Luis Rubio

The democratization that the country has undergone over the last decades brought with it unanticipated consequences to deal with because the alternative is absolutely unacceptable. Whosoever wins an election feels free to advance their agenda not only disavowing the opposition, but, as occurs today, branding it as the enemy. Instead of a democracy, Mexicans have built, or reproduced for the XXI century, the famous phrase of Cosío Villegas: a six-year monarchy. Rather than employing politics to build a common future, a requisite interdependence, all critical and dissident thought are excluded. Those are the ways of a dictatorship and, when that happens, the political belonging or the person in charge is no longer important: what matters is the reality.

Many of the excesses of the present government, above all its manner of destroying institutions and obligating their legislative contingents to follow instructions, as if they were mere hired hands, are doubtlessly a visceral reaction to the excesses –in form or in substance- of former administrations. But the fact that a president can engage in excesses evidences the enormous fragility of our system of government, the pandemic accomplishing nothing other than magnifying this fragility.  Elaborating or modifying laws in a democracy is the elemental function of the government’s legislative branch that, in the separation of powers, constitutes an equal power and a counterweight. However, as Santiago Kovadloff says of Argentina, “we modify the Constitution much more than we comply with it.” In Mexico it is the president who presides over, legislates, executes and violates the Constitution, claiming that he is governing, when in reality he instructs and subjugates.

In nations in which the word is unique, an imposition, its reversion is similarly swift. What the president is doing with the economic reforms and with the institutions, trust funds, and organisms arising from prior executive and legislative actions cannot be explained as anything more than a revengeful and belated spirit deriving from the negation of time and from the change in circumstances.

Without doubt, what has made it possible to dismantle the administrative, political and regulatory structures lies in the trifling legitimacy that they enjoyed; but on acting in the same way –in fact, much more arbitrarily because here not even the forms are looked after- the President is sowing the seeds of the next counterattack. In place of building and governing, the population, which he treats as subjects, will end up seeing and thinking of the present government as it came to pass with all of the bygone ones. No one, not even AMLO, can challenge the law of gravity.

One could ask how is it possible for the President to possess such great power as to carry out his centralization program without any counterforce. The response is very simple: Mexico remains a pre democratic nation in which the members of his party in the legislative branch are disposed to yield to the President, and he continues to make them function in that fashion, shamelessly. Instead of representing the entire population, they respond to their boss, in typical pre democratic style.

The key question is what will these same legislators and judges do when the errors and privations catch up with President and they demand answers to the daily problems, those the pandemic accumulates at a speed superior to the growth of the number of deaths. If there is one constant that Mexican politics possesses it is that the king is king while he is there, but the moment that changes all hell breaks loose. There is not a sole president in this era who has not gone through that ringer, although some have gotten away better than others. Stirring up that vindictive fervor only increases the chances of it.

The other constant is the infinite incapacity to recognize what was previously achieved and to build on it. The past was always bad and has to be modified because the new owners are always more intelligent and competent than those of before.  The arrogance is so great that it blinds everyone, beginning with the most ambitious: a country of more than one hundred twenty million inhabitants is bossed around as if it were a small village in the middle of Tabasco. The problem is that, despite the mistakes and corruption, Mexico is one of the principal nations of the world and the citizenry, while belittled, has the right, and aspirations, to improve and go forward. In the long run, it always gets it what it wants. Information will continue to pour out even if the president closes all of the media.

However, the panorama ahead is not promising. Denying the number of deaths, the depth of the recession or the number of unemployed (the real number, not only those recorded by the Social Security Institute) does nothing other than contribute to the deepening and lengthening of two simultaneous crises: the health crisis and the economic one. The government ignores the citizenry, but the latter cannot ignore its reality, that which is hit directly in its income and in its possibilities of surviving.

It is urgent to review the content of Mexican democracy in order to re-engineer the form of governing. The absence of a process of reform of the political system is what has caused the subordination of the legislative branch, the dysfunctionality of the so-called federal pact and the excessive attributions -real and nominal- of this presidency. The alternative is not of an attractive color.

Opinion | Costs and Consequences

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

In solidarity with Nexos
Luis Rubio

“The reports of my death are greatly exaggerated,” stated Mark Twain. The same can be said about capitalism. Since 2008 innumerable politicians, scholars and opinion writers have assured us that capitalism was at death door; twelve years later, the pandemic has unleashed a new wave of protests and Cassandra-like predicaments. But capitalism continues and will continue because, says Francesco Boldizzoni,* it responds to human nature.

The “Black Lives Matter” Internet page, the inspirer of the protests, states that its objective is “the dismantling of imperialism, capitalism, White supremacy, patriarchy and State institutions.” The agitators who have appeared in Mexico, in addition to employing terms not typical of the country (suggesting imported “technology”), do not have an Internet page, but without doubt share the same objectives. Instead of generating conditions for the prosperity of their hordes of followers, many Morena-party groups speak openly of creating chaos in order advance toward the paradise of Hugo Chávez.

The paradox is that liberalism, which historically has been an inexorable complement of capitalism, is flexible and adaptable, while the protesters are dogmatic and in good measure arrogant. Some will tell me that I cannot judge the movement, but their destructive nature speaks for itself. The agitators and those who follow blindly in their footsteps, hardly represent the population.

It is evident that the economic situation, the unemployment and the months of semi-quarantine have exacerbated spirits, but from there one is unable to deduce that the population wants to destroy what exists, however much the status quo requires and deserves fundamental changes. Whosoever burns or wrecks a business is certainly not thinking about the unemployed or the harrowing recession. It is pure and unadulterated vandalism with ulterior motives.

Two recently published books cover the persistence of capitalism, but with very distinct focuses. Boldizzoni begins with a pithy phrase: “These days the world seems to end with staggering regularity.” The great recession, Brexit, Trump, the climate apocalypse, the coronavirus and whatever accumulates this week, are all intimations of the inevitable and irreversible collapse of capitalism. But the masses never appear to learn the lesson.

The Boldizzoni book relates the history of capitalism in great detail: an especially valuable journey for the manner in which the author classifies the diverse critical currents. For Rosa Luxemburg, what is relevant are the implosion theories, in which capitalism collapses under the weight of its contradictions. Others, such as John Stuart Mill and Keynes, propose the depletion of capitalism that leads to its death after its having engendered a foundation for prosperity. The voyage concludes with Schumpeter, who worries about the contrary: that the success of capitalism in devising wealth and prosperity prompts the abandonment of the work ethic that made it successful. Most valuable in the text is that it situates capitalism within its just dimension: it is “both an age-old human activity —individuals producing and trading— and a more recent socio-economic system based on clearly defined property rights and wage labour.” Although the author is critical of capitalism and speaks in catastrophic terms, his argument is, in essence, that capitalism is inherent to humanity and that this explains its persistence throughout the centuries.

Thomas Philippon** follows a very distinct line. His text compares the way the economies of Europe and the United States have evolved over the last decades, evaluating the capacity of flexibility and adaptation of each of these. He starts by observing the ability to innovate, finding that Americans are superior in developing novel devices, which the author calls “toys.” However, while during the eighties the Americans precipitated two moments of high innovation thanks to the unfettered competition apropos of the deregulation of aviation and the breaking of the telephone monopoly, Philippon’s appreciation is that European regulators learned these lessons better than the Americans themselves, developing greater regulatory effectiveness on intervening in the market, producing much greater competition in their economies.

The lack of competition in the U.S. economy is not a new criticism, but the author’s conclusion is that economic success depends on the  aptitude for generating wealth and that is measured in terms of market access, which the author consider to be superior in Europe.

The lesson for Mexico is evident: Mexico has, literally, millions of entrepreneurs who struggle from sunrise to sunset to build their future, but they never end up growing and consolidating because becoming formalized is so onerous that they never make it. It’s easy to get lost in big businesses, but what is transcendent here is the enormous number of potential entrepreneurs, limited by regulatory and fiscal requirements that are frequently insurmountable. These books show how important it is to have a competent government that creates conditions for prosperity. Unfortunately, to date, this in Mexico is not part of the equation.

*Foretelling the End of Capitalism: Intellectual Misadventures Since Marx; **The Great Reversal

www.mexicoevalua.org
@lrubiof

Luis Rubio

Which came first, the chicken or the egg? The eternal riddle of both science and daily life is never resolved, but what is transcendent, says Matt Ridley in his new book on innovation, is how one thinks in this regard. The theory of evolution exemplifies the point in razor-edged fashion:  evolution does not tell us anything about the existence of a superior being, but attests to that if this in fact does exist, it does not entail, or abhors, central planning. Evolution does not have a predictable pattern but studying it allows one to entertain a distinct perspective about things and, as Alan Kay affirms, possesses a higher-ranking value: “a change in perspective is worth 80 IQ points.” If Mexico wants to break away from the pandemic quickly, the recipe dwells on creating conditions for innovation to flourish. In How Innovation Works: And Why It Flourishes in Freedom, Ridley insists on looking further than the evident explanations and proposes that on adopting a creative manner of solving problems one becomes less dogmatic, especially on recognizing that there can be more than one solution to a given problem and that making mistakes is part of the process and is not a failure. “Innovation is the child of freedom and the parent of prosperity.” This is the heart of Ridley’s argument: progress cannot be planned; contrariwise, innovation is always disruptive. “Innovation is obvious in retrospect, but impossible to predict.” This is due to that the process that produces innovation is not linear and always involves wrong answers and right answers that, in conjunction, advance knowledge. Underestimating the creativity and abilities of persons acting of their own free will and without coercion is the most frequent error of bureaucracies that claim to advance science, knowledge, and technology by means of design and central planning. Ridley illustrates this point comparing the way that France, Germany and Great Britain moved forward in the XVII and XVIII centuries: while the continental governments engendered vast bureaucracies devoted to the furtherance of science, the English government was very slow to support its development, privileging the market as the decisive factor. This is how the Industrial Revolution ended up being English. The key here is that no one can anticipate, plan or predestine the course of the advance of knowledge. “It pays not to underestimate self-deception and noble-cause corruption: the tendency to believe that a good cause justifies any means.” This is as valid for science as it is for energy and economic growth. Ridley demonstrates that progress does not begin in the laboratory to then move toward the commercial world, but often the inverse occurs: it is changes that take place in factories, workshops and offices that are then rationalized and codified by academicians, these in turn making sense of their own studies. Darwin, says Ridley, proactively went in search of the advice of pigeon and horse breeders because they would understand, in a practical manner, what Darwin would later call “natural selection.” Ridley comes down somewhat hard on scientists, but his point of view engages a certain logic: entrepreneurs are nearly always conceived of as merely avaricious beings with no interest beyond money, when in truth the enterprise is the most successful problem-solving mechanism ever created. What is relevant is the system that permits one to innovate, this much more efficient in companies than in academia. “Innovation is not an individual phenomenon, but a collective, incremental and messy network phenomenon.” The “messy” factor appears to be crucial in the innovation process.  The notion of a “messy network” that produces a new order is fascinating to me in that it cannot be anticipated or planned: it is disordered in the sense that it depends on trial and error, on false beginnings that take shape based on experimentation. One learns by doing, with the creativity that permits promoting human inspiration to procure benefits for the collectivity. The book’s subtitle sums up its entire argument: progress is made in freedom and advances by putting alternatives to the test and frequently misfiring. Many things are understood in retrospect and it is rare for one factor to be definitory in the result. There are no “eureka” moments that resolve everything. Progress requires an environment of freedom and conditions that favor creativity: a mixture of public policies and a legal framework that promotes efficient markets and enables work. Ridley’s proposal is not a paradise for the bureaucracy. Politicians and bureaucrats always believe that their intentions are results that on only wishing for an integral transformation one will be achieved. Ridley convincingly establishes that progress cannot be planned, but instead comes about when propitious conditions exist for it, the most important being the freedom to think and act. And this has never been truer than today, in the midst of this terrible recession. CONACYT, SEP and the Mexican government would reap great benefits on understanding how is it that the world advances because the future of the country largely depends on what they do and, above all, of what they impede.

www.mexicoevalua.org
@lrubiof

https://mexicotoday.com/2020/08/19/opinion-to-progress/

Luis Rubio

There is nothing older than resentment, above all of the poor toward the rich. Nor is it new to the politicians’ resource of exploiting and provoking grievances, real or imagined. Isocrates, one of the great Greek orators of the IV century A.C., accused hostility, but he recognized it as a typical emotion of democracy. What has changed, says Jeremy Engels,* is that while in a direct democracy citizens express themselves openly at the polis, today it is politicians who incite resentment as a governing  instrument. Such a strategy, writes Engels, has limits and can easily revert.

The Greeks saw democracy as a fraternity of citizens dedicated to curbing tyranny. Their results, however, did not impress the Federalists, those thinkers who gave life to the American political system: for them, it was fundamental to avoid the “tyranny of the majority” because a democracy should similarly protect the minorities. The Federalists’ concern was very specific: once the fury is unleashed, nothing can contain a bloodthirsty mob.

The underlying problem is, and always has been, that there are natural differences among citizens: wealth, abilities, origins, preferences, education. Social differences comprise an inexorable part of the history of humanity and democracy is one way of making decisions that permits all citizens to participate equitably, independently of those differences. It is the public policies that the democratically elected government adopts that should attenuate the differences and equalize the opportunities.

Resentment is a knee-jerk reaction to the contrast between the promise of equality inherent in democracy in the face of the flagrant inequities in the results of the political process or when disparities between poverty and wealth are major. The degree of disparity is providential material for politicians and special interests devoted to profiting from social differences and the privileges enjoyed by some as a means of advancing their causes: gaining popular backing and, more commonly, manipulating the population. The resentment that is inherent in human society ends up being an instrument of power to control the population: the quintessential strategy of demagogues like Perón, Chávez or Trump, the same as that of corporativism, of sad memory  in a good part of the Mexican XX century, and of the fascist system conceived of by Mussolini.

Confronting and agitating the population is the tactic that President López Obrador has employed to build up his base and solidify his project. The key question is whether this is a means to advance a constructive transformation that reduces inequity and that raises aloft the development to which the entire population can aspire, which is, at least in the rhetoric, what was proposed by the users of the same method of the old PRI; or whether it is a first step toward the destruction of the fragile social stability characterizing the country since the seventies. In the first case we would be speaking of a process of conformation of a regime of control to substitute for what characterized Mexico after the Revolution; in the second case, the beginning of a process of destruction of the frail Mexican democracy that has come to be built with penury, setbacks and reluctance in recent decades. In both cases, resentment as an instrument of power, not of the construction of a better future.

What there is not the least doubt about is that the President sees confrontation and animosity as instruments of governing. In this he is not differentiated to a great extent from other experiments throughout the world or in the South of the continent, all of which ended in failure, some due to the bankruptcy of their economies, others because they brought about violent responses. Chávez opted to invest in insurance against a tempestuous way out, on virtually transferring to Cuba the control of his country.** Whatever the method, none of those examples benefitted the citizenry or empowered their prosperity, but all impoverished the citizens and blemished their followers.

The problem is, once the anger is unleashed, returning to a world of concordance becomes nearly impossible. Venezuela, Argentina and Chile stand as examples where rancor has never perished.

The sole clear element is that the popularity of the President continues to be relatively high, not the result of his inexistent successes in economic matters, corruption or in social concord, but instead more probably the result of the hate that he has laid bare and that he might not be able to stifle. The evolution of perceptions among the citizenry of a leader who provokes but who does not get results is not obvious. Will another appear to capitalize on that very resentment?

When Lenin arrived at Petrograd after being expelled from Zurich, the Revolution had already begun but he had something unique in hand: a plan, which allowed him to take control and build a regime in his image and likeness. The Mexican reality is in such an agitated state that whoever arrives with a plan could become a new leader. The risk is that were the plan like that of Lenin, Chávez or Bolsonaro, Mexico would end collapsing, like so many other experiments in history.

*The Politics of Resentment;
**Maldonado, Diego G., La invasión consentida 

www.cidac.org
@lrubiof

https://mexicotoday.com/2020/08/11/opinion-resentment/

Luis Rubio

Continuity is normal when a government changes, with natural adjustments for style and personality. The president changes, but the country continues along its course: the new government imprints its forms, preferences, and priorities, but in general perpetuates the essence of what the government is and its relationship with the society. On occasion, for endogenous reasons –such as the advent of a  transformative government- or on exogenous grounds –like the appearance of unpredictable factors such as a pandemic and its social and economic sequelae- the circumstances press for a break with the past or render one possible. Now and again, the changes improve the future, at others they amount to a shot in the foot.

The main gamble of President López Obrador is for his base, now his clientele, to be preserved intact despite economic infirmities and unemployment, and for the U.S. economy to be sufficiently strong to generate demand for domestic exports.  As the principal engine of Mexico’s economy, exports are key for any attempt at economic recovery, as Mexicans learned so well in 2009, when the U.S. recession nearly caused a depression in Mexico.

Another issue is for the presidential project to end up untouched, despite the changes taking place in both the internal as well as the external milieu. The only sure thing is that everything the president does -his visits around the country and the entire political operation- are oriented toward winning the midterm election in 2021 at any price.

In this perspective, there is no tediousness in the query of whether this government is driven by the search of a profound change (the demagogues of the so-called Fourth Transformation love to speak of an inexistent “change of regime”) or of continuity with modifications in the style of the presidential house. Beyond eliminating counterweights that have proven to be paper tigers, the government has accomplished nothing other than strive to recreate the old Mexican Presidency, but those efforts have come to entail unanticipated consequences. Perhaps the President has not realized that the greater the control, the greater the deterioration: in an open world, restrictions, cancellations, and impositions have an incremental cost.

The key question is whether everything the country and the world have undergone this year will allow it to return to the previous normality, as if nothing had happened.  Serious countries that led the public health process without competing agendas –such as Germany or Korea, to cite two successful cases- have achieved a return to some degree of normality and, along the way, their governments have earned the applause of the citizenry because the latter recognized in the government an ally that did nothing more than dedicate itself to combating the common enemy. In Mexico, the government encountered a multiplicity of adversaries, took the fight against the virus in jest and won the disapproval and, worse, procured the disappointment of a good part of the collective citizens, as surveys have conveyed. It may be that in terms of greatest importance for his sole objective, the 2021 elections, the President has done nothing, not even recognize that unemployment and recession entail consequences for persons and their families, especially the most vulnerable, many of whom voted for him. The ballot boxes will be the ultimate test of those perceptions.

Two circumstances make one doubt the viability of the governmental plan of action. The first of these is whether the blind obstinacy in “priority” projects (such as the refinery and the Tren Maya) is the best way of governing. The famous Prussian General von Moltke said that not even the best of plans survive the first contact with reality, and no one should have the least doubt that the reality changed radically over the last few months due to the recession, which had been looming since last year, as well as unemployment. The President has not been willing to alter his project even an iota, which obligates asking the question of whether lack of attention to the most affected population will exert political and/or electoral effects. It is inconceivable for it not to.

The second characteristic of the governmental approach is that it is, at its core, a fundamentally commercial transaction: while the President devotes himself to activating and nourishing his networks through his tours around the country, the lifeblood of his electoral strategy lies in the transfers of monies to older adults, to “young people building the future” and to other clienteles. Those individuals and families doubtlessly are grateful for the contribution, but that does not mean all of them are believers as a result: except for those who in effect entertain a quasi-religious bond with the President (there are many), the rest maintain a basically business relationship, which depend on the transfers continuing. Vote buying is an old tool in Mexican politics and the population engages in it as it is: a transaction. Will the relationship survive when public finances put a squeeze on, which will inexorably happen in the upcoming months?

Nothing is written for the 2021 elections, but it is clear that Mexico is already in full electoral season, and everything that the government and the opposition do is directed toward defining or redefining the correlation of forces that emerged in 2018. The problem for the government is that it does not possess a strategy for the development of the country and that is, at the end of the day, what makes a difference for the citizenry.

https://mexicotoday.com/2020/08/04/opinion-shot-in-the-foot/

www.mexicoevalua.org
@lrubiof

Luis Rubio

From generalized and unpunished corruption Mexico has moved to centralized and purified corruption. What is left is the same corruption as always: only the adjectives changed.

The circus begins around the detention and extradition of the Pemex ex-CEO Emilio Lozoya but the corruption remains: a great hubbub, grand negotiations and a sole objective: distract the citizenry from the failures of the government, the terrible recession and the absence of action regarding the promise made by this President in his election campaign and that captivated the majority of the population: hope.

The preeminent promise of presidential candidate López Obrador was that he would end corruption.  The context was more than propitious not only because of the audacity that characterized corruption in Enrique Peña’s government, but also due to the population’s being fed up with what it perceived as the exploitation of natural resources for private advantage, permits and contracts granted to those close to those near the regime, and the privileges enjoyed by his cronies. As the information that Lozoya presumably has in his power suggests, corruption was not only an objective, but also a modus operandi: everything was fixed with money and no one or nothing was too marginal to be part of that perversity: member of congress, senators, journalists, governors, the opposition, entrepreneurs, the media. Peña comprised an extreme in the old practice and the very Mexican tradition of corruption due to lack of self-restraint: stealing was a divine right to be burnished in all its magnitude.

The history of President López Obrador is another: instead of fighting it, the new fashion is to centralize it. As in the good times of the PRI in the XX century, corruption is there to be administered from the presidency as an instrument to reward those nearby: relatives, close friends and favorites or to sanction the enemies. The novelty is that giving the presidential word is sufficient for cases of evident corruption to be purified: those who are close can never be corrupt because mere proximity disinfects them.

Corruption returns to be a trifling instrument of power: to generate loyalties and distract the citizenry: an old custom dating from the Colonial era, later refined in the XX century in form and substance, until reaching its current subtlety. What we are now observing is its ultimate perfecting in the manner of a media spectacle with vastly ambitious aims.

Rare was the government in PRIist times in which some functionary from the previous government was not apprehended to establish who was the new owner of the town. The practice was so frequent that the population knew the anticorruption laws as “the law of the letter carrier” because only lesser functionaries were prosecuted: all the rest were mere messages and personal retaliations. While the profile of those incarcerated from prior administrations escalated over time, it never achieved what is now presumed as possible: the prosecution of an ex-president.

The question is whether this a change of direction or a paltry strategy of distraction. Without doubt, the supposed evidence that Lozoya has in his possession entertains media and political value, but it is not obvious whether it could be employed as evidence in a judicial process that respects the rules of evidence and due process. The political usage of corruption is long-standing, and this government is preparing to take it to a new threshold.  But none of this implies that this would be combatting corruption or that it will sanction those proven to have incurred in that practice. The dilemma is whether to advance toward the eradication of corruption or merely give it new turn back to the usual: scapegoats instead of former functionaries properly prosecuted.

The matter is not a lesser one because neither is the circumstance. No government in the memory of anyone living today has undergone the size of the recession, the unemployment, and the violence, taken together, that characterizes today’s Mexico. The exceedingly strange moment that we are now living through, with a confinement that has frozen nearly everything -from the economy and political debate to social demands and personal conversations-, has created a political parenthesis that doubtlessly is the calm before the storm. Sooner or later these evils will explode and the government has not prepared itself to deal with its consequences. The economy will not recover soon, transfers to the president’s clienteles will be insufficient for addressing the needs, and the suffering will multiply irrepressibly. In contrast with other nations, the Mexican government appears to be petrified in place: in everything except the upcoming media circus and its unwavering concentration on the 2021 midterms.

The question is whether the attempt at distraction that the President is launching will be sufficient to release him from the responsibility of his poor decisions and incompetence in heading public affairs. In an environment where people are fed up with the status quo and as polarized, the natural cynicism of Mexicans will permit them to enjoy the comedy: nothing like seeing a president handcuffed, if the government achieves this-, but it will not change their opinion of a president whose principal vow was corruption, not chaos nor the circus. That is no mean difference.

https://mexicotoday.com/2020/07/28/opinion-the-new-vogue/

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

Luis Rubio

 Like so many other things in life, organized crime functions in and adapts to the environment in which it operates: when it encounters resistance it retreats, when the lay of the land is auspicious it advances. Where there are rules and compliance to them is enforced, there is adherence to them. In the Mexico of today there are no rules and the terrain is more than propitious: it entices. It is only in this manner that one can explain the temerity of the assassination attempt executed against a government official. Where is the government left in all this?

 The most elemental definition of a Narco State applies when a government’s fundamental institutions have been infiltrated by organized crime. A similar, but not equivalent, term is “Failed State,” which implies the incapacity to satisfy the basic functions of a government, such as security and providing services. Neither of the two is applicable, strictly speaking, to Mexico, but there are clear elements of both in distinct parts of the national territory.

There are vast regions of the country that are narco areas, where the government exercises neither presence nor capacity of action. In the northern state of Tamaulipas, for example, the Mexican Army provides a custodial service for vehicles requiring transport from one city to another: convoys that are formally organized in order not to be intercepted by the dark overlords of the territory. Instead of resolving the problem, an alternative reality is created. Similar situations take place in states such as Michoacán and in parts of the Northeast, from Jalisco to the border. There are entire regions of the State of Mexico, Guerrero and Guanajuato that are the territory of organized crime. Without resistance, the reality is institutionalized.

To the latter one must hasten to add the impunity with which the mafias operate in the country. The attempt against the life of the Mexico City Minister of Public Security is illustrative: it was not only the size of the operation, but also the audacity of effecting out on the main avenue of Mexico City in broad daylight. That cannot happen without the complicity of some authorities.

Beyond the circumstances of the specific case, the fact itself denotes a truism: that it is possible to deploy an operation of this nature. The same is true whether it was an act of revenge, whether the government had taken sides in the so-called war on drugs or whether the interests of this particular mafia had been affected. The fact is what counts.

The larger accusation is that the Federal Government has aligned itself with a drug cartel, which would imply, in criminal logic, that it has become a legitimate target. There are videos showing the President conversing with the mother of the Sinaloa cartel leader, not in itself constituting evidence of a pact, but in politics, appearances are reality.  While this is not the first time that the Federal Government has allegedly engaged in negotiations with the Sinaloa cartel, what is new is that it was the President himself, in its territory and in public, speaking with a person so close to the heart of the cartel leadership. There are many ways of combating organized crime, but what the attempt reveals is that the strategy that the government has adopted, regardless of whether an agreement does in fact exist, is not bearing fruit.

Negotiating does not imply, in technical terms, that Mexico has become a “Narco State” but, were the presumed negotiations true, it would not be far from being one. And that is the problem. The government has acted without considering the implications and repercussions of its actions. Nor has there been an improvement in the security of the population, wherein lies the government’s principal responsibility.

What is clear it that there exists no strategy to fight against the mafias or that the one that there is, that is, bear hugs not bullets (abrazos no balazos), is inadequate. The question is whether the weakness of the government in this matter has rendered it possible for the criminal organizations to advance their positions, making it increasingly more difficult to change the status quo. The assassination attempt intimates that the balance of power shifts in favor of the mafias, whose objective appears not to be to govern but to operate their business without governmental interference. Every retreat by the government is capitalized on by some drug cartel but, to guarantee this, the cartel must liquidate its rivals, perpetuating the world of violence in which Mexicans live.

What is important is not the label –Failed State or Narco State- but rather that the government continues not to recognize and accept that security is its most basic responsibility. Its sights are focused on the only thing that matters to it, next year’s election, while its personnel, not to speak of the garden-variety Mexican, lives in the fear of an unexpected attack on their life.

When the attempt is against a figure of the relevance of the Chief of Police Chief of the capital of the country, the affront is evident and the symbolism impossible to hide.  The president’s nonresponse is an obvious response for those involved.

In the absence of the pandemic and the recession, it is possible that the policy of security of this government would have ended up as no worse than that of its predecessors. But the pandemic changes everything: highly sensitive times are in store for the security of the populace that do not refer to the narcos or to organized crime as such, but instead to the urgency of parents to resolve their immediate family needs, beginning with food. While the narco will be (is) there to capture local support, the government does not protect the citizenry. In place of engendering effective municipal police forces from the bottom up, it de facto promotes a response from the population that is nothing more than “Every man for himself.” This is not a serious way to govern.

https://mexicotoday.com/2020/07/21/opinion-a-government-besieged/

www.mexicoevalua.org
@lrubiof

Luis Rubio

 Financial advisers often differentiate between low-risk, low-return investments, from higher-risk bets, albeit with higher potential returns. The President’s trip to Washington followed a different logic: high risk with low returns. Given what was involved, it was not a bad strategy, but victory can only be claimed once it becomes clear that the reverberations do not prove counterproductive.

The speeches of the two presidents could not have been more contrasting, because each had a different objective. For Trump, the goal was to end the dispute that he himself generated with Mexico to appease Hispanic voters. His speech was flat, predictable, and contradictory with everything he had said since his campaign in 2016, particularly regarding the border, migration, NAFTA and, in general, Mexicans. A sparse speech, designed to praise his guest and, at the same time, addressed to his potential voters.

The objective of President López Obrador, of which there was so much speculation, was transparent: to be recognized by the President of the United States. More than a national agenda, his was personal and electoral (and, maybe, rewarded with the arrest of César Duarte, a former governor of Chihuahua). His speech was not that of a president engages in sensitive negotiations, but of one who had reached the zenith of the mountain and wanted to turn it into a historical milestone for his base. Shouting “Long live Mexico” at the White House might seem a bit out of place, but it was the call of someone who had just been legitimized by a higher authority. And that is the problem of the speech: despite repeatedly demanding to be treated with respect and as an equal, the speech suggests that he does not feel he is.

The dinner hosted by President Trump offered the opportunity for American businessmen, strongly represented by large investors in Mexico, especially in the automotive, financial and energy sectors, to ask questions and make clear statements about their concerns regarding decisions that, from the cancellation of the Mexico City airport, have characterized the López Obrador government. A dinner chaired by the businessman in Trump, who clearly understands the importance of certainty and trust in investment decisions, was a perfect context for American entrepreneurs to express themselves “frankly,” as the diplomatic jargon would have it.

The list of guests from the Mexican side leaves no doubt about the way AMLO conceives of business; all of his guests represent activities dependent on the government: contractors, owners of concessions (like telecoms, radio, mining and television), and sellers of services to the government itself. The contrast with the Americans is palpable, which will not help to mitigate the concerns that the AMLO government raises every time it cancels an investment project, calls for a manipulated “consultation” or eliminates an autonomous regulatory body.

The Mexican government is pleased to have concluded the visit without major incidents, which is to be celebrated, but its sights were not high to begin with. There are three risk factors that were not addressed, two of them consciously: the Democrats and the Mexican communities in the United States. The date of the meeting was not a coincidence: if it had taken place a week earlier, with the Congress in session prior to its summer recess, the president would have had to visit, at the very least, Ms. Nancy Pelosi, speaker of the House and a key person in the approval of the USCMA; otherwise, it would have created a diplomatic incident. Pretending that there will be no repercussions from the Democrats or candidate Joseph Biden’s team is naive. For them, the visit constitutes an AMLO vote for Trump, so one ought to wait to assess the results of the visit. Better leave the celebration for later.

Regarding the communities of Mexicans, it is inexplicable that there was not even an informal meeting with the leaders of such militant organizations and which the current president cultivated for a long time. A meeting would have had a minimal cost; not having organized one will surely have a monumental cost. One wonders who decided something so absurd and at the same time so obvious.

The third risk factor is related to the protests that took place when the president stood guard at the monuments of Juárez and Lincoln. I was not there, but the screams did not sound like Mexican Spanish; rather, they appeared South American, perhaps Cuban or Venezuelan. It is known that there is some opposition along those lines brewing in the state of Florida, so it is not impossible that the president has opened a dangerous Pandora’s Box without even realizing it.

Two no less important unknowns remain: the first is what will happen when a journalist catches Trump off guard and he returns to his traditional anti-Mexican rhetoric or when, in the next few days, he acts on the DACA issue.

On the other hand, nothing in this visit altered the stumbling block on the Mexican side: the wind will take care of the words heard in the Rose Garden; what matters then is not speeches but the results. To be successful, the new trade agreement, the  avowed reason for the meeting, depends entirely on the certainty that the government of President López Obrador generates among investors, something not guaranteed. The visit was saved; Now the economy needs to be saved as well.

https://mexicotoday.com/2020/07/14/opinion-pitfalls/

www.mexicoevalua.org
@lrubiof

Luis Rubio

Divergent objectives that aim to solve a common problem. Perhaps in this way one could begin to appreciate the complexity inherent to the new North American trade agreement. Each of the governments involved had its priorities and the result is the new USMCA that was inaugurated this week. Like any instrument, it has its strengths and weaknesses, but it is not a panacea.

According to old Greek mythology, the panacea, named after the goddess of universal remedies, is a cure for all ills. The new trade agreement is certainly not a panacea in the Greek sense, but it is without a doubt the best deal that was possible given the political circumstances. And that is the relevant criterion: negotiations among nations, like all negotiations, reflect both the purposes of the parties involved as well as of the correlation of forces at the time.

For President Trump, the primary objective was to discourage the emigration of industrial plants from the United States to Mexico and the new treaty reflects that priority. There is no greater contrast between the NAFTA and its successor, the USMCA, than this one. In this change, the number one priority for which Mexico proposed the original negotiation back in the nineties vanished.

The context of that accord is key: the Mexican government proposed the negotiation of a trade and investment agreement as a means of conferring certainty on investors after the conflict-ridden decade of the eighties: in a word, the objective was to use the American government as lever to regain the trust that the Mexican government had lost in the expropriation of the banks. A means was sought to assure investors that the Mexican government would not act capriciously or arbitrarily in the conduct of economic affairs and that any disputes that might arise between the government and investors would be resolved in courts not dependent on the Mexican government.

The American government of that time saw in NAFTA the opportunity to support Mexico to achieve accelerated progress, a key objective of its own definition of its national interest. Behind it dwelt the premise and expectation that Mexico would carry out deep reforms to turn the treaty into a transformative lever that would allow achieving the hoped-for development, something that evidently did not happen.

Although the renegotiation began with the Peña administration, President López Obrador gave it its distinctive character, incorporating his own objectives in the new treaty, which are very different from those that motivated the NAFTA, especially in labor and social matters. Many of the USMCA’s ​​most controversial and potentially onerous provisions stem from this vision, in which, for very different reasons, the two governments converge. While for Trump the avowed objective is the protection of the American worker, for the Mexican the priority is to attack inequality and reduce poverty. Through the treaty, the Mexican government intends to promote the modernization of the productive plant with a rationality of social inclusion and protection of labor rights. These are not different objectives, but it is not obvious how they will work out in practice. When ambitious purposes are mixed with limited instruments, the result is not always as expected.

The strangest thing is the use (which will undoubtedly be biased and politicized) of American institutions to force a change in the way of operating of Mexican companies, especially in the organization of unions and the election of their leaderships. The Mexican government intends a triple somersault: to democratize labor relations, to co-opt the new leaders (or to impose them), and to create new electoral clienteles, all through an international treaty where the government of the country on which all this depends has political and protectionist objectives, which clearly have nothing to do with the political logic of the López Obrador government.

Throughout the last quarter century, NAFTA became the main engine of growth of the Mexican economy through exports. When these collapsed due to the 2009 US financial crisis, the Mexican economy fell dramatically, evidencing both the enormous importance of the export sector, as well as the lack of a strategy to accelerate the transformation of the domestic market, to turn it into another powerful engine of development in its own right. However, nothing was done to respond to that obviousness, and this is one thing the new treaty aims to achieve, at least in spirit.

What has not changed on the Mexican side is the need to provide certainty to investors, something that the new treaty no longer guarantees, except for some services. Certainty will now have to be provided by the Mexican government itself, which has not distinguished itself by its willingness or ability to secure it. Without private investment, the new treaty -and any other strategy- will be irrelevant. The real challenge is not Mr. Trump or the potential (probable) law suits coming from the US, but the lack of an internal compass regarding what makes it possible to attract investment.

https://mexicotoday.com/2020/07/07/opinion-panaceas/

www.mexicoevalua.org
@lrubiof

 Wilson Center, June 29, 2020
Luis Rubio

Fellows and staff from the Wilson Center’s Canada and Mexico Institutes answer questions about the impact of the July 1 implementation of the United States-Mexico-Canada Agreement (USMCA).

Luis Rubio
Global Fellow & Advisory Board Member, Mexico Institute, Wilson Center; President, COMEXI
June 29, 2020, Mexico City, Mexico

NAFTA provided certainty for investors both through its specific investor protections and because it forced Mexican leaders to commit to stay the course on economic reforms. Can the USMCA provide similar certainty today?

The only true similarity between NAFTA and the new USMCA is the fact that both establish rules for trade and investment across the two North American borders. Beyond that, these are two quite distinct legal documents. NAFTA was meant to be a mechanism whereby the United States provided guarantees for investors in Mexico with the objective to accelerate Mexico’s development while deepening the economic ties across the three nations. The ulterior objective was to strengthen America’s border, which stemmed from the notion of Mexico as a primary national security interest. A prosperous Mexico, the then American president argued, is in the best interest of the United States. The primary objective of NAFTA was strategic and political. USMCA is above all a compromise on trade.

USMCA not only eliminates the guarantees for investors but creates disincentives for new capital to flow into Mexico through a series of mechanisms, including very tight rules of origin, severe penalties for labor practices, and (very high) minimum wages for a series of industrial processes. In addition, the agreement incorporates a sunset clause after every six years, a circumstance that hinders long-term projects from being contemplated. Clearly, the two documents pursue different objectives.

Most of the emphasis of the USMCA is placed on both updating the old agreement to incorporate the novelties of one of the fastest-changing periods in history, especially with the introduction of the Internet, online commerce, just-in-time delivery (as part of dynamic industrial supply chains that crisscross the region), and all things digital. On the other hand, the agreement incorporates a series of measures to introduce political change in Mexico, particularly as it attempts to dismantle the old labor-union structures that for decades were one of the staunchest support mechanisms of political stability. Whether the pretense of introducing democracy into the labor arena will deliver what the two governments want (which most likely is not the same thing) remains to be seen. What the López Obrador administration certainly wants is to replace the existing labor structures with his own, to then bring them over as social control systems within its own coalition.

To answer the question in one line, there is no way that the new USMCA will provide for long-term economic growth and political certainty because it is not meant to accomplish that. At best, it will protect, for a while, Mexico’s foremost engine of growth, namely exports of manufactured goods, and not even that is certain. Much ado about nothing wrote Shakespeare. Something similar may well be waiting for USMCA, albeit with much bigger, probably dire, consequences.

https://www.wilsoncenter.org/article/usmca-becomes-reality?emci=33dcecb6-0dbb-ea11-9b05-00155d039e74&emdi=e979ec8d-19bb-ea11-9b05-00155d039e74&ceid=49581