THE TRANSFORMER: MEXICO´S PRESIDENT HAS YET TO MAKE PEOPLE´S LIVES BETTER / THE ECONOMIST

The transformer

Mexico’s president has yet to make people’s lives better

But he has grabbed a lot of power for himself

“We are living a stellar moment,” declared Mexico’s president, Andrés Manuel López Obrador, this month, a little over two years after he took office. 

It is hard to find evidence of that. Even by the standards of a covid-ravaged world, the country is doing poorly. 

Mexico has the fourth-highest number of excess deaths as a share of population since the pandemic’s onset. Its economy was in recession before the pandemic arrived (see chart). 

The poverty rate probably rose more than in Latin America’s other big economies. 

Almost half of Mexico’s 126m people could not afford to eat properly at the end of 2020, according to official figures. 

Whereas murder rates have dropped sharply in some violent Latin American countries during the pandemic, in Mexico the decline has been tiny.

If the moment is not stellar, most ordinary Mexicans trust Mr López Obrador, often simply called AMLO, soon to make it so. 

According to a recent poll, his approval rating is 62%. 

Another survey found that nearly 40% of Mexicans plan to vote for his party, Morena, in legislative and regional elections due in June. 

The two most popular opposition parties have a quarter of that level of support each (and a third of voters are undecided). 

AMLO’s popularity is evident in places like Ecatepec, a municipality near Mexico City that is as poor, violent and covid-blighted as anywhere. 

Some neighbourhoods lack water; walls are plastered with posters for missing people and help applying for visas to the United States. 

“We have not yet seen results” from amlo, admits Efrain Salguero, a local driver. “I think we should give him more time.”

Mr Salguero is among the millions of Mexicans who still have high hopes for AMLO’s “fourth transformation”, which is to make the country work better by ending corruption and rampant crime and distributing gains from economic growth more fairly. 

He envisions it as the successor to the war of independence of 1810-21, the war for liberal reform of 1858-61 and the revolution of 1910-17. But in two years of transformation amlo has changed Mexico much less than did these momentous events, and mostly for the worse.

In practice, the fourth transformation seems to have three main elements: the undoing of recent reforms; new initiatives that fail to solve the problems they purport to; and concentration of power in the president’s hands.

Reforms enacted by amlo’s “neoliberal” predecessors, however sensible, were quick to go. Early in 2019 he scrapped an education reform introduced by Enrique Peña Nieto, his immediate predecessor, that linked teachers’ pay and promotions to the performance of their pupils. amlo abolished Prospera, a much lauded conditional cash-transfer programme for the poor. 

Handouts, for example to farmers, are now presented as presidential gifts.

AMLO tried to reverse the opening of energy markets, once dominated by state monopolies, to private and foreign enterprises. 

Mexico’s Congress is debating a bill under which electricity generated by state-owned cfe would get priority access to the grid, in preference to cheaper alternatives. 

This would not only raise prices for consumers but could breach the US-Mexico-Canada Agreement (usmca), North America’s free-trade pact. 

It would put at risk some 150 renewable-energy projects that are expected to bring more than $40bn-worth of investment, and make it impossible for Mexico to reach its commitments to reduce greenhouse-gas emissions. 

AMLO cancelled the construction of a $13bn airport for Mexico City that was already half-built. These policies have undermined the confidence of investors.

If all this were a prelude to enacting bold ideas for improving Mexicans’ well-being, the cost might be tolerable. But AMLO’s solutions are bullets discharged from an antique gun that is badly aimed and packed with too little fiscal firepower. 

His dedication to fiscal discipline, laudable in a populist of the left, became counterproductive in the pandemic. 

In a bizarre role reversal, the IMF is urging Mexico to spend much more than the 0.7% of GDP it has done to fight the pandemic’s economic effects. 

Brazil, by contrast, has spent 8% of GDP, and Argentina 3.8%. AMLO resists because he fears that Mexico could become beholden to foreign creditors as it did during a financial crisis in 1982.

His tightfistedness, some economists fear, will lead to “scarring”—a permanent drop in output caused by a loss of jobs and businesses during the pandemic. 

Bound by fiscal constraints, the patron of the poor has done little to protect them. He has shuffled money around, slashing spending on the government apparatus and boosting it on pet social programmes. 

He has doubled old-age pensions and aims to pay 2.3m young adults to study or take up apprenticeships. Overall, though, social spending has risen little. Social programmes are being “done on the cheap”, says Javier Tello, a television commentator. 

A sharp rise in the minimum wage has helped some workers with formal jobs. Businesses pay for that.

Where AMLO has splashed out is on old-economy projects that will deliver little return. 

He has poured money into Pemex, the world’s most indebted oil company, and plans to spend $8bn to build the Dos Bocas refinery in his home state of Tabasco. 

Airlines think the mountainous terrain around the military airport that is to become the alternative civilian hub for Mexico City will restrict flights.

The fourth transformation has not lessened the greatest dangers to Mexicans’ safety, one new and one old. The government’s handling of the pandemic has been disastrous. 

Its miserly social spending has contributed to a widespread feeling that unsafe work is the only alternative to going hungry. AMLO has been spotted just once wearing a face mask (most Mexicans do wear one). 

Mexico tests few people for covid-19 by international standards. Hospitals are full and oxygen tanks are in short supply. 

Vaccination got off to a very slow start. People who hoped that AMLO would show a greater sense of urgency after he contracted covid-19 were disappointed. 

On February 8th he reappeared after a two-week convalescence. He caught the bug, he said, because like many Mexicans he cannot stop working.

The voters who gave AMLO his landslide election win in 2018 wanted, perhaps more than anything else, a big reduction in the country’s high number of murders. They are still waiting. 

AMLO proclaimed last year’s 0.4% dip a “significant success”, but it comes after a rise the year before. Murders of women, which led to mass protests last year, stayed at record levels in 2020.

AMLO rejected previous governments’ tactic of killing or capturing crime kingpins, because this led to a splintering of gangs and thus to more violence. But his signature policies for combating crime have not so far worked. 

His notion that reducing poverty will ultimately lower crime “might stop a three-year-old becoming El Chapo”, a notorious drug lord, says Mr Tello. “But it doesn’t have an answer for the current El Chapos.” 

Formerly suspicious of the armed forces, AMLO issued a decree giving them primary responsibility for fighting crime. A new 100,000-strong National Guard is composed mainly of soldiers rather than people trained in policing.

AMLO has fought the gentler crime of corruption by setting an example of probity and imposing stiffer penalties on bribe-taking bureaucrats. He has done less to strengthen institutions that will carry the battle forward. 

The national anti-corruption prosecutor is overwhelmed with cases. 

A proposal by anti-graft prosecutors for constitutional guarantees of their autonomy and a minimum budget “has not found traction with López Obrador’s congressional majority”, according to a recent report by wola, a think-tank in Washington. 

An autonomous government agency estimates that the number of acts of corruption rose by 19% between 2017 and 2019. The vast majority of government contracts are not open to tender.

Ordinary Mexicans have overlooked AMLO’s failures because he has a bond with them that most presidents lacked. “He is from the people, for the people and with the people,” says Daniel Sibaja, a Morena official in Ecatepec. 

His popularity flows from who he is rather than what he does. Power thus flows to him.

AMLO sets the national agenda in daily morning press conferences that can last three hours. He has cut the budgets and dismissed the bosses of autonomous institutions such as Coneval, which measures poverty. 

Last month he proposed to abolish several autonomous agencies, including the antitrust body and freedom-of-information institute. He rails against critical media and ratings agencies.

AMLO damages the social fabric by constantly “characterising the elite as wicked and the poor as saintly and victimised”, says Soledad Loaeza, a historian. 

The elite call him a Mexican version of Hugo Chávez, Venezuela’s late socialist strongman. 

That is an exaggeration. But the mix of policy failure and power-grabbing is worrying. 

Next June’s congressional and regional elections may be Mexicans’ last chance to tame their rampant president.