Nathaniel Parish Flannery Contributor Leadership Strategy Latin America-focused political analyst FORBES
Foreign investors excited about the launch of the new US-Mexico-Canada (USMCA) trade deal need to understand the potential risks associated with breaking ground on new projects in Mexico right now. Mexico’s President Andres Manuel Lopez Obrador is widely recognized by policy analysts and investment advisors as an incompetent demagogue who cares more about crafting speeches and consolidating political power than in designing and implementing policies that can meaningfully address his country’s longstanding problems. During 2019, in his first full year in office, Lopez Obrador prioritized performing political theater and promised the public he would build multi-billion-dollar pet projects. He promotes himself as a transformative leader, but so far his highest priority initiatives are a new oil refinery in his home state and a controversial diesel-powered train that would bring tourists through some of Mexico’s most pristine and delicate ecosystems. Improving security? Reigning in monopolies? Fighting for progressive tax reform? Working to help Mexico’s sprawling informal economy evolve? These are all difficult but essential tasks that Lopez Obrador has shirked. Rather than lead Mexico, he simply continues to campaign.
Constantly antagonizing and demonizing his political rivals and his critics in the media, Lopez Obrador proves himself to be a man without a plan, a blundering charlatan who excels at identifying Mexico’s worst problems but has utterly failed to assemble a team of advisors capable of designing and implementing meaningful reforms. Even while many of his closest allies and most fervent apologists are caught up in corruption scandals he continues to insist that criminal activity is a moral problem that can be addressed by promoting personal rectitude rather than attempting complicated institutional reforms. He continues to criticize his predecessors for their failures in controlling crime, even while a record-breaking 35,558 people were killed during his first year in office. While violent crime continues unabated in 2020, he blindly insists that his job creation programs will encourage cartel gunmen to renounce their naughty habits and look for honest work. He hasn’t yet grappled with the potential impact of rising unemployment as businesses around the country hemorrhage workers and job losses mount. Just in June Mexico’s economy may have lost more than 130,000 jobs. The economy could contract by more than 10% by the end of the year. The challenges Mexico faces in 2020 have disrobed Lopez Obrador of any semblance of competence. He continues to travel to promote his train project, refuses to wear a mask, and promises the public that the virus has been tamed and that the economy will bounce back quickly.
Mexico is in trouble because Lopez Obrador has no viable plan for confronting the triple crisis of worsening security problems, an out of control pandemic, and an already-unfolding economic collapse. While sometimes derided as a “socialist” by misinformed TV news commentators in the U.S., Lopez Obrador is rightfully lambasted by progressives in Mexico for embracing a hands-off, neoliberal approach to confronting the virus and the unfolding recession. He lauds Mexico’s residents for their individual responsibility but hasn’t considered diverting money away from his refinery and train to provide publicly-funded solutions in the form of cash handouts or food deliveries to help low income urban families stay at home and impede the spread of the coronavirus. As Lopez Obrador embraces austerity during this crisis, Mexico’s families are left to fend for themselves. Under Lopez Obrador’s leadership, Mexico is facing a very, very challenging year. Through sheer stubbornness and ineptitude he is failing to respond to the emergency and tens of thousands of Mexicans are paying with their lives. By the end of Lopez Obrador’s sexenio in 2024 it’s likely that 100,000 Mexicans will have lost their lives to coronavirus and another 150,000 will have died from violent crime.
Over the last few weeks I’ve been sharing articles on the monumental challenge Mexico faces in confronting simultaneous crises in the areas of public health, a historically bad recession, and record-breaking levels of violent crime.
On June 30, I shared this Bloomberg story by Eric Martin. He explains that when it comes to the quantifiable economic impact of the coronavirus crisis, “Mexico has been among the countries hardest hit by the pandemic due to the fall in trade with the U.S. and the crash in oil prices, while more than 12 million citizens lost or were suspended from their jobs in April. The data is consistent with the view that Mexico’s economy will shrink 10% or more this year.”
On June 30, I also shared this Washington Post article in which Kevin Sieff describes a recent attack in which cartel gunmen used 50-caliber machine guns to try and assassinate Mexico City’s police chief in an action-movie-style attack in one of the city’s wealthiest enclaves. Sieff explains, “Violence has continued to rise across Mexico, even during the coronavirus pandemic. Mexico City’s wealthier enclaves have typically been spared, though, making Friday’s attack particularly startling for residents here. Photos of García Harfuch’s Chevrolet Suburban show the vehicle ripped apart by bullets.”
On June 25, I shared this Reuters article in which Anthony Esposito explains that Mexico could record more than 100,000 confirmed Covid-19 deaths by October. He writes, “Argentina, Chile, Colombia, Ecuador, Guatemala and Peru are each forecast to see over 10,000 fatalities, while 15 nations including Paraguay, Uruguay and Belize are seen with fewer than 1,000 deaths each. In a worst-case scenario, the COVID-19 death toll could climb to 151,433 people in Mexico.”
On June 25 I also tweeted this Financial Times article by Jude Webber. She explains, “Lopez Obrador insists that Mexico’s greatest asset is ‘the honesty of its people’, but independent studies show corruption has worsened in the 18 months since [he]took office.” The evidence is mounting that Lopez Obrador’s moralizing sermons aren’t helping the country meaningfully reduce violent crime and corruption.
On June 10, I shared this New York Times article by Azam Ahmed. The article explains that “top business leaders sat down with Mexico’s president to implore him to do more to save the economy [and warned that]people were losing jobs by the tens of thousands [and]small and medium-size companies were running out of cash. The government needed to intervene, they argued. The data was irrefutable.”
Lopez Obrador simply shrugged.
“I have other data,” he said. “You do whatever you think you need to do, and I’ll do what I need to do,” he added.
SOURCE: FORBES
