Dancing in the street for new Mexico leader
• Investors fear for future of energy sector privatisation
Andres Manuel Lopez Obrador was elected as Mexico’s first left-wing president in recent times, riding a public revolt against crime, corruption and poverty and handing a crushing defeat to the business-friendly parties that have run the country for decades.
Lopez Obrador’s coalition also looks poised to pick up scores of seats in congress, with some polls indicating it may actually take a majority in both legislative chambers.
Final tallies could be days away, creating jitters among investors who worry that such broad power could allow Amlo, as Lopez Obrador is known, to quickly enact an agenda that includes building refineries and railways, and auditing energy contracts from outgoing President Enrique Pena Nieto’s term.
The peso slid 1.2% in early trading on Monday.
While congressional votes are still up for grabs, there was never really any doubt about the outcome of the presidential election. Figures announced by the electoral board gave Lopez Obrador 53.7% of the vote, with half of the ballots computed.
Ricardo Anaya, the leader of a right-left coalition, was next with 22.7%.
The 64-year-old former mayor of Mexico City, who narrowly lost the presidency in 2006 and again failed in 2012, has been both compared to Donald Trump and former Venezuelan president Hugo Chavez in his populist rhetoric and ambitious promises to help the poor while keeping the budget deficit in check.
He’s promised to govern as a pragmatist and says he won’t nationalise companies or quit the North American Free Trade Agreement. Still, his procession to victory has alarmed many investors and business leaders.
“There’s nothing to fear,” he said. “I’m not a dictator.”
Long before official results began to emerge, congratulations had poured in from foreign leaders, including Trump.
“I look very much forward to working with him,” the US president, who’s repeatedly lambasted Mexico for sending illegal migrants and drugs across the border, said on Twitter.
In an address on Sunday Lopez Obrador promised “deep changes” and said that while he’ll respect all Mexicans, “we’ll give preference to the poorest, and to the forgotten”.
The business community and investors have expressed concerns that the privatisation of the energy industry will be rolled back, and expanded social programmes will push the country into debt. Lopez Obrador says his plans can be funded without deficit spending, with money saved by eliminating graft.
“This will be a new era,” said Alonso Cervera, chief Latin America economist at Credit Suisse. “The continuity of the economic model is in question.”
The model, overseen by USe ducated technocrats and centred on tight budgets and foreign trade, has won investmentgrade credit ratings for Mexico. It’s been less successful at delivering growth in the $1.2-trillion economy or higher living standards for ordinary Mexicans. About half of the country’s 125million population live in poverty. They’re Lopez Obrador’s base and they’ll be expecting material benefits.
The Mexican election fits into a wider pattern of anti-establishment politicians appealing to voters left behind by globalisation, though Lopez Obrador, who cut his political teeth as an activist defending the rights of indigenous peoples, has little in common with Trump or rightwing populists in Europe.
Markets have had plenty of time to prepare for an Amlo win. The peso has declined since mid-April as his poll lead widened. After early gains in election night trading, the currency was among the worst performers of developing nations on Monday.
Even before Sunday night’s electoral landslide, one of Mexico’s most prominent historians was worrying about one-man rule. The presidency is already enormously powerful, and Lopez Obrador’s personal charisma will make it even more so, Enrique Krauze said in an interview.
“We could face a concentration of power in one person not seen [before] in Mexico.”
Only two parties have run Mexico in the past century or so: Pena Nieto’s PRI, and Anaya’s PAN. Mexicans decisively turned their backs on both.
On the campaign trail, many voters said crime was their top concern. A decade-long war on drug cartels has pushed the murder rate to record levels (politicians haven’t been spared: more than 120 were killed during the campaign).
Corruption was also a widespread complaint. Pena Nieto’s allies and family were tainted by a string of scandals. He began his six-year term hailed as an economic reformer and a fresh face, and is ending it with some of the lowest approval ratings in the history of the presidency.
Pena Nieto will remain in office until December, because Mexico has a five-month gap between elections and inauguration. But on Sunday, as crowds thronged into the streets of Mexico City, there was a sense that power was shifting. In the Zocalo, the historic city centre framed by palaces and cathedrals built under Spanish rule, Lopez Obrador’s supporters jammed the square, dancing to a mariachi band as they waited for the election winner.
[IT IS] A PATTERN OF ANTI-ESTABLISHMENT POLITICIANS APPEALING TO VOTERS LEFT BEHIND BY GLOBALISATION WE COULD FACE A CONCENTRATION OF POWER IN ONE PERSON NOT SEEN [BEFORE] IN MEXICO