Luis Rubio

The contrast between the economic reforms of the last decades and those of an electoral-political nature is striking. The first have followed an impeccable logic and are characterized by their clarity of purpose. The second ones have all been reactive, tiny and of changing compass. One can agree or disagree with one or the other, but it is indisputable that they are two different “animals.”

The need to reform arises when the status quo is insufficient to meet the needs of the population. In this sense, the notion of reforming implies a change in the surrounding reality and, therefore, the affectation of interests that benefit from the state of affairs.

In Mexico, the reforms began to be discussed in the sixties because the factors that had sustained the political-economic order began to erode. Until then, the economy operated within the context of import substitution, which required the importation of various inputs for it to function. Since the country’s exports included virtually not0hing in industrial matters, the decline in grain exports from the 1960s raised a signal of alarm. The same was true of the 1968 student movement for the political system. What had worked for several decades was no longer sustainable.

Mexico required reforms to deal with those two fledgling crises, but what actually 0happened was the beginning of a dispute over the future that was resolved, at first, in favor of a growth in public spending and inflation (1970-1982) as a means to try to satisfy the entire population. The idea was that higher spending would translate into higher growth and lower political tensions. The result was twenty years of economic crisis and an explosive political polarization.

After the 1982 debacle (an external debt crisis that took two decades to resolve), the economic reforms began, at first with timidity, then with greater speed, but always with a clear sense of direction as well as a great limitation: They liberalized imports, opened the investment regime and privatized companies that in virtually no country in the world are owned by the government. The great limitation was also obvious: although the objective was consistent (generating high rates of economic growth), nothing would be done to alter the monopoly of power, which, in practice, protected various groups, activities and sectors for the sake of maintaining political peace and the privileges that accompany it. That is to say, although consistent, economic reforms were always confined -and, therefore, impeded from wholly achieving their purpose- for political reasons.

The political reforms were another song: the monopoly of power was untouchable and was modified only to avoid crises (usually when these were about to explode). While some of these reforms were intelligent and proactive (such as the one of 1977 that sought to incorporate the left in the space of full political legitimacy- or the one in 1996, which created an independent electoral authority), the common denominator was that these were always reactive to the problem of the moment instead of attempting to develop, as had been the case in the economy, a new political order. The reason is simple: as Fidel Velázquez, the long -lasting union leader, said for many years, “by arms we arrived and only by arms will they take us away.”

The contrast between the two processes explains our current circumstance. In the first place, the dispute over the future persists and this has gained enormous importance in the current presidential race; Secondly, as was illustrated by the enormous difficulty faced by independent candidates to achieve their registration, the political system was not liberalized but, rather, the old system was expanded to include two new parties (the PAN and the PRD); finally, in third place, even though the population today votes and its votes are counted (something not minor in Mexico’s history), the population’s capacity to influence the decisions that affect them is almost non-existent because the political system is absolutely refractory to the citizenship.

What Mexico requires is a new political regime. Whoever wins in this electoral season, the citizen will continue to be the loser: although candidates promise to solve this or that, our nodal problem is that we continue to expect a person to solve problems that require the participation of the entire population. The whole direction of the economy and of society is at play in this election, something that should never be possible in a serious country; nobody should have that much power to make such transcendent decisions without proper counterweights.

To prevent this from happening again in the future, Mexico needs a new political system that contains effective checks and balances, eliminates the arbitrary faculties which, de facto, characterize the country’s politicians and bureaucrats, and makes possible a functional and professional government, all within an environment of true accountability.

Will it be too much to ask? Without a doubt, but without that, it’s not even possible to go out dancing in Chalma, as the saying goes. The question is who contributes better to this possibility.

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Luis Rubio

Nostalgia is pernicious as a guide for action for government, but that does not seem to dissuade many. The notion that a past can be recreated that, in retrospect, seems idyllic, has such an obvious appeal, that invites prospective rulers to create mental utopias and proposals that capture emotions, which does not make them any less deceptive. In this, the electoral protagonist in the current electoral cycle is not very different from those of other latitudes (Trump, Brexit, etc.). By its nature, political discourse always seeks to appeal to emotions, because what is sought is to captivate the voter without having to explain anything other than: the “I am” the solution. It is not necessary to say how or why.

The proposal is simple but powerful: the country worked better when the federal government centralized and controlled everything, but now, due to the reforms of the last decades, corruption was generated an this explains all deviations. No matter the issue (criminality, economic growth, poverty or relations with the United States), the solution is to end corruption through the election of Andrés Manuel López Obrador, whose person is imposing and, therefore, liable to end corruption merely by his election. All the rest is commentary.

The approach is emotional: it seeks to attract those who have not joined, or have not been able to incorporate, to the digital economy, the victims of crime and the old corporate sectors, to make possible the recreation of a nostalgic past, despite the obvious: the past is not repeatable.

About twenty years ago I had the opportunity to talk with Mr. Antonio Ortiz Mena, secretary of finance in one of the most stable and fastest growing economic eras of Mexico (1958-1970). The talk revolved around his strategy as the author of the “Mexican miracle.” His explanation continues to resonate in my head until today: in essence, he told me that there was no possible similarity with the time when he had been responsible for the country’s finances, because before, things were comparatively very easy: the government was almighty, exchange rates were fixed, the economy was closed, control over unions, businesses and the press enormous and, in short, that the key to his success in those years had been the willingness of the government to control itself. In other words, a world absolutely contrasting with the current one, in every sense. I was impressed by his humility and his mental clarity, which led him to visualize the current world as radically different from the one he had led.

The government of President Peña arrived determined to recreate the past but never could achieve it and it is there where it got stuck. López Obrador is convinced that it is not only possible but necessary to go back and, therefore, his proposals are all retrospective and nostalgic. Unless he is willing to destroy everything that exists, there is no reason to think that he will do any better.

The current electoral times compel the voters to elucidate between the options, those that seek to resolve the wrongs that remain or accept the nostalgic solution, each one with its consequences.

I wonder if it would be possible to deal with emotions and, at the same time, advance the development of the country. Part of the reason why nostalgia is so attractive is the fact that, despite having advanced on some fronts, the population feels harassed and paralyzed. Faced with criminality and the apparent absence of options, nostalgia becomes extraordinarily seductive.

The only way to break the vicious circle is to get out of there: to confront nostalgia with a different project that, building on what exists, proposes solutions rather than a return to what stopped working, opportunities instead of utopias. This may involve a new political arrangement, social reforms of various kinds or political and economic initiatives that make it possible to launch a new era of high-quality educational, infrastructure and health paradigms. Above all, a new vision.

Until now, for several decades, the entire government strategy, regardless of person or party, has focused on marginally improving what exists, but always without breaking the political status quo. Maybe it’s time to rethink the political arrangement, because that’s where everything has got stuck. A new political regime does not imply the destruction of the what exists, but it does involve fundamental changes: first and foremost, modifying the purpose of the government and, therefore, its priorities.

If the priority is no longer the preservation of the status quo at any cost, the opportunities become endless and the promises, which appeal to the emotions, become credible. Everyone knows what’s essential: physical and patrimonial security, legal certainty, elimination of the causes of corruption, high quality education and infrastructure (in the broadest sense) for a great future. Everybody knows it but one government after another has shirked that responsibility. The key lies in breaking with the vicious circles in which Mexico has been plunged for decades and that, despite real advances, many enormous ones, keep the country paralyzed and demoralized. This is no rocket science, but its implications almost are.

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Luis Rubio

From its Independence, Mexico lived disputing its form of government. Edmundo O’Gorman describes with great vehemence the debates, disputes and disagreements that took place as to whether the country should be republican or monarchical, centralist or federalist, conservative or liberal. In more recent years the discussion has been about whether the political system should be presidential or parliamentary and that discussion has been framed in terms of “regime change.” In reality, the way in which a government is organized does not constitute the essence of a regime; rather, the latter is a representation of the regime in daily political life. From this perspective, the relevant discussion should not focus on the form of government but on its essence.

The current regime operates through a formal structure of three separate branches inspired by the American system and, in its origin, from the conception of Montesquieu. However, its essence refers to the regime that emerged from the Mexican Revolution and whose nodal characteristic lies in the unipersonal power represented by the president. For several decades throughout the twentieth century, the revolutionary regime worked according to its design, guaranteeing political stability and creating conditions for the growth of the economy. The centralization of power allowed resolving conflicts and, in the absence of other effective means of settling disputes, contributed to the country’s development.

When the economic and political premises began to fail, especially between 1965 and 1968, the system began its decline, which has not ended. The governments that emerged from that era -from Echeverría to Peña- faced challenges stemming from the increasing diversity of society, the emergence of organized crime and the extraordinary complexity of the economic world in the era of globalization, for which the stagnant political system was not prepared, nor did it have the means or the flexibility to adapt. The old regime, structured almost one hundred years ago, was conceived to face the chaos that the end of the revolution had left and responded to the time and circumstances in which it was organized. Its validity and viability was extraordinary, but for a limited period.

For several decades, the regime allowed to achieve economic growth rates close to 7% per year on average, with inflation hovering around 2%. It was an exceptional time in which the combination of authoritarian political control with an equilibrium in the balance of payments achieved exceptional and sustained prosperity between the forties and the sixties. The political system that existed favored such achievements but, by not adapting to the changing times, ended up being dysfunctional. However, the fact that it is dysfunctional, is characterized by enormous deficiencies and has no capacity to deal with daily and structural challenges -from insecurity to waste in the government accounts- has not prevented it from securing its permanence in the face of all odds, including the 2000 political transition to two governments of another party. The political system -the revolutionary regime- has remained unperturbed.

The difference between the successful years of the old regime and the current moment lies in the legitimacy of the system. What was once a hegemonic regime that enjoyed not only broad support but even great prestige, became a discredited and illegitimate system. Legitimacy was lost because the system ceased to be functional: despite the improved economy, it created vast social differences and has been unable to deal the wave of violence and insecurity.

The circumstances of the 21st century are radically different from those that gave rise to the movement led by Plutarco Elías Calles in 1929. Today the tessitura has been stated sharply: either Mexico returns fully to the old system as proposed by Andrés Manuel López Obrador or it builds a new political regime, breaking, once and for all, with the old order.

The old regime is based on meta-constitutional powers for the presidency, an system of endless crossed loyalties, full discretion in the exercise of governmental affairs, arbitrariness in decision-making and corruption as a means of appeasing the clienteles that comprise it, all wrapped up in a world of impunity. That is, a system that confers absolute faculties on the president and that, although distorted over time, allows decisions all ley decisions by one person with no checks. That is the regime that Morena’s candidate promises to return to.

What Mexico needs is a new regime based on effective checks and balances, duly ingrained constitutional balances, transparency, and broad rights and protections for the citizenry, all wrapped up in a regime based in the Rule of Law. That is, a radically different regime that starts from the principle that the government is to serve the citizen and generate conditions for the development of the country.

Two contrasting projects that must be clearly assumed by the candidates, defining their position fully: for or against the citizenry, without considerations or exceptions.

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Luis Rubio

“The next five years will be key in the decisions we make to move Mexico towards a knowledge economy,” say José Antonio Fernández and Salvador Alva in their recent book A Feasible Mexico (Un México Posible). The statement would seem like a truism, but it collides with the prevailing environment: some welcome the reforms and advances that have been made, while others criticize the undesired (or undesirable) effects of the changes that have been promoted, including those that are a result of the technological change, which is altering established patters the world over. So much focused on the past, few notice the challenges facing the country and its implications, some of them ominous.

The central argument of the book is that, in order to be successful, the country has to transform its educational system in order to fully incorporate itself into the knowledge economy, which is where, more and more, the creation of value is concentrated and, thus, of wealth and jobs. Without that focus, the country will be trapped in the past and in poverty. That is why, the authors say, it is absurd to boast about the reforms that have been carried out, out of context: Mexico may have carried out many reforms, including some transcendental ones, but to the extent that other nations have gone further and faster, instead of moving forward, we have remained behind.

The world changes, and it does so in an accelerated way, and Mexicans continue to debate whether the very modest educational reform of the outgoing president ought to be advanced or dismantled. Many nations, especially developed ones, are becoming paralyzed, oriented by the rear-view mirror, but the nations that really should matter to us -such as Southeast Asia, India and China- are running to try to occupy the spaces left by rich countries.

In Korea and Thailand, the educational debate is about how to go faster than their competitors in the race to add more value, not, as in Mexico, about how to protect the status quo. The children of fifty years ago competed for jobs and opportunities with their school peers; Today, a child who attends primary school will compete with graduates of schools in Mumbai, Lagos or Helsinki. The space of competition is the world and the key is the consumer, not the producer, which shows the absurdity -and a-historical nature- of the notion of returning to a seemingly past of certainty.

Beyond the person who wins the elections, the challenges facing the country will not go away; a president may wish the country to accommodate to his narrow vision, but that does not change the reality. Therefore, in this era, there are no single solutions or permanent guarantees.

The electoral debate has emphasized the obvious fact that the benefits of the reforms of the last decades – carried out late in almost all cases- have not been distributed in an equitable manner. The big question is what to do about it. One possibility, the one promoted by AMLO, would be to take refuge in an uncertain and idyllic past (which, by the way, disappeared because it ceased to work). If AMLO succeeds, who would win out, the radicals represented by Taibo or the pragmatism that AMLO showed as mayor of Mexico City? In any case, both perspectives are inadequate and insufficient for the current challenge.

When technology changes at the speed of light and the population is as informed as the most consolidated of government officials, the solutions have to be decentralized, that is, they must confer the greatest weight of decisions to citizens fully trained with the necessary skills to adapt constantly and systematically. The bet must be for an educational system radically different from the existing one, together with an open political system because no ruler, nor the wisest and consummate president, has the ability, or the possibility, to understand that enormous and changing complexity. Instead of centralizing, it is imperative to bet on skills for a changing world where the only constant is the intense and growing competition. The pretense of taking refuge in the past is pathetic.

A Feasible Mexico offers an infinitely more rational and effective outlet: only decentralization of decisions, but a real one, could change the direction of the country and this implies, in practice, “empowering” the population with the necessary capacities to be able to compete in the world of the 21st century. That is, there’s a need to recognize that there is no magic wand that allows facing the problems of inequality and poverty, which are real and painful; rather, the emphasis must be placed on a human capital strategy that gives individuals the ability to decide on their own future.

Centralizing power and control sounds attractive, but only if this were Moscow in 1923. The reality of today, which no one can avoid however much they want, is that only individuals can face their problems. Obviously, the government must create conditions for that to happen. Mexico has clearly failed to provide every citizen with the opportunity to be successful. Centralizing control only postpones the solution and, in fact, makes it even more difficult. The exit, like it or not, is an education of the first world that confers, to each citizen, effective capacities to solve their own problems.

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 Luis Rubio

The world changes when people accustom themselves to the unacceptable, when they see as natural what is not, such as insecurity. Instead of protesting, exacting and demanding the construction of a security system that attends to the needs and interests of the citizenry, we Mexicans are becoming accustomed to living under the yoke of organized crime in its diverse variants. The government, in fact, the various governments of recent decades, have been incapable of providing a solution and have ended up as defeated and accommodating as everyone else. Instead of effective leadership, Mexicans have had Defeatists-in-Chief. The promise to negotiate with narcos and grant amnesty to criminals is another facet of the same thing: more of the same, or worse.

People adjust and adapt to the environment, a characteristic inherent to the human race. In terms of security, that feature constitutes an enormous danger because it implies that the outcry for a regime of security that satisfies the population and makes possible an integral transformation is in danger of disappearing.

The phenomenon is ubiquitous. The informal economy exemplifies the price of our becoming accustomed to what should not be: rather than progressing and prospering, those existing in the informal sector wind up entrapped within it and, although they can generate an income, they constitute clienteles that comprise an incentive for politicians to preserve an order (i.e., disorder) from which there is no way out. The same is true of corruption, which can appease an immediate need (such as complying with a paperwork requirement), but it is accompanied by the consequence that those processes are never eliminated or streamlined. Private police, increasingly higher walls and barbed wires are nothing other than subterfuges that take the pressure off of those who should solve the problem and promote a peaceful coexistence.

To the extent that the citizenry distances itself from the world of rules and, in general, from the law, governmental institutions stop being relevant, intensifying the crisis of confidence and credibility that stalks Mexicans. The attractiveness that AMLO represents for many prospective voters does not lie in original and positive ideas that, incidentally, the candidate does not possess, but precisely in the contrary: since none of that works, let us better be embedded in the “traditional practices” (usos y costumbres) that hamper the resolution of the real problems. When one crosses that threshold, it dilutes the viability of the construction of a democratic system of checks and balances, political systems are discredited and, as Max Weber would say, the criminal element is in the last analysis the State because it is the one that flaunts the monopoly on force. Phenomena such as those of strange party alliances, party switchers without principles and trust based on beliefs rather than on institutions are obvious manifestations of the deterioration that Mexicans have experienced.

The proposals of recent candidates and governors remit to existing laws and regulations (one favorite is the Single Command) as well as institutions, as portrayed by the judicial and police reform. All of these are legitimate endeavors but, as depicted by Colombia, perhaps the most successful example of transformation in this matter, none of that alters the reality until the government assumes its role as guarantor of citizen security and is willing to transform the institutional reality that lies, at the end of the day, behind the chaos of illegality and the reigning insecurity. In Colombia, a series of successive governments transformed the country because they recognized that the problem were not the criminals but the lack of State, therefore the only way of going forward consisted of constructing, in point of fact, a new State, with all that that implies*.

Merely reforming existing institutions in a general ambience of illegality, informality, impunity and corruption accomplishes no more than hampering true, long lasting solutions. A transcending reform –that of the police, the judiciary, etc.- will only be successful to the degree that it is inscribed within a context of a general transformation of the political regime. In contrast with extreme proposals –granting amnesty to all or ruling with an iron fist- Colombia showed that there are no intermediate pathways: the government must transform itself in its entirety or all of the efforts made will return to the same place. The avatars of the federal police during these years illustrate this phenomenon in neat fashion.

Mexico is living through critical and transcendental times. Insecurity grows and feeds off governmental inaction and the absence of policies leading to resolve it. It pretends to preserve what works –as illustrated by the epic negotiation of NAFTA- but does not propose an integral solution to the problem of insecurity that, inexorably, reduces the potential of investment in the country, while it does not address the effect on the citizenry. The risk of ending up in a “new normality” of permanent insecurity is not small and, judging by the proposals concerning amnesty, ending up a Narco State is immense.

In speaking of native cleverness, Jorge Luis Borges criticized that spirit of flouted legality or accommodated illegality that characterizes our culture. Being smart-witted, said the Argentinian writer, does not imply ceasing to be ignorant. Circumventing real and urgent solutions is.

*See: A security strategy to protect the citizenship in Comexi.org

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Luis Rubio

Kafka, according to the anecdote, should have been Mexico’s local customs and manners author. Perhaps even he would have never imagined the absurdities of Mexicans’ daily lives. In a Patricio Monero cartoon, the schoolmaster queries: “Wouldn’t it have been better to first have the new educative model and afterward the teacher evaluation? The functionary responds: “We’re not in Finland! Here we pave the streets first and then install the sewers”. Examples of this nature, in all ambits of national life, are interminable, but some entail serious consequences.

What is certain is that the presidential campaigns show dramatically different readings of the national reality. The recent debate exposed not only a contrasting conception of the way in which national issues should be addressed, but a shocking inability to recognize the very nature of the problems. Candidates who are preparing themselves to run national affairs have an extraordinary disposition to avoid discussing them. Whether it is corruption or insecurity, the issues of the recent public forum, the candidates showed more interest in reaching the presidential chair than in solving the problems that affect the country.

Andrés Manuel López Obrador insists that all Mexicans are potential criminals and that their nature would only change from having a higher income; for him, honesty is identified with his own person and the solution to national problems will result from his arrival at the National Palace. Ricardo Anaya has built a campaign reminiscent of Fox, suggesting that the evils would be solved merely by evicting the current tenants of Los Pinos, the presidential house. José Antonio Meade has not been able or willing to separate himself from the current administration and his team has been unable to understand the environment in which the presidency is disputed in 2018. Margarita Zavala cannot find her own space, nor does she recognize that coming from the outside is much tougher than when she lived at Los Pinos. Jaime Martinez, “El Bronco,” went out to have fun and be recognized as he is and, undoubtedly, came closest to achieving his goal.

Beyond the anecdotes, the debate created a new political reality. AMLO had a pathetic performance and is now clearly vulnerable: what seemed like a slam dunk is no longer true. José Antonio Meade missed the opportunity to leverage his unique circumstance as a citizen candidate and his exceptional experience and personality to present himself as the natural contender. That role now belongs to Ricardo Anaya who, although he did not manage to deliver a devastating blow, clearly changed the nature of the contest.

The question is now threefold: first, will AMLO redefine his campaign? Second, will Anaya have the capacity to transform himself into a reliable and credible candidate for the presidency? And, third, how will the PRI corner respond: by supporting AMLO or negotiating with Anaya? I do not think there are other relevant questions at this time.

The three questions are crucial because they will determine the dynamics that the electoral process acquires from now on. AMLO will likely continue his campaign as if nothing had happened, but will face questions and queries that until now he was able to easily sideline, and the contradictions inherent to any campaign will be exposed. Anaya faces the challenge of his life, which entails not only presenting himself exactly the opposite of how he is, but it also involves the construction of alliances with those he previously ostracized. For Meade comes the moment of recognition that his reading of the context was wrong and, therefore, the strategy that stemmed from it unviable. His dilemma now -and that of the PRI members, which is not the same- lies in working out the least bad scenario.

The moment also opens an exceptional opportunity for the citizenship and for the political development of the country. For many years, the political class -all political parties and politicians- has enjoyed the dubious privilege of not having to respond to the citizenship thanks to the combination of at least two circumstances: one, the structural one, that the political system has not been open to the competition from outsiders; and the other, that both the NAFTA and migration made it possible to keep the boat afloat without having to bother too much. Neither of these two “anchors” will be sustainable in the future, which will require politicians to be accountable to citizens in a way that was unthinkable before and that, for politicians, continues to be so today.

And this brings me back to the sewers. For four decades, the country has tried to solve its problems through structural reforms that have transformed the economy, while leaving a trail of problems unattended, which is precisely the source of AMLO’s candidacy. Those reforms were and are necessary, but they are not enough: to prosper (which should be the only objective), Mexico requires a fundamental institutional reform, in fact, a new system of government. That is the one front that has not been addressed and that is the origin of poverty in the south, inequality in general and the huge differences in economic performance throughout the country.

The new circumstance opens a huge opportunity. The question is whether there are politicians capable of making it theirs for the benefit of the country’s development and the citizenship.

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Luis Rubio

A somber panorama was presented by the parents and relatives of thousands of the disappeared on Reforma Avenue a few weeks ago. An infinity of crosses, on both sides of the avenue, each representing people whose relatives -children, parents, brothers- one day simply did not return. Nobody knows if they were killed by a gang of criminals, whether they were recruited by drug traffickers or stopped by the police. Walking those four long blocks of Reforma reminded me of crimes against humanity in the Second World War, Rwanda, Cambodia, Argentina and others that should never have existed: wars, governments that tortured or the total absence of authority. No event illustrates our reality better than that of those disappearances because that which was responsible did not act or, worse, colluded with the murderers.

The procession was not innocent. The political and, at this moment, electoral charge is more than evident: the easy thing is to blame the administration -the current or the previous one- but the reality is that the country is experiencing an accelerated decrease in government capacity in what really counts, in the raison d’être of the State itself: the protection of citizenship. A demonstration of that nature at this time was obviously designed to discredit the candidates of the PRI and PAN respectively, but that does not change the fact that, as a government, the Mexican has failed the population, and this has gone for longer than one can count.

Everyone is negligent on this one: presidents, governors, mayors and heads of government in Mexico City are equally responsible for their inaction, if not their complicity. One may disagree with the strategy designed by Felipe Calderón (and that, de facto, although reluctantly, Peña Nieto has followed), but no one can fail to recognize its merit in recognizing that a government cannot remain undaunted in the face of the massacre that society suffers. López Obrador criticized the strategy at the time with the arguing that “they should not have hit the wasps nest,” suggesting that passivity -that is, the status quo- is a better way to conduct the affairs of State.

Should he win the elections, AMLO would find a very different scenario than what he has been promising. The reality of crime does not disappear if a government proposes to negotiate with drug traffickers, for two very obvious reasons: first, the underlying problem is not the crime itself, but the lack of government, the absence of authority. The Mexican government has spent decades encroaching itself and evading its most elementary responsibilities: instead of modernizing and reforming in parallel to the demographic, industrial, political and security transformation experienced by the country, the political class -at all levels and political parties- remained undisturbed, as if the obvious deterioration were routine. In this way, Mexico went from a very powerful and centralized political system to a decentralization without structure, resources or responsibilities. Had the government been reformed, there would be no security crisis. Thus, the notion that a new president, by virtue of taking office, changes that reality speaks for itself.

Second, gangs of narcos and criminals are involved in a territorial dispute to the death that ignores and transcends the formal authorities, when it does not corrupt or subjugate them. The government cannot negotiate with the narcos, but it must develop the capacity to impose rules and limits as narrow as it has the capacity to enforce them.

The case of Ayotzinapa is very revealing. There the local authority was in collusion with the narcos and was clearly responsible for what happened. The only reason why the government of President Peña ended up being held accountable was because of its arrogance: pretending to control everything made it responsible for everything.

The extent of the impunity that characterizes the country can be observed in the fact of the disappeared. It is easy to blame criminals, tax evaders or simulators of this or that criminal act, but the real absentee is the government, whose authority vanished when it stopped performing its most elementary functions, beginning with that of protecting the citizenry.

When the next government takes office, it will have to find a way to respond to the citizenship, because if something is clear from the current electoral process, it’s that Mexicans have exceeded their tolerance for corruption and impunity.

One day, walking in a huge urban artery in Seoul, I observed the measure of authority: the avenue, with eight lanes, was full of trucks, cars and motorcycles moving at full speed, generating a great bustle. Suddenly, coming out of a little single-lane street, I saw a boy of no more than four or five years old springing out on his bicycle to cross the avenue without stopping or turning around. The green light gave him the right of way and he did not hesitate. His parents evidently trust the authority and allow the child to cross without restraint.

There was the authority, not in the form of a person, but in the rules of the game that all those trucks fulfill in a strict and absolute way. That’s a government that works and fulfills its duty. The day Mexico gets to that, impunity will have disappeared.

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Luis Rubio

All the evaluations of the problems of the Mexican economy usually include: lack of credit, industrial plant competitiveness and the competition from (mostly Chinese) imports. Each of these symptoms possesses its own dynamic and structure of causality; what the three have in common is that, at heart, it’s the same problem.

First off, credit. A permanent perennial complaint of business, and not a few politicians, is that referring to the Mexican economy’s relatively low level of banking penetration and, above all, the participation of credit as a percentage of the GDP. Participation of the Mexican banking system in the economy is less than in other similar economies but there are reasons that explain the difference. In Brazil, the total credit amount given to persons and businesses represented approximately 60% of the GDP in 2012, compared with 27% in Mexico. Of this 60% in Brazil, the BNDES development bank represented 21% of the GDP, that is, one third of the total credit. Taken as a whole, everything would indicate that one explanation of Mexico’s growth problems derives from the absence of credit.

More careful analysis reveals transcendent factors. On the one hand, in contrast with private banks, BNDES has taken enormous credit risks and has assumed huge liabilities of private companies. Many analysts anticipate that much of its portfolio will end up on the list of bad debts. Time will tell. With this, the numbers that are indeed comparable are 49 vs. 27, that is, a difference of 22 percentage points, not few, and that perhaps is basically explained by the nineties’ banking crisis in Mexico, which generated a financial culture much less risk-tolerant than that which formerly existed. But there is another factor that is much more revealing: the issuance of credit to both large companies and consumers is similar to the Brazilian numbers. The great difference resides in the small and medium industrial sector, where credit is all but not extended in Mexico.

The productive plant’s low competitiveness is perhaps where the main problem of national industry resides. If one listens to the sector’s businessmen, the explanation alludes to a matter of credit, the absence of support and protection on the part of the government, the informal economy and smuggling, that is, the third factor. The credit issue is real but circular: there is no credit because companies are not competitive and they are not competitive because there is no credit. The banks affirm, rightly so from my perspective, that it is not possible to extend credit to enterprises lacking a viable and competitive investment project, one likely to make these companies successful in a globalized economy. The demand for protection in the form of subsidies and tariff and non-tariff barriers to trade (a demand ever more successful in this administration) confirms what the banks say: that these companies are trying to stay alive not through their ability to produce good products at fair prices that the market demands but rather by means of protection granted to them by the government with respect to their competitors. Increasing credit through Mexico’s development bank NAFINSA would not address this problem.

In its essence, the country’s industrial problem is a mismatch between theory and reality. Up to the eighties, the structure of the Mexican economy was not very distinct from that of the Brazilian one. The development model adopted after WWII was oriented toward promoting industrial growth by means of subsidies and protection from imports. The objective was to achieve the growth of a powerful local industry through import substitution. The model favored the producer over the consumer and ended up creating a negligibly competitive industry that typically produced high-priced, low-quality goods. In the eighties, the Mexican government opted for trade liberalization with the objective of heightening the competitiveness of the economy and, through that, improving the quality and price of the goods it produced, but above all facilitating a rapid growth in overall productivity that would translate into better and higher paying jobs.

Behind the decision to liberalize lies a well known principle among scholars of the economy: that of the comparative advantage. On one occasion, the mathematician Stanislaw Ulam asked the economists’ dean of his era, Paul Samuelson, whether there were an economic principle that was, concurrently, universal and not evidently true. Samuelson immediately responded with David Ricardo’s principle of the comparative advantage, developed in 1817. Under this principle, what’s important for an economy is not its absolute capacity and ability to produce goods, but its relative capacity and ability with respect to others.

Although a country produces many things, each economy is more efficient in the production of some goods than others. Under this premise, international commerce leads a country to specialize in some type of goods that it also will export, while it imports others in which it is less efficient, thus achieving a greater level of well-being. The principle is well established and there is no doubt of its functioning. The problem is how to apply it in an economy operating under the premise of the virtual inexistence of international trade, our case until the eighties.

According to the economic theory, on liberalizing the Mexican economy, the country would have specialized in a certain type of goods (such as electronics, automobiles, engines, aviation fruits and vegetables, meat, etc., that is, all of the sectors in which Mexico is brutally competitive as an exporter) and would have abandoned other sectors in which it does not possess comparative advantages and that only existed as the result of the protection and subsidy strategy of before. Some of this did occur, which explains the disappearance of many enterprises in sectors such as toys and textiles but, thanks to the persistence of direct and indirect protection mechanisms, many companies that normally would have had to transform themselves or perish are still functioning. A few benefit at the cost of a general lesser growth of the economy.

The country is facing a dilemma that has not been resolved since the moment trade was liberalized, nearly thirty years ago: entering full speed ahead toward the construction of a modern productive plant or persisting in the protection of one sector that, as such, has no future. It can persist, but the cost is growing and can be measured in the form of bad and poorly paid jobs, low levels of economic growth and, above all, minimally productive jobs that inevitably pay the poor salaries.

www.cidac.org
@lrubiof

Luis Rubio

This election is becoming clearer every day: the dispute, not in a rational but in a subliminal sense, is about two worlds, two perspectives on life and the role of government in development. Rather, it is about arrogance versus redemption. A large part of the citizenry is simply fed up with the status quo: insecurity, governmental arrogance, corruption, unfulfilled promises and the clash between political discourse (of all parties and candidates) and the harsh reality of everyday life. Against that, the offer of all candidates except one sounds frivolous, if not banal. There is no doubt that the vision implicit in that (mainstream) offer -of whichever candidate one prefers- is the one that Mexico needs, but to the average voter sounds false because it has been the same for decades.

The success of Andrés Manuel López Obrador in the polls is due to the fact that he offers something radically different: a return to a quiet life where there is no more promise than that of redemption. As with Trump, he has managed to penetrate the subconscious of the citizenship because he does not operate in the real world but in that of the despondency that legitimately characterizes a good part of the citizenry. When those of us who pretend to live in the 21st century see him not answer questions, evade relevant matters or promise absurd things, we congratulate ourselves that he lives in another world and that, therefore, no one in his right mind would vote for him. But today’s numbers say something different: his messianic discourse has a redeeming effect and therein lies the reason for his success.

Andrés Manuel López Obrador has a great sense of himself and of his ability to, by his mere presence, transform reality. Under normal conditions -that is, in a context of social peace, economic progress and reasonable optimism about the future- his message and public presence would have no chance of prospering: everyone would see the absurdity of his proposal and, particularly, its lack of reality. But, as with Trump, a significant portion of the population sees it as a means, an instrument, to stick it to those who have been promising solutions for decades without resolving anything.

Lopez Obrador’s offer clashes with objective reality, but nobody cares about that because people are fed up and profoundly angry, so that anything different from the status quo seems better to many voters “on foot”. Whoever wants to see the numbers will recognize the enormous advances in quality of life, longevity, health, consumption and many other objective indicators, that has taken place but none of this is relevant when the electorate feels offended by the arrogance of the government, something not new, but incomparably superior in the current administration. Previous governments at least understood that Mexicans were anxious for improvement and thus devoted their rhetoric to mitigate their annoyance; the current one is so full of itself that it does not even have the capacity, let alone the humility, to understand that its attitude is the main source of the problem.

What sensible politician in the world would come up with a media campaign focused on complaining about the citizens? That is precisely what the current government has been doing throughout its term, first with its “stop complaining” campaign and now with a new one that says exactly the same: “let’s do the numbers.” With that obvious arrogance and indifference regarding the people’s sentiment, it is not difficult to understand the position AMLO holds in the polls. His mere presence says something different.

AMLO lives in a different world from the rest of the Mexicans. His programmatic proposal is a-historical and dangerous insofar as it consciously ignores the world of today; his opposition to the new Mexico City airport is revealing and, indeed, very similar to Trump’s wall, that is, it is a symbol. It is not that the saturation of the current airport isn’t obvious, but that, as with AMLO’s “to hell with your institutions,” his position on the airport constitutes an affront against those whom he has disqualified as  the arrogant ones who promise but do not deliver and become rich at the expense of the rest. The position, and the strategy that lies behind, is impeccable.

It is significant that AMLO never refers to the citizenship because, in his vision, it does not exist. He embodies the “people” because only he understands it and represents it, ergo, his mere presence ends with corruption and the “mafia of power.” In his world, checks and balances are bad (and unnecessary), institutions serve as a means for the president to impose his vision and the almighty ruler is the only one who can decide. In other words, the essence of AMLO’s project lies in ending individual freedom, the market system, trade agreements, the independent press and social organizations (business, trade union, civil) because they all limit, in greater or lesser extent, the president’s ability to act as he pleases.

AMLO touches a very sensitive fiber that can only be countered with a truly transformative proposal, one that starts from the principle that the political status quo must be changed because that is where the obstacle to the development of the country lies. As long as that does not exist, the redemptive discourse will continue to be successful.

www.cidac.org

@lrubiof

Luis Rubio

Mexico has been fighting for the future for at least half a century. After decades of stability and relatively high economic growth, in the 1960s the economic order based on the substitution of imports and the political order based on the tight control by a closed political system began to crumble. From then on, the country has divided into two main currents: the one that sought to build a new future by looking forward and outward; and the one that persecuted to return to the revolutionary nationalism originated in the Mexican Revolution, particularly in its cardenista phase.

The way in which the dispute was resolved, after the economic crises of the 1970’s, was typically Mexican: with a hybrid of past and future: building new economic strategies but without abandoning the old political structures. No one should be surprised that this contradictory combination is making water right now.

Andrés Manuel López Obrador is a faithful representative of the revolutionary nationalist current and is exploiting the errors, but especially the shortcomings and inadequacies, of the modernizing current. These shortcomings and inadequacies -in an environment of openness, ubiquitous information and social networks capable of transmitting any message in nano seconds- make it possible to highlight the corruption, privileges and excesses of the old system that, due to this unfinished modernization, persist in Mexican society. It is obvious that all those forms of abuse existed before and, without a doubt, they would continue under an AMLO government, but that is not the point of this contest; what exists is something unbearable for the citizenry and that is the heart of AMLO’s strategy: to show the shortcomings by promising nirvana that, everyone knows, is a utopia.

Although the modernizing currents have dominated the economic and political landscape for these decades, the dispute never disappeared. And that is the core reason why the NAFTA was conceived: to guarantee the viability of the process of modernization, at least in a part of national life, that of investment. That is to say, from the beginning, the modernizers understood, at least in a pragmatic way, the existence of a flagrant contradiction but, instead of solving it once and for all, they built a mechanism that was implacable to protect at least the heart of modernity: the economy. So strong was the PRI political framework that the two PAN governments did not take a hair out of the cat.

The NAFTA resolved the crux of the problem by depoliticizing an enormous chunk of public activity, since its essence lies in the fact that it constitutes, for all practical purposes, a space of exception: there are rules, functional mechanisms to resolve disputes and enforce contracts. With the NAFTA, a fundamental part of the economy was shielded from corruption and isolated from the broader political dispute. However, for the losers in that dispute, the NAFTA became the factor to defeat; their problem was that the trade pact became extraordinarily popular because its virtues are obvious to the citizenry: it is the only relevant engine of growth of the economy and, more importantly, although for the majority it is something distant, it constitutes a vivid example of what the rule of law is.

When AMLO calls “PRIAN” the modernizing governments of the PRI and the PAN, he obviously does so to disqualify them but, in reality, he’s addressing the struggle between the past and the future: openness versus autarky; market vs. government in charge; democracy vs. vertical control. It is not that the governments of the PRI and the PAN have been a paragon of virtues, since they all spoke of modernity but they continued to preserve the world of privileges. But what is relevant is that the common denominator is the PRI system of yesteryear in its political aspect: that which, however much free elections, has not changed in the essential.

The old-new dispute lies at the heart of the old PRI system of which Lopez Obrador and Peña Nieto are equally paradigmatic: both are worthy representatives of the PRI of the sixties and none promises anything other than preserving that old system in its political aspect; where today’s candidates -AMLO and Meade (or Ricardo Anaya)- differ radically is in the economic aspect: one wants to return to the idyllic world of the sixties, just when it was beginning to crumble; the other wants to move towards modernity creating greater development opportunities that are, in the end, those that have stabilized the economy and created a growing and booming middle class.

Contrary to what AMLO proposes, the real challenge of Mexico lies not in the economic “model” but in the old political order, because that is where the country has stuck, preserving a world of privileges and crony capitalism. Thus, the dilemma for the citizenship lies in deciding how to change: forward or backward.

It is worth remembering the wise words of Vaclav Havel: “a better system will not automatically ensure a better life. In fact, the opposite is true: only by creating a better life can a better system be developed.”

www.cidac.org

@lrubiof