How AMLO’s Plans to Transform Mexico Ran Into Reality

Mexican President Andres Manuel Lopez Obrador rode to a landslide election victory in July 2018 by promising to transform Mexico. AMLO, as he’s known, pledged to restore security, end corruption, spur development and change how Mexicans view their leader. He inherited a slowing economy and a belligerent neighbor to the north in U.S. President Donald Trump. Here’s a look at what he’s managed to change and where he’s fallen short.

Safety and Security

  • THE CHALLENGE: Mexico has long been a battleground among drug cartels moving cocaine and other narcotics from South America to consumers in the U.S. The nation’s own southwest serves as a cradle for heroin production thanks to bountiful opium fields. The homicide rate soared from 2007 to 2011, rose steeply again starting in 2016 and set a record in 2018, with an average of 91 killings per day. During 12 years of a crackdown under AMLO’s two predecessors, Mexican military forces assigned to stem drug-related violence and organized crime were accused of widespread human-rights violations including extrajudicial killings and torture.
  • AMLO’S APPROACH: To end reliance on the military, he created a new National Guard under civilian command and assigned tens of thousands of those forces to the most violent parts of the country. He launched a program that gives 3,600-peso ($190) cash transfers to out-of-work, out-of-school youth for taking on apprenticeships, in hopes of addressing security through development.
  • RESULTS SO FAR: The National Guard didn’t officially begin operating until July, and in the meantime murders continued to climb, surpassing 14,000 in the first half of the year, up 4.4% from 2018, which stands (for now) as the deadliest year on record. Thousands of National Guards were sent to help stop undocumented migrants from Central America on Mexico’s southern border after Trump threatened tariffs.

Corruption

  • THE CHALLENGE: Corruption has long been endemic in Mexico, transcending which party is in power and resisting efforts at reform. Mexico was ranked 138th out of 180 countries in Transparency International’s Corruption Perceptions Index in 2018, tied with Russia. The escape of drug lord Joaquin “El Chapo” Guzman from a maximum-security prison with the complicity of officials in 2015 caused embarrassment. Perhaps the biggest scandal involved the purchase of homes from a government contractor by President Enrique Pena Nieto, his wife and his finance minister.
  • AMLO’S APPROACH: He slashed the payrolls of government ministries, citing largess and political patronage. His party is pushing a bill through Congress to ban public employees from working for private companies that they regulated for at least 10 years after they leave government to address his criticism of past cozy relationships between government and business. And he canceled a $13 billion airport for Mexico City that he said was a waste of taxpayer money and riddled with overly generous contracts for private developers and investors, including billionaire Carlos Slim.
  • RESULTS SO FAR: AMLO’S airport replacement plan has lots of doubters, and no one involved in the original project has been prosecuted. Weeks after taking office, AMLO deployed the army to combat gasoline theft from state-owned company Petroleos Mexicanos by drug gangs that he said was resulting in losses of $3.5 billion annually. Pemex, as the company is known, said earlier this year that those efforts have reduced robbery by more than 90%. Though AMLO said during the campaign that he wouldn’t focus on past cases of corruption, prosecutors are pursuing allegations of graft in a fertilizer plant purchase by Pemex and issued an arrest warrant for former Chief Executive Officer Emilio Lozoya, previously a close ally of Pena Nieto. Juan Ramon Collado, an attorney with ties to Pena Nieto, was arrested on money-laundering charges.

Economic Development

  • THE CHALLENGE: AMLO pledged to lift average annual growth to 4% — a high bar, considering that Mexico averaged 2.5% growth in the last 25 years. The International Monetary Fund cut its growth forecast for Mexico for this year. Oil production is floundering as Pemex struggles to reverse 14 years of declining output and reduce $106.5 billion of debt.
  • AMLO’S APPROACH: Rather than spend more to spur growth, his administration committed to building the widest budget surplus in more than a decade to cut debt and improve the nation’s global reputation. AMLO has slashed spending on government overhead, cutting the budget for his own office by almost 90%. His cancellation of the airport and freeze of oil auctions have put a chill on investment. For Pemex, the government secured a record $8 billion bank loan, provided tax relief and pledged not to issue new debt this year. AMLO has stuck with his prediction for the economy to grow 2% this year.
  • RESULTS SO FAR: The economy may have slipped into recession in the second quarter. Economists forecast 1% growth for this year, based on a Bloomberg survey, which would be the lowest since the 2009 financial crisis. AMLO hasn’t gotten any help from the central bank, which has kept the key interest rate at a decade-high 8.25% with inflation above its 3% target. Fitch Ratings downgraded Mexico’s sovereign credit rating in June, citing the risk from Pemex’s deteriorating credit profile. The agency also cut Pemex’s rating to junk.

Relations With the U.S.

  • THE CHALLENGE: Trump singled out Mexico (and Mexicans) for criticism on his first day as a candidate for U.S. president. He promised to make Mexico pay to build a border wall and to rip up or overhaul the North American Free Trade Agreement, the 1994 deal that also includes Canada. More recently, he threatened to impose a 5% tariff on all Mexican goods, rising to 25%, if Mexico didn’t do more to reduce the number of migrants from Central America reaching the U.S. border.
  • AMLO’S APPROACH: AMLO promised voters that he would stand up to his American counterpart, writing a book called “Listen, Trump” and comparing his rhetoric toward Mexico to that of Adolf Hitler. As president, AMLO has sought to avoid conflict with Trump. Despite being a longtime Nafta critic, he embraced Trump’s replacement version of the deal. In response to Trump’s tariff threat, AMLO allowed migrants who claim asylum in the U.S. to await their results in Mexico.
  • EARLY RESULTS: Trump has praised AMLO since Mexico began stepping up border control operations in early June. Trump curtailed his demand for Mexico to pay for a border wall and is trying to get the U.S. Congress to do it instead — a win for AMLO. Mexico’s Senate, where AMLO’s alliance has a majority, passed the renegotiated version of Nafta known as the United States-Mexico-Canada Agreement, or USMCA, making Mexico the first of the three partners to do so. Apprehensions by U.S. Customs and Border Protection at America’s southern border, a proxy for undocumented migrants, fell 28% in June from May.

Image of the Presidency

  • THE CHALLENGE: In part due to omnipresent security risks, Mexico’s presidency developed into something of an imperial one, carried out with scripted speeches that involved heavy security screening for attendees. Pena Nieto almost never took questions from the press and generally kept his schedule free of public events on Saturday and Sunday.
  • AMLO’S APPROACH: AMLO pledged that there would be “no divorce between power and the people” and that he would spend five days a week in municipalities and states of the country gathering the feelings of the people and solving problems and evaluating the progress of development and welfare programs.
  • RESULTS SO FAR: Forging an image of the president as a man of the people is perhaps the biggest change that AMLO has brought about. Following through on campaign promises, he travels only on commercial airline flights, put the presidential Boeing Co. 787 Dreamliner on the auction block and opened to the public the gated former presidential compound, choosing to live in his own home (though in July he moved into an apartment in the palace where he works). He’s shunned armed security, riding through the streets of Mexico City in a white Volkswagen Jetta and wading into crowds to embrace supporters or even to confront protesters. Rather than rest on weekends, he travels around the country, visiting some of the most impoverished communities. At his urging, legislators passed a law that cut his after-tax salary (and those of other highest-earning public servants) to 108,000 pesos ($5,600) a month, half that of his predecessor. He had a 70% job approval rating in a July poll by Reforma and the Washington Post.

Source: bloomberg

The Mazatlan Post