After spending a few days in Mexico shortly before the Dec. 1 inauguration of leftist president Andrés Manuel López Obrador, I can’t say that I found a climate of widespread optimism about the incoming government. Compared with my visit a few weeks earlier, high hopes have given way to high anxiety.
López Obrador, who is commonly known by his initials, AMLO, took several populist measures in recent weeks that have shaken investors’ confidence and caused the Mexican stock market to plunge to its lowest level in four and a half years.
AMLO’s approval rating has fallen from 65 percent in August to 56 percent in November, according to a poll by the daily El Universal. While most Mexicans want him to meet his campaign promises of eradicating corruption and focusing on the poor, he has made almost a dozen big mistakes before his inauguration.
AMLO has carried out a series of controversial “citizen consultation” votes that asked Mexicans, among other things, whether they wanted to go ahead with a $13 billion plan to build a new Mexico City airport.
But the questions were loaded to support AMLO’S already-announced positions, and the votes were not supervised by any independent institution.
Last weekend, I visited one of AMLO’s public consultation voting places. I found it hard to take it seriously. It was an improvised table on the street in Guadalajara’s La Paz Avenue, manned by half a dozen young people, with no independent observers. I asked them whether there were any observers from rival political parties, and the answer was no.
“We are all volunteers,” one of them said. Critics say the whole voting exercise was supervised by AMLO’s political party, and its results were designed to give an aura of legitimacy to the new president’s decisions.
After the first of his dubious referendums rejected construction of the new Mexico City airport in Texcoco, one of the country’s biggest public projects, AMLO said he would meet his campaign promise to scrap the project. “The decision is to obey the citizens’ mandate,” he said after the referendum.
Trouble is, scrapping the Texcoco airport contract, in effect, meant breaking contracts with major construction firms and leaving investors who bought $6 billion in airport bonds in limbo. Business analysts accused AMLO of not respecting the rules of the game. The Mexican peso took a dive, and the stock market tumbled.
Causing further nervousness among investors, AMLO appointed hard-line nationalists to key jobs supervising Mexico’s energy industry and announced a salary cut for high-ranking public officials. While the upcoming pay cut for senior public servants ostensibly is meant to help fight government waste, critics say it is a way to get rid of technocrats and open vacancies to be filled by AMLO’s loyalists. Many highly trained economists have reportedly announced their intention to quit their government jobs and join the private sector.
AMLO has also made some symbolic decisions raising fears that, rather than being a moderate leftist, he will be close to the Jurassic left. Reversing Mexico’s agreements with 13 other Latin American countries that make up the Lima Group to isolate Venezuelan dictator Nicolás Maduro, AMLO has invited Maduro to his inauguration ceremony.
Amid all of this, AMLO’s incoming government plans to appoint “super-delegates” to state governments, which some governors are denouncing as potential parallel local administrators who will report directly to the new president.
It’s too early to tell whether AMLO will be a populist autocrat or if he will learn from his recent missteps that you can’t reduce poverty — at least in the long run — if you scare away investors and cause the economy to slow down. But he has started off on the wrong foot, sending signals that have already caused a depreciation of the currency and huge stock market losses .