Mexico’s Fourth Transformation Might Not Transform the Country After All
Andrés Manuel López Obrador entered the presidency with the promise to end political corruption as well as economic and social injustice in Mexico. But is he really different from those who came before him?
Mexico’s position in the international community has always been a peculiar one. Its economy is stable enough to be considered part of the G20 group. But, the nation’s high dependence on economic treaties with the United States, foreign tourism, and the oil industry makes it susceptible to downturns. Both the COVID-19 pandemic and the disputes between Saudi Arabi and Russia over oil prices have become the perfect combination to bring Mexico’s GDP down. The president’s highly dependent populist strategies have not helped either, as the International Monetary Fund calculates an estimated loss of 6.6% of the country’s GDP this year alone¹. The Latin American country could be facing one of the hardest recessions of its history, as well as an immense public health crisis.
Andrés Manuel López Obrador, or AMLO, entered the presidency two years ago with the promise to bring Mexico its “Fourth Transformation” after his third trial for the executive position. The country was tired of years of violence, lack of transparency, poor economic development, and, most of all, corruption. After the 2018 presidential election, AMLO won the big seat with more than half of the total vote, proving that Mexican society was willing to put their trust on a leader with an unstable platform but with tempting promises.
AMLO’s assurance to end corruption, however, came at a tremendous economic cost to the already unstable nation. He canceled national projects worth millions of Mexican pesos, such as the new airport in Mexico City, and created ones without proper analysis, such as the Maya Train in the southern part of the country. As a result, big international investors saw the nation as a potential financial liability. Despite the disapproval of many of the nation’s most powerful businessmen, the president’s populist strategies made him lovable with the people, as he has one of the most significant approval ratings in the world.
But Mexico’s desperate attempt at eliminating the corruption that has lead its nation into decades of economic and social instability might have probably costed the same unstable results they were trying to get rid of in the first place. Multiple members of his administration or even his so declared transformative party “Morena” have been involved in plenty of corruption scandals. From the lack of clarity when it came to reporting the luxury homes from the head of the electricity department to the leader of Morena claiming to have made an error in her taxes (said error saved the politician more than $850,000)².
Despite promising to bring effective strategies and policies to end corruption, similar discrepancies regarding transparency in Mexican politics still occur during this administration. For example, it is estimated that 75% of public contracts are done without any bids³, meaning that these expensive projects tend to land on the hands of the president’s associates or friends. Take the case of Ricardo Salinas Pliego. He won the opportunity to handle a social program that distributes government funds to thousands of Mexicans through his bank “Banco Azteca” without a public bid⁴.
Mexico has taken a significant financial punch with this new presidential administration. And as said before, the global health emergency has only made Mexico more prone to a deep recession.
When it comes to strategies to deal with the current crisis, AMLO has decided to stick to the populism that made him president in the first place. In short, Mexico’s economic recovery strategies consist of assistance to those in the middle-to-lower class. Owners of small businesses and everyday workers are safe for now, as the government has mandated either loans or continuous paychecks for them. But surprisingly, the private sector has gotten nothing. Businesses will not be allowed to file taxes on later dates or apply to loans from the government to keep their staff on payroll. They are expected to continue functioning as usual without any help during times of crisis⁵, which is merely unrealistic if what the nation wants is to achieve economic growth.
The people of Mexico were desperate to find a president who would not betray them; they craved honesty and transparency; therefore, it was natural that most of the society would fall unto populist ideas and speeches.
The nation needs more than just empty promises and leaders who hug their supporters. During hard times such as this one, it is vital to have a head of state that not only the people but the private sector and the international community can trust.
¹ ⁴ ⁵ “Mexico’s bazooka-shy president.” The Economist, 16 Apr. 2020, www.economist.com/the-americas/2020/04/16/mexicos-bazooka-shy-president.
² ³O’Neil, Shannon K. “Mexico’s Lopez Obrador Is Stoking Corruption, Not Fighting It.” Bloomberg, 4 Feb. 2020, www.bloomberg.com/opinion/articles/2020-02-04/mexico-s-lopez-obrador-is-stoking-corruption-not-fighting-it.
⁴ Welhan, Robbie. “Billionaire Mexican Is Behind Company Suing Government for $2.4 Billion.” The Wall Street Journal, 15 Nov. 2019, www.wsj.com/articles/billionaire-mexican-is-behind-company-suing-government-for-2-4-billion-11573849316.
