Luis Rubio

According to Simón Kuznets, there are four types of countries in the world: developed, underdeveloped, Japan and Argentina. Argentina has been defying gravity for decades, in fact almost a century: with small moments of euphoria, its economy has gone from bad to worse for so long that this Nobel-winning economist ended up creating a special category for that nation, which was the second richest in the world at the beginning of the 20th century and today has more than 40% of its population living below the poverty line. Regardless of the economic and, in general, governmental project that the president-elect Javier Milei implements, for at least 56% of voters the situation had become so intolerable that any alternative seemed better.

It doesn’t take a genius to appreciate the unease of Argentines. In conceptual terms, Argentina’s problem is very obvious: over eight decades they built a set of social programs that entail increasing public spending, while facilitating, and in fact rewarding, unemployment. The number and diversity of “support” schemes is extraordinary: pensions, transfers based on the number of children, retirement with full salary with very few years of work and a wide variety of benefits. Juan Domingo Perón, president in the forties, created and was able to finance his transfers (which were meant to elicit loyalty from voters) and nationalizations due to the enormous wealth that that nation accumulated during the Second World War, but as soon as it vanished, everything collapsed: the first great fiscal crisis occurred at the beginning of the fifties. There has never been the capacity or willingness to face the simple fiscal reality: the programs remain, expand and multiply, but the income to pay for them does not.

The fiscal cost rises systematically, in fact exponentially, all of which has been financed with monetary emission, which keeps the country, especially in recent years, permanently on the brink of hyperinflation. The inflation that characterizes the country is structural: transfers have become acquired rights that take on a life of their own and become untouchable political factors.

The notion of forcing a solution through a monetary mechanism is not new. In the nineties Menem created the so-called convertibility that equated the Argentine peso with the dollar one to one. The theory behind that project was that the cost of breaking convertibility would be so high that it would force politicians to face fiscal realities. However, the problem was not addressed, spending continued to grow as always and the inevitable happened: the project collapsed with the so-called “corralito” at the beginning of this century, where most of the population lost all their savings, while a virtual depression occurred.

Milei has two traits: one is his style and rhetoric, which makes him similar to Trump. The resemblance to Trump is merely of appearance, because his economic team is not protectionist. According to Milei, who intends to shrink the government drastically, the problem does not lie exclusively in social spending but in a towering bureaucracy that prevents it from being resolved.

The other characteristic is a monetary shock program no longer with peso-dollar convertibility, but with the outright adoption of the dollar as currency. Adopting the dollar implies that spending can only increase to the extent that the number of dollars in the economy grows, which can only occur through exports, investments from abroad or the normal growth of the American monetary base. In practice, adopting the dollar implies an immediate brake on the economy, since everything has to be adjusted to the available dollars. As Argentina is in default with the IMF, the bondholders and the private banks, the project, if it is implemented (given that the president will not have a majority in Congress), would imply creating a pressure cooker effect: there is no money, but spending demands remain constant. The ensuing conflict is clear cut.

According to the economists behind Milei, the recession would be brief because there are many dollars in private hands and Argentina could increase its exports of meat, grains, oil, gas and the like as soon as the taxes that currently disincentivize exports are eliminated. This has logic, but it only covers part of the problem. The other problem is that deficit spending is structural due to social programs. If the government actually sticks to the monetary project it proposes, it would have to cut that spending immediately and brutally. Time will tell if voters understand the implications of what they voted for, but what’s coming is not going to be pleasant, however necessary it may be.

From Mexico’s vantage point, whose government did everything possible to support the losing Peronist candidate, the message is very clear: sooner or later the population rebels against what they consider intolerable. The notion that more of the same would be acceptable to the electorate has always been dubious, even while, clearly, Mexico does not face the size or type of crisis that characterizes Argentina today. The two candidates have a lot to learn from what happened in Argentina: for one to propose something different, but reasonable; and for the other to not get carried away by the idea that everything is fine.

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Luis Rubio

When one reads Kafka’s novels –The Trial, The Castle, The Metamorphosis – there is no way to avoid the sensation of confusion and fascination as one goes through those labyrinths of fear, uncertainty, anxiety, irony, and the every-present lacerating humor. Whoever looks through the pages of the Mexican-national newspapers or is brave enough to watch the early-morning presidential renderings could do nothing other than conclude that Kafka indeed lives in and resides in Mexico.

Mexico is a clinical case, on occasion a pathological one, and sometimes exceptionally healthy. Both realities coexist in all ambits: pacific regions and violent zones; a vigorous economy in some districts and depression in others; rising scholarship and extreme illiteracy; impressive wealth and acute poverty. Mexico is a cultural mosaic but also a cluster of benign and malignant contrasts. What works in some regions is spurned in others, and vice versa. The diversity is impacting, but so also are the disparities. Mexico is one thing and the other, all at the same time.

In this electoral season it is easy to fall back on simple phrases to attempt to explain exceedingly complex circumstances where, however much an individual aspiring to govern wishes, ready-made solutions that arise on short notice do not always work. The diversity, disparity, inequality and complexity of Mexico must be ministered to with viable strategies, not only for each one of them, but also for all of them, but without disdain toward the need to create conditions for these differences to find an exit channel. It is equally ingenuous to pretend that what constitutes a solution for a problematic in the Mexican state of Sonora is going to function, for example, in Chiapas State; each situation is different. Governing implies finding the golden mean between the general and the particular, a point intensely difficult to achieve.

The first great disquisition must be philosophical in character: attempt to control all of the processes or create conditions so that every Mexican can find the opportunities possible for them. The first pathway, Mexico’s history shows, leads us directly to the gallows. The second, duly structured, obliges the government to resolve problems at the same that it facilitates conditions for the citizenry to be productive and for the latter to make the process its own. Resolving problems so that progress could be possible is the most directly conducive path to development.

But resolving problems is not an easily obtained objective. Mexico’s problems are vast and complex but are not novel. At least from Andrés Molina Enríquez in his book The Great National Problems published a century ago, it is clear that Mexico confronts a plethora of circumstances, such as inequality and poverty, which have not been resolved. The past one hundred years have been witness to a diversity of attempts, limited and ambitious alike, to deal with these problems, but the result, on the whole, is not especially commendable. The current government tried a new version of the same -wagonloads of money- without the country coming to entertain a better possibility of advancing. I ask myself whether now would not be the time to scan the horizon for a different future.

Now that Mexicans find themselves in the face of a change of government, it would be desirable to procure novel ways of confronting the diverse problematics that the country comes up against, while those factors already nearly on track or that can almost function on their own are supported. There are no perfect solutions nor are there unambiguous ones, but there are indeed things that are known to function, while there are others that merit new ways of thinking and acting. The choice is very clear: pretending to control the uncontrollable given the diversity and dispersion of the population or focusing efforts and resources on the spaces and populations most susceptible to transforming themselves to join the process of development.

The problems facing Mexico, like those of other latitudes, are not incorrigible; in technical terms, everything has a solution. The problems are, deep down, political, because they respond to ideological interests, cultural interests or preferences that have nothing to do with the technical nature of the situation. These are the factors that differentiate nations in the way they face up to, or do not face to, their problems. These differences are also the factors that generate certainty or uncertainty.

Viewed from this perspective, the pertinent question would be, what is the best way to advance a long-term development project that additionally yields short-term tangible benefits, especially under rubrics such as poverty, income and growth? This question evidently presupposes that development is the objective, something that cannot be said for the outgoing administration, but that doubtlessly permeates the discourse of those aspiring to head up the next government. ln this context, it would not be impertinent to ask, for example, whether the attacks, mockeries and strategies aimed to polarize just for the mere fact of doing so contribute to that purpose. Polarization matches a government for which development is more a problem than an objective, but it is not so for government that wishes to promote it.

At the heart of the dilemma confronting Mexico in the next election lies a crucial factor, What is the government for: to control or to promote? To generate certainty or mistrust? In these dilemma Mexicans risk their future.

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By Luis Rubio on November 13, 2023

 The 2024 presidential election promises to be like no other since Mexico began its long, painful, and unfinished transition to democracy. Three factors make this a unique moment: an economy ever more distant from the political cycle; a political structure susceptible to collapse; and a race where the stakes are the highest in at least half a century.

The coming election is not only unique essentially because outgoing President López Obrador has raised the stakes in an already skeptical society. Whereas the previous five presidents attempted to pursue a common thread of gradual political and economic liberalization, AMLO shattered the notion that Mexico was advancing towards a democracy and an open economy. Furthermore, he has been a strong advocate for moving in the opposite direction and has created conditions for that to be furthered in the future. Even more important, also in contrast with his predecessors, he is bent on directly influencing the electoral process, regardless of whether this constitutes a crime according to the electoral legislation, which aims to secure a level playing field. This set of circumstances creates enormous risks, but also a potential opportunity.

Over the past four decades, Mexican governments provoked significant economic change through a series of reforms aimed at modernizing the Mexican economy and incorporating it into the global circuits. Despite the president’s continuous attacks on those reforms, he has been their biggest beneficiary. In fact, Mexico has become ever more closely attached to the US economy through exports, radically reducing its connection to the Mexican political cycle. Something similar has happened with the most politically sensitive economic variable, the exchange rate, which today is determined by exports and remittances, and much less so by government finances. Thus, the economy will be a factor in the coming election only to the extent that the US industrial production index experiences significant alterations.

The same cannot be said of the political arena. The biggest paradox of Mexico today is how the economy and the political system have exchanged places. The one constant through the 20th century was always the strength and resilience of the political system. Authoritarian or not, it was an extraordinary factor of stability and continuity. Mexico experienced crises, some political, others economic, and financial, but the political apparatus had the capacity to manage and remain effective. That is no longer true. The economic and political reforms of the past four decades eroded the old political structures and AMLO has further undermined the few remaining elements that used to provide stability.

The scene taking shape will thus include an extremely powerful player in the president, a rapidly weakening political context, an increasingly politicized military, a frail government-financial situation, and two relatively novice candidates for the presidency. Any one of these factors could be disruptive; the fact that there are several elements in the game could be extremely risky. And the riskiest is undoubtedly the president himself, who will not spare any asset at his disposal to get the outcome of his preference. Should that outcome fail to materialize, he could easily become the source of the gravest danger Mexicans have experienced since the end of the Revolution in 1917.

It is in this context that the election will take place. Mexicans will have to decide whether they want to pursue the course launched by AMLO or try a different tack. At present, neither of the candidates has fleshed out how she would go about addressing the big economic and political deficits that Mexicans face. Though Claudia Sheinbaum has articulated an effective structure for her campaign, at present all her proposals reflect the enormous influence wielded by her promoter, so they are not a reliable foundation to assess how a government led by her would work. On the other side of the aisle, Xóchitl Gálvez has yet to come up with an organization capable of defeating the governmental team, but her instincts and statements demonstrate a much more open, cosmopolitan, and modern thrust.

It is still far too early to reach any conclusion about the June election. The two key races -the presidency and congress- are intimately related given that few Mexicans split their votes. It is not inconceivable that voters will produce a very powerful congress without a majority in charge, an opportunity to truly begin to develop the end of the political transition Mexicans have long been waiting for. Thus, a lot rides in those votes.

Whatever the outcome, its implications will be major for both Mexicans and Americans. Mexicans will be directly affected, whether for good or ill. Americans will also be impacted because of the extraordinarily complex border their two nations share. The stakes could not be higher.

ABOUT THE AUTHOR: Global Fellow; Mexico Institute Advisory Board Member; Chairman, México Evalúa; Former President, Consejo Mexicano de Asuntos Internacionales (COMEXI); Chairman, Center for Research for Development (CIDAC), Mexico

https://www.wilsoncenter.org/article/risk-and-opportunity

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Luis Rubio

Antinomy, a contradiction between two things such as laws or principles, describes well the dilemma of Mexico, but one which has been systematically sidestepped as if it were not to exist. Instead of facing up to the problem of governance, each of the governments of the past three or four decades pretended it to be manageable without resolving its essential contradictions. The problem has been apparent for a long time, as I have attempted to set forth in this space, but it was the reading of the new compendium of Fernando Escalante Gonzalbo* that enabled me to find the missing piece of the puzzle to determine precisely what this problem was.

The fundamental problem of Mexican society is governance. In the past, says Escalante, the political arrangement consisted of adapting “the immense heterogeneity of the social needs and to offer, on a case by case basis, money, regulations, quotas or licenses, concessions or tolerance for non-compliance of the law. And for the latter a reasonable margin of impunity to administer the public resources.” In one paragraph, Escalante synthesizes the essence of the functioning of the old system: corruption, illegality, impunity, all of which safeguarded the peace and created an environment in which a certain degree of progress was satisfied. None of this is novel, however much the current government flaunts it as its great innovation.

What cleared up the panorama for me was the role of the Institutional Revolutionary Party (PRI) in attaining that governance. My point of departure had been that the conjunction between the government and the PRI (two of the several components of which Escalante denominates the State) allowed for maintaining control and stability, in addition to creating conditions for economic progress. The text, especially the chapter on the PRI, makes it clear that Mexico had a feeble government, dedicated basically to properly administrative functions, but in which the activity expressly of governance was carried out by the PRI Party: the function of “mediation, between State and society, between capital and labor, between the legal order and the informal order, between the expectations and the possibilities, in order to resolve the fundamental problem of the weakness of the State and the dispersion of power.”

The PRI was constituted to institutionalize the power, eliminating the political violence that culminated in the assassination of President Álvaro Obregón (1928). Its function, in the words of Escalante, had been to deal with the dispersion of power, but above all to replace the mission that, under other circumstances, would have corresponded to the government. Escalante further argues that a weak State “that does not correspond to the ambition of the idea of the State, which cannot impose wheresoever its authority in an immediate and unconditional manner, such that the decisions must always be negotiated.” The party ends up being “a resource to contribute to managing, governing or rendering governable that situation.”

The nodal point is that, throughout the 20^th century, Mexico had been able to count on an effective political system because the PRI substituted for the absence of governance capacity due to the intrinsic weakness of the government, because of its lack of institutionality. The PRI became a mechanism through which decisions were intermediated, the society was organized, the political control was maintained, and this was negotiated with the diverse groups and interests so that the   assemblage of these would work, however that happened: with corruption, special arrangements, favors, arbitrariness and total impunity.  It worked as long as it was effective. Like everything in life, its success produced the seeds of its own extinction: to the degree that the country advanced, the economy diversified, the middle class expanded, the population grew and dispersed, those arrangements were no longer capable of addressing the problems that began to present themselves, above all from the end of the seventies.

The reforms of the eighties and the nineties consisted in essence of attempting to formalize everything that the PRI had carried out informally: rather than special agreements, general laws and in place of the politization of the decisions, clear and transparent rules. The point is that the political as well as the economic transition implied the dismantling of the mechanisms that up to that moment had comprised the essence of the country’s governance. And nothing was substituted for them. The pretense was that the electoral democracy would create a new system of government and that a vigorous economy would resolve the problems of poverty and regional inequality. In a word, the mechanisms of the old order were dismantled but the scaffolding of a new source of governance was not built (nor, clearly, were the economic problems resolved nor those of violence and criminality, additional evidence of the absence of government).

Three decades later a government came into power that was dedicated to return to the broad “margins of discretional maneuvering with utter impunity for the political class, opacity regarding the public expenditure, possibilities of electoral manipulation and new spaces of intermediation.” Neither the old system nor the “new” one are the solution to the most deep-seated problem: the Mexican government does not work.

To top it all off, the singular characteristics of today’s President may have permitted skirting the integral collapse of the government, but nothing guarantees that the individual who will come after him possesses the capacities and abilities to sustain it.

*México: el peso del pasado. (Mexico: The Weight of the Past). Cal y Arena.

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 Luis Rubio

Luis Rubio

The Good Tsar is a myth. In history there are good presidents and bad presidents, an inevitable circumstance of human nature and of the complex reality. What is unacceptable is submitting the population to the possibility that its president might be good. The essence of democracy does not lie in the free election of its governors, however crucial that initial step may be, but instead in the capacity of limiting the harm that can be inflicted upon the citizenry and on the country by a bad ruler.

Good or bad, the ruler is always prone to tyranny.  Voltaire spoke of benevolent tyranny as the solution to the governance of a nation, but he himself reined in that notion: “the best government is benevolent tyranny tempered by the occasional assassination.” To depend on the goodness of a ruler implies that some will not be good, thus the well-being of the nation will always be subject to comings and goings and highs and lows, such as those that have characterized Mexico for too long. Much better to develop effective counterweights that permit, before anything else, delimiting the damage that can be palmed on a bad ruler, and second, impeding the bad governor from attempting to impose another ruler of the same stripe as their successor.

In its most fundamental sense, democracy is transcendent because it protects the citizenry from the abuse of the ruler on assembling counterbalancing mechanisms that limit the damage a bad one can cause. It is according to this that, as the philosopher Karl Popper wrote, the relevant question concerning democracy must be the following: “How is the state to be constituted so that bad rulers can be got rid of without bloodshed, without violence?”

The government that is about to end its mandate has sung its own praises regarding its extraordinary capacity to dismantle one after another of the mechanisms constituted in prior decades to fence in presidential power and whose purpose was to confer certainty on the citizenry. Some have applauded those measures because they perceived in the existence of counterweights a source of obstacles for the exercise of presidential power. And, of course, when the mechanisms forged to act as a counterweight became absolute stumbling blocks and impediments (a little like what happened with the two PAN administrations), they failed in their purpose.

But the other side of the coin, this most frequently found in Mexico’s history and that which has typified the current government, is more pernicious. The extreme of the latter has been a Congress conceiving itself as an instrument of the president rather than acting as a mechanism of equilibrium not to impede, but to build the tools -such as the laws- for the development of the country. When the president orders the Congress to approve a bill (or that “not even a comma of it be changed”), the manner of understanding not only governance, but also of democracy becomes plain: as a mere showcase for the rhetoric, but not for the daily functioning of the governmental task.

The phenomenon is not limited to the Executive Power–Congress relationship. The same occurs in the relation between the President and the governors, reaching the extreme of demanding that they relinquish their powers or else face the risk of criminal prosecution. When it is within the jurisdiction of the president the faculty (de facto or de jure) of initiating (or stopping) penal processes against their enemies, democracy and the Rule of Law would end up being nonexistent. Thus, dictatorships and tyrannies begin and that is precisely why it is fundamental not to weaken the judiciary.

The out-going Mexican government has been distinguished by its contradictory stance with respect to the other branches of government. On the one hand, democracy cheers when its candidate wins or when its bill is approved, but, on the other hand, it berates the Supreme Court for its lack of democracy.  In the conception of Montesquieu’s separation-of-powers design, the three branches of government would function as a counterbalance among themselves: some would be elected, others nominated. In this manner, while the president and the members of the legislature are elected through the citizen vote, the justices of the Supreme Court are proposed by the Executive Branch but are voted in by the Legislative Branch.

There is no perfect system of government; notwithstanding this, as Churchill affirmed, democracy is the least imperfect of those attempted so far. But democracy only works when there are institutional structures to anchor it in place and a citizenry that makes its own the responsibility of insisting that the government comply with the law and that makes it be complied with.

There is no way of guaranteeing that a government will be good or that the ruler will be benign and that is the reason why it is indispensable for there to be counterweights underwriting that a bad ruler will not be up to their old tricks. The Mexican presidency is so powerful (above all for those knowing how to engage all the instruments at their disposal), that the potential for abuse is immense, to which Mexicans have been witness in recent times. Therefore, there does not exist -thus it is a myth- the notion of a “Good” Tsar.

Whoever wins the presidency in 2024 will find a dire fiscal situation bordering on chaos and a population hoping -the eternal hope- for a better government. If instead of pretending to be a good tsarina the new ruler devotes herself to building effective counterweights, Mexico will advance unrestrainedly.

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Luis Rubio

One morning, as Gregor Samsa was waking from a restless sleep, he discovered that while he was in bed he had been transformed into a monstrous insect. Without doubt a transcendental occurrence for Samsa, the character of Kafka’s The Metamorphosis, but perhaps too strange and farfetched for its nature to be understood and, even, whether it was a real change.  The same as Samsa, the Mexican citizenry has awoken to an attempted fait accompli: as if everything had already been decided upon without the need for any explanation of what had happened. The Presidential Election of 2024 is still far away, and lacking is a plethora of twists and turns to get there.

The Morena-party candidate advances like a train: with clarity of course and a sense of purpose. The Frente Amplio alliance candidate tries to build a platform that confers presence and recognition to her within an electorate that does not yet know her. To complete the panorama, the entire governmental apparatus, from the President to his last operator, is dedicated to building up their candidacy while destroying that of the opposition. No one should be surprised that the numbers revealed in recent polls reflect those factors.

Contradictions on the horizon are ubiquitous and are found in all parties. Morena is a complex entity, dissimilar and characterized by tribes and groups that inhabit distinct bunkers and that dispute posts and potential opportunities for the upcoming government. The ability of Claudia Sheinbaum to manage those contradictions is obvious, but in a party in which the sole factor of cohesion is the president, the capacity to contend with the tribal strife is always limited.

The contradictions within Frente Amplio are different, but no more complex that those of the other side. First of all, the parties that make up that alliance entertain interests and incentives that are not necessarily aligned with winning the presidency: given the shortsightedness of the party leaderships, with obtaining sufficient Congressional seats they satisfy their objectives. On the other hand, the success of the candidacy of Xóchitl Gálvez depends on attaining a balance among the interests of the parties that support her and her nature as an independent candidate. That balance is difficult to come by, but once the candidate achieves it, her candidacy inexorably will begin to take wing.

While Gálvez must differentiate herself from the parties that sustain her and simultaneously keep them within her control, Sheinbaum must take care of her relationship with her boss, while building an independent presence. With such a dominant and jealous personage in terms of his (supposed) legacy, the challenge is not a lesser one. The point is that each of the candidates confronts contradictions and complex challenges that are not easy to administer.

Under these circumstances, it is feasible to erect scenarios concerning as to how this contest could evolve from here until next June. The starting point is that surveys are a snapshot of the moment, but the moment that counts, voting day, remains far off and no one can anticipate all the factors, internal and external, that could exert an effect on the outcome. What is possible is to speculate about the environment that could characterize Mexico next June, once the election is over, because that would permit us to visualize the elements that the citizenry would have had in their sights when they decide how they will vote.

My point of departure is a very simple one: the great factotum of present Mexican politics is doubtlessly the President. No one in the political arena possesses a presence like his, a control of the narrative, a history such as that which characterizes him and the legitimacy he has garnered along the way. In a word, the personage is unrepeatable. That is, however much he influences the process, violates the electoral laws and attempts to control his candidate, the personage has an expiration date and no one could inherit his attributes.

Whosoever wins the race next June, the next Mexican presidency will be very different from the current one.  Lacking in the integral control of the scene and in the capacity of disqualifying, discrediting and threatening the whole of society in systematic fashion, the victor will confront the relentless need to procure the reconciliation of the Mexican society. The context, if she wants to advance, will obligate the winner to do distinct things from those that would today appear obvious, a circumstance much simpler for Xóchtil, due to her freshness and to her being the victim of the unbridled presidential attacks, than for Claudia, who inevitably must assume that the table is ready set for her.

The vote in June will determine not only who governs the country, but also the composition of the Congress, a factor that could constitute the great change in Mexican politics if a power equilibrium is achieved that would bestow viability and certainty on the country after these years of abuse and, paradoxically, paralysis.

President López Obrador exposed many of the maladies and myths of Mexican politics, but he never even tried to resolve them. For him, it was enough to be powerful. The question is what conclusion the citizenry will derive from his administration and, therefore, for whom it will opt to succeed him.

No doubt there are to come months of ups and downs and endless altercations, some violent. But, to date, nothing is decided.

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 Luis Rubio

In the realm of folklore and ancient traditions, as set forth by Carlos Lozada, myths are tales forever retold for their wisdom and underlying truths. No one understands this logic better than President López Obrador, who is not only a master of narrative (and mythology), but of another trait that few have noticed: his success does not depend on his concrete actions or on his results, but instead on his personality cult. To date, the formula has been implacable; the question is what that implies for the future of the country.

There are at least four factors that are critical for development and that the presidential narrative reviles day in and day out, but not for that do they stop being key:  investment and economic growth; security; the relationship with the United States; and the rules of the game. In terms of each of these items, the President has been gnawing away at the scaffolds, frail in themselves, which make things work.

Development is, evidently, the sole objective possible, despite the disdain in which the current government holds it. Focused exclusively on power and its perpetuation, it prefers a poor but loyal electorate to a developed and wealthy country with a hale and hearty citizenry. Regardless of who wins the 2024 election, he or she will be obligated to focus on development (and what that implies in terms o health and education) not only due to the obviousness of its being the only possibility for the country’s future, but also because social problems have been piling up. The formula is known: create conditions to attract capital, without which economic growth is impossible, but with a redistributive strategy that allows raising the population’s living standards without affecting the functioning of the economy. All that is required is certainty: clear and predictable rules. Given the conditions, nearshoring is a huge opportunity (not a panacea) that can grow without limits.

Security is a matter that is not only unresolved, but one that becomes more complicated by the day. Whatever the governmental spokespersons say, it is evident that organized crime controls vast territories, where extortion, abduction and violence reign. Nominal popularity can be high, but the reality at ground-floor level is mutilating and is not solved with rhetoric nor with the National Guard that is not a substitute for local police forces (and judicial system) that protects the population and generates an environment of stability and peace. The Army is a requisite, but solely to pacify the country, not to make it function. Bear hugs look great, but security hinges on an everyday life not besmirched by fears or grounds for the latter.

Berating the Americans and inviting their rivals to the Independence Parade is perhaps the most revelatory of Mexico’s mythical rottenness. Rallying for the people to wrap themselves in the flag was viable as a strategy fifty years ago, but not in the era in which it is increasingly rarer to find a family with no direct relatives in the U.S. This in addition to the economic, political and social   transcendence of the exports and remittances for the country’s stability. It would seem suicidal attempting against these manifest sources of viability.

Finally, the rules of the game: what is technically known as the Rule of Law. The great achievement of the original Free Trade Agreement (NAFTA) was that it engendered a legal and regulatory framework that would confer certainty on the investor and the entrepreneur: general rules, which were clear and that could be enforced through trustworthy, not politicized mechanisms. AMLO has inverted the equation: rather than general and known rules, he has tried to solve every situation in individual fashion, revealing that he does not care for the law, nor does he understand (or cares for) what makes investors tick: the reliability of the general rules.

The question remains of how to confront these maladies. The answer is, in concept, crystal clear. Thirty years ago, a scheme of rules of the game and reliable dispute resolution mechanisms was sought through an international treaty, which in essence implied that Mexico borrowed the rules and judicial system in trade and investment matters from our trading partners. That avenue has not been exhausted, but it has experienced serious deterioration. Consequently, the only way to recreate conditions that make the rules predictable is with enforceable internal political arrangements. In a word: Mexicans have to do today what could not be achieved internally before: a political-legal framework that is reliable.

The great challenge for the next government will lie in building a framework of agreements that reduce the sources of hatred and polarization, which translate into political agreements that entail a source of reliability and certainty for the economic agents. It sounds complex, but it is the only way through which Mexicans can contemplate a way out of the hole in which the current government has placed them and whose legacy will be much more complex and chaotic than apparent.

The country needs an “indigenous” understanding that opens spaces for participation and eliminates sources of disruption and insecurity. This would involve the formal political forces, but also a broad representation of the citizenry, business, and unions. Mexico has become too large and complex to depend on a few actors with special interests. The challenge is enormous, but so is the opportunity.

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Luis Rubio

Polarization alters everything: from the way things are worded to the inclination to listen to them. Polarization destroys language, with widely accepted terms morphing into polemical conspiracies prone to the extermination of adversaries. Bent by the obsession for confronting the good with the bad, it is in the end nearly impossible to recognize common ground, spaces where there are no significant differences, where what is common is greater and more substantive than distance and difference.

The concept of civil society has fallen into that ambit: presented as exclusive of the elite, -the conservatives in the new vernacular- thousands of base organizations are excluded that do not have the time to dispute designations but that represent citizens demanding respect for their rights. Mexico’s civil society is much more than what it appears to be. Defaming these organizations means attacking legitimate citizens who do nothing but fight for rights enshrined in the constitution.

What differentiates the members of the civil society -a concept coined by Aristotle- is not the income level of its members, but instead the willingness to make their rights be heard and complied with, insisting on the satisfaction of their claims and participating actively in the political and social processes. From that perspective, there are many more organizations that, frequently without title or registration, represent the citizenry than those that exist formally.

There we find the women of Cherán in the Mexican state of Michoacán, fed up with the loggers wresting away their source of employment, abducting and killing their children and spouses, who organize themselves to confront and eradicate them. In the town of Santiago Ixcuintla, Nayarit, there has not been a single abduction in years thanks to the citizenry organizing itself. In Monterrey, the religious sisters of Citizens in Support of Human Rights (CADHAC) designed a new model for the office of the prosecutors. In the states of Veracruz and Morelos (Tetelcingo) the families of the “disappeared” have organized themselves into groups, have trained themselves in forensic science (women converted into experts in DNA samples) and in the search for graves.

Examples proliferate throughout the country, with distinct degrees of success, but that as a whole evidence the presence of an active, participatory and demanding society. Communities organize events and contests in sports, culture, festivities and traditions: everything comprises volunteers, the essence of citizenry and the natural evidence of a civil society. Not even the most seasoned of governmental operators can co-opt a community that organizes itself.

The current government has procured the exacerbation of not only differences, but also above all perceptions, the core objective of the daily early-morning presidential narrative. The good ones are the people, the bad ones are the citizens. The object of the morning press conferences is the “good people” who receive benefits from the government, who are passive and who only understand the logic of “what will you give me” and “in exchange for what.” The old political system developed an all-encompassing culture of exchanging benefits for votes, but the present government has raised this to new height where economic development is no longer necessary because with the “support” (i.e., contributions or cash transfers that the government provides directly to its base) lasting loyalties are purchased. In this dimension, organized crime is more than functional to the government in that it inhibits political participation, generating fear, thus annulling the propensity, or at least the possibility, for those who were once members of the “people” coming to assume themselves as citizens.

Citizens are subjects because they do not keep their arms crossed: whether these are the orphaned children in Ciudad Juárez, Chihuahua, who obligated the municipal authorities to focus on the feminicide that had left them in that condition, or legally constituted entities combatting the impunity and corruption based on data, the hard sources of information. Two sides of the same coin. Some call themselves civil society, others simply are: they defend the rights and needs of their children in the schools, insist on security problems being attended to, and, in general, respond to the agenda that reality has obliged them to come to grips with.

In the interaction between the good ones and the bad ones that the President promotes, a novel phenomenon has come to light: many individuals have begun to discover that they have rights that they had not identified or had not known previously. In his eagerness to extol some at the cost of others, the President perhaps may have provoked the emboldening of increasing numbers of Mexicans who might renege against and criticize the so-called “organizations of the civil society”, but who day by day are coming to form part of this, at least regarding their manner of demanding their rights.

The promotion of informality as a political strategy contributes to the strengthening of the population as the object of governmental favors, in detriment to the growth of the economy in general. The express, even conscious, objective may not be that of promoting informality (because this does not afford tax benefits), but the effect is precisely that: an informal worker owes favors to the corner police officer, to the municipal inspector and, therefore, to the structure that with enormously hard work Morena has been building. The express expectation is that this protection and “support” will translate into permanent loyalty and votes, but nothing guarantees that this will happen.

Mexico has been split between those who pull and those who wait to be pulled.  There is perhaps no more transcendental dispute than the latter because on its outcome will depend the future of the country.

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