Luis Rubio

During her transition period, the president-elect was extremely cautious about how she would exercise power, especially given the large majorities with which Morena controls Congress. She was emphatic in protecting the rights of minorities. However, once in office, that change of tone disappeared from the map. Harmony disappeared, being replaced by renewed militancy. No country can prosper when its population, including the counterweight mechanisms that are essential for the stability and functionality of any society, are constantly under siege, denigrated and disqualified. The question is how, in the context of a government capable of launching acts of authority with no counterweights, is it that the government pretends to achieve both prosperity and harmony.

In his recent book entitled Age of Revolutions,* Fareed Zakaria makes an interesting distinction in the way that leaders over the last four hundred years commandeered relevant processes of change and analyzes which were more successful and why. Revolutions, states the author, follow a common pattern: technological or economic changes of great magnitude unleash a change in the population’s identity (how people understand themselves), leading them to demand a new type of political response. What distinguishes leaders under these circumstances is the way in which they manage the situation, because that determines whether the revolution will end up improving the quality of life of the population involved or whether it will unleash great chaos, violence and stagnation. As an example, the author contrasts the so-called “Glorious Revolution” in the United Kingdom in 1688 (in which the monarchy was deposed and parliament began to acquire relevance), with the “Reign of Terror” and the House of Bonaparte dynasty in France. In the former case the leaders procured the support of the populace and developed gradual solutions that respected citizen rights, thus securing legitimacy among the middle classes. In the French case, the politicians who conceived of themselves as enlightened, intended to force a rapid change in a very traditional and marginally developed nation, with predictable results.

The lesson to be learned is relevant because it suggests that an electoral triumph is not sufficient to guarantee the success of the processes of change that the government emanated from an election unfurls. That is, the formal majorities are not enough: similar in importance, if not even more so, is involving the populace (this distinct from trying to manipulate it) and building the scaffold of supports that permit not only approving the laws, but also making them work. It is sufficient to take a glance backward two or three decades to appreciate the significance of this lesson effected by Zakaria’s book:  many of the reforms intended or undertaken by recent Mexican administrations were approved but were at the end of the day dysfunctional or unviable in that they were not socialized nor did they in the last analysis enjoy legitimacy, thus popular recognition.

Still more important for the government is the complexity of the Morena Party in these matters, where there is the prominence of Jacobin-like extremists, radical personages who are decided on and dedicated to advancing extreme causes, the product of their history and the purity of their ideology, but not representative of or desirable for the population, including of course many of whom voted for today’s President. The how, says Zakaria, makes an enormous difference in the long term. The propensity of the “pampered elites” in aspiring to impose sudden radical changes is frequent in history, but rarely culminates in success and these changes are nearly always destructive and violent. Nothing like cultivating popular support for substantive changes liable to improve the quality of life, raise productivity and economic growth. The how is yet as important or more than the what.

Radical militants within the governing party harbor a revolutionary zeal and a natural tendency toward imposed solutions, which would inevitably clash with diverse elements of the agenda of the government itself, starting with the removal of obstacles to the growth of the economy. The way the government decides to promote growth is likewise key: although the mantra is that the government should “marshal” the economic agents, the way to make the economy grow is through creating conditions that attract private investment. There’s no alternative to this.

When a government invests in infrastructure (or decides where it should be installed), it is by that sole act deciding on and incentivizing private investment. But much more important than physical infrastructure, that in the same fashion can be financed through private investment, Mexico faces massive deficits in health and educational matters, two indispensable conditions, first for the healthy development of the populace, but also fundamental for adding value to the productive process, thus elevating the income potential of those laboring therein. The formality, that is, the way things are presented and managed, matters as much in the political world as in all the others.

“Institutions and laws, wrote Lord Acton, have their roots not in the ingenuity of statesmen, but as much as possible in the opinion of the people.” Much better to bring everybody on board towards progress than attempt to impose, thus to paralyze.

*Revolutions: Progress and Backlash from 1600 to the Present

www.mexicoevalua.org
@lrubiof

Luis Rubio

The government changed, but the problems remain, which does not mean that they can cease being attended to. Mexico has been experiencing a peculiar paradox for many years: an increasingly activist government with an increasingly weak State.   Perhaps this is about a way of facing, or hiding, the true problem: the government increasingly controls less territory and its capacity of leading the country diminishes in parallel with the nearly uncontainable rise of the population’s expectations but, especially, of the ambitions of those who govern.    

The problem is not new in Mexican political life, in that it goes back to the beginning of the country’s independent life in the XIX century: the great challenge was always that of pacifying the country and its integration as one, sole nation, especially after the American invasion of 1847. The time of the Porfirio Díaz government (1877-1911) was the first period during which the government achieved a consistent pace of economic growth, a circumstance that repeated itself with the PRI after the revolutionary feat. The contradictions of that system and its inevitable limitations eventually led to economic liberalization and to the political opening, respectively, with the consequence (clearly unanticipated) of debilitating the government and reopening the brutal struggle for power that, as in the XIX century, although with distinct specific characteristics, starts to seem like a new normality.  

Since the nineties, when the first far-reaching political reforms were negotiated, those that would lead to undisputed democratic elections and to the development of several institutions that were critical for governance, the need was debated for an integral reform of the structure of the Mexican State. The objective soon lost its focus and the reforms were limited to the creation of some institutions and organisms oriented toward resolving specific problems that came to present themselves, such as energy, competition and elections.

What those projects and concrete reforms did not attend to, and what during those years came to light in all its dimensions in the Lopez Obrador government, was the problem of power. In a literal and conceptual sense, the objective of an institution is that of containing power, that is, hindering or limiting potential abuses by those political holding power. The point is not to hamper a president from exercising their functions and responsibilities, but instead for their acting in terms of adhering to the law and not to violate principles, so that it confers certainty on the population and protects the rights of the minorities. The idea of a counterweight is not to impede, but rather to render transparent: that the affairs be debated that correspond to the three branches of government and that there come forward those who support as well as those who object to a certain determined program or project, so that with that information, the legislature and the judiciary, respectively, can process their decisions.

To the degree that a president can act with no limitation whatsoever, the whole society lives in uncertainty. Of course, those who enjoy and benefit from the decisions assume that the latter are desirable and thus merit universal endorsement, while those who object to them and/or feel aggravated by them think the opposite. A civilized society knows that power changes hands over time and that implies that those found on one side of the equation could someday find themselves on the other; this is the reason why the existence of strong institutions liable to resisting the onslaughts of power, are beneficial to all and, thus, become a source of certainty for all. This that would seem so obvious and towards which Mexico was, more or less, advancing, was destroyed in just a few months.

The important point is that the entire population, independently of its socioeconomic reality, should have the means to be abreast of where it stands. The former government scored a milestone on raising the cash transfers to an enormous segment of the population, which, paradoxically but logically, provoked uncertainty with respect to the permanence of those programs during the electoral period. The institutionalization of those programs is thus key for the beneficiaries of those programs to be certain that those programs would not become a matter for electoral dispute.

Exactly the same is critical for the regulations that govern private investment in sectors that earlier were reserved for the government, such as electricity. The strength of institutions lies in the certainty that they confer on the population in all ambits of the society and the economy. 

Where many of those who decades ago advocated for a reform of the State erred was in focusing on the creation of institutions in lieu of immersing themselves in the containment of power. Though it is evident that containing power is manifested through institutions, this containment is impossible without an integral reform of power and that is the great challenge of Mexico, much more so now that the government is experiencing the onslaught of her predecessor. The virtues of the new president are many, but they are very distinct from those of her predecessor and will surely not permit her to contain the tensions, conflicts and interests encountered (even within her own party) without her attending to that crucial problem: the excess of the concentration of power.

www.mexicoevalua.org

@lrubiof

Luis Rubio

Every time a Mexican administration exceeds its budget, protests arise in the vein of levying additional taxes. To justify this, comparative statistics are invoked among (usually dissimilar) nations or exceptional circumstances. The easy part for a politician is to seek novel wellspring of resources instead of questioning how the existing ones are employed. If the objective is to erect a superior steppingstone to civilization, one that would require a higher tax echelon, the government would have not only to raise the quality of its governance, but also that of its accountability. One is impossible without the other.

Taxes and the social contract that exists, whether explicitly or implicitly, between governors and the governed go hand in hand. Nations with heightened levels of trust and empathy tend to be characterized by governments that respond to their citizens, while those in which similar circumstances are not enjoyed tend to gravitate toward despotism. In the former, governors are subject to laws and rules that enjoy popular support, while in the latter the breach between citizens and their government is vast. That it is obvious that Mexico falls into the second group of nations will not escape any Mexican.

Europeans, Canadians and Japanese pay a much higher share of their incomes in taxes, but their quality-of-life levels are equally high: the caliber of their infrastructure, health system, educational system and public transport, to cite evident examples, are of extraordinary quality. There the streets do not have holes, electricity flows without interruptions and the police take care of the citizenry. It would be straightforward enough to argue that higher taxes translate into better services, but the evidence does not sustain that: what does allow that binomial (i.e., taxes-effective government) to function is the strength of the social pact that lies behind everything else. A serious government does not survive poor performance. In Mexico, as we have seen in recent years, the government that survives is that which utilizes public funds for private ends, not the one that advances the country’s development.

The social contract is an agreement between the government and the citizenry. It is, in essence, a pact, even if it’s implicit, by which an agreement is reached about the way public resources are collected and employed. The citizens cede some of their rights in exchange for the government’s providing them with public goods and services. The tax level matches the quality of the services and vice versa; if one attempts to alter one of these, the other must be resolved. The notion of simply extracting more resources from the citizenry without a concomitant improvement in the services implies an attempt against the country’s stability, itself already fragile. Sooner or later questions would start to be asked: What is the sense of paying more taxes only to defray the costs of excesses incurred by the government (such as PEMEX subsidies or cash transfers) without any accountability? Paying taxes assumes an exchange: When a person is obliged to pay “private taxes” -ergo, extorsion-, is it also required to pay taxes to the government that fails to guaranty his or her security against the criminals who assault them?

In the end the matter is less financial than political, more about democracy than authority. A government claiming that its legitimacy derives from the votes, not from the law, and that it controls or has eliminated all the mechanisms of counterweight can hardly argue that it is accountable or, even, that it is obliged to do so. Within that context, the notion of undertaking a tax reform entails an enormous deficit of legitimacy long before its is formally proposed.

The matter of a fiscal reform has involved years of discussion in Mexico. The fact that what technicians and politicians would have desired has not been carried out -more resources- explains the nature of the problem. There are good arguments for   maintaining a low fiscal tax-collection regimen, if what is sought is attracting high investment levels, as Ireland did for many years. But, in exchange for that investment, Ireland employed existing resources in creating circumstances for that investment to come to enjoy conditions appropriate for its development.  That is, it was not that it decreed a low tax-level regime and went to sleep. Other nations, such as France, are characterized by very high tax levels, but these countries offer services that satisfy the needs of their population and politicians there are always subject to citizen supervision, to democratic scrutiny and to electoral defeat. The current Morena regime does not face any of those challenges.

The fundamental point is that a government cannot pretend to effect a fiscal reform without considering a full-fledged democratic reform in which the funds to be collected as well as the way of allocating them are subject to democratic scrutiny, that is, to an effective checks-and-balances regime. The actions of the government from its initiation, with the destruction of the judiciary, point precisely in the opposite direction. The question is whether the President is willing to undertake the negotiation that a “new” democracy would require, because that would be the price of an integral fiscal reform.

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

Luis Rubio

The story goes that Isaac Newton developed the theory of gravity when an apple fell on his head, and he asked why it fell rather than flew. Although fictitious, the anecdote serves to think about the way Mexico could progress and prosper or retrogress even further. President Sheinbaum has set clear goals for her government that involve raising the rate of economic growth in an inclusive manner, for which she has vowed not only to preserve but to increase the social programs. The question that seems crucial to me is: What would be necessary to make both objectives compatible?

The starting point must be that it is impossible to defy gravity, that is, it is not possible to pursue contradictory objectives in permanent fashion. The former government found that economic growth and the distribution of social benefits were incompatible, leading to its abandonment of the promotion of growth, along the way running out of all the resources, funds and instruments that the government habitually counted on to advance economic development. In plain language, the distributive proposal is praiseworthy (and necessary), but only sustainable within the context of a rapidly growing economy and one that systematically raises its rate of labor productivity. Without these two conditions, distribution is impossible.

The President’s priorities with respect to the government’s role in guiding the economy are clear enough, but not everything depends on her will, much less so in today’s era of interconnectedness. The last few decades have yielded convincing lessons on the failed attempts to advance economic progress. Here are my learnings and observations about this.

• In effect, as the President says, entrepreneurs only look out for their own interests. That is their virtue and their function. The objective should be to achieve that millions of Mexicans become entrepreneurs for them to generate wealth, jobs and opportunities. The government is not there for reviling them but instead for promoting them so that they can garner ever greater benefits for themselves because they are the ones who make development possible.
• The function of the government is to create conditions for the population to develop and that implies establishing clear, reliable and well-known rules of the game to which the government adheres. Among these rules there are those of raising productivity and distributing benefits so that the population progresses simultaneously. At present, the government invents rules daily, destroys those that exist, derides those who produce, and threatens to eliminate constitutional safeguards, all of which engenders a sea of uncertainty. Who is going to save, invest or produce in that context?
• China, whose example entertains such an attraction for the current administration, concentrated on two elements to achieve its impactful transformation: clear rules that were complied with and an implacable, even ruthless, dedication to eliminating obstacles to investment and economic growth. The results speak for themselves.  In Mexico the government began with a judicial reform and with the creation of yet more obstacles to growth and investment. It is thus common sensical to expect that the results will not be similar to those that China achieved in the past four decades.        
• All countries that have transformed themselves have followed a common rationale, that of looking toward the future, recognizing the obvious: to achieve being able to transform themselves it is necessary to stop doing what does not work. And that evidently includes not only the previous administration but also those of the past four decades. Observing the so-called Asian Tigers, and others like Spain, Chile and nations that are not so distinct from Mexico should make this more than clear. 
• Another common denominator of these nations lies in the similarly ruthless search for elevating productivity. The prescriptions for this are obvious, and there is not a sole exception: infrastructure, education, health, meritocracy rather than clientelism. All that in the context of two factors: clear rules and a judiciary that settles disputes. None of these elements appear on the agenda of the government, not the present one nor the past ones. 

The Mexican is extraordinarily adaptable, creative and entrepreneurial. It is enough to observe what Mexicans have achieved in the United States. The question is why the same thing does not happen in Mexico and the response is obvious: there, the rules are clear, judicial mechanisms function, and, above all, the incentives are in their totality oriented toward taking advantage of the capacities of individuals to prosper so that, all in all, the country itself comes to prosper. What a great paradox it is that Mexico is benefitted by their remittances instead of by the production occurring here in Mexico of that immense wealth and productivity!

In the last analysis, the crucial factor for development and prosperity is nothing other than the trustworthiness that a government generates not only through its programs, but also the institutions that sustain it and make it work. A country prospers to the degree that the government builds sources of trust and that these are institutionalized. Contrariwise, to the extent that everything -from the rhetoric up to the legislation and implementation of decisions- conspires against predictability, the result will be obvious and, instead of transformation, the country will end up in an involution from which it will not be able to recover.

www.mexicoevalua.org

@lrubiof

  Worldcrunch
Luis Rubio
November 21, 2024

Will Mexico’s leftist government show pragmatism in dealing with the next U.S. administration or just keep bashing Donald Trump and watch the dismal effects on its economy, asks Mexican political commentator Luis Rubio.

AMERICA ECONOMIA

-Analysis-

MEXICO CITY — U.S.-Mexico ties will always be complex: two nations that share a long border, yet have enormous historical, cultural and economic differences. Theoretically, the relationship is also a tremendous source of opportunities.

Now, following the United States’ presidential elections, Mexico’s government must clarify its expectations of our northern neighbor and how it intends to deal with the incoming Republican administration of Donald J. Trump. Our first priority of course is figuring out how to will deal with our own problems and shortcomings, which some will say is the ultimate source of our past discrepancies and tensions with the United States.

For the latest news & views from every corner of the world, Worldcrunch Today is the only truly international newsletter. Sign up here.

There are three dimensions to be considered here: Firstly, the depth and importance of our economic interaction. This may be the world’s most dynamic frontier (with more than $3 million worth of trade per minute), letting through the exports that keep our economy going. In a word, there is no way to minimize the importance to Mexico of this commercial relationship.

Blunt truths

The second aspect concerns changes, made evident in the last elections, affecting American society both inside and in its relations with the world. We’re seeing a veritable epochal shift in response to stark internal divisions, to changes to the so-called world order and China’s emergence as a factor in this change, and to resurgent geopolitics in a dynamic global setting.

Thirdly and more closely related to Trump’s recent triumph: the bilateral relationship will become more transactional, with often asymmetrical exchanges that will nonetheless be transparent.

In contrast with more traditional administrations, Trump is clear and direct, with simple likes and dislikes, and a tendency to be blunt in both private and public. Above all, not everything in his mind is about Mexico.

How does the Sheinbaum government perceive the United States?

His vision may seem brutal, but he is not necessarily mistaken, especially when speaking about our country. Indeed, you would have to be blind to insist all is well in Mexico. This might be the time then to act preventively: by tackling our own problems in areas like crime, education and energy, and more broadly by addressing developmental needs.

In plainer terms, how does the government of President Claudia Sheinbaum perceive the United States? Can it see that the opportunities and risks inherent in this relationship largely depend on our own decisions? In bygone days of protected national economies, governments could hide behind geographical distance or notions of sovereign independence. Today, these constraints have become gloriously irrelevant, and potentially harmful, notions when exportation is what decides whether we have prosperity, or no economy at all.

Looking in the mirror

In an ideal world, every country would define its interests, objectives and preferences, then set about realizing them in practice. In the real world, options are restricted and the cowwnsequences of errors, plentiful. That doesn’t mean Mexico must simply submit to U.S. demands but it does require addressing its own failings, which have contributed to the reality we all know today.

Geography has given us an immense opportunity.

In a word, the best way to assure that ‘sovereignty’ we so cherish is through a strong economy and developed society. Nothing beats those two elements. But has the new government grasped what this implies?

Geography has given us an immense opportunity, yet as a country we have failed so far to create the conditions allowing physical connection with our neighbors to power our country’s comprehensive development. We may appreciate or despise the Americans, but they are if nothing else, a singular opportunity. That’s how we should look at them.

Complex phase

As for our weaknesses, in the making over decades of bad decisions by policymakers, touch key areas as education (where government objectives seemingly pursue everything but personal development), healthcare (where the state has reduced options and impeded an efficient system that would even benefit the neediest), and our mistaken priorities concerning infrastructures for the economy.

We’ve engaged in absurd commercial spats, and are now planning to overhaul a stressed judicial system in a way that will surely send investors running. All in all, we have been consistently adept at blocking development.

The problem is not Trump or the Americans, but our own national myth-making.

The problem is not Trump or the Americans, but our own national myth-making, which may be the real obstacle to our development. We seem to have an open, dynamic Mexico on the one hand, sharing the land with a backward, crime-ridden and intimidated half of the same population. Trump has pointed this out, and we can hardly blame him.

The change of administration will usher in a complex phase, but our interdependence remains the bigger reality. Now, should we pick the wrong path and face down “the gringos,” or take this change as a cue to work differently, work better, and push our country to a better place?

https://worldcrunch.com/world-affairs/trump-sheinbaum-trade-2024

Luis Rubio

There is no better guide to determine whether a leadership connects with the circumstances of the country than gauge whether her vision of the past and of the future matches the budgetary reality. There is nothing more concrete than the content of the governmental budget, in that therein are shaped the priorities, the interests and the perspectives that the governor imprints on her administration and on the future of the nation. All the rest, as a former Mexican president once said, is demagoguery.

“The past is prologue” wrote Shakespeare, but in governmental matters the past frequently ends up being a burden because its components linger permanently embedded in the laws, rules, and above all, in budgets. Decisions once made, perhaps justifiable within the context from which they arose, they are in the end consummated deeds that become acquired rights, thus untouchable. Many labor contracts, cash transfers and innumerable budgetary items become political realities that restrain the country from advancing. The English novelist L.P. Hartley fully summed up the problem: “The past is a foreign country: they do things differently there”. The key to the budget of a new government dwells on dealing with the burdens of the past, especially the fiscal deficit, but building the foundations of a different future.

‘Nothing is more important than investing for the future’ reads the rhetoric of political candidates, but very infrequently -in Mexico practically never- do these investments come about. Regarding the government, the crucial part is not doing the things, but rather creating the conditions for these to occur, that implying investments under at least three key rubrics: education, health and infrastructure. In addition, given Mexico’s circumstances, a fourth factor must be included, that is, public security, without which all the rest would be irrelevant. Are these the priorities of the government?

Despite overwhelming evidence at the worldwide level that education is the principal asset to be able to count on for any nation, Mexico continues to be firmly lodged in the past. Worse yet, the outgoing government not only did not break with that sorry tradition, but also procured the politization of education to an even greater degree. Countries without natural resources, such as Japan, Korea and Singapore, converted education into their ticket out to development and all of these transformed themselves, achieving very high growth rates and a consequent rapid diminution of poverty. The same can be said regarding health, the obverse side of the coin of education. These the two crucial factors allow for not only the transformation of persons’ lives but also for the advancement of the development of the country. Are these vectors up for change in the budget?

Infrastructure is another crucial element in this equation but, in contrast with education and health, where the public presence typically predominates, it is perfectly feasible for infrastructure projects to develop with private financing, drastically reducing the need for scarce governmental resources. A view of infrastructure oriented toward the future would involve evident rubrics such as improving communications (and Internet) within the country, guaranteeing the supply of dependable water and energy and raising the quality of highways, ports and border interconnections. For example, it is obvious that Mexico City requires a new first-world airport; the same can be said of the highways (like that of Mexico City—Monterrey and all intermediate entities, all these absolutely saturated). Pondering the future implies not only abandoning irrelevant projects of the past, even those built yesterday…, but developing and building those demanded by the future and a dissatisfied and increasingly frustrated population.

The urgency of facing the problem of security is blatant. How is it possible to aspire to development if the prevailing violence impedes daily life? How is it possible to argue for the future if children live in permanent uncertainty and their parents still worse? The primary and most rudimentary reason for the existence of a government is security, but in Mexico that principle has been evaded in systematic fashion, blaming the neighbors or the past instead of assuming the fact that there are not conditions for the population to live safely and starting from there: from the bottom up. In contrast with the other priorities, this one is more complex to harness, but without this, the others diminish in viability. Paraphrasing Dag Hammarksjold, the former Secretary General of the United Nations, “Security was not created to take mankind to heaven, but to save humanity from hell.”

The previous government did not have one eye trained on the past, but both: as posted on a sign in London some years ago: “A nation that keeps one eye on the past is wise. A nation that keeps two eyes on the past is blind.” That is the key question: How to wrest the country free from this conundrum? That is the key question: no government can forget the past, but the mission of the government is to make possible the future. The budget must reflect that look: half toward the past and the other decidedly toward the future. 

www.mexicoevalua.org

@lrubiof

Luis Rubio

The relationship with the United States will always be complex due to the enormous differences between the two nations that are so historically, culturally and economically in contrast to each other, but that has not hindered the neighborhood from having become a source of enormous opportunities. Now, once the Americans have elected a new president, the Mexican government must determine what it expects from its neighbor and how it will relate with its new government. Most importantly, the real issue for Mexico is how will it deal with its deficiencies, because that is the true question at heart. 

There are three dimensions that must be appreciated. Before anything else, the depth and, above all, the transcendence of the economic interaction. It is perhaps the most dynamic borderland crossing in the world (with more than three million dollars in goods being traded every minute) and the exports that Mexico sends north constitute the main engine of growth of the Mexican economy. In short, there is no way to minimize the relevance and transcendence of this relationship.

A second focus is the fact, evidenced in this election, of the enormous change, even convulsion, that the American society is experiencing both internally and with respect to the rest of the world. The US is going through a complex adjustment process facing deep domestic polarization, a change in the international order and the emergence of China as a transformative factor and the return to geopolitics in a changing world. Its history has always been thus: as Churchill said about them, “Americans will always do the right thing only after they have tried everything else.”

Third, more directly regarding the new reality after the Trump victory, the bilateral relationship will return to a transactional structure where the exchanges will frequently be asymmetrical, but always transparent. In contrast with more traditional governments, Trump is clear, direct and entertains simple preferences, even while his delivery might be aggressive. Not everything in his repertoire is about Mexico: his vision is brusque, but not always wrong and only a blind person would argue that all is well in Mexico. Perhaps it would be high time to act in a preventive manner: by addressing in a direct and clear manner the issues that plague Mexico in security, education, energy, and, more generally, development.

For Mexico, all this is summed up in just one thing: how does the government of Claudia Sheinbaum see the U.S. and whether she understands the opportunities and consequences of its potential options. In an era of isolated economies, it was possible to pretend distance and independence, two artifices that, in the age of economic integration (and the immense importance of the exports for the functioning of the internal economy), are irrelevant, if not counterproductive.

In an ideal world, each country would define its interests, objectives, opportunities and preferences in the abstract to later seek the best way to achieve them. In the real world, the options are limited, and the consequences of erring are multiple. That does not imply that Mexico should yield to the demands of the U.S, but it should indeed call for admitting the deficiencies that the country confronts, these the very ones that gave rise to the reality in which the country finds itself in today. In a word, the only way to guarantee sovereignty lies in having a strong economy and a developed society. Nothing surpasses that. The question is whether the new Mexican government will be willing to assume what that implies.

Geography generated an immense opportunity for Mexico, but as a country Mexico has been negligent in bringing about conditions for the physical connection with its neighbors to the north for these to convert into a lever for the integral development of the country. Mexicans may appreciate or despise the North Americans, but the vicinity offers extraordinary opportunities should Mexico learn how to seize them.

And the deficiencies remit to decisions that have come to be made, or not made, throughout the decades in key areas such as education (where the development of individuals to their maximal potential is what is most distant from governmental projects); health (where instead of favoring an efficient and generalized system the options are closed, especially for the most needy); mistaken priorities (or inexistent ones) in matters of infrastructure to facilitate economic activity; absurd trade conflicts; and a legal regime, and now a judicial one, which today engages more in frightening off and diminishing investment than in promoting the country’s development. 

The problem is not Trump or the Americans. It is rather, Mexicans’ own mythologies, which have been the real hindrance to development. Exports show one avenue, but success depends on realizing and accepting that Mexico broke into two nations: the open, competitive Mexico, and the poor, struggling, violent and extorted Mexico. And both Mexicos live next to each other. That is the true complaint that Trump brings to the table, and he is not wrong…

The U.S. presidential succession anticipates a complex stage, but one cannot lose sight that interdependence is a two-way street. If instead of getting our act together, Mexicans were to confront the Americans, it would end up badly. The simultaneous beginning of two administrations is a great opportunity to change the national vectors toward development.

www.mexicoevalua.org
@lrubiof

Luis Rubio

In her speech before Mexican and North American businesspeople the President delivered three messages: first, the free trade agreement between the two nations is key for Mexico and should be strengthened; second, foreign investments are fundamental for the development of Mexico; and third, the investments are safe and there will be clear rules. She guarantees these. The big question is how credible is that guarantee for potential investors.

Madison, the U.S. President at the beginning of the 19^th century, explained why the statement of President Sheinbaum is problematic: “It may be a reflection on human nature that such devices [checks and balances] should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary.” For the “guarantees” that the President offers to entertain credibility among potential investors, be they national or foreign, these guarantees must be sustained in institutional structures that enjoy legitimacy and permanence, precisely contrariwise to what Mexico is experiencing these days.

In fact, only a few hours had gone by after the end of the President’s address before the bilateral business council for her own words to demonstrate the fragility of those guarantees. Instead of stating that Supreme Court justices would resolve disputes in judicial matters, therefore providing support for the separation of powers and for the counterpoise that the latter power would represent, the President asserted that “The judge is exceeding her authority” and that she, the President, is not going to obey an order of a judge, in the case of an “amparo” (a judicial protection order or redress), because “the petition of that judge does not command legal backing.” I do not sit in judgment with respect to the matter-in-dispute because I have no idea who is right in the specific disagreement, I only read the statements and deduct the obvious contradiction between what is being said in one forum and the other.

In the first forum clear rules and guarantees are offered while the second she makes clear that these rules and guarantees do not exist and that the President is the ultimate authority for determining what is legal and what is not. What would a company-associated corporate lawyer conclude from this situation regarding whether potential investors would be interested in investing in Mexico? As Madison in 1788 penned in Federalist Paper 51, checks and balances are the sole guarantee because human beings, the common man and the presidents, one and the same, are not angels and are prone to changing their opinion and embracing the vagaries of the moment.

Were clarity to be lacking in the presidential vision, some days later she closed the circle by claiming that “No judge, nor eight justices, can stop the will of the people of Mexico.” I do not know the will of the people of Mexico, since even with her broad margin of electoral victory the President does not represent the totality of the population. In addition, what was being voted on back on election day was in effect who would govern Mexicans, not the content of every decision or specific legislative proposal. As Ruchir Sharma wrote, “State meddling is rife [in Latin America]. Erratic stabs at judicial reform in Mexico, constitutional reform in Chile and presidential interference in state-owned companies in Brazil are adding to the uncertainty and scaring off international investors.” If the President is right, investment will grow significantly; if Sharma is right, complex times are in store for Mexico and for the project of the new government.

The questions remaining up in the air is whether, as the President stated, “their investments are safe in Mexico.” In the phrase that followed lies the key: “We should all possess the certainty that this will be conducted with clear rules.” Whosoever has observed the way the judicial reform was approved or, worse yet, the secondary laws, will harbor severe doubts concerning what is being understood as “clear rules.” What I observed comprised a collection of chaotic processes, special (and powerful) interests skewing the content of the articles of the new laws, a pack of hounds seeing how to take advantage of the proceedings and an overwhelming majority of legislators simply raising their hand without having any idea (or the least interest) about what was being approved. More than clear rules, what the judicial reform (and its derivatives) portends is the presence of true anarchy in the process of the election of judges, many of these chosen to respond to a certain political leader or criminal.

To an even greater extent than in the rules, what the government is fostering is a growing uncertainty with respect to the future, exactly the opposite of what an investor requires to put their patrimony at risk in Mexico. Uncertainty is not a novel factor in the Mexican government; in point of fact, eliminating uncertainty was the reason why NAFTA was procured in the nineties, thus it becoming the most important factor of stability and economic advance in the last fifty years. The problem today is that there are no guarantees of the permanence of the Agreement, while the Mexican government insists upon heightening the levels of uncertainty.

As the comedian Cantinflas said, “At voting time, it’s all promises… when it’s time to keep them, it’s all excuses.” Certainty is achieved with institutions, not with promises or personal guarantees. It’s never too late to start building it.

www.mexicoevalua.org
@lrubiof

Luis Rubio

“The political left has never understood that, if you give the government enough power to create ‘social justice,’ you have given it enough power to create despotism. Millions of people around the world have paid with their lives for overlooking that truism.” This is spelled out by Thomas Sowell, one of the keenest scholars in politico-economic affairs, above all in matters of discrimination, in that he is Black. This circumstance distinguishes him from innumerable intellectuals and politicians and gives him great latitude in asking questions that no one else would dare to or to present ideas that contravene “common sense.”

The recent judgement and sentencing handed down concerning García Luna, ex-Secretary of Public Security of Mexico, has situated the entire Mexican political system in the dock. Although Morena has attempted to elicit political rake-off from the verdict arising from the latter, the reality is that the judgement placed all of Mexico in evidence, especially its governments.  It would be easy to try to limit the damage by attributing all the blame to the individual being judged or to his former boss, but a more careful observation would reveal that that’s a street fight of little importance. What really occurred in that judgement is that it disrobed the political system in its totality because it functions at the service of organized crime independently of whomsoever is in charge.

The whole system of government has been condemned. If to that one adds the dysfunctionality that the self-same system entails for the exercise of its normal and day-to-day functions, the case-in-point takes on other dimensions.  It is enough to observe the unbalanced relationship in which the presidency engages with the remaining two branches of government and their total submission as of late. The same can be said of the relation between the governors and the presidency, all of which nurtures the insecurity throughout the country.

Mexicans live in a nation where the government is heavy-handed in the extreme, but it does not fulfill its responsibility to preserve the peace and security of the population while economic development advances. These essential responsibilities of any government are not complied with because the whole system is dysfunctional or, rather, because it was not designed for those objectives. The system was indeed designed for the control of the population, a goal it no longer achieves either, given that it is, de facto, devoted to facilitate the effective functioning of organized crime in general and of narcotrafficking in particular.   

The political system that persists was created after the end of the Mexican Revolution with the purpose of restoring order -civil and political- and, with that, of promoting economic development. The system was created expressly to confer on the president enormous power, to whom very efficient instruments of control and appeasement were granted. The political party, the distribution of political posts and access to corruption were central elements of the project of the post-Revolutionary government.

It is thanks to that structure that narcotrafficking could flourish without collateral damage.     When the movement of drugs began through national territory, from the middle of the past century, everything seemed planned for it to operate: a strong government that could establish rules and that was capable of making them be complied with; Colombian narcotraffickers oriented strictly  toward the U.S. market, that is, without permanent local ties; and, above all else, an environment propitious for local authorities -governors, political or military chiefs in each zone- to receive  “compensation” for their services in facilitating the transit of narcotics. Consistent with the normality of corruption as a tool of government, narcotrafficking prospered without surcease: the functionaries changed but the business, and the concomitant corruption, persevered.

Decades later the situation changed radically. First, however much Morena tries to recreate the old presidency, the country has already become decentralized; the great achievement of that era -iron-fisted control over criminality- disappeared from the map and there is no strategy in place, nor even a conception of what is necessary, to create a security system coherent with the current realities. The economy is infinitely more complex than back in the day; the governors, subordinated to the president as they are, have not engendered instruments to preserve the internal peace or to promote development. In sum, the existing regime doesn’t work: returning to the past is an absurd notion because it is impossible and incompatible with the circumstances of today and insecurity and violence escalate uncontrollably. In a word, there are there many García Lunas who have taken his place in this troubled river: the relationship between politics and organized crime has been normalized.

The central issue is that the country does not have a functional government while the presidency continues to be excessively powerful. However, as Sowell says in quote at the outset, there continues to be a retinue of believers who consider it best to carry on strengthening the presidency with its bent toward despotism. The evil lies in the excessive concentration of power; the solution is in a presidency with the necessary attributes but also with effective counterweights, which impede the individual occupying that function from abusing its power and from causing destruction left and right, with no limit.

 www.mexicoevalua.org

@lrubiof

Luis Rubio

In the golden era of the National Action Party (PAN), the nineties, the party had strong, focused leaderships and a strategic vision that permitted it to begin to build, step by step, the scaffolding that led to its eventually winning the presidency.  It was a party of citizens, financed by donations from the society. The mediocrity of its performance and of its leaderships in the successive years took place during the era of governmental financing. Might this be mere coincidence?

The performance of a political party is the result of a multiplicity of factors and cannot be simplified to the degree that the latter paragraph suggests. What can be stated, because it is obvious, is that the PAN did not achieve converting itself into an effective and successful governing party at the federal level. With many exceptions throughout its history of individuals, men and women, who proved to be extraordinary politicians and leaders, in general, the PAN members are not individuals with a vocation for power, something strange for a political party whose raison d’être is precisely that. Distinguished Mexicans of all socioeconomic levels have passed through the PAN, the majority desirous of constructing “a free and generous native land” as its motto has it, but with little inclination for confronting the dilemmas that characterize the labor of governing, which tend to be tough and often less than clear in moral terms. 

In contrast, the Institutional Revolutionary Party (PRI) is a party of power, born out of power and it always recruited persons whose nature and vocation comprised exactly the search for and administration of power. In an article from several years back, Aguilar Camin cites Juan Lezama with an anecdote that describes the PRI cover to cover in its Golden Age: “Then, Elpidio Mendoza attended his first successful anteroom session in the new PRIist era and arrived at the Campaign Desk. –Profession? -Politics. -I mean, what is it that you do and know. -Politics. -But a Doctorate, a master’s degree, a profession, something useful… -Just politics –repeated Elpidio Mendoza as he turned on his heel. And stick it out.”

The biographies of the PAN and the PRI are very distinct, starting with that the former had been engendered expressly as a reaction to the latter. Many citizens associate the PRI with corruption, while the PAN’s main driving force was its criticism of the PRI and the corruption. However, once in power, the PAN mimicked the PRI and became as corrupt as a governing party as its predecessor had been, but running a very inferior quality of governance. Nothing describes the contrast better than the declaration of a PRI politician at the time of the Peña Nieto presidential campaign, proudly declaring that “we might be corrupt but we know how to govern.”

Now that the Electoral Tribunal has endorsed the misdeeds of the current PRI leadership, whose objective appears to be to imitate the conduct of the parties in the service of the highest bidder, all this in the context of an opposition that is clearly in the minority, of almost irrelevance given the abusive way in which the distribution of seats in Congress was carried out, the question is whether either of these two parties will have the capacity to transform themselves in order to compete successfully against the almost hegemonic (but not uniform) movement that governs the country today, or whether new organizations will be born that are capable of competing.

The PAN is currently a much larger party in terms of votes won than the PRI, but both have come face to face with the imperative need to rethink themselves, re-conceive themselves, restructure themselves and  transform themselves into forces able to compete successfully with the Morena party in the elections of the coming decades, but starting in 2027 at the federal level and, much sooner, at the local level. Their alternative is plain and simple: die.

After the failed and poorly organized alliance of 2024, each of these formations will continue along its own trajectory, leaving the citizenry who did not vote for Morena (a nothing-to-be-sneered-at 45% of the total) before the tessitura of who could effectively represent it and safeguard its concerns and hopes. The myths and aversions at play between these two groupings are legendary (many justified) and there are wide swaths of the electorate that would never vote for one or the other. In this context, the question is whether one of these will be capable of, effectively, responding to the moment, the circumstance and the demands of the citizenry. The inevitable problems that will confront the Morena government constitute an enormous incentive for that transformation. 

As it stands, the outlook for the opposition is not commendable. The cost and complexity of creating a new political party is high, but my impression is that the decline of the PRI constitutes an exceptional opportunity for young and attractive leaders, under the guidance of experienced, illustrious and focused (ex) PRI politicians, to have a high probability of success. Freed from the yoke of the pathetic PRI leadership, the group of powerful women and men who are veterans of many fights, with a quality as statesmen that is almost non-existent in the other organizations, could make a big difference. If this group of visionary characters were capable of building a new political party, free of the scourges that characterized the PRI, it could become an unstoppable force against a Morena, a party-movement that seems to be hegemonic but has such a propensity to fracture, fragment and corrupt, in addition to the enormous governance dilemmas it will face, that it could well be defeated sooner than it might appear.

www.mexicoevalua.org

@lrubiof