized crime were lost.

Key in that process was the erection of institutions whose objective was to confer trust on the population (such as the Federal Electoral Institute [IFE], a new Supreme Court, the   National Institute for Transparency [INAI], the National Human Rights Commission [CNDH]); on the economy (such as the Federal Economic Competition Commission [COFECE]); and on specific sectors (such as the Energy Regulatory Commission [CRE], the National Hydrocarbons Commission [CNH], and the Federal Telecommunications Institute [IFT]). Some of these institutions achieved constitutional rank, others autonomy, some were more effective than others, but all pursued a common rationale: to confer trust and become checks to the power of the almighty Executive branch of yesteryear. It was about (or tried to be about) giving shape to a modern economy and a democratic society.

The project of López Obrador is exactly the opposite: his objective is to centralize and concentrate the power, impose the presidential vision, and eliminate every vestige of independence, democracy, and competition, as these are incompatible with his model for the country.  Consequently, it becomes clear why he would need to abolish, neutralize, or eliminate all these institutions, many of which, unfortunately, proved too flimsy to bear up under the presidential siege. In attack mode, López Obrador and Trump are remarkably similar, but the U.S. institutions, in contrast with Mexico’s, proved strong enough to withstand the onslaught.

The problem for López Obrador, but above all for Mexico, is that his model jars with today’s world and with the daily reality of a populace with aspirations and expectations proper to the XXI century. Many of those people voted for López Obrador due to their believing in him or being fed up with the past, but what he has attempted to advance is not only a reactionary adventure; rather, it is nothing more than a chimera and an unrealizable whim of fancy. This, more than anything else, better spells out the electoral hecatomb that the President underwent.

“The essence of democracy,” wrote Deng Yuwen, editor of a newspaper controlled by the Chinese Communist Party, “is how to restrict government power: this is the most important reason why China so badly needs democracy. The overconcentration of government power without checks and balances is the root cause of so many social problems.” López Obrador is beginning to experience these same twinges.

www.mexicoevalua.org
@lrubiof

Mexico Today –  July 14, 2021
Luis Rubio

 Governing is the art of managing the gap between citizen expectations and day-to-day realities says Argentinean economist David Konzevik. Mexico is a living example of the huge rift between both elements and also of the inability of its government to bridge it. The question here is why.

 Mexico’s most recent midterm election  provides us with a clue to the country’s key problems which several Mexican administrations have avoided for decades.  Independently of the electoral result, the midterms made evident two clear patterns among the Mexican electorate. On the one hand, a recognition of the immense change for good that Mexico has undergone throughout the last decades. One needs to look no further than the impressive urban vote -all the way from Mexico City to the cities in the border with the US- to see an active, demanding and resolute side of the country that fully envisions a promising future. On the other hand, the midterms showed the underdevelopment that continues to be the definitive trait of a large part of southern Mexico and other areas.

In a way, not much has changed since Mexico’s decisive 2018 election when Andrés Manuel López Obrador was elected president. The country exhibits enormous inequality levels which have been exacerbated (not diminished) by the president’s own tendencies. Rather than advancing toward the goals that López Obrador brandished in his campaign, Mexico has withdrawn into itself, and the country’s problems are now more accentuated.

It would be easy to assign the blame for Mexico’s current state to López Obrador only. Yet, that would ignore that the issue at stake are the institutional structures that made it possible for a president to change so many things without any checks and balances. Some Mexicans like what López Obrador has done as president. Other Mexicans disapprove him. Yet, both points of view elude the underlying stumbling block: Mexico does not need a savior or a tlatoani, the ruling monarch of Aztec times. What Mexico needs is a system of government that works, that solves problems and that builds a suitable environment for the country’s development. Such idea implies providing Mexicans with effective services (education, health and public safety) and creating the structures that make long-term development of the country possible.

At the heart of the Mexican dilemma lies the difference between the economic and political reforms that the country undertook during the past decades. Mexico’s economic reforms since the 1980s followed a very well-articulated model despite mistakes and implementation biases. Meanwhile, Mexico’s reforms in the political realm occurred in reaction to other developments and they did not have a sense of direction. Mexico’s political reforms of recent decades were designed to appease political actors and interests starting with the very man who is now president of Mexico and who spent decades in the opposition. These reforms did not built a wide and inclusive system that could encompass all Mexican political forces. The result was what Mexicans have lived through since then: a dysfunctional and distant government that does not serve the needs of the population. In addition, Mexicans live in a divided country where special interests protecting the status quo impede progress of vast regions.

A film about the 1993 Oslo peace negotiations between the Israelis and Palestinians shows the disparity of views between the two sides. The first Oslo negotiation produced agreements on general principles. It was not simple, but what emerged was an outline of what could be worked with. However, it was not until they began to discuss the details -like trash collection or taxes- that Israeli and Palestinian negotiators had to bring down to earth such big general principles so that everyday governance could be achieved. The true negotiation did not start until they approached what makes a country work. The Israeli-Palestinian peace process failed for other reasons. But the example seems highly relevant for Mexico.

Mexico’s process of political reforms never arrived at a juncture like that. Of course, the Mexican political forces reached agreements on electoral matters or on issues dealing with the Supreme Court. One could think other less visible but no less transcendental key agreements like agreeing to an independent Mexican central bank. Notwithstanding this, Mexican political actors never entered a negotiation on issues that really mattered to the population in its day-to-day life.

Among the issues that were never agreed upon during Mexico’s process of political reform were: the relations between Mexican state governors and the federal government, the distribution of state and federal monies and the much broader separate sovereign arrangements between states and the federal government. Mexican political forces never discussed and agreed on a public security system not dependent on the army, the nature of the justice system at the local level, the nature of political parties, the accountability mechanisms for members of the federal cabinet, how to guarantee freedom of speech and the financing of Mexican media. Without coming to an agreement on those “details” it would be impossible to solve “small”, everyday life problems affecting Mexicans like garbage collection and criminal extorsion.

Mexico’s landmark 1996 electoral reform solved a specific problem, but simultaneously created a much larger one. The reform solved the issue of how the opposition could compete for power for opposition through free and fair elections. It did not solved the issue of the way Mexicans would govern themselves. All the different problems that Mexico faces today stem from the dismantling of a one-party political system that controlled everything but which was not replaced by a new one that solved citizens’ demands. Since that moment, special interests from all sides rose to the top and rendered possible the arrival of a hyper-presidentialism with no checks. No country can make progress or prosper under such circumstances.

* 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: @lrubio

https://mexicotoday.com/2021/07/13/opinion-mexico-and-the-art-of-governing/

Mexico Today –  July 07, 2021
Luis Rubio

 No one can mistake the government of China for the government of Mexico. Regardless of their huge historical and cultural differences, both countries are pursuing transformation, each in its own way and style. Whatever the future of the Asian giant holds, the great contrast between the two countries is that the Chinese government has monumental ambitions and is crystal clear on how it intends to achieve them. Anyone who has seen its airports, roads, trains, and especially the increasingly sophisticated products emerging from ifts factories can only marvel at its achievements.

And yet, Stanford University-based researchers Scott Rozelle and Natalie Hell argue that China’s successes in recent decades obscure the enormous challenges facing that nation. Despite being the world’s second largest economy, China still remains, in many ways, an impoverished nation. These authors’ emphasis is not on the visible and successful portion of China, but on its backwoods, where the necessary conditions to escape poverty and underdevelopment are non-existent. In particular, the authors analyze education in China’s rural areas (where hundreds of millions of people live) and conclude that the desired transformation is impossible based on its current educational reality.

The authors’ analysis of China could also be an account of the Mexican reality: success to date is largely due to the availability of cheap labor with few skills, which has yielded extremely high growth rates for several decades. However, only 12.5 percent ​​of Chines workers have a college education, the lowest rate of any nation at China’s level of development. Although it has a theoretically inexhaustible source of cheap labor, China beginning to lose competitiveness due to constant wage increases in the manufacturing sector. In contrast to Korea, Taiwan, Singapore, and other nations that achieved a complete transformation, China has not invested in education and is now paying the price.

The authors’ core argument is that the transition to an advanced economy requires a population with high levels of education, capable of adapting to the changing demands of the labor market in order to raise the economy’s overall productivity levels. The authors differentiate between countries that make these investments in education and those that do not: the former manage to avoid stagnation along the way, the so-called “middle-income trap,” while the latter get stuck and are unable to sustain a growing level of income. The authors point to Mexico as the perfect example of the second case: countries that bet on cheap labor and ended up stagnating along the way, and suggest that China, having undervalued education, is in the same predicament.

Every country has its own circumstances and follows the logic mandated by its realities. In Mexico’s case, one government after another has preferred to use the teachers’ unions to advance its political objectives rather than betting on the country’s development. For some Mexican administrations, these unions have been key to maintaining political control over vast regions of the country; for others they have been nothing more than an electoral tool. Still other more radical political actors are betting on Mexico’s unions and their leaders as the muscle for the day when the “great confrontation” between the forces of good and evil takes place. Regardless of the rationale behind the plans of previous Mexican administrations, the glaring fact is that neither has understood the enormous challenge that shifting from an industrial society to a knowledge society entails. Therefore, betting on Mexico’s educational status quo is betting on poverty.

In the industrial era, what added value was the production process itself, and companies focused on improving production technology and boosting productivity on the factory floor itself (i.e. improving the use of workers’ manual skills). In the knowledge era, the major difference and the space where the greatest value is added is on the creative front, which has to do with process design, software development, and applying the human mind to devise new technologies, all requiring a command of computer skills. In one word: a radically new world. Education ends up being key to incorporating the entire population to the digital world.

China is an authoritarian nation that used all its capabilities to push whirlwind development over the past four decades. If Rozelle and Hell are right, its future will be less commendable than it would appear today, and certainly will fall well short of its ambitions. The problem with Mexico is that, in order to get out of the hole in which Mexicans find themselves, the bare minimum required is to imagine a better future, something that China has in spades, but which Mexicans seem to be denied, at least with the current López Obrador administration.

* 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: @lrubio
https://mexicotoday.com/2021/07/07/opinion-unfortunate-bedfellows/

Mexico Today –  July 02, 2021
Luis Rubio

 There’s an old proverb that says that the road to hell is paved with good intentions. Something like this happened to Mexico in the late 20th century with several reforms of its electoral system. The reforms were devised by political actors who wanted to lead Mexico towards, first, political stability (from 1958 to 1978) and, later, towards democracy (starting in 1996). The problem is that those efforts focused exclusively on electoral issues, leaving the matter of how Mexicans should govern ourselves up in the air.

Theory and practice explain the problems Mexicans have experienced in these decades and, also, the rationale behind president López Obrador’s governing strategy. Theoretically, it’s been known for decades that in democratization processes around the world, consolidating a strong and effective government is critical before liberalizing political competition. Constituting a government that can effectively govern and meet the demands and expectations of the population is otherwise practically impossible. Additionally, those countries that achieved successful transitions to democracy also consolidated their rule of law, the crucial framework to curb a government or its bureaucracy’s potential for abuse. Mexico’s grade in these matters is not good.

On the practical side, Mexico has experienced two very successful periods of economic growth with political stability: the Porfirio Diaz era at the end of the 19th century and the hard-line PRI eras, between the 1940s and the late 1960s. Both had as their political earmark an authoritarian government whose only check and balance was the population’s and the investors’ willingness to participate in their own spaces. Both historical moments ended badly due to their rigid structures and processes: when difficulties arose, they were unable to adapt to a new reality. In the Porfirio Diaz era, the challenge was partly political and partly the famine that gripped the country at the turn of the 20th century. Without the slightest flexibility to undergo reform, the Porfirio Diaz era collapsed, opening the door to a civil conflict that decimated the economy and left over a million deaths.

The second moment, in the early 1980s, ended differently, but no less chaotically. After the Mexican economy and politics began to implode in the 1960s, the government sought to artificially extend its validity through foreign debt, encouraged by the expectation of ever mounting oil prices. In the end, the excessive debt brought about a financial meltdown and led to a decade of near hyperinflation in Mexico. The economic reforms that followed solved part of the problem by stabilizing the economy, opening the country to international trade, and building a manufacturing powerhouse in the process.

What was not addressed was the Mexican society’s wish to participate in political decisions and thereby limit government excesses. It’s clear that  president López Obrador believes that building a new era of stability and growth is what Mexico requires, and in his mind this calls for a strong government that limits citizen excesses. That’s why he’s centralizing power and ditching checks and balances left and right. Mexican history gives him formidable hope.

The problem is that the Mexican government is not set up to solve problems, pave the way for growth, or build a platform for development in the next century. Our government, heir to the Porfirio Diaz era and organized under the post-revolutionary pact -with the unequivocal goal of having the revolution do “justice”- is designed to plunder, corrupt, and abuse. Political, union, and business groups in Mexico -and their associates within the political class- are not interested in citizens, workers improvement or the quality of products and services, but rather in ensconcing themselves in a system that yields them rents, sometimes inordinately big.

Mexico’s electoral reforms from 1996 on were accompanied by the assumption that the country’s problem lay in the lack of political competition and that once unfettered, everything else would fall in place. What in fact happened was that electoral democracy was mounted on the existing political system, with its stagnant bureaucratic structures and tangle of interests which continue to benefit at the expense of the country’s full development. Thereby stem the two great evils we face: Mexicans’ frustration as manifested at the polls one election after the next, and the enormous inequality of opportunities and economic possibilities.

The solution that president López Obrador advances will only postpone and heighten the frustration because it doesn’t address it, just attempts to evade it. Instead of confronting the political, bureaucratic, and special-interest structures that rob the treasury blind and maintain half of Mexico mired in poverty, the López Obrador government, like its predecessors, devotes itself to inventing new excuses instead of solutions. What Mexico requires is a transformation of its political system, without which we will never extricate ourselves from the vicious circle we have been in for decades.

* 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: @lrubio

https://mexicotoday.com/2021/07/02/opinion-mexicos-cycle-of-reforms/

www.mexicoevalua.org
@lrubiof

Mexico Today –  June  23, 2021
Luis Rubio 

President Andrés Manuel López Obrador came to power in 2018 with the clear idea that the economic and government reforms economic that previous Mexican administrations enacted since 1983 had to be repealed. In his mind, Mexico’s problems began with those reforms, so repealing them was a must. Since the onset of his administration, López Obrador has nullified or dismantled those Mexican government institutions that he considered unnecessary or restrictive, has concentrated power, and has modified the regulatory framework to accommodate his priorities. This course of action -sometimes following law, sometimes not- has fostered a high degree of uncertainty. This uncertainty stems not so much from the Mexican president’s actions themselves from him being able to modify laws, regulations, practices, contracts, and institutions with no real check or balance.

The ease with which López Obrador is tearing Mexico’s institutional fabric reveals how superficially these institutions were entrenched and their lack of credibility given their lack of relevance for the average Mexican’s daily life. At the same time, however, it evidences the Mexican government’s enormous weakness, as no country can withstand so sudden, radical, and -in some cases- serious changes. Although Mexico is used to the traditional policy swings from one administration to the next -which are a feature of our political system-, the way president López Obrador acted has become a factor of uncertainty and –potentially- instability. This in an era in which the well-being of virtually all Mexicans depends on the deep-rooted supply chains that span the entire North America. The tension between the president’s goals and the requirements for progress is more than glaring.

President López Obrador clearly wants to attract private investment to Mexico, but he is not willing to accept that, in the 21st century, the only chance of doing so lies in creating conditions for investors to do it on their own free will. The possibility of government forcing people –well-off or needy- to save or invest ceased to exist decades ago. Private investment will flow only to the extent that the uncertainty emanating from the Mexican government itself disappears. And institutions are key to creating an environment of certainty. However, that will not transpire as long as the terms set by the government remain anachronistic.

There is one precedent: the nationalization of Mexican commercial banks in 1982 was a violation of an understanding between key actors in Mexican society. The government’s decision to nationalize the banks and more importantly the way in which it was carried out -to spark confrontation and social anger- led Mexico to years of uncertainty, lack of savings and investment, and an extremely precarious economic situation. It took more than a decade to rebuild political understandings that would restore peace between these key actors in Mexico. In the end, the North American Free Trade Agreement (NAFTA) was the institution that sealed those agreements among Mexicans. From the Mexico’s perspective, NAFTA’s true significance was that it tied the Mexican government’s hands, imposing very high prices on any attempted abuse, imposition or nationalization.

NAFTA became the most important institution that Mexico built. From the logic of an open Mexican economy consecrated in NAFTA, other reforms sprang out including those that created the regulatory entities to make them work. For over 20 years, this framework made it possible to give functionality to various markets and activities. Today we know, in hindsight, that the validity and significance of these institutions was due not to the legitimacy they enjoyed, but to the respect that later administrations granted them. The price of removing these institutions will end up being much higher than anyone could have imagined. The cesspool uncovered by president López Obrador isn’t new, but is much more consequential because it cancels Mexico’s future growth.

Beyond the transcendence of these institutions for the functioning of the present-day Mexican economy, there is another cost more significant in the long term. The erosion of Mexican regulatory institutions also affects citizens who are now realize the devastating capability of the Mexican executive branch for brandishing immense powers with nary a check or balance. The ensuing institutional destruction, which might seem insignificant, has eliminated key mechanisms that have helped in solidifying trust among Mexican society and investors. It turned out that the idea that Mexico had changed -geared to grow and eventually address inequality- was no more than a mirage. Clearly, the López Obrador has other plans, which are at odds with that idea.

The obvious question for Mexicans is how far president López Obrador can go. Will the elimination of the current independent regulatory agencies be followed by new ones with a better social foothold among Mexicans? Once unpunished institutional destruction is in gear, the inexorable question is, what is next?

(Excerpts from Luis Rubio’s newly published Spanish language book: “La nueva disputa sobre el futuro: Ideas viejas para un México moderno”, Editorial Grijalbo).

* 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: @lrubio

https://mexicotoday.com/2021/06/23/opinion-the-mexican-presidents-harm-to-institutions/

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Mexico Today –  June 15, 2021
Luis Rubio

  Citizens spoke loud and clear during Mexico’s midterm election. Now, the entire political system will have to adapt to a new reality. In a show of great wisdom, Mexicans ratified its trust in the the country’s independent elections authority (INE), rejected President Andrés Manuel López Obrador’s excesses, demanded good sense from political actors, and continued its quest for “a change.” By claiming sweeping victories, party leaders demonstrated a total lack of understanding of the moment, unlike president López Obrador, who undertook an attempt to moderate his approach (though it did not last long), in his own peculiar way and without acknowledging the electorate’s message in the polls. It would have been hard to find a better scenario for Mexico, given the country’s polarized and furious climate threatening to reach fever-pitch by the second.

Since 2018, López Obrador outrageously and immoderately milked the election where he was elected president. Surmising an unassailable endorsement by the polls to do and undo at will, he proceeded to turn the Mexico’s clock back 40 years. López Obrador’s persistence and single-mindedness led him to decisively alter the country’s circumstances, to the point of widespread rejection by the middle classes and investors. This was, in fact, a middle-class rebellion in Mexico’s urban areas against the president’s party MORENA.

The electoral result leaves president López Obrador enough elbow room to save face and to be able to argue that his (huge) losses were not so major. He can contrast the 20 percent decrease in members of his party in Mexico’s Lower House of Congress against the growth in the number of state governorships in MORENA’s hands. However, both the election results and the moment in the presidential cycle herald fundamental changes for Mexico.

First, ever since Vicente Fox announced his candidacy to the presidency immediately after the midterm election in 1997, Mexican presidents lost their old instruments to control and postpone the succession process. This will be especially hard for MORENA given its lack of institutional structures and internal discipline which promises constant intra-party clashes. This fact in itself will amplify the already MORENA’s existing fractures, which will inevitably weaken the López Obrador ability to control the succession process or promote new political or legislative initiatives.

Second, although MORENA will govern more than half of Mexico’s states, the potential for intimidation -the president’s main instrument for keeping the state governors in check- will be diminished. Regardless of their party, the 15 new governors -out of Mexico’s 32 states- will enjoy freedoms vastly superior to those of their predecessors.

Third, MORENA will no longer have the supermajority that it had in the Lower House of Congress, nor will it be easy for it to find a “swing” party to push through constitutional amendments. That changes the Mexican legislative dynamic in several ways. Most of all, it introduces an element of instability to the coalition formed by MORENA, the Green Party and the Labour Party (PT). The results encourage these eccentric allies, especially the Green Party -which never misses an opportunity to profit from the political moment- to contemplate different alliances for the future. No less important, the Lower House will become Mexico’s space for political interaction and negotiation that the supermajority previously held by MORENA made impossible.

All of this creates a new environment for Mexico in which visions and proposals that sketch a less contentious and bitter political future could -indeed, should- flourish. To date, Mexican politics has focused on the past: for some, the 1970s, for others pre-2018, despite the fact that not many Mexicans would like to return to those times. The contrast between the 2018 presidential election and the 2021 midterm election makes it clear that Mexicans want to move forward, towards a more cordial future, with greater progress, and a better distribution of benefits. Early in his term, president López Obrador should have undertaken such effort but he was lost in the confrontational strategy that has not yielded Mexicans results, and even less for him as the midterm election result evidenced. In fact, López Obrador’s political future is now in a difficult position: unless he rectifies course, his ambition to go down as one of the great transformers of Mexican history will have vanished.

President López Obrador has been falling into a not unusual paradox, frequent among those who accumulate power without a vision that can attract and marshal the citizenry. The more power he amasses, the less power he can exert. More power could tempt him to follow a more radical route risking crises, thus destroying his whole project. Perhaps there is no better example of this than the risk that Mexico devalues its currency, something López Obrador has said won’t happen. Something similar happens with the idea of extending his six-year term in office. The consequences of trying to break a centuries-old Mexican political taboo would be devastating for the promoter and detrimental for the country.

Three tricky years lie ahead. These could become an exceptional opportunity for reconciliation to lay the framework for a better future. Unfortunately, it is not obvious that there are statesmen -in the López Obrador administration or in the Mexican opposition parties- capable of leading and advancing it. But the opportunity is still there.

* 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: @lrubio

Opinion | Mexico’s next three years

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