Luis Rubio

Mexican lawyers often say that “a bad deal is better than a good fight.” I imagine that’s what the NAFTA negotiators were thinking when they reached an agreement that does not meet any of the needs, or the reasons why the NAFTA was negotiated in the first place. The best that can now be expected is for the US Congress to reject the agreement and, with that, to leave things as they are. It may well be that, in a Machiavellian jump into the void, that’s what they were actually trying to accomplish.

From what is known of the agreement reached last Monday, there are two elements that are indicative of the concessions Mexico granted. On the one hand, a limit was set on the export of vehicles, the most dynamic industry in the country, thus capping the potential growth of the sector. It can be argued that many more vehicles could be exported outside the framework of the new accord, paying the corresponding tariffs, but it is impossible to ignore the risk that, when the “revision” of the agreement comes in six years, the American interpretation will be that it was an absolute limit, not constrained by the agreement itself. In other words, the negotiators accepted to put the pillar of the Mexican industry at risk.

On the other hand, the heart of the current NAFTA, Chapter 11, was weakened to the point of practically turning it into an irrelevancy. That chapter refers to the resolution of disputes and constitutes the essence of the treaty’s success from the Mexican perspective, for a very simple reason: because it confers certainty to investors that there will be no capricious actions or expropriations without justification, by the Mexican government. The mechanism entails procedures that allow resolving disputes in an environment free of political influence. That chapter was the reason why Mexico proposed the negotiation of what ended being NAFTA in the early 1990s to the United States.

It must be remembered that, in its origin and in its essence, the NAFTA was conceived with political rather than strictly economic objectives. To attract investment, the country required a mechanism that would provide certainty that there would be no constant changes in policy or politicized decision on economic matters so that conditions for investment would be like those of any other place on Earth. For investors, both national and foreign, investing in Mexico could be highly attractive as long as the legal and regulatory framework would be credible and would ensure that the conditions existing at the time of investing would be maintained. The NAFTA, through Chapter 11, makes it possible for economic agents to ignore all political considerations in investment decisions, which is precisely why the NAFTA is so important and so popular. It is, in fact, the only space where the Rule of Law reigns in the country.

What was negotiated in terms of dispute resolution protects services only, thus leaving manufacturing industry hanging out in the open. This suggests that, although the negotiators from the Ministry of the Economy fully understand the heart of the NAFTA and why these issues are so important, the decision to accept the result was not theirs. Rather, that the decision to accept this agreement was the product of political calculations that transcend that of preserving the stability and economic viability of the country.

In addition, something that does not necessarily reflect the preferences of the Mexican government, the way in which this stage of the negotiations was concluded leaves Canada up in the air, facing an ultimatum: it joins the agreement as is or it’s left out in the cold. Just as chapter 11 is crucial for Mexico, Chapter 19, on anti-dumping, is crucial for Canada; Mexico here accepted the elimination of that chapter, thus threatening Canada’s interests, and, with it, the trilateral relationship. Canada now faces a difficult dilemma, since even its ruling coalition could collapse if its government were to accept the terms imposed by the Mexican negotiation.

Everybody knows that this negotiation was forced upon Canada and Mexico by the circumstances and that the mechanism that had been identified to update and upgrade NAFTA without unleashing the negative passions associated with the word NAFTA -the TPP- collapsed the day Trump entered the White House. However, the promise was a NAFTA 2.0. The result ends up being a NAFTA 0.5.

The agreement reached a week ago casts several doubts: first, what Canada will do; second, whether it would be possible to send a bilateral agreement to the US Congress, given that the authorization this body gave the administration was for a trilateral one; third, if there would be enough votes for one (or two) bilateral agreements, given the contrasting interests of the American states on the two borders; fourth, how much damage has been done to the relationship with Canadas: and, fifth, perhaps most importantly, how many changes the Congress will seek to insert into the agreement that was, tentatively, reached this week. It seems clear that the companies deeply engaged in the North American region as manufacturers, starting with the automotive companies, will not remain idle: rather, they will be working with their representatives to ensure that their interests are as protected as those of the companies in the services sector.

The panorama suggests that there are only two possibilities: One is that Mexican negotiators trust that Mexico’s interests will be defended by third parties (US companies with interests in Mexico) through the US Congress (a Machiavellian leap to the void), which could imply that at least what already exists (NAFTA 1.0) remains in place or that what was negotiated is corrected out there. The alternative is that the real objective was to try to rid the outgoing administration of another failure. The great virtue of the NAFTA was its almost apolitical character; what was done here was to politicize it absolutely.

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a quick-translation of this article can be found at www.cidac.org

Luis Rubio

The days and weeks pass and the reality begins to sink in: things are more complex than the government in the making supposed and anticipated. The question is what it will do about it.

The speed with which the president-elect took control of the discourse stunned all of Mexico -and the world- but it did not surprise anyone. Since Peña Nieto disappeared from the map after Ayotzinapa, Andrés Manuel López Obrador took control of the narrative and created the conditions that made his overwhelming triumph possible. Perhaps it was inevitable that this would happen, but the fact has consequences: on the one hand, it has allowed the next president full control; on the other, it has made it impossible for him to ignore the real complexity of the country today: with 53% of the vote, the buck stops with him. These months have served to make clear that AMLO has a decision of essence to make: what to prioritize and how to do it.

Recognizing reality does not imply that the future should be a mere continuation of what has not brought favorable results for the population, but it is the starting point. One government after another in the world for almost half a century has accepted the premise that “there is no alternative” in the famous words of a British prime minister. For several decades, the world was moving in one direction and all nations competed for the same sources of investment, which created very precise conditions for a governmental strategy.

The circumstances that created the competitive environment for investment have not changed, but it is obvious that the willingness of voters to tolerate mediocre results has disappeared. The overwhelming vote for AMLO makes this quite clear. But that does not change two core factors: first, that there is no going back in the world of instant communications or the ubiquity of information. The voters turned out for a candidate and conferred upon him an extraordinary mandate, but they did not throw away their sources of information or their smartphones: it would be naive to assume that they will tolerate the destruction of what does work. The other element that is not altered is the fact that there are external constraints to what a government can do to change the direction of development.

Changing the direction of development is not only possible, it is necessary. The model followed to date started from the (implicit) premise that the political status quo had to be left untouched, which in fact implied preserving power strongholds, thus limiting the potential for development to those already living in the modern world: those who can compete, export and survive in the world of globalization would be the big winners; the rest were left to their own luck.

The problem is not the economic model that the country has followed since the 1980s, but the way in which a large part of the population has been de facto excluded. The economic reforms of the eighties and beyond were intended to create conditions for the country to prosper, but only as long as they did not alter the existing structure -political, trade union and business. This is what created a dual economy: those that could compete and be successful versus those that lagged behind. The challenge for the next government is very simple: destroy what does work (the environment that favors competition and success in the global world) or redefine its agenda so as to create conditions for that all Mexicans can be part of that success.

Although it seems paradoxical, there is no contradiction in this: the problem does not lie in the economic model or the ability of Mexicans to be successful, but in that everything that exists is biased to prevent Mexicans from making it. Mexicans emigrate because there are no conditions to be prosperous; Once they arrive at their destination, they are as successful or more as the best. One can see how the Oaxacans in Los Angeles or in Chicago are as capable as everyone else, but not in Oaxaca. The question thus becomes: Does the problem dwell on the Oaxacans as individuals or in the socio-political reality of Oaxaca?

The dilemma for the next government is that its premises and prejudices do not match reality. The reason why NAFTA is so popular is that therein are found the best jobs, the best paid and with those with better prospects: the lesson is that Mexico must generalize the conditions that make these circumstances possible. However, no matter how obvious the lesson, one government after another has been avoiding action for five decades: they have been dedicated to preserving the status quo, including an ancestral and unviable industrial plant, instead of creating a process of real transformation that creates opportunities for all to be successful.

The dilemma is simple and transparent: to break with the impediments to the success of the modern economy -in fact, make it possible for 100% of Mexicans to have access- or to insist on an agenda aimed at developing unproductive clienteles that will end up killing the sources of income of the country. There is nowhere to go: either addressing the issues that previous administrations have not wanted to attack or to remain in today’s mediocrity. The mandate gives for this and much more.

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Luis Rubio

The result of the presidential election altered not only the structure of power, but the nature of the political dispute. The citizenry opted for a strong presidency, with all the powers to undertake a structural change of potentially enormous dimensions. Even without anyone knowing, for certain, what the nature and reach of the so-called “fourth transformation” is, the election sparked a revealing debate of both buried emotions and latent resentments in the political and intellectual world. Now all this is seeing the light.

Three terms summarize the nature of the discussion: austerity, transformation and counterweights. Although there are obviously many ways to define each of these words, the political burden that accompanies each of them is quite suggestive.

López Obrador is a model of austerity in his person and has built a political career around this guiding principle. When he refers to the era of stabilizing development (the successful economic program of the 1940s-1960s), he’s presenting a vision of the world that is radically different from the one pursued by the reforms from the 1980s and on. Three factors characterized the stabilizing development model: first, a strong and centralized government, with an acute capacity to use public resources to finance large infrastructure projects. Instead of endless negotiations with the governors and various power groups (like today), the federal government decided the priorities, devoted the resources to that objective and imposed its vision on the country at large. Second, the government’s total expenditure as a percentage of GDP was significantly lower than it currently is: the government was effective and austere, a circumstance that changed dramatically in the 1970s when not only did spending increase at an accelerated pace, but also lost its ability to establish clear and precise priorities. Finally, the economy operated within a political context very different from the current one because the government had effective control of employers and unions through a variety of mechanisms (especially permit requirements) that determined the profitability of companies and the limits of the trade-union action.

The change in economic model that occurred in the mid-eighties never consolidated. Its two nodal anchors consisted of a fiscal balance and the liberalization of the economy. In the first, the spirit was to return to the sixties, an objective that was never achieved: although there were many cuts in spending (notably in investment, especially infrastructure), current spending continued to grow. The government of today is noticeably bigger with respect to the GDP than the one of the sixties and continues being clumsy and ineffective. The only thing it has achieved (more or less) is to stabilize the fiscal accounts to avoid crises; but it is no coincidence that the financial and exchange crises began in the seventies and continue to be present because, in contrast to that time, the concept of austerity of the last five decades has been rather lax.

If AMLO does manage to reduce the enormous excesses of government spending and to allocate resources in a more effective way, his impact could be enormous and extremely positive, but that is not what those proposing the end of austerity within his entourage mean. There is no doubt that this contradiction anticipates deep conflicts.

The transformation that the next president has announced is still to be specified, but the mere fact that it is posited as a radical change -the size of the Juarez or Madero “transformations”- has unleashed all kinds of proposals, speculations and fears. The change of model that was postulated at the end of the eighties did not consolidate because the political structure did not change, even if the reality of power was altered. Let me explain: the political regime centered on the presidency and the distribution of privileges has not changed one iota since the end of the Revolution a century ago; PRI and PAN governments came and went, but the regime persists and, in spite of the hoopla, it may very well end up strengthening, rather than changing, in the six years that are about to begin.

Despite this, the reality of power did change because the circumstances are different: the economic dynamics of the different regions of the country; the power of organized crime; the abuses of the governors; and the strength of the market in economic decisions; are all elements that illustrate how the reality of power has changed (for better or for worse), despite the fact that the formal political system has not reckoned with it. However, the discrepancy between the two is suggestive of another of the conflicts that are brewing: the notion that today’s problems can be solved by centralizing power can only work by annihilating the contrasting regional dynamics, which would involve demolishing the sources of economic growth that exist today.

The dilemma forward ends up being very simple: to centralize in order to control, with the risks and potential benefits that such a course might entail, or to construct a new political system that makes possible an effective allocation of resources for a more balanced and generalized growth. In a word: there will be no change as long as the paradigm of the unipersonal regime is not altered, the one that Porfirio Díaz inaugurated back in the 19^th century.

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Luis Rubio

The temptation to imitate the Colombian process to pacify their country is immense. Although that process is yet to be concluded -or enjoy widespread support- the Colombian experience is exemplary for the depth and solidity of its conception and process, but also because it sought not only to resolve an ancient dispute with the oldest source of violence in the continent, but also to incorporate the violent ones into the normality of everyday life. I imagine that this is the source that inspired the new governing team to proceed with a process of negotiation, pacification and transitional justice, all terms that, as the extraordinary text of the Colombian negotiator Sergio Jaramillo* illustrates, come from there. The problem is that the Colombian circumstances bear no resemblance to Mexico’s.

In Colombia there are two essential factors that made the peace process possible: first, over three decades, one government after another built institutional capacity, which not only strengthened the government itself, but also conferred upon it solidity to act. Different presidents led the effort, which ended up constructing the foundations for a functional government. That is, they first built a professional police force and an independent judiciary as means not only to be able to negotiate, but above all to deal with the consequences after the negotiation process itself. The negotiation carried out by the government of President Santos would not have been possible, not even conceivable, without the existence of a true State.

Second, in Colombia the source of violence was not merely drug trafficking, although this was a central component, but the guerrilla that for half a century had controlled a huge swath of Colombian territory, from which it operated, kidnapped and killed systematically. A guerrilla is not the same as a criminal organization, although both collaborated over time: the central issue of the Colombian negotiation was the fact that there was an alternative political project that was financed by the narco. The negotiation was not with criminals but with a political entity.

In contrast with Colombia, Mexico´s institutions are weak, there are no professional police forces capable of guaranteeing security, nor are they capable of administering a peace process like the one that has been advanced in Colombia, or the one that is pompously being proposed for Mexico. Nor are there judicial institutions -either on the side of the prosecutor’s office or the judiciary- to be able to talk meaningfully of justice in any of its potential denomination. No less important is the fact that the initiative of the Colombian government was extremely ambitious, centered on the citizenry, especially on the victims, to build a democratic political project anchored on well-founded civil rights, that would protect the peace project in the long term. The idea was that those rights would also eliminate the resentments and hatreds that decades of armed conflict had generated. In Mexico, the real challenge is much more basic: to build the institutions that Colombia already had, as well as a political project of democratic institutionalization.

Of equal importance is the fact that in Mexico the potential interlocutors are not politicians who seek to advance an alternative project of a nation (a paradox with the fledgling government that proposed the same thing) but organized crime, pure and simple: these are not guerrillas and their project is not political. Perhaps there is some of this in the mountains of Guerrero or among the Zapatistas in Chiapas, but this is certainly not the source of extortion of store owners of Guanajuato, protection money in the La Merced market, or of murdered women in Ciudad Juarez. There is much to learn from the Colombian process, but that learning is clearly not present among those who are promoting a process of pacification or transitional justice.

Pacification is a praiseworthy and necessary objective, but it is not a substitute for the government’s ability to fulfill its nodal objective, which is to govern and confer certainty and trust to the citizenry. After two administrations that pursued a strategy that has not achieved their avowed objective, it is not only valid but necessary to change the approach, but this must start from a diagnosis about the true nature of the problem. Only from an accurate definition of the causes of insecurity in the country can a solution be developed. This can include negotiations and amnesty, but its essence does not lie on the other side, that of criminal organizations, but on that of the government itself. In the end, it is the government’s weakness that made it possible for organized crime to grow and multiply.

There are many potential models to follow in developing a structure of public security, some of which start from the municipal governments, while others, recognizing the municipal government’s inherent weakness, contemplate state governments as the heart of a secure nation. Whichever is the right one, the crucial thing is to have a correct diagnosis, so as to concentrate all forces and resources in the creation of an effective security system, one to which the governors would be fully accountable.

What one can see in the discussion forums on security that were launched in the last few days illustrates the most ingrained spirit of Mexico’s political nature: we crack the eggs first and then start looking for a pan. There are better ways.

*http://www.eltiempo.com/politica/proceso-de-paz/sergio-jaramillo-explica-como-se-logro-la-paz-con-las-farc-247388

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Luis Rubio

Complex societies, says Joseph Tainter,* tend to collapse because their costs pile up until they become dysfunctional: investments yield diminishing returns and the expenditures involved in the administration of increasingly intricate social and political structures are in perennial escalation. Although his study refers to civilizations such as the Roman Empire, the Mayas in Mexico and the Chacos in Paraguay, reading his work made me think of the South of Mexico, a critical matter for our development as a country.

The backwardness of that area in the South is not only lacerating, but also constitutes a stumbling block to growth. This region of the country, the richest in natural resources, history and demographic profile, is also the poorest and that with the fewest opportunities for development. The poverty derives from ancestral times but is preserved and reproduced by the political and social structures that prey upon and live off the status quo. The diverse programs that, from at least the sixties of the XX century, were developed and implemented to alter that reality have had very little impact.

Over the course of these past decades Mexicans have had governments (at all levels) of the Left and of the Right, PRIist, PANist, PRDist, and more recently, Morenist and, nothing changes. Some of these engaged in projects involving massive financial outlays, others undertook direct transfers; some of these transfers entertained clear electoral ends, while others adhered to objective, non-politicized, criteria. Under that rubric institutions devoted to evaluation were constituted that have become part of the debate, equally politicized. The poverty has not diminished more than marginally and that has happened, most typically, due to the behavior of macroeconomic variables such as prices, the overall rate of economic growth or the exchange rate. When the current federal government was inaugurated, its faultfinding of former governments was implacable; five years later, the same criticisms are applicable to this government itself.

Clearly, something is wrong with the very focus: the issue-at-hand is not one of spending, direct or indirect, but instead one of structural factors that perpetuate, consciously or not, the status quo. Porfirio Díaz stated that “governing Mexicans is more difficult than lassoing turkeys on horseback” and perhaps he knew and understood something in this respect: effecting changes in ancestral economic and sociopolitical structures, as in the case of localities such as the southern states of Chiapas and Oaxaca, entails such painstaking intricacy that no one dares attempt it.

I wonder whether it is not time to rethink the entire manner of conducting public affairs. During the last half century, the country has sustained an unprecedented rhythm of changes and reforms, which have dealt new vitality and viability to a good part of the nation, but plainly not to the whole. States in certain regions, such as Tamaulipas and at least part of Veracruz, have experienced devastation in their most fundamental governmental structures due to organized crime, whereas others have remained frozen in time, abiding criminality as well as local power factors that endure by hindering any change from taking place, as in the case of Guerrero. Whether due to the criminal element or the ingrown sociopolitical structures -often associated with the narco-, there are states or regions that are incapable of emerging from their predicament.

There certainly has been no lack of diverse efforts and attempts to break these patterns, but nothing has worked. This leads me to contemplate drastic solutions, similar to those employed in other latitudes with a high measure of success. In Northern Ireland, for example, the British Government imposed “direct rule,” that is, from London: it took control of the province until the latter was able to self-govern anew. Something like this occurred in the U.S. South during the fifties and sixties, when the Federal Government deployed Federal Marshals and the National Guard to force local governments to modify their racist police practices. There are also instances of entire countries being converted into protectorates to stabilize the nation, pacify it and drive a transformation.

The key to the successful cases-in-point lies in one very specific attribute: a federal government clear on what it requires and the inclination to achieve it. If one observes the case of Michoacán in 2007 and, again, in 2013, that is, under Calderón and Peña, respectively, the result was pathetic: both dispatched the Federal Police and the Army to pacify the state but not to transform it. Pacification came about in a few weeks, but there never was a plan for transformation; in contrast, in Northern Ireland as well in Alabama, the project per se was the transformation. In a word, the key is a government endowed with clarity-of-course, a crystalline compass and a transformative project committed to revamping the local sociopolitical structures, enforcing order on organized crime and establishing a new system of government at the local level.

None of this is simple or swift, nor does it comply with the normal presidential calendars: in the cases cited, external control lasted for years and was not removed until the reality had changed. I see no alternatives, but I do see a conditio sine qua non: clarity in the objective to be sought.

*The Collapse of Complex Societies

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Luis Rubio

The outgoing administration never understood the Mexico that he was about to govern. He did not care that there was a Mexico yearning to incorporate itself into the modern world and that was briskly advancing toward that aspiration, and the other Mexico, the one left behind, which was unable to break with the bonds of the old system and the petty fiefdoms, interests and mafias that keep it tautly anchored in an unsustainable phase. His reforms were necessary, but not sufficient: there also was a dearth of governing. The lacks inherent to his (and previous) governments created the environment that made Andrés Manuel López Obrador possible.

The notion of a “new” PRI that he boasted about from left to right was none other than the oldes and left-behind PRI, the one which had refused to modernize itself, opposed the first wave of reforms and lived from the status quo: the one on which AMLO has now set his sights.  The truly new PRI is the one that we will surely begin to see in upcoming times: the one that AMLO’s Morena hoists on high, now without technocrats or confusions –nor limiting factors- ideological or pragmatic. A new political monopoly, a new ideological hegemony.

The project of AMLO is foundational: to start with a clean slate of what exists in order to build a platform that presides over the future of the country. The model is similar to that proposed by Plutarco Elías Calles back in 1928, but one saddled with a quintessential difference: for the latter involved an institutional project, while for AMLO the objective is personal, to construct a movement that envelops all of the political forces, controls the population and bestows political-ideological sustenance on his government. What AMLO has called the “fourth revolution” is nothing ethereal: it concerns an integral political reorganization, much greater and more ambitious than the national heroes he invokes as the authors of the three previous ones.

The question lies in just how viable a hegemonic project of this nature is in the XXI century. When Elías Calles advocated the creation of a “country of institutions,” Mexico found itself submerged in a flood of political violence, the government relied on extraordinary powers that were the product of the circumstances of the moment and of the specific era: the information possessed by the population was filtered by the government, television did not even exist yet, not to mention the Internet, and the revolutionary movement had finished off all of the public and private instances of any relevance. In a word, it was a world not even remotely like that of today.

Elías Calles summoned the pertinent leaderships of the time and spliced them together into an organization that would serve to shape the development project that raised aloft the victors of the revolutionary feat. AMLO sets foot into the government of a profoundly divided and polarized nation, well informed, inserted into a universe of nano-second communications and within the context of weighty political, entrepreneurial, financial and international powers that feature the capacity to act. The context is absolutely distinct, but so are the people.

In contrast with Elías Calles, AMLO’s venture is inherently personal. This I do not affirm in a negative sense: his vision is that of correcting or dismantling that which, from his perspective, has constituted the modernizing project of the past four decades. Instead of constructing new institutions, the objective is to give credence and sustainability to his personal vision, thus conferring upon it political viability. His enterprise does not entail building a new institutional framework, but rather the reorientation of public policies. The insistence during the last weeks of the campaign to secure the vote to his candidates for Congress and governorships reveals the true aim of his vision: to occupy all positions and political instances so that, from there, he can launch the assault against the modernizing project.

The model is not that of Alonso Quijano, Don Quixote, but nonetheless embraces much of it: rise up against the instances of power –political, economic, union, civil- not to destroy them but to take them but to submit them.  Instead of Sancho Panza, there is Morena, whose object will be to absorb at least the PRI and return to the “original,“ hegemonic, undertaking that emerged from the Revolution. To do this, it is imperative to pervade all the spaces and oversee all the power loopholes.

How far will he take his crusade? Throughout the election, he was accused of being Chavista and desirous of restoring a permanent regime. But AMLO is not Chávez: he is a sixties PRIist who wants ensconce Mexico in the period during which, from his standpoint, everything worked well: when there was growth, less inequality, and order. The meltdown moment will come when his vision clashes against the complex reality of today, when it becomes evident that the cost of implanting it into the XXI century is so steep that it would produce just the opposite of what he aspires to:  financial crisis, impoverishment and more inequity.

AMLO does not have a destructive project in mind, but his plan is incompatible with today’s world. When that clash is apparent, we will know what he is inclined to do because it will oblige him to define himself: there is much he could achieve if he were to devote himself to setting aright the excesses and the vices of the present –and he proposed just that with absolute clarity in his campaign, such as inequality, pathetic growth and insecurity- rather than trying to turn back the hands of time.

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            Luis Rubio

In 2000, Fox had the opportunity to modify the structure of power that has kept the country subjugated, but he did not have the vision or the guts to do so. Today, the electorate has given Andres Manuel LópezObrador a new –the last?- opportunity to carry it out and prevent the country from drifting. The key lies not in changing per se, but in what to change and, above all, what for.

AMLO has postulated three central priorities throughout his campaigns: economic growth, poverty and inequality. If one adds the security problem that afflicts more and more Mexicans, that is the agenda that has to be addressed. The question is how, because these phenomena are not causes but symptoms and consequences of the evils that the country faces.

Since the 1970s, all governments have tried to raise the growth rate. Some tried it with debt, others with public investment and others seeking to attract investment from abroad; with successes and mistakes, contrasting results were achieved but the central issue was not resolved, behind which lie the other two priorities of AMLO, poverty and inequality. The most accomplished and longest-lived project of all those that have been tried is the one that personifies the NAFTA because it has had an inordinate success in some parts of the country, although almost no impact in others.

The diagnosis that the government-elect makes, now beyond the dynamics of the electoral season, will be crucial in determining what needs to be done. The evolution of the coming administration, and its probability of success, will largely depend on that diagnosis0. As the saying goes, it is not the same to be a drunk than the bar owner, so now it is no longer a rhetorical question but one of responsibility and opportunity.

The governments of the seventies tried to solve the problem with spending and debt and ended up creating the financial crisis that brought the government to virtual bankruptcy in 1982 -and determined the widespread impoverishment that followed. The so-reviled reforms that followed had two characteristics: one, they made it possible to foster the economic activity in some industries and regions; the other was that they were not fully implemented because there was always some political, bureaucratic, business or union interest that prevented it. The reforms were made to reactivate the economy but as long as they did not affect the political status quo. This is where the incoming administration can have a decisive impact: break the status quo and create an environment of equal opportunity for all Mexicans to be successful.

The reason why NAFTA is so important and has been so successful for Mexico is precisely that it created a space of economic activity that was isolated from all those interests and political conundrums. Thus, the NAFTA is not only the engine of the Mexican economy, but a showcase of what is wrong in the country which has caused the permanence of poverty and inequality: what is associated with the institutional framework that characterizes NAFTA works; the rest lives under the cacique interests that kill every opportunity. Just to illustrate, it is no coincidence that the country has many fewer kilometers of pipelines -key for industrial development- than other countries with a similar level of development: because there was a monopoly of tanker trucks in the hands of a politician who had the power to prevent pipelines from being built. That condemned the south and west of the country to many less growth opportunities. Poverty is not the byproduct of the reforms of the past decades but of the absence of political reforms that create a new system of government from the bottom up.

The post-revolutionary political system was based on the allocation of privileges, which have been preserved in the most creative ways. It is not only the appointments that create opportunities for corruption with full impunity or the usual contracts and concessions, but also the mechanisms for assigning senators and members of congress, which allow the same people to remain permanently in the game and to dedicate themselves to their personal and partisan interests rather than caring for those of the citizenship.

If AMLO wants to change the country – the mandate of the polls – the dilemma is very clear: open the political system to take it away from the politicians and their favorites and transfer it instead to the citizens; or try to recreate the old political system with its imperial presidency, something impossible because of the diversity of the population of today and the complexity for the economy.

The first course of action would lead to permanently build trust on the part of the population because it would have to be institutionalized in a new system of government developed from the bottom up. The alternative would be to destroy what exists without the least chance of success.

The problem of the south of the country is not that the north is doing well, but that the south is dominated by bosses, caciques, entrenched political and trade union groups that depredate and submit the citizenship, thus impeding economic development. Therefore, the solution lies in confronting those bosses and interest in order to build a new system of government, not in recreating something that has long since died.

In contrast to Fox, LópezObrador has the political skills to carry out profound structural changes. The question is whether he will use those skills to do away with existing obstacles to development while respecting citizens’ rights or to rebuild the authoritarian system of old. Only the former would really be a revolution worth having.

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Luis Rubio

President Enrique Peña offered to “move Mexico.” I doubt that his definition of movement is the one that occurred on the first of July, but there is no doubt who is responsible. In a presidential system as centralized as Mexico’s, where everything works around the president, the presidency constitutes, for good and ill, the heart and compass of the country. The trust among citizens -and that of savers and investors who need certainty to save and employ their money in productive ways- depends on who holds that office. It is the president that establishes the direction the country follows.

When that sense of direction disappears or the person occupying that office ignores the elementary factors of its function, it ends up being rejected by the citizenship and, when that happens, the whole country goes into catatonia. President Peña arrived with great plans and a huge arrogance to restore the imperial presidency of the sixties, but among all those big plans governing was not one of them. Major reforms were approved by Congress, but citizens did not see any improvement in the things that mattered most: security, incomes and jobs.

What the population saw was a distant president, frivolous and always unwilling to explain and convince; no wonder he’s ending as an example of everything the population despises: impunity, corruption and bad government. Worse, he used the resources of the presidency to persecute a candidate, favor his favorites and take revenge on his enemies. He never understood that governing in the 21st century consists of explaining, leading and convincing citizens, who have access to as many sources of information as the president’s. When the president abandons his responsibility to lead in a country so centralized and without checks and balances, the country gets into trouble. Enrique Peña did not understand his role or the moment of Mexico.

From the moment those 43 students were killed in Ayotzinapa, the president abdicated his elementary functions: he disappeared from the map, creating a vacuum that was filled with diligence and foresight by Andrés Manuel López Obrador, who is today president elect thanks to his decades-long work and strategic clarity. It is not necessary to be in agreement with his proposals and positions to recognize his extraordinary ability and work to achieve what the citizenship granted him the first of the month.

Candidates win for their ability to convince citizens of their project and personality, but presidents are judged by the way they respond to and handle the unexpected. Some presidents grow up in the face of adversity, others are daunted. In serious and developed countries, the president is important in terms of advancing a specific government agenda and to the extent that he or she succeeds in convincing the population and legislative bodies of the relevance of their proposals. But those leaders are limited in their capacity to affect the life of the population in a dramatic or excessive way. In Mexico, a presidential error can lead to a financial crisis in a matter of seconds or it can cause a political crisis of enormous magnitude. Examples abound of both circumstances in our recent history.

The paradox of Enrique Peña was that he advanced the agenda he offered until he ran out of projects, but it was his insistence on showing that he alone was in charge and in control of the country (something that decades ago is impossible) only underscored his mistakes and failures. The reality is that no president can control everything but, rather, in this convulsed era, he is often nothing more than a hostage of circumstances over which he often has little influence, as is now the case with the NAFTA. What makes a president distinct and successful is his ability to respond to difficulties: the leadership he deploys matters more than the problem itself because proper handling makes it possible for trust in him to emerge or, vice versa, to vanish. Peña abdicated his responsibility even before concluding half his term and, worst of all, did not know how to respond to Trump’s insults, something that AMLO will surely enjoy doing, even with the potentially enormous risks such a course would entail.

The issue of his white house and then Ayotzinapa marked this administration definitively. From that moment, his luck was marked. But the president insisted on making things worse.

It is incomprehensible to me that a president will dedicate himself to complaining about the voters, but this president did it without hesitation and, worse, repeatedly. His advertising campaign of “Stop Whining” (ya chole con tus quejas) will go down history of presidential arrogance. But it got worse: the earlier campaign was followed by a new edition: “do the accounts right,” as if voters are always dumb. Over the years, I have listened to many politicians, in Mexico and elsewhere, complain about the electorate, which in general they consider, almost universally, as an obstacle and a bunch of fools; however, until these campaigns came to light, I had never seen a politician tell his citizens what he thinks of them. What happened on the first of July Peña has only himself to blame.

With our vote, Mexicans are responsible for electing a ruler. The lack of effective checks and balances creates a presidency with excessive powers, making dependent the collective well-being on a person’s mood and ability. A presidency like that is about to end, while a new one, hopefully better, starts anew.

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Luis Rubio

There now is a president elect and it is high time for reconciliation. A new government, especially one specifically focused on changing the prevailing paradigm, has the unique opportunity to transform the country. To end the climate that characterizes Mexico and, above all, to build a new future. To build on what exists to successfully face the three issues that Andres Manuel López Obrador deemed key priorities in his campaign: economic growth, poverty and inequality.

Over the past three decades, we Mexicans went from an authoritarian political system aimed at controlling the population that did not tolerate competition, towards a competitive electoral regime but without institutions that generate certainty and protect the citizenry. However, the common denominator is the same: elections remain a bet where everything is at stake every six years. No serious country can survive such a sword of Damocles, permanently threatening political and economic stability.

In the regime emanating from the Revolution, the central figure was always that of the president, whose effective faculties far exceeded those expressed in the Constitution. The concentration of power, combined with the leadership of the control structure exercised by the PRI, went beyond the legal framework and gave the president constitutional meta-powers. Those powers were not only expressed in his own decisions, but also gave a central role to personal and group loyalties to the president, which were compensated with corruption and, therefore, impunity. That is the regime with which Mexicans have lived for almost one hundred years and that did not change even one bit with the governments of the PAN. That regime has impeded true development and has been prone to recurrent crises.

So central is the presidential figure that any election -or wrong decision- entails the risk of becoming a schism. The problem does not reside in a person but in that the presidency has such vast powers that it can affect the livelihood of all the population. In the past -in the PRI era that, at least in this regard, ended in 2000- the presidential succession was part of a contained process in which the outgoing president sought to limit the risks that his successor would break the canons and put the viability of the country at risk, as it happened after 1970. The opportunity today is to end this political regime without sacrificing what has been built to generate wealth and jobs like never before.

Things changed since 2000 because the powers inherent to the presidency diminished (as a result of the “divorce” of the presidency from the PRI), but quasi-autonomous powers appeared, such as the governors, while democratic competition brought about candidates who do not share the previously existing paradigms. The combination of excessive power and the absence of shared paradigms exacerbated the dislocation potential associated with a change of government, producing fears, imbalances and crises. Today there is an almost unique opportunity to leave all that in the past.

Mexico is no longer a marginal country in the international world. When the Mexican economy was closed and (almost) all the variables were under government control, the risks inherent to the succession could be contained. Today, in the context of an open financial system, an export-oriented economy and merciless competition to attract investment (in this, Mexican and foreign investment are indistinguishable) on which the welfare of the population depends, the capacity to contain the risks is simply non-existent. There is no country that can resist the onslaught of the markets when the key financial or political balances are broken. That’s what happened to the British Empire in 1992.

The Mexico of 2018 is very different from that of the middle of the last century, except in one factor: the political regime remains, in its essence, the same, but now, instead of generating certainty, it has become the source of imbalances, risks and, in fact, threats to stability. The vast powers allowed the government to act in a concerted manner, as happened during the era of so-called stabilizing development, but they also fostered all kinds of bureaucratic and political abuses that were perhaps tolerable in an era before the social networks. Today, with universal access to information, the capacity to control what was the essence of that system has disappeared.

The opportunity lies in carrying out the political reform that the previous system always rejected, to build effective checks and balances that give economic and political viability to the country for the next century, a true transformation. Only a strong president can achieve such a revolution.

Mexico needs a change of regime to build a different future, one without poverty and with equity. The country requires a political system based on the Rule of Law, which means only one thing: checks and balances that protect the citizen. To achieve the long-awaited development and end the climate of hatred and confrontation.

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@lrubiof

Luis Rubio

At the heart of the political dispute that ends today is the great lack that Mexico has suffered for decades: capacity of government or governance. That ability to act and resolve disappeared in the maelstrom that produced a lethal combination of circumstances -financial crises, (near) hyperinflation, globalization, organized crime and blindness of the political class- between the seventies and these years of the millennium. Instead of producing solutions, the paralysis led to the decline in government capacity and this generated an endless nostalgia.

The nostalgia, that longing for a mythical past, is easily explained by the daily deficiencies and complexities that the population suffers: insecurity, poor public services, terrible education, poverty. But nostalgia is a bad counselor and can easily become a propaganda instrument of political control and not good governance.

The government that emerged from the revolutionary era was more authoritarian than institutional, a circumstance that allowed it to deal effectively with crime and to allocate resources discretionally, all of which favored some decades of political stability and economic growth. At the same time, its inherent rigidity prevented it from adapting to changes that occurred both within the country and in the external environment.

And those changes ended up undermining its structures, making the government increasingly ineffective. The first manifestations of this decline were the economic crises of the seventies, the insufficient and sometimes inadequate reforms of the eighties and the security crisis since the nineties. All these factors were the product of changes in the external environment that the Mexican government did not have the capacity -or disposition- to face. In a word, Mexico did not prepare itself for the changes that took place in Colombia and the United States and that had the effect of altering the operating patterns of organized crime. Nor did it create favorable conditions for all Mexicans to insert themselves successfully into the process of globalization. Both phenomena transformed the world, but in Mexico the government did not adapt and thus was unable to avoid the security crisis or to generate a strategy to better distribute the benefits of globalization.

In this context, it is easy to fall into the nostalgia of returning to a world in which things apparently worked, where the economy grew and there was no violence: a moment in history that is unrepeatable. Hand in hand with nostalgia for stability and growth comes the dream of unipersonal command, the control of the population and the subjugation of trade unions and employers. It sounds attractive because it allows the voters to imagine magic solutions for the problems that afflict the country, at no cost. But it is a myth: magical solutions do not exist.

For those who live in that idyllic moment of the past, it is impossible to understand that the world changed not because somebody willed it, but because there were circumstances that ended the livelihoods of that era: technology evolved prodigiously, communications accelerated exchanges and the integration of the productive processes allowed to elevate economies of scale that translated in impressive improvements in the quality of the goods and lower prices. Those who drive a car today cannot conceive that thirty years ago they would have had to take their cars to the workshop every so often because the breakdowns were frequent: life has improved dramatically.

The challenge is to right the wrongs of the present without creating a mega crisis and this requires a clear recognition that there are no more resources. The (alleged) austerity of the governments from the eighties onward was not the result or their wishes but of the lack of alternative. There was not that much austerity and there are no savings.

Mexicans live endless contradictions in their daily activities. Instead of things being organized so that it is easy to prosper, obstacles of all sorts are pervasive: bureaucratic, special interests obstructing new ideas and government officials looking after their personal or political affairs rather than generating conditions for development. All of this speaks for the need of a political reform to make it possible for the economy to prosper.

The existing economic structures have made it possible for vast regions of the country to grow at Asian rates, but ancestral political structures have preserved poverty in the south of the country. This speaks of the absence of a government capable of breaking obstacles, not of an erroneous economic model: our evils stem from the political hindrances that keep states like Oaxaca and Chiapas in poverty. The dilemma is not to reconstruct the past keeping the good of the present, something impossible, but to change the vectors that currently exist to make development possible. Therein the political challenge.

The paradox of this election rests in that the regions that suffer are those in which the economic reforms that have been so criticized have not been implemented. Inequality and poverty are the result of intricate special interests: changing that reality entails a change of regime with two characteristics: a modern and functional and the Rule of Law.

As The Economist recently wrote, “Nostalgia, in any form, is an indulgence. And as any clergyman worth his salt will tell you, indulgences come with a price tag.”

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@lrubiof