A new economic chance for our other NAFTA partner
Mexican presidential frontrunner López Obrador offers a different type of populism
The man whom Mexicans will elect as their new president July 1 holds promise of restoring credibility to populism.
The populism that holds sway in much of the world is reactionary. It feeds on, and fuels, resentment. By contrast, Andrés Manuel López Obrador, known by the affectionate sobriquet “Amlo,” is a lifelong social-justice advocate. His proposed remedies for a country in crisis are inclusive and, for the most part, practical.
López Obrador, 64, has led in the polls since launching his presidential candidacy last year with an anti-corruption and economic-justice platform.
López Obrador vows to raise workers’ pay (the current minimum wage is just $6.30 Canadian per hour) and double seniors’ pension payouts. His proposed heavy investments in education include tuition relief. “We want scholarship students, not contract killers,” he has told supporters.
López Obrador plans to create a nationwide apprenticeship program, and to subsidize business startups and expansions.
In the impoverished agrarian south, López Obrador proposes a revolutionary transition.
He would use state subsidies for farmers to shift their output from corn and other commodities made uncompetitive by cheap, tariff-free U.S. food imports to greatly increased fruit production and logging, where Mexico has competitive advantage.
In the industrialized north, López Obrador has a scheme for a duty-free zone along the international border, where tax breaks would be available to Mexican and foreign companies that build factories there.
Mexico has been conspicuous among major economies in its reluctance to use such forms of stimulus spending to relieve hardship and swell the ranks of the middle class.
That is a legacy of the 1994 peso devaluation (the “Tequila Crisis”). Ever since, Mexican governments have shied away from economic stimulus.
The downside of that fiscal austerity is that more than half of Mexico’s 124 million people live in poverty. López Obrador is unapologetic about using fiscal stimulus.
“The term ‘subsidy’ has been satanized,” López Obrador has said on the campaign trail. “But it is necessary. In the United States, they do it.”
Opponents have tried to peg López Obrador as another Hugo Chávez, the late populist autocrat who led Venezuela into its current economic chaos. That charge doesn’t jibe with López Obrador’s avowals not to raise taxes, even on the rich. And he repudiates Chávez’s expropriation of private property.
Actually, López Obrador’s role models are Franklin Roosevelt; the 19th-century Mexican president Benito Juárez; and the 1930s Mexican president Lázaro Cárdenas. Each was an agent of socio-economic justice.
López Obrador can be described as a throwback, but not to a Mexico that was among the world’s most protectionist countries prior its partnership in the 1994 North American Free Trade Agreement (NAFTA). He has mixed feelings about NAFTA’s impact, to be sure, but isn’t anti-NAFTA.
Instead, López Obrador’s progressive agenda recalls Juárez, a beloved figure remembered for his dogged championing of the underprivileged. It also evokes the legacy of Cárdenas, Mexico’s Great Depression president, who granted hundreds of thousands of hectares of farmland to the dispossessed.
The only time López Obrador has held elected office, he earned a reputation for pragmatism. As mayor of Mexico City, the world’s second-largest city, from 2000 to 2005, López Obrabor worked with the city council to launch a pension plan for seniors and to reduce traffic congestion with an upgraded highway network. He also partnered with Mexican billionaire tycoon Carlos Slim on a renovation of the city’s historic district, a project jointly funded by the public and private sectors.
López Obrador has made his share of unrealistic claims, including a campaign boast that his government will collect $20 billion (U.S.) from the eradication of public-sector corruption. López Obrador has also pandered to national pride, making frequent reference at his massive campaign rallies to mexicaniso — roughly translated as “Mexico first.”
But López Obrador has not scapegoated NAFTA. The trade deal put almost two million Mexican farmers out of work due to non-tariff U.S. food imports, but it also helped Mexico become the world’s fourth-largest exporter of vehicles and auto parts.
Nor has López Obrador used U.S. President Donald Trump as a punching bag, having said his piece about Trump’s many slurs against Mexicans in his 2017 book, Oye, Trump (“Listen Up, Trump”).
López Obrador has left Trump-bashing to the likes of Vincente Fox, a former Mexican president.
Loathing of the U.S. president is universal among Mexicans, and on their behalf, Fox has slagged Trump for his thin record of achievements.
“Donald, you suck so much at (your) job,” Fox has said. “If they ever do a Mt. Rushmore for s---ty Presidents, it will just be your bloated, orange head — four times.”
López Obrador pledges to enhance Mexico’s economic prowess so that, in his words, “no threat, no wall, no bullying attitude from any foreign government, will ever stop us from being happy in our own fatherland.”
López Obrador was born to a family of shopkeepers in a village in Tabasco state. He is a Mexican-educated political activist and author who has written six books on Mexican political history.
He will be Mexico’s first non-technocrat president in 38 years. That’s a worry for the U.S. State Department and the editors of the Economist. The latter regards a López Obrador presidency that is expected to break with neo-liberal economic orthodoxy as a “risky experiment.”
But more than 70 million poor Mexicans are proof of the shortcomings of that doctrine, which is an imported one. A succession of modern-era Mexican presidents have adopted it from the International Monetary Fund (IMF), the World Bank, the OECD, and the U.S. Ivy League colleges they attended.
It’s fair to question if López Obrador is really a “radical left-wing populist,” as media reports worldwide invariably label him. He might simply be a leader who prefers the madein-Mexico stewardship of Juárez and Cárdenas to that of Mexican presidents who got their tickets punched at Harvard.
There is a bigotry of low expectations here. An unspoken tenet of geopolitics is the question of whether Mexico can govern itself.
Mexico has suffered three government-caused crises in modern times — the disastrous peso devaluations of 1976, 1982 and 1994. And the five-year tenure of Mexico’s unpopular outgoing president, Enrique Peña Nieto, has been a failure. It has been marked by economic stagnation and record levels of violence, including more than 90,000 murders and a failing war against drug cartels.
Mexicans regard the July 1 vote as one of the most important in the country’s history because it might bring about a government that can actually govern. There’s more than a little skepticism about that possibility, especially abroad.
López Obrador has no illusions about the mountains he’ll have to move to remake his country, the task he has sworn to accomplish. But the scholar of Mexican political history knows it has been done before, by Mexicans, and how it was done.