Mexico: Press Dossier on July 1st Elections

Carlos Urzúa Presents the Economic Plan of AMLO (in case he should win)

(reprinted from Forbes magazine — Mexico edition — on April 16, 2018)

In the April 16, 2018, issue of Forbes magazine (Mexico edition), whose motto is “The Capitalist Tool,” AMLO’s appointed Secretary of the Treasury of Mexico, Carlos Manuel Urzúa Macías, detailed the economic program of the future president. He introduced the plan as follows:

“We would like to make all the foreign and domestic investment funds understand that everything will be fine, we are very careful. We want to change things, but on the fundamental issue of public policy, we are more, even much more, conservative, than the other parties.”

And he announced the following in support of this statement:

“Respect for the autonomy of the Central Bank of Mexico, no primary deficit, support for the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Free Trade Agreement (TPP), among other points.”

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Mexico’s presidential election: Investors need to know these key factors

(Market Watch, June 30, 2018 — Excerpts)

Investors are worried what AMLO’s likely election could mean for Mexican assets, given that the country is a huge beneficiary of foreign direct investment.

Mexico, Canada and the U.S. have been in renegotiation talks regarding the North American Free Trade Agreement since August 2017, seemingly with no end in sight.

Some believe that Lopez Obrador will be more practical as a leader than he is given credit for. He ran a pretty orthodox Mexico City government during his time. The danger is that AMLO is less predictable with issues like NAFTA, although he said he would continue the line of negotiation that Mexico has gone down.

“I find it hard to believe that he’ll just be moderate,” Lawrence said, who also said federal transfers shored up Mexico City’s finances during Lopez Obrador’s tenure.

“Unfortunately, AMLO appears set to reverse some of Mexico’s recent economic reforms, potentially setting back the country’s economy,” said Eric Lascelles, chief economist at RBC Global Asset Management.

If victorious, it will come down to what Lopez Obrador says in his would-be acceptance speech and then, during first few days in office, he wouldn’t assume until December, market participants said. He would likely get penalized by the markets if he started his term off with too aggressive a stance.

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Leftist Wins Mexico Presidency in Landslide With Mandate to Reshape Nation

By Azam Ahmed and Paulina Villegas

(New York Times, July 1, 2018 — excerpts)

The core promises of Mr. López Obrador’s campaign — to end corruption, reduce violence and address Mexico’s endemic poverty — were immensely popular with voters, but they come with questions he and his new government may struggle to answer.

How he will pay for his ambitious slate of social programs without overspending and harming the economy? How will he rid the government of bad actors when some of those same people were a part of his campaign? Can he make a dent in the unyielding violence of the drug war, which left Mexico with more homicides last year than any time in the last two decades?

And how will Mr. López Obrador, a firebrand with a tendency to dismiss his critics in the media and elsewhere, govern?

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AMLO’s Victory Speech

(La Jornada, July 2, 2018 — Excerpts)

While presenting his victory speech on the evening of July 1, stated La Jornada (July 2), “Andrés Manuel López Obrador, virtual winner of the presidential election, called for national reconciliation, and sent a message of confidence to the financial markets, declaring that he would respect the autonomy of the Central Bank and maintain financial and fiscal discipline. He also said that his government would not act arbitrarily or expropriate property. …

“At the same time, he reaffirmed that his government would respect all the commitments made to foreign corporations and banks. With regard to the oil contracts and other agreements in the energy sector signed with individuals and corporations, he said these would be examined on a case-by-case basis with the aim of preventing acts of corruption or illegality.”

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He Was Once Called a “Danger to Mexico.” Now He’s Its Next President.

By Jo Tuckman

(Vox, July 4, 2018 – Excerpts)

So far he Andrés Manuel López Obrador has reassured the financial markets that he will respect the autonomy of the Central Bank, keep the country’s books balanced and inflation under control, and not raise taxes. But he has also insisted there will be no U-turn on his commitment to “put the poor first.”

That includes campaign pledges of subsidies for peasants, boosting local industry with the aim of reducing dependence on imported goods, and a massive program of paid youth apprenticeships and student stipends under the slogan “Scholarships yes, cartel hitmen no.”

Eliminating corruption and slashing what he calls “offensive privileges” for public officials will pay for it all, he promises, though his explanations of how have focused on a pledge to lead by example. …

López Obrador’s assurances that he can bring down the murder rate are equally vague. There will be 6 am meetings with security chiefs, an invitation to the Pope to get involved, and he might explore the idea of an amnesty for low-level cartel members.

Supporters often say they understand that AMLO’s vision of peace, prosperity, and social justice will take time. How long the honeymoon lasts is anybody’s guess.

Trump was one of the first international leaders to congratulate López Obrador, who has since said he is determined to maintain good relations with the US. “We are not going to get into fights,” he told Mexico’s Televisa TV network on Monday. “We are going to extend our hand honestly in the search of a friendly and respectful cooperation.”

López Obrador added that he would not interfere in the NAFTA negotiations until he takes control of the government on December 1. Then, he hinted, he would seek a more ambitious deal including U.S. aid for rural development in the name of discouraging migration.

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López Obrador’s First 100 Days

By GUILLERMO ALMEYRA

(Excerpts from weekly column published in La Jornada, July 8, 2018)

In order to be accepted by Washington and by sectors of the ruling classes, AMLO has incorporated into Morena’s leadership businessmen and right-wing politicians who had previously served the PRI and the PAN. AMLO had once fought against them; today he will govern with them. … AMLO now occupies the government and has a majority in Congress, but the oligarchy continues to maintain power and control over the justice system, the media, the repressive apparatus, and the State bureaucracy.

What could happen, then, in the coming months? Most likely, the oligarchy and Washington will try to woo and co-opt the reformist government. But AMLO, in that period, could reinforce his popularity by introducing the revocability of mandates and reduce high salaries and privileges.

He could also eliminate repressive institutions, initiate a cleansing of the justice system and the police, take advantage of the majority in the two houses of Congress to repeal all the reactionary, anti-national or liberticidal laws passed from 1982 to the present, take measures to imprison those responsible for the murders of journalists or the crime of Ayotzinapa, and achieve peace in Chiapas, incorporating indigenous rights into the Constitution.

He could also increase the people’s purchasing power in the internal market by increasing salaries and pensions, as the WTO is calling for, and strike a first blow against drug trafficking by controlling bank accounts to prevent the laundering of criminal money and also by combating the complicity of those in positions of power.

Increased funding for health and education at all levels and the repeal of the current law (counter-reform) on education resisted by teachers, as well as a special security effort to combat the killing of women and rape, are also urgent measures that would strengthen the security of AMLO’s popular base.