Wednesday, May 29, 2024

OPINION AND ANALYSIS | 30-06-2018 08:52

Down Mexico’s way

Thanks in large measure to the huge markets opened by NAFTA, Mexico enjoys various advantages of which Macri can only dream of achieving in a decade or so.

Unless tomorrow’s presidential elections turn out to be as unpredictable as many World Cup matches, Mexico is poised to send a message all the way down to the rest of Latin America – not least Monday’s football rival in Samara, Brazil (which will be choosing its next president in only three months’ time), but also Argentina. And that message is a reversion to populism in the form of the clear frontrunner Andrés Manuel López Obrador, generally known as ‘AMLO.’ Although he could also prove a perfect match for Donald Trump on the other side of the Río Grande, let us keep the spotlight on Mexico south of its border with the focus on the potential fallout in Latin America for now.

An AMLO triumph would be disturbing for the Mauricio Macri presidency in particular. Thanks in large measure to the huge markets opened by NAFTA, Mexico enjoys various advantages of which Macri can only dream of achieving in a decade or so – a strong export industry, a flourishing mortgage market as part of increasingly sophisticated financial structures with respect for Central Bank independence, and an economy which is more competitive in every sense with a less monopolistic business community (so much so that the tycoon Carlos Slim has faded as a contender for the richest man in the world in recent years). All this now stands in jeopardy with the populism and big government implied by AMLO’s leftist rhetoric. At this point it should be interjected that despite this rhetoric AMLO is no Nicolás Maduro or even Cristina Fernández de Kirchner. He is rather worringly all things to all men – to give one small example, just look at what he said on the issue of a second Mexico City airport to a business chamber (“a vision of the future”) and how he described it to environmental activists (“a monument to corruption which I would never allow”). Perhaps the prospect of an AMLO presidency arouses uncertainty rather than a sense of doom. By any standards it is a shot in the dark.

Yet any comparison of Mexico with Argentina is incomplete without mention of a cancer overshadowing the former’s economic progress – namely, a drug-fuelled violence with over 26,000 murders last year and the number of candidates assassinated in this election campaign alone well into three digits. Even if over 80 percent of this appalling toll is between the crime rings, this bloodbath should never be underestimated. Under President Enrique Peña Nieto’s administration, beginning December 1, 2012, more than 21,000 people have disappeared. The violence has clearly been a factor in eroding public confidence in the traditional parties, handing the election on a plate to AMLO even though he seems to have no real answers either. For that reason Macri should not assume that any progress toward a strong export industry or mortgages or any other of Mexico’s advances will be on an inevitable collision course with an ultimately ungrateful electorate.

“Once might be a misfortune but twice looks like carelessness,” wrote Oscar Wilde – whatever Mexico decides tomorrow should await confirmation in Brazil in three months’ time, but if both the region’s economic heavyweights with the only two nine-digit populations in Latin America move in the same direction, this would establish a trend that would be impossible to ignore. Monday’s match in the futuristic hub of the former Soviet space programme might or might not be decisive for the outcome of the World Cup, but off the pitch Mexico and Brazil this year stand to be even more important for the region’s future and its outlook on it.

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