..AMLO, Mexico’s answer to Donald Trump…


How scared should the world be of Mexico’s “likely” next president Andrés Manuel López Obrador ?…

Mr López Obrador, who has run for the presidency twice before, has a folksy air of incorruptibility that enchants many Mexicans. He promises a “radical revolution”.

Some hear that as a threat. Mr López Obrador has at times opposed the measures earlier governments have taken to modernise the economy.

His critics liken him to Hugo Chávez, whose “Bolivarian revolution” has brought ruin to Venezuela. The nationalist populism he offers is unlike anything Mexico has seen since the early 1980s.

And if the polls are right, he will win.

With that, Latin America’s second-biggest country will join a clutch of democracies where electorates have rebelled against the established order.

What is about to happen in Mexico feels akin to the election of Donald Trump in America, Britain’s vote to leave the European Union and Italy’s turn towards populism.

It may be repeated in Brazil, where the front-runner to win the presidency in October is Jair Bolsonaro, who speaks viciously about gay people but warmly of military rule.

The causes of popular anger vary. In Latin America, as elsewhere, voters are furious at elites they regard as corrupt, ineffectual and condescending.

Just as American populists decry the “swamp” in Washington and Brazilians are aghast at the filth of their political class, Mr López Obrador fulminates against the “mafia of power” that he claims controls Mexico.

A leap into the unknown

The charismatic leaders who ride these resentments to power are almost always false prophets, promising security and prosperity even as they erode their foundations.

The danger they pose to new democracies is greater than in more deeply rooted ones.

Mr Trump is constrained by Congress, an independent judiciary, a free press and a bureaucracy with a long tradition of following the law.

Mr López Obrador, by contrast, will govern a country that has been democratic only since 2000, and where corruption is widespread and growing worse.

The next president’s main job should be to reinforce the institutions that underpin a modern economy, democracy and above all the rule of law.

The risk with Mr López Obrador, who will be the first non-technocratically minded president in 36 years, is that he will do precisely the opposite (see Briefing).

Mexican technocracy has had its successes. Orthodox economic policies have ensured relatively steady if unspectacular growth since the 1990s.

Thanks to the North American Free-Trade Agreement (NAFTA) with the United States and Canada, which took effect in 1994, Mexico is the world’s fourth-biggest exporter of motor vehicles.

The outgoing president, Enrique Peña Nieto, opened energy and telecoms to competition and is trying to impose higher standards on a failing school system.

Alas, progress has been slower than politicians promised and is uneven. Mexico’s south, where a quarter of the population lives, has ox-drawn ploughs rather than assembly lines. By Mexico’s own measure, nearly 44% of its citizens are poor.

The main source of Mexicans’ discontent is not inequality but crime and corruption, which have run riot under Mr Peña.

The murder rate has broken a record set in 2011. The ruling party has seen countless scandals. It emerged that Mr Peña’s wife’s $7m home had belonged to a government contractor.

In an ordinary election, Mexicans would ditch Mr Peña’s Institutional Revolutionary Party and turn back to the conservative National Action Party.

But after its last crime-ridden years in power, from 2006 to 2012, they are fed up with that, too. They want change, which Mr López Obrador certainly offers.

The firebrand from Tabasco

What sort of change remains to be seen.

The biography that beguiles his supporters is replete with danger signals. Time and again he has shown contempt for the law. He has urged people not to pay their electricity bills.

After he lost in 2006 his supporters proclaimed him the “legitimate president” and blocked Mexico City’s main street for weeks.

He has said that the courts should be an instrument of “popular sentiment”.

His supporters say he has matured, and that his record as Mexico City’s well-liked mayor from 2000 to 2005 shows that he was always pragmatic.

He has made his peace with NAFTA and no longer talks of reversing the energy reform. He promises to run a disciplined budget, to respect the independence of the central bank and not to raise taxes.

Some of his ideas, like a nationwide apprenticeship programme, make sense.

But he seems to have little idea how a modern economy or democracy works.

He disparages independent institutions, such as the supreme court. He talks of making Mexico self-sufficient in food and of building oil refineries, which are unlikely to make business sense.

His ideas are simplistic. He wants to halve the salaries of senior officials, including the president, and to subject himself to a recall referendum every two years.

Though personally clean, he has formed alliances with politicians who are anything but.

He denounces Mr Peña’s education reform, which offers poor children a chance of a brighter future. Yes, Mr López Obrador has reinvented himself, but as a bundle of contradictions.

That makes his presidency a risky experiment.

The financial markets might tame a López Obrador government. But a congressional majority for his party might equally encourage radicalism.

It might go well if, say, he curbs corruption or stands up to America over trade.

More likely, progress will remain elusive. Mexico cannot stop graft without the institutions Mr López Obrador scorns.

And with protectionists at the helm in its two biggest member-states, NAFTA could well collapse.

That would further poison relations with the United States, possibly imperilling co-operation over drugs and immigration.

We worry about Mr López Obrador’s presidency, but wish him luck.

If he fails, worse may follow.

-30-

This article appeared in the Leaders section of the print edition under the headline “Mexico’s answer to Donald Trump”
From the June 23, 2018  Print Edition

EVEN a short walk in Tabasco can feel unbearable.

When Graham Greene visited Mexico 80 years ago, he lamented the tropical southern state’s “blinding heat and the mosquito-noisy air” that left “no escape for anyone at all”.

Now Tabascans can at least endure the humidity with fans and air-conditioning. But half of the state’s residents are poor and electricity prices are among the highest in the country. Twenty-three years ago a local politician decided to do something radical.

Andrés Manuel López Obrador (known as AMLO), fresh from an unsuccessful run for governor, organised a campaign of “civil resistance”, instructing Tabascans not to pay their electricity bills.

The campaign has lasted for over two decades. Some 570,000 Tabascan households have racked up debts with the Federal Electricity Commission (CFE) averaging 10,500 pesos ($500) each. In 2015 the CFE began another bout of cutting off non-payers.

Mr López Obrador, by then head of his newly created party, the Movement for National Regeneration (Morena), summoned a brigade of vigilante electricians to reconnect them. He also warned the state’s governor, Arturo Núñez Jiménez, that his palatial office would suffer power cuts were he to try disconnecting people again.

These events sum up what many Mexicans have long liked about Mr López Obrador, and what others fear.

His concern for the poor and wish to improve their lot is sincere.

However, Mr López Obrador has a shaky grasp of economics—urging some people not to pay their bills tends to drive up prices for everyone else, for example. And he has little respect for rules or institutions.

This matters because Mr López Obrador is set to become Mexico’s president in an election on July 1st. He has a poll lead of 25 points over his nearest challenger, Ricardo Anaya of the conservative National Action Party (PAN). José Antonio Meade, a non-party candidate picked by the ruling Institutional Revolutionary Party (PRI), is further adrift.

There is also a chance that a coalition led by Morena, founded four years ago, will win control of congress.

Mexicans are likely to deliver a voto de castigo (punishment vote) because the president, Enrique Peña Nieto of the PRI, is the least popular leader for decades.

People are also angry at the PAN. Though the PAN turfed the PRI from power in 2000, ending seven decades of one-party rule, it failed to govern much better and the PRI returned under Mr Peña in 2012.

Mr López Obrador promises drastic change.

Mexico will have a charismatic president for the first time since the 19th century, says Enrique Krauze, a historian who first called him a “tropical messiah”.

On the campaign trail he says that a “fourth transformation” of Mexico is coming, after independence in 1821, a civil war and liberal reforms in the 1850s and 1860s, and a revolution that began in 1910. The change will be “as profound” as the revolution, but “without violence”, he promises.

He vows to overthrow the “mafia of power”, that he believes holds back Mexico.

When he says he will “uproot the corrupt regime”, he is talking about everyone in the political class except himself and his circle. His opponents say he wants to unravel the market-friendly policies that the PRI and PAN have cleaved to since the 1980s.

Some fear that in a country where democracy is barely old enough to order a tequila, a charismatic populist might seriously undermine it.

Third time lucky

Mexicans are fed up.

During 30 years of growing democracy and economic liberalisation, they were told that Mexico would become a rich country. Income per head has risen by 40% over the same period. But growth has been uneven. The parts of the country near the United States have prospered while peasants in the south still toil outdoors in the sun.

The economy has been sluggish in recent years, partly thanks to a low oil price. Meanwhile, Mexicans are furious about corruption and terrified of gang violence.

Mr López Obrador governed Mexico City between 2000 and 2005, before unsuccessful presidential runs with the centre-left Party of the Democratic Revolution (PRD) in 2006 and 2012.

The question as he seeks the presidency for a third time is whether he will fix some of what is wrong with Mexico, or replace its (admittedly imperfect) institutions with a more personal and messianic style of government.

The acronym of Mr López Obrador’s party is an allusion to La Virgen Morena of Guadalupe, Mexico’s patron saint. It is also a term used to describe darker-skinned Mexicans, who often live in the poor south.

The gap between Mexico’s richest and poorest regions is twice as wide as the next-biggest one in the OECD, in Chile. That is partly because the North American Free-Trade Agreement largely benefited northern Mexico, where American firms built factories and created millions of jobs.

Mr Núñez says Tabasco is “forgotten” by central government, a feeling many southerners share.

Mr López Obrador, who would become the first president born south of Mexico City in half a century, wants to redress the imbalance.

He has plans for new infrastructure in the south, vowing to pave every road in Oaxaca, a mountainous state with a poverty rate of 70%. He also promises a railway from Quintana Roo to Chiapas, and a road and rail corridor across the Isthmus of Tehuantepec, in Oaxaca and Veracruz, paid for with loans from China.

He would also build two oil refineries, in Campeche and Tabasco.

A fanciful scheme for “food self-sufficiency” would include price guarantees for crops produced by southern farmers.

Winning votes in the south was never hard for Mr López Obrador. What is different this time is that northerners, who used to worry that he would wreck the economy, are warming to him.

Incredibly, he is now more popular among the richest third of voters than among the poorest. “He has matured,” insists Rafael De Dávila, a previously PAN-voting electrical engineer in Escobedo, a suburb of Monterrey, the state capital of fast-growing Nuevo León.

That may be true. Mr López Obrador has courted voters who wearily recall his antics in 2006, when his protesting supporters shut down Mexico City for months after he lost the presidential election narrowly to Felipe Calderón.

He is making fewer mistakes on the campaign trail this time. Advisers have, for example, persuaded him to drop contentious plans for a referendum to repeal energy reforms, which in 2014 allowed foreign oil firms into Mexico for the first time since 1938.

His campaign produces lighthearted videos, most recently a series featuring middle-class Mexicans confessing to friends and family that they are “AMLOvers”.

Crucially, he is more relaxed. When rumours spread that Russia was meddling in the election to favour him, he responded with a video on social media.

Standing by a harbour, he introduced himself with a smile as “Andrés Manuelovich” and said he was waiting for a submarine to arrive with a delivery of Russian gold.

His argument that the political system is broken has been assisted by the torrid tenure of Mr Peña, who entered office on a wave of optimism.

Mr Peña forged a coalition of Mexico’s main parties to pass sweeping reforms and aimed for growth of 6% by the end of his term.

But the most important changes—to energy and education—will take years to be felt. The collapse of oil prices in 2014 hurt the economy. Under Mr Peña the economy has grown by only 2.5% a year (see chart).

Mr Peña is unpopular mainly because his government has been passive and unaccountable on the two issues that matter most to Mexicans, corruption and security.

Mr Peña vowed to halve a murder rate that had rocketed after his predecessor, Mr Calderón, sent the army to fight drug cartels.

But after locking up several drug kingpins, his administration did not respond when their would-be heirs began to fight each other and diversify beyond drug smuggling.

Mexico is on course for 32,000 murders this year, a record high and double the toll in 2014.

The best-known violent crime during Mr Peña’s tenure was the disappearance in 2014 of 43 student teachers, who were pulled off buses and almost certainly murdered.

An early investigation was botched. Later ones showed that local officials and drug gangs were shockingly entwined.

Mr López Obrador’s rivals talk about a “smarter” approach to crime.

He offers a vague “amnesty” to low-level drug dealers. Many Mexicans, hungry for peace, think he cannot do worse than today’s government.

Another hard job

Then there is corruption.

Under Mr Peña, it has grown more blatant, or at least been exposed more effectively.

Two ministries run by Rosario Robles, now secretary of agrarian development, saw 1.3bn pesos vanish from their coffers. Several governors from the PRI face charges of treating state funds as personal piggy banks.

The government is accused of shelving a bribery investigation into Emilio Lozoya, a member of Mr Peña’s campaign team who went on to run Pemex, the state oil firm.

During Mr Peña’s tenure Mexico has fallen 30 places in Transparency International’s corruption index. It is now 135th, tied with Russia.

Any public faith that Mr Peña would curb graft melted away in 2014 when a journalist revealed that his wife’s $7m house had belonged to a businessman who had won several contracts under his presidency.

Under previous governments, crooked bigwigs would typically build, say, a road and take a cut, explains Armando Santacruz of Mexico United Against Crime, an NGO.

Now, he says, they invoice for the road, funnel the money through phantom companies, build nothing and run off with all the loot.

Corruption has grown more visible not because the state is adept at investigating it but because of a nascent civil society and social media.

In 2015 when David Korenfeld, boss of the state water authority, took a government helicopter to go on holiday with his family, a neighbour snapped some photos of them and their suitcases. Mr Korenfeld, an old friend of Mr Peña, resigned after the images went viral.

Mr Peña’s government has hampered the fight against corruption. Civil-society leaders and journalists say they report corruption to ministers, but nothing happens. Institutions to catch and prosecute graft remain pliable and neglected.

Critics point to a bribery scandal involving Odebrecht, a Brazilian construction firm, which has led to people being charged in nearly every Latin American country. The exceptions are despotic Venezuela—and Mexico.

Mr López Obrador promises to “eliminate, not reduce” corruption through an attitude of zero tolerance and the shining example of his own incorruptibility.

Yet in 2003 while he was mayor of Mexico City René Bejarano, a close political associate, was caught on video accepting $45,000 in cash from a businessman. As mayor he refused to enforce rulings from the supreme court, including one to clear a bottling factory taken over by striking workers.

He was the superior arbiter in this case, he explained, because the court lacked “social sensitivity”.

He seems uninterested in creating the independent institutions needed to expose and prosecute graft effectively. “He thinks there will be a big bag of corruption money he can find and spend on the poor,” huffs an aide to a rival candidate.

Mexican stand-off

Mr López Obrador openly scorns civil society and the supreme court, neither of which will bend to his will as president. He pledges referendums to solve policy questions, including a recall vote every two years during his presidential term.

To some that looks like accountability. To others it is a troubling break with representative democracy and the principle of single-term presidencies enshrined by the revolution.

In stump speeches Mr López Obrador touts a brand of austere populism. There can be “no rich government with a poor populace,” he says. He vows to halve the president’s salary and those of senior bureaucrats, refrain from spending public money on clothes, sell the presidential plane and move the official residence to somewhere more humble.

He derides a $13bn airport proposed for Mexico City, saying that its construction was unnecessary and riddled with corruption. Government ministries in the capital are to be scattered around the country.

He is also socially conservative, opposing both legal abortion and gay rights.

Strangely absent from this populist brew is anti-Americanism, despite the unpopularity of America’s president. Mr López Obrador insists he will not recklessly provoke Donald Trump. “We have to have enough patience to get to grips with President Donald Trump, to maintain the relationship,” he said on June 10th.

To soothe fears that he would be fiscally irresponsible, he is rumoured to be adding to his team Guillermo Ortiz, a former chief of the central bank, and Santiago Levy of the Inter-American Development Bank. Their task will be to find the money to pay for their boss’s policies.

The most expensive include a universal pension for the elderly and disabled, scholarships for poor students and an overhaul of water infrastructure.

Those promises alone would cost 1.7% of GDP each year at a time when the budget deficit is 2.9% of GDP.

Unlike Mr Trump, who abhors policy details, Mr López Obrador obsesses over them. One adviser recounts his poring over the party’s 461-page election manifesto and crossing out policies he deemed unaffordable.

As mayor of Mexico City he worked with the private sector to refurbish the city centre. He did not run up huge debts and left office with an approval rating of 85%. All this points to a pragmatic streak. Optimists hope that he will offset extra spending with cuts elsewhere.

Pessimists note that Hugo Chávez initially posed as a moderate, too.

Mr López Obrador will surely not plunge Mexico into tyranny and destitution the way Chávez did Venezuela.

But many question his sincerity. If he really cares about curbing corruption, why did he enlist Napoleón Gómez Urrutia, a mining-union leader accused of embezzling millions of dollars, as a senate candidate for his party?

If the PRI is part of the mafia of power, why is he encouraging its senior officials to join him?

And if he truly cares about the poor, why does he vow to roll back reforms that would make their schools better by hiring teachers on the basis of merit?

Victory is in AMLO’s palm

The most likely answer to these questions is a cynical one.

His young party needs foot-soldiers to knock on doors and get out the vote. Last year it had just 320,000 members, according to the National Electoral Institute. The PRI had double that in the state of Puebla alone.

By opposing education reforms, Mr López Obrador wins the support of a 100,000-strong teachers’ union. His overtures to Mr Urrutia, whose union boasts 120,000 members, will bring more recruits and lure other union bosses.

The trickle of PRI officials defecting to Morena may become a flood if the PRI is thrashed on election day.

AMLO aims high

Some suspect that Mr López Obrador’s plan is not only to dislodge the PRI but to adopt its model as a big-tent party.

He sees echoes of the social division and violence during the revolution, which subsided when the PRI centralised power and invited everyone to join it. The stronger Morena grows, he may think, the more governable and harmonious Mexico will become.

One thing looks certain. In whichever direction he takes Mexico, resistance will be weak. For the first time a single party is set to control the presidency, capital and congress all at once.

Presidents in the 20th century were subservient to the PRI. Mr López Obrador has created a party which answers to him.

Every other party faces destruction at the polls with only a divided PAN in a position to oppose him.

Mr Nuñez, who has known Mr López Obrador since the 1980s, criticises his doctrine of “civil resistance”.

It has created a culture of non-payment in Tabasco not just for electricity bills, but also for land taxes and water bills.

He recalls telling Mr López Obrador in 1996 about the importance of electoral reforms to formalise democracy.

“He told me: ‘They are not important. This country is going to advance with popular mobilisations, not with legal reforms.’” The time to test that theory has arrived.

 

This article appeared in the Briefing section of the print edition under the headline “Tropical messiah”
| Mexico City and Villahermosa, Tabasco

####

……tough neighborhoods getting tougher by the day……w

 

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