Teaching Comparative Government and Politics

Monday, March 18, 2019

How goes the new presidency in Mexico?

Here's the Economist's view of AMLO's presidency.

AMLO splashes the cash in his first 100 days

"POWER STUNS the intelligent and drives fools mad.” Andrés Manuel López Obrador, Mexico’s president, repeats this adage often, as a rebuke to politicians who promise much and accomplish little. On March 4th, the 94th day of his presidential term, he tweeted the phrase again to show that power has neither stunned nor maddened him, and that he will keep his promise to transform Mexico.

Mr López Obrador, or AMLO, as he is known, has already brought considerable change. He cancelled construction of a part-built international airport, stopped new private investment in the oil industry and shut down fuel pipelines to prevent theft… AMLO has cut the salaries of senior officials and bureaucrats, including his own, and put their cars up for auction. He travels about by commercial airliner.

More than three-quarters of Mexicans like what they see. Nearing 100 days in office, AMLO is more popular than any president at that stage bar Vicente Fox, the first president of the democratic era…

His plan to achieve this involves restoring the state to its earlier position as the main underwriter of Mexicans’ well-being…

AMLO’s statism does not preclude co-operation with the private sector. As Mexico City’s mayor in the early 2000s, he worked closely with firms, for example to rebuild the city’s centre. Many of the infrastructure projects he plans, such as the “Maya train” through the south, will need private or foreign finance. But no one will doubt that the train comes from him.

AMLO has begun by giving more money directly to individuals. His government has doubled pension benefits and made more people eligible for them. It set a minimum price for beans grown in the state of Zacatecas. Eventually, most major crops across Mexico will have support prices. The government will give scholarships and grants to 2.3m young adults…

Change is coming to child care. The “children’s room” programme created by Felipe Calderón, president from 2006 to 2012, pays 950 pesos a month per child to women who provide day care in their neighbourhoods, often their homes. Some 300,000 mothers use the programme. Many do not realise that the state is subsidising the bill. AMLO plans to correct this (and save some money) by paying mothers 800 pesos a month directly.

The pesos-for-the-people approach may not always help its intended beneficiaries. AMLO said he would end subsidies for women’s shelters but failed to explain how he would give money to victims of domestic abuse. After an outcry, he retreated.

Seeming generous will sustain his popularity only if he keeps other promises, especially to reduce crime and corruption, and keep the economy strong…

The biggest threat to his popularity is the economy. The central bank has revised its projection of GDP growth for this year down from 2.2% to 1.6%. Foreign direct investment in the last quarter of 2018 was 15% below its level a year before, partly because investors distrust AMLO…

But for now, millions of Mexicans are cheering a windfall, and the president, just as he hopes…