Luis Rubio

Three expressions sum up the disagreement characterizing the country’s economy at present and that explain the paralysis (stagnation with a strong propensity toward recession), lack of progress and bad prospects. Presidential rhetoric will camouflage the problematic with grandiose phrases such as “this is not a change of government, this is a change of regime,” “the fourth transformation” or “the poor come first” when, in reality, what is taking place is swift deterioration.

Some of the phrases that have become prototypes of the AMLO government are revealing of its world vision, but especially its clinging to a specific era: “hugs not bullets” and “I have other data” reflect a way of conducting politics and confronting the issues that the country is facing, but none is more indicative than the one the President has expressed numerous times: that “the economy should be subordinated to political decisions.” I do not know of, nor have I observed any politician throughout time, who does not desire the latter: not so many decades ago, governments effectively controlled and managed the principal variables that make the economy function, but that scenario disappeared in the last third of the past century not because of the will of someone in particular, but due to technological change and the sudden emergence of instant communications that has overtaken the world. It is not by chance that, since that fact, there is virtually no country on the planet –including Cuba, North Korea and Vietnam- that is not geared to attracting private investment, doing this not for pleasure but because there is no choice.

I see three key issues that explain the paralysis Mexico is experiencing in economic matters that derive from the latter. First, the nature of the economic world in the XXI century and why it clashes with the governmental strategy; second, the importance of procedures and, more so than anything else, of trust; and, third, the cesspool laid bare by the President himself.

In terms of the economic world, the XXI century reality bears no similarity to that of the mid-XX century in that the government maintained a closed and protected economy. In that era, the government subordinated economic decisions to those of politics, but that disappeared because of the way in which the world’s ways of producing evolved (the so-called globalization and supply chains) and, particularly, due to the ubiquity and availability of information outside of governmental control. Once the economic world was liberalized, it was no longer under the control of governments and there’s no going back, unless there’s a disposition to generate a depression.

From the latter, there derives another fundamental change in the political relations surrounding the economy: from the moment that controls in matters of investment, exports and imports disappeared, the government -all governments- had no greater alternative than that of dedicating itself to convincing their citizens as well as the community of investors, businesses and financiers, both domestic as well as international, of the good of their projects. Once the world became the prime space of economic action, all governments competed for the same investment and the only way to capture it is to create conditions that will make it attractive, together with sources of certainty that generate trust in them. The decision to save and invest passed from the governments to the citizens and investors and there is nothing in this world, and even less so the pretension of a “change in regime,” that will change that. Exactly the same transformation took place in the political arena, i.e., the INE (National Electoral Institute) and the Electoral Tribunal and the Supreme Court.

Finally, the President opened a sewer of which he is not yet aware but that radically affects the present moment. For many years, one government after another constructed institutional mechanisms designed to confer certainty on economic agents and on the society in general. Thus were born the autonomous institutions, each in pursuit of a specific objective: access to information (National Transparency Institute, INAI); regulation of the energy market (CRE), and the National Hydrocarbon Commission, (CNH); the Human Rights Commission (CNDH); trust in the electoral process and regulation of political parties (INE and the Electoral Tribunal); and the resolution of disputes among the branches of government (the Supreme Court).

Today we know, in retrospect, that the validity and transcendence of these institutions was due not to the legitimacy that they enjoyed, but instead to the respect that successive presidents and administrations allocated to them. The easiness with which the President has neutralized or eliminated these institutions illustrates their intrinsic weakness. What the President does not recognize is that, on implicitly declaring “the king has no clothes on,” he did away with key wellsprings of certainty for the citizenry and for investors and savers. Once exposed, that sewer has become Pandora’s Box.

The problem now is to regain the trust that those entities engendered, a task complex in itself, but impossible for a government whose raison d’être is to deny that the problem exists or that it is a valid one. The economic-growth crisis and the way in which the COVID-19 will likely deepen it will force the government to act. The question is whether he’ll act in a constructive or in an authoritarian mode.

Twitter: @lrubiof
https://mexicotoday.com/2020/03/31/opinion-an-unknown-world/

Luis Rubio

Professor Huntington* caused a scandal when, in the middle of the Cold War, he wrote that what is important in a government does not lie in its ideological characteristics, but in its effectiveness. What gave rise to the uproar was his affirmation that the U.S., the U.K. and the Soviet Union had systems of government that worked, while many nations within the American sphere of influence lacked that capacity. Pairing the USSR with the U.S. was pure apostasy, but the argument was well sustained: the three nations, penned Huntington, have strong, adaptable and coherent political institutions, with effective bureaucracies and mechanisms to resolve political conflicts. The key point, and therein lies its relevance for Mexico, was that despite their differences, in none of the three nations was there impunity.

Impunity has become the main characteristic of present-day Mexico: there is literally no space in public life where there is compliance with the rules, procedures or laws. Although this statement may seem excessive, the evidence is overwhelming: there are criminals because there are no sanctions nor the capacity (nor the interest) to restrict or impose limits on them; murders, extortion and abductions go unnoticed, as if they did not exist; the administration juggles budgetary items, rigs public consultations, commissions public works without calling for bids, does away with the purchase of medicines and reduces salaries, all in order to transfer funds to the government’s electoral projects, with no impediment; the government cancels contracts without compliance with the law or established rules; organized crime terrorizes the population and levies protection money without the authority ever showing up; the police are corrupted (and use the laws to abuse them in their favor), without punishment; the functionaries of previous administration, just to cite one example, stole without compunction, but are only persecuted when it is politically convenient for the current government. The point is clear: impunity is the prevailing law.

The matter is not partisan, ideological or political. Impunity banishes all vestige of organized society because it implies, by its very nature, the inexistence of rules, laws or contracts. When a society descends into the realm of impunity, civility disappears as does civilization, because the only thing that counts is the power of the most powerful, formerly known as the law of the jungle. The paradoxical part is that each administration claims that its officials are pristine, unpolluted and untouchable, permitting it to penalize its predecessors, with no limit. However, those who boast of power and victimize their enemies, sooner or later find themselves on the other side of the fence. The pretense that today, in contrast with the past, there’s no impunity is sheer fantasy.

The trademark distinguishing the present administration resides in the construction of an entire legal scaffolding, beginning with the fiscal and, presumably, being followed by the judicial, whose true purpose is intimidation and threat. With powerful -and abusive- laws in their hands, the government today has the possibility of jailing citizens without a judicial order, expropriating their property (eminent domain) without there being a trial, and freezing their bank accounts with a simple administrative order. Hard to imagine a clearer and more patent definition of impunity.

Impunity is what explains that Mexicans live under the threat of permanent insecurity, bureaucratic abuse, corruption, sale of government positions, the President’s “purification” of corrupt civil servants, scamming investors who buy clean-energy bonds, refusal to authorize the mega-investment of a brewery in Mexicali and, the crown jewel of impunity, the pretension of Pemex and of the Ministry of Energy to keep the Zama oil field developed by the Talos enterprise, violating the contracts and rules and regulations in force.

Impunity is an old malady of the Mexican political system because the laws confer upon its functionaries enormous discretionary, in fact arbitrary, powers, which render possible any action on the part of whoever holds the power at any given moment.

There is no evil worse than that of impunity because it implies the total absence of rules, thus, of certainty, the mother of development and civility. Worse yet when it becomes the raison d’être of a government.

While impunity comprises part of Mexico’s DNA, the governments from 1982 onwards attempted to erect institutional scaffolding that would check or diminish its reach. The real tragedy of the present government is that, on doing away with this entire platform, it became evident that the only thing that interests it is imposing itself by force or intimidation. The long-term cost of this is indescribable, regardless of whether the government functionaries of today and their acolytes can understand it.

The expropriation of the banks in 1982 threw open Pandora’s Box because it flaunted force and impunity. What the current government has done is to appropriate that torch and take to its ultimate consequences. The result of last time was the lost decade of the eighties; the impact of the present one will not be identical, but it surely will not be better.

*Political Order in Changing Societies

https://mexicotoday.com/2020/03/24/opinion-impunity/
. Twitter: @lrubiof

Luis Rubio

 “The history of Mexico, says a well-known analyst, is first and foremost the history of personalized power -of the concentration of all the levers of power and resources- in the hands of a leader standing above society, of a succession of leaders and their regimes. Breaking away from the post-PRI era required a leader who could act as a battering ram to destroy the old order. That person had to be an outstanding and charismatic politician with the courage to break with the past and force the political class and state authorities to leave the past behind. That person needed a strong personality and the ability to lead. However, to introduce a system based on political rivalry and competition requires quite a different kind of leader, one prepared to ’abdicate the throne’ and transfer at least some executive power to other institutions.”

Even when a new society and new institutions began to emerge –continues the author-, the government played by the old rules. If the fundamental principle of democratic elections is that “the rules are clear, but the results uncertain,” the elite was determined that the rules should be uncertain and a result favorable to itself guaranteed. Rather than make provisions for an alternative regime and rotation, the elite stressed continuity. Samuel Huntington’s observation that two election cycles are sufficient for a country to become democratic proved not to apply to Mexico, where regular elections provided a smokescreen for backsliding from political liberalization.

Society was too inexperienced to develop independently into a civil society. The new occupants of the presidency had come to power on a wave of democratic enthusiasm, but not only had they no intention of promoting the development of civil rights and liberties, they systematically obstructed the process, turning their backs on the democratic forces that had helped their rise to power.

The technocrats supposed that introducing a capitalist economy would be enough, and they ignored the need for new institutions and the crucial importance of subordinating the state to the rule of law. As a result, they reconfirmed Adam Przeworski’s conclusion that without stable liberal institutions, a sustainable liberal economy is impossible. Indeed, in the absence of viable independent institutions and the rule of law, economic reforms can become a destabilizing factor that pushes the ruling class toward authoritarianism in order to defend its interests and its property.

Could this leader and this elite, given their origins and ignorance of anything other than the old political system, have behaved differently? The reforming governments did not foresee the consequences of their endeavor, but all reformers start by shaking the foundations of the status quo without knowing where their actions will lead. If they could see into the future, no doubt any would have second thoughts.

In truth, all Western leaders made a double mistake, first, by relying on the local reformers and believing that they would guarantee a successful transition, and, second, by emphasizing the economy and neglecting the role of political reform.

Mexico’s present or future? Or is it its recent past? The analysis is revealing and looks impeccable. However, none of it is about Mexico, even if it appears to have been written recently by an expert well versed in its reality. In fact, the author, Lila Shevtsova, is talking about the failed transition in her own country, Russia,* in a book about the first two decades of post-Soviet Russia. All I did was pick a few fragments and replace Mexico where it said Russia (or Kremlin) and “a leader” or president, where the author wrote the name of one of Russia’s presidents.

What’s remarkable is that the similarities, but also the differences, of a process of profound political and economic change as that that has characterized both societies, reflects the complexity of the challenge that the reformers undertook in each nation without really understanding the difficulties which would have to be faced down the road and, particularly, the forces they were unleashing.

It’s clear that both nations had to break away with the past because the status quo ante proved unviable and unsustainable. Neither the USSR nor Mexico launched their process of reform on ideological grounds; rather, they did so due to the paralysis and series of crises that each had experienced. The result was, as the title of the book says, a lost transition that, while having advanced, did not reach the promised port of landing. The new status quo has proven uncertain and remains far removed from a liberal and competitive economy, characterized by development, stability and democracy.

*Lost in Transition

 Twitter: @lrubiof
https://mexicotoday.com/2020/03/17/opinion-similarities-and-differences/

Luis Rubio

The big question is how Mexicans are going to get out of this one. Aside from the President’s popularity, all indicators are pointing the wrong way: the economy stagnates, employment does not grow, the government continues to amass legal and fiscal instruments to persecute the citizenry and there is not a single topic –from security to childhood, passing health on the way- in which the government can exhibit any improvement.

Conflict, whether social or political, has become the raison d’être of Mexican reality because therein are summed up the expectations, resentments, envies and aspirations of Mexican society as a great collective. Some perceive the government as good, others reprove it; some trust that things will improve, others are sure that the only possibility lies in things worsening.  Independent of affiliations, phobias or preferences, the contradictory rhetoric of the quotidian declarations does not contribute to creating a future in which all citizens can partake.

A clear majority of those who voted did so for today’s Mexican President López Obrador. I entertain not the least doubt that much of the anger and many of the grievances that encouraged that vote are absolutely legitimate because, despite the advances, a competitive economy was never consolidated, one sufficiently broad in scope for all Mexicans to benefit from. The vote of tedium reflected a clash between reality discerned with decades of rhetoric that oversold the future, but delivered poor results.

If one brings this situation into focus as a problem requiring a solution,  it is that the country urgently needs new institutions, a term that has acquired a bad name in the current government’s morning discourses,  but one that is nonetheless transcendent. The problem is that, in the existing chain of events, it is nearly impossible to build institutions that satisfy its sine qua non condition of success: having widespread support and recognition. The environment of conflict and polarization renders it highly difficult to create and consolidate new institutions: at present, the country is encountering two great currents running against the flow: those that want to break with the status quo at any cost and those who demand certainty that can only derive from solid and non-contentious institutions. Beyond the side on which one finds himself in this antinomy, what is certain is that it is impossible to achieve stability and predictability in a society that lacks institutions that are credible for the majority of its citizens.

The milieu is so vice-ridden that anything the government proposes ends up being conceived as an abuse by one part of the population and as a given by the other. The opposite is equally true: the Morena majority automatically condemns, and is ready to dismantle, everything in existence prior to its advent, although many of the best things existing today –and that, doubtlessly, its base appreciates- are the product of the reforms of the recent decades.

The advances of the last decades are not few nor are they small: freedom of speech; free elections; a perhaps primitive health system, but infinitely superior to the madness into which the current government has incurred; access to innumerable first-rate goods and services at infinitely lower prices (after inflation) than those that existed before. At the same time, it is evident that there is a myriad of things, in terms of the conditions of daily life as well as the functioning of the governmental system, that are unacceptable, bad, corrupt and exceedingly inefficient. I do not doubt that, soon, we will find that the stalwarts of Morena, now at various levels of government, will be found immersed in problems of corruption, as occurred with PAN party members, the Puritans of those times. The problem does not lie in persons or parties, as much as the President absolves them, but rather in structures and incentives. That is the reason that the country will not get ahead unless it adopts a new legal and institutional structure. In contrast with the past, the latter would have to be legitimate to achieve its objective.

The dispute with respect to the INE was born in 1996 and reinforced in 2006 because the PRD party, many of whose constituents now espouse Morena, did not participate in decided fashion, and was in fact excluded, for good or bad reasons. Legitimacy was not achieved because there was no consensus, at least once, for this crucial institution.

There’s an additional phenomenon: much of public life consists of negotiating and a serious negotiation cannot be conducted in public. Mexicans have made theirs the myth of transparency, which is obviously necessary, but not everything has to be transparent. In Congress or in the Supreme Court, for example, transparency is indispensable but not in discussions and negotiations among the actors because it is there that, as Bismarck noted regarding sausages, the future is constructed. What is public ends up being merely a show and spectacles do not lead to good government.

Conflict can only come to an end with negotiation leading to legitimacy. The question is whether the government is in the business of promoting and deepening the conflict or building legitimacy. The women’s march of March 8 will be a bellwether of where Mexico stands today.

Twitter: @lrubiof

 https://mexicotoday.com/2020/03/10/opinion-conflictand-institutions/  

Luis Rubio

The master of the house unequivocally, maybe unbearably, threatened his wife: bring me a little girl as a “gift” or I will rape our daughters. The woman responded by bringing him a little girl.  Perhaps the dilemma was existential, but the woman complied, condemning as she did an innocent child. We all know what followed: the little girl was called Fatima.

The true pandemic that has all of Mexico awestruck is not the coronavirus but the impunity, and in no matter is this greater than in that which afflicts girls, boys and women. Rampant impunity has made possible not only for violence to misappropriate the life of Mexican society but, worse yet, this does not seem at all strange anymore to anyone.

In which country is violence tolerated such as that which oppresses Mexican society without anything happening? In what country is it possible for what is intolerable to become an everyday happening without anyone saying, or being able to say, anything? In what country does the government feel aggrieved because the society protests the femicides and the infanticides, in other words, the impunity? What country discredits whosoever calls attention to crimes that should not exist? In what country does the governing party and its acolytes accuse the victims of the impunity? What country denies a right so very elemental, that of indignation? That can only happen in a country that has lost all bearings of civility and civilization.

The information revolution, what distinguishes the XIX century, has transformed all public activity, but especially the relations between the government and the society, because it has conferred upon them novel instruments never before available. The ubiquity of information obligates everyone -citizens and governments- to act distinctly: the society is informed, it communicates and it acts, all this without governmental mediation, the latter the stamp of the XX century. The government possesses the same capacity, but particularly the opportunity, to transmit almost personalized messages, and it now confronts the challenge of not only communicating, but above all of convincing. The once monopoly of information alters the relations among all the actors of a society, but the Mexican government refuses to adapt to the new reality.

In this XXI century, crises are key moments that imply transformation or bust. Transformation when those that govern and the society come together to build a new constellation. Bust when each of these components only looks out for number one, on occasion meeting head on. In today’s Mexico the government confronts, by design, in a systematic way and cannot conceive of a society working in harmony. This vision impedes it from understanding the summons-to-arms that the femicides have placed at the Palace gate.

In the XXI century, an earnest and realistic government would head up the movement against femicides and infanticides, it would make them a common cause for transforming the country. In AMLO’s Fourth Transformation (4T), in which everything has to be different from what went on before, the government plays the victim and disqualifies anything that dares to present a distinct manner of thinking or acting, beginning with the First Lady, who was required to recant her words.

In the Mexico of the XXI century the victims are guilty; those who denounce assaults, rapes, homicides and other social wrongdoings (regarding whose termination the responsible party is evidently the government, all government) are conservative; and those who disagree with the official truth are traitors, i.e. neoliberals. The sole fact that there continues to exist the pretention of there being an official truth betrays the absurdity –the ahistorical nature- of this nineteenth-century view in the heart of the information era.  Back to the authoritarianism of the XX century.

Femicide is an ill created and tolerated by Mexican society because it has lost the compass of what is acceptable and what is intolerable. The sole fact that it would even occur to the head of a family to demand a “gift” in the form of a little girl and bully his own family into procuring one for him is incontrovertible evidence of the destruction of the essence of civility.

Just to put things into perspective: if the ill that afflicts Mexico were the coronavirus, we would have disappeared from the map due to this absolute incapacity to organize ourselves and act in response to the obstacles confronting us through the day-to-day reality. An epidemic that is not contained turns into a pandemic and pandemics –in matters of health and of politics- kill off societies and their governments.

Thus, femicide and infanticide should not only be condemned, but they also should be assumed to revise the dogmas of how to conduct public affairs so that these ills would cease to be once and for all. This lack of moral compass that would allow to distinguish what is –and should be- acceptable and intolerable, or if one prefers, differentiate the good from the bad, have led us to view with naturality what is not natural, what cannot be tolerated.

This “damned reality” has fallen into the hands of the government and it has not known how to respond. Rather than obligate it to assume its responsibility, its reaction has been phantasmagoric: how dare the damned reality sabotage the 4T.

 Twitter: @lrubiof

https://mexicotoday.com/2020/03/03/opinion-pandemic/

Luis Rubio

The book of anecdotes relates that Mexican President Adolfo Ruiz Cortines (1952-1958) kept a completely tidy desk, with the exception of two bins: the first said “Problems that resolve themselves” and the second, “Problems that time takes care of”. That political philosophy, carried over time, allowed successive administrations back in the middle of the 20^th century to keep the peace during a time, but did not avoid collapse. Like so many moments in Mexico’s history –and that of the world-, things work until they don’t.

The epoch of Porfirio Díaz (1876-1910) functioned for a time, but later collapsed; stabilizing development (1940s-1970s) afforded the country some decades of accelerated growth until its inherent limitations ended it on rendering it unviable. The diverse French Republics encountered a similar fate, precisely akin to that which took place in the era of the reforms during Mexico’s most recent decades. Each of these examples dawned with great expectations but arrived at its destination exhausted, in good measure due to the complacency generated.

A great initiative is launched, whatever necessary is done for it to work effectively but, some years later, it wears out and no one does anything to correct its errors, insufficiencies or negative byproducts. The much-heralded process yields decreasing benefits until it collapses; that is what happened from the forties and until the beginning of the eighties of the last century. Instead of resolving the problems, updating the model, introducing novel elements and components, paving the way forward, Mexico’s history has been one of steering clear of difficult decisions, preserving predatory interests, protecting politically favored groups and, in a word, coddling the status quo. The outcome should surprise nobody: insufficient or incomplete results, unsatisfied expectations and, at the end of the day, collapse in the form of electoral rejection of the reformer project.

If something is clear about the reforming process of the eighties to date it is that the reforms were not sufficiently ambitious or, at least, they were not imbued with the integral drive required to be successful. It was claimed that it was possible to liberalize the importation of goods, but not to do so with services, leaving the industrialists facing top-notch competition without access to credit, insurance and diverse services (communications, infrastructure, etc.) similar to those typifying the producers of other countries. It was claimed that it was possible to transform education and provide Mexican children with the tools and opportunities that would be required for them in the future to compete with their Japanese, French or Brazilian peers, without modifying the petty tyrannical control characterizing the Teachers Union (SNTE) or its radical appendages like the CNTE. It was claimed that some could be submitted to competition while others were protected. Under conditions such as these, it is impossible to envisage the success of a project. The evidence is the reality.

Each of the decisions to impede the reforms can be explained analytically in terms of the actors and the specific correlation of forces  at each particular juncture, a circumstance that is neither exceptional nor exclusive to Mexico, but it is also evident that there was enormous complacency in all of the ambits of political, economic, and union power. In contrast to countries that had no alternative other than to keep working to make possible a substantial improvement in their populations’ life levels,   in Mexico migration to the United States and NAFTA let everyone rest on their laurels: migration diminished the social pressure and NAFTA created a state of exception within the country that attracted investment. Rather than extending that space in order to generalize it and for the exception to be what was not working, which would have required affecting diverse interests close to the “system,” all of the key actors became complacent and engendered an environment that rendered inevitable, in retrospect, the excess and consequent popular rejection of the status quo.

It is fortunate that the country enjoys the privilege of having an increasingly wealthy population residing outside of Mexico that sustains a huge part of the citizenry, above all in rural areas, through its ongoing remittances. Also implicit in this are the exports, which permit maintaining stability in the balance of payments and contributing decisively to the growth of vast regions of the country. However, these are exceptions and, given the current American context, overly precarious situations.  Like its predecessors, the government of AMLO benefits from these elements but cannot rely on them, because both are in the sights of Trump.

Whichever way the President adopts in matters of development, there are two circumstances that he will be unable to avoid: on the one hand, he must procure a high growth rate: the notion that development can be achieved without growth is mere fantasy. On its part, growth requires private investment, which will only be attained when the uncertainty emanating from the government ceases. On the other hand, the only way to achieve growth that is likely to advance toward development is with an inclusive strategy that promotes social mobility, something natural in the XX century but nearly nonexistent at present.

Twitter: @lrubiof

https://mexicotoday.com/2020/02/25/opinion-the-costs-of-doing-nothing/

Luis Rubio

The future is built, whether consciously or unconsciously. The president, through his actions, decisions and rhetoric, shapes it, like it or not. Nearly a year and a half after the initiation of President López Obrador’s administration, there are two things that are very clear: first, his objective is to change the future that was under construction throughout the previous four or five prior decades. And, second, he holds a series of very fixed and clear-cut ideas with respect to the future that he intends to build on and that are incompatible with the XXI century. Therein lies the problem.

The President’s vision arises from an era very distinct from that of the present. The country began to change –what he demonizes as “neoliberalism”- because the development strategy deriving from the substitution of imports in a closed and protected economy had delivered all it could muster. During these decades the world changed due to the revolution of communications, the ubiquity of information, and, above all, the realities that those elements engendered at the global level: the internationalization of production; the threats from the environment and the potential pandemics; the rules imposed by the importing nations; the exploitation of information -Big Data- by the technological behemoths; and the magnification of the expectations of an increasingly knowledgeable and in general worldly wise population. Rebuilding an idyllic past is simply not possible. 

Despite the truism of our circumstance as a country embedded in the global context, the Mexican tradition of reinventing the government every six years continues to be as operative as ever. In terms of what distinguishes the current government is the enormity of its ambition: it wants to not only reinvent the government, but also to recreate the country. The steps it has been taking in that direction are revealing: it has been making mincemeat of all the structures and institutional organisms constructed to confer certainty on the population in its diverse aspects: the human rights commissions to protect the citizenry from the actions of the State; and the regulatory commissions in matters of energy, communications and competition to provide certainty for the actors in the economy.

The result of its performance is two-fold: on the one hand, it has increasingly concentrated power; on the other hand, it has generated an exceedingly elevated degree of uncertainty. The gap between the President’s popularity‒ as a person vis-à-vis his government –of around 40%- illustrates the phenomenon: the citizenry trusts the President but does not see eye to eye with the actions of his government nor with its policies. We are at the let’s-see stage as to whether the National Electoral Institute (INE), an institution much more transcendent and well known to the ordinary citizen, is being similarly set upon. The evident question is: At what moment will the straw that breaks the camel’s back appears to topple the president’s popularity?

In fact, the easiness with which the institutional framework was dismantled reveals the lack of deep rootedness of those entities and the absence of credibility regarding their importance for daily life. At the same time, it exhibits the enormous weakness of the government itself because no country can bear up under the jolts between administrations that characterize the Mexican political system, and even less so in the period during which the well-being of almost all Mexicans depends on the mightily entrenched supply chains traversing the three nations of the subcontinent. The contradiction between the President’s objectives and the requirements for progress surpasses flagrancy.

The President undoubtedly wishes to attract private investment, but is unwilling to accept that, in the XXI century, his sole possibility of producing this rests in creating the proper conditions for it to flow of its own free volition. It has been decades since there has been the possibility of a government to force people modest or lofty- to save or invest without their leave. Investment will pour forth only to the extent that the uncertainty stemming from the very government itself and its carryings-on dematerializes.

The point of departure for the group in power resides in its belief that democracy was inaugurated in Mexico in 2018. Therefore, everything that existed prior to that should be eradicated and, simultaneously, the legitimacy that the government enjoys allows it to do whatever it pleases not only with the past, but even with the future. That type of arrogance has already plummeted more than one government in our recent past and there is no reason to think that things would be distinct for the present one. The president’s alternative lies in convening the construction of a common future, something that is plainly contrary to his nature and strategy but that, in the long term, will come to be recognized as its sole possibility of success.

Democracy, says David Runciman,* lives in the moment and displays its strengths over time. This mismatch produces confusion and uncertainty. We can’t wait out the confusion and uncertainty because waiting them out gives them the room to grow, damaging both democracy and the economy. The question is whether the intention is to create or to destroy because the current milieu provides no alternatives. It is in this sense that it is worthwhile to think about the warning of the historian Mary Renault: “There is only one type of shock worse than the totally unexpected: the expected for which one has refused to prepare.”

*The Confidence Trap

Twitter: @lrubiof
https://mexicotoday.com/2020/02/18/opinion-building-the-future/

Luis Rubio
Americas Quarterly – February 13, 2020

To build a better economy, Mexico needs to focus on the future – not the past.

MEXICO CITY – Nostalgia may be a natural human trait, but nostalgic Mexicans today are facing a dilemma: choosing between different, and dueling, views of the past. On the one hand, President Andrés Manuel López Obrador, or AMLO, wants to recreate a distant era that few living Mexicans even knew. On the other side, we find many Mexicans that assume that the AMLO administration is a passing phenomenon—a dream or a nightmare depending on one’s perspective—so that things will go back to where they were when he took over. Neither is possible, and therein lies the ongoing fight for the future.

Many Mexicans, perhaps a majority, expect normalcy to resume once the current administration ends. The problem with that view is that AMLO’s election was not the result of chance, but of a society tired with the status quo and endless promises of improvement in daily life that failed to materialize. If one puts together the circumstances that led to the 2018 election and the nature of the AMLO coalition and his actions, returning to the past is all but inconceivable.

The question then becomes what kind of future awaits Mexicans after AMLO. The fight for the future is ongoing at several levels. On the one hand, harsh reality has meant that the economy is not growing and the government’s frame of reference—“the State is in charge and everybody follows”—is incompatible with the kind of competition for investment that is the trait of the 21st century. Although the government would like to attract private investment, both domestic and foreign, it fails to accept the rationale that it must create conditions for it to materialize and that, ultimately, it cannot force anyone to save or invest.

The government’s actions and rhetoric, particularly by cancelling the new Mexico City airport and, above all, by eliminating or neutralizing key regulatory agencies, have frightened off investors. Investment has kept flowing to maintain existing lines of production, and there have been several acquisitions of Mexican companies by foreign entities. “Carry trade”, given the beneficial interest rate differentials, has continued to attract portfolio investment in government securities, but there’s not a single new direct investment project in the works.

The president’s perspective was shaped during the 1960s and 1970s, an era of fast economic growth, high social mobility and, at least until the beginning of the 1970s, order and relative peace. In his hometown of Macuspana, in the oil-rich state of Tabasco, PEMEX would provide for the community and there was no need to attract private investments or create jobs. That very basic reality from the 1960s seems to animate his bigger plans for dominating Mexican politics in the 21st century, a contradiction that has been overshadowed by the president’s enduring popularity and skill at evading harsh questions in his daily early morning encounters with the media.

The issue at heart is the radical contrast in perspectives that the various constituencies around the president and AMLO himself harbor vis-à-vis Mexican politics and democracy. For all of them, Mexican democracy was born in 2018 and everything that existed before must be eradicated while, at the same time, it confers upon the government full legitimacy not only to do as they please with the past, particularly the reforms of the past few decades, but also to shape the future. But what about the next presidential election?

From 2000 on, Mexicans grew accustomed to competitive elections and the alternation of political parties in power, and the 2018 election was different only in that it brought the left into government for the first time. But the issue is far more relevant than it might appear at first sight. The question percolating inside the president’s Morena “movement” is whether to attempt to stay in power by winning elections (the old-fashioned way) or whether to stick to power at any cost. There are plenty of constituents for both perspectives within the party. The next issue looming as part of this divide dwells on the National Electoral Institute’s looming new appointments: Will Morena impose itself and nominate members of its own or will it open the game for all political parties to participate as a Congress is supposed to do?

Sooner or later, the obvious contradictions between the government’s actions and lack of economic delivery will erode the president’s popularity and force him to confront the need to take a different approach. The key factor that determines the nature of the coming challenge is the president’s deeply-felt commitment to a zero, or close to zero, fiscal deficit. Avoiding a financial crisis is crucial to his political perspective. Hence, his actions have not brought high levels of inflation that, in the past, quickly delegitimized several administrations. The flip side of the equation, stagnation, takes longer to bite into people’s livelihoods, but is gradually ever more visible in the difficulty of finding jobs, lower consumption of some non-key services and the like.

At some point, the president will be forced to radicalize, accept reality or change to make a series of reforms that Mexico does need to attack corruption, reduce poverty and increase social mobility, three key components of his electoral program that previous administrations refused to countenance. Unfortunately, the latter is almost inconceivable and, thus, the question is whether Mexico’s future will be another failed and mediocre administration (the best one can hope for at the moment) or a radicalization of the administration. Much rides on what happens on the midterms of 2021.

https://www.americasquarterly.org/content/mexican-dilemma

 Luis Rubio

The past will not return: Mexico and the world changed, each at its own rhythm and circumstance. Thus, the only certainty is that we are facing a different future. The “old” order is over; we find ourselves in the face of a historic rift of enormous proportions and the more one delays in assimilating this basic premise, the worse that future will be.

The most human propensity is to cling to what exists or, more commonly, to what is known. The clearest image in this respect is that of the interminable efforts that we all make, every day, for the genie to go back into its magic lamp. Instead of dealing with the new realities, we dream of returning to what there was: that the September 11th attacks had never occurred, that Candidate X (insert your preference, there are many) would have lost.  It’s like wanting to put the toothpaste back in the tube: it can’t be done. The only thing for sure is that the past no longer exists; the big question is what’s next.

Immersed in the conflict for the independence of India, someone asked Mahatma Gandhi what he thought about European civilization: his response was “it would be a great idea.” Attaining civilization would imply reaching a new stage of stability, growth and civility, three major concepts that are absent in Mexico’s current reality. It seems evident that the way we are going will not permit any of these three elements to materialize, which is why Gandhi’s response is highly pertinent for the Mexico of today. Civilization is built, it does not come about fortuitously.

It is important to recognize the crossroads at which Mexicans find themselves: it is not the product of chance, nor is it the result, at least in its origin, of the present government. That merit is held by a succession of various administrations that carried out changes and reforms without reflecting on the totality that they were constructing, particularly in the political ambit: in a word, they did not reckon with the need to develop the governmental capacity to cope with the social, economic and political forces being unleashed. But there is a specific government that not only lost its way, but that also never found it: it never understood why it came into power, what it came into power for or what its “mission” was.

The reforms began in 1983 because it was the last resort: the governments of the seventies had left the country bankrupt. One might coincide or not with the inclination of those reforms, but there was no alternative to the urgency for restructuring the government and stabilizing the economy. The governments that followed imprinted their bias on the process, some with greater vision and skill than others; some with clarity of course and others with an entire misunderstanding of the challenge they were dealt.

But without doubt it was the government of Peña Nieto which never understood, first, why the electorate conferred on the PRI a new opportunity to govern again and, second, the huge potential that this President had in his hands. Instead of edifying a “new” Mexican State, the project was limited to advancing some reforms (not to be scorned as is likely to become obvious when AMLO’s cart gets stuck in the near future) while the swindle of the century was being consummated. Without the government of Peña today’s Mexico would be very different.

No one can blame AMLO for the causes of his victory. The forcefulness with which he won constitutes a sentence of disapproval that leaves no doubt of the message: the electorate felt betrayed by the outgoing government and turned in full to the only option that offered something clearly different. And that distinct part is what today is in the throes of building a different order toward the future: it is not only another government; it is another way of seeing and understanding the world.

On the planet much is being debated concerning the end of the world order constructed after the conclusion of WWII. The reason, the same as that within Mexico, is that there are new actors, new power realities and new game rules. We find ourselves in the stage of the “arm wrestling” in which the new groups in power are attempting to impose themselves on diverse political, economic and social instances and institutions. Little by little, novel criteria and values are appearing, affecting –for good or for ill- the manner in which power is come by, the effective rights of the citizenry, the way the economy is run and how social controls are procured.

The new order does not necessarily imply less poverty, more equality or a better economic situation. It solely implies new rules of the game that respond to the new groups in power. As throughout the world, we find ourselves at a moment of change in which everything is at the verge of sprouting, susceptible to being altered, because what we see today cannot last, all of which creates a climate of inexorable uncertainty.

The President has devoted himself to attempting to provide certainty to the diverse social interests in that his conception of the old Mexico is viable and the message, like it or not, has been taken up by many key actors of all ambits –politicians, entrepreneurs, union leaders-, all of them jockeying to position themselves well. But it is, nonetheless, a misleading scenario, of a dead calm before the forces, interests and values of the new governing group make impose themselves on the whole of the political scene and ordain their law. A new order that despite being new will not necessarily be benign.

@lrubiof

https://mexicotoday.com/2020/02/11/opinion-theres-no-turning-back/

Luis Rubio

Why did the Mexican government lose effectiveness? What had distinguished it throughout nearly the entire XX century was its steadiness and efficacy, in stark contrast with most of the nations of the hemisphere. Mexico was characterized, as the President constantly states, by its stability, order and economic growth. That all ceased and there is no shared diagnosis concerning the causes of the weakness of the Mexican government, but I am certain that the current attempt at centralization will not achieve its objective of restoring its effectiveness of yesteryear.

The heart of the problem lies in an obsolete system of government that has not worked for almost a half century and, more importantly, that is not going to function however much the present government attempts to reconstruct its decrepit structures. Mexico acquired a federal system of government because it replicated the U.S. Constitution, but the nations’ circumstances were not similar. Not by chance were the two stages of greatest economic growth –and of their benefits in the form of social mobility and job creation- those of the Porfirio Diaz government and the post-revolutionary PRI. The common denominator was the centralization of power, in flagrant violation of the constitutional framework. Despite the rhetorical reverence paid to federalism, the country does not possess a system of government that is compatible with a federal political organization.

Prior to the Porfiriato and from the end of the seventies, the Mexican government had been ineffective. Before because an institutional structure did not exist, today because that which exists does not work. Many Mexicans alive today remember (some with nostalgia) the stability and economic growth that made possible the strategy of “stabilizing development”, which gave up the ghost due to that the factors that rendered it successful disappeared. On the economic side, the import-substitution model reached its limit, while political demands ended up forcing an opening that reduced its vertical control.

Instead of the gradual economic liberalization that would allow for an adjustment of the domestic industry to the competition, from the 1970s the economy closed to an even greater degree, favoring national groups not concerned with elevating their productivity levels or satisfying the consumer. On top of that, the public expenditure rose in unusual fashion, all financed with debt. The mix ended up provoking the collapse of the government’s finances in 1982, bringing about a brutal adjustment because there was no longer any alternative.

The political opening was further encroached upon because it was reactive and went in counterflow to the most powerful interests. The most important electoral reform, that of 1996, created the conditions for equitable competition, but did not modify the manner in which the country was to be governed. The system of government, structured since the thirties, remained essentially the same. For example, instead of liberalizing the electoral system the reform incorporated the second and third parties (which then were the PAN and the PRD) into the PRI system of privilege. That is, it extended the existing system, assuming that the problems that the new structure would generate would solve themselves, which obviously did not take place.

Instead of transforming the system of government in order for it to deal with the conditions and challenges of the XXI century, its structure and objectives were clung to, leaving it totally incapable of functioning in a radically changed environment. Opening the economy implied that the government stopped controlling the private sector and the unions of the private sector. The political reforms produced vices that magnified themselves systematically: decontrol of the governors; the absence of institutions for security, beginning at the local level; mediocre services; de facto powers acting at will; and a population that, legitimately, reproved the existing order.

The reforms, in political and economic ambits, were necessary, but a strategy did not develop that anticipated their consequences in terms of governability, stability, security and efficacy. As Francis Fukuyama would say, Mexico became democratized before constructing a functional government. What we are observing today is an attempt to reconstruct what –a half-century ago- worked, when what is required is building a system of government for the XXI century.

The nodal point is that Mexico’s federal government is ever less powerful (even while more functions are being centralized) in the face of a society that is increasingly larger, more demanding and diverse and an economy that calls for conditions of stability in order to be successful. The Porfiriato and PRIist ruse of centralizing the power will not yield the result that the President desires because it is not compatible with the era of the ubiquity of information and of ferocious international competition.

The Mexican government needs to increase its capacity and that implies a change of conception: to build mechanisms that allow it to perform its functions from the municipal level to the federation, with procedures that make accountability possible, while systematically increasing its capacities to fulfill its functions, from the most elementary such as security, to the vital ones to eradicate poverty such as education and infrastructure.

Mexico stands in need of a revolution in its system of government; while this does not occur, governments will come and go, but peace and stability will continue to be illusory.

www.cidac.org
@lrubiof