Why you should care
Mexico’s president is turning increasingly populist, spooking industry and investors.
Marco Antonio Guzmán, who supplements his job as a cleaner at Mexico’s Education Ministry by driving a taxi, tucks away the 500 peso ($26) check he has just been given — a grant for his daughter for secondary school. The 35-year-old father of three is among a crowd picking up government payouts from officials in beige waistcoats in the main square in Iztapalapa, Mexico City’s most populous borough and also one of its poorest and most dangerous. Here not everyone enjoys running water on a daily basis.
“You can feel the change, the fourth transformation,” Guzmán says, using President Andrés Manuel López Obrador’s description of his radical mission to overhaul Mexico.
Guzmán praises López Obrador for deploying the new National Guard police force in Iztapalapa. But most of all, he is grateful for the one-off 900-peso payment for his daughter’s school supplies and 500 pesos grant every two months. “This is a benefit for us and it really helps,” he says.
In some circles in Mexico there is this feeling that the president acts irrationally, but … he’s a man with a message and he’s sticking to it
Antonio Ocaranza, former presidential spokesman
López Obrador pulled off a landslide election victory a year ago by identifying the need to eradicate corruption, reduce violence and deliver inclusive growth to Mexico’s downtrodden poor. But with growth slowing sharply seven months since he took office, his narrative has morphed into one of economic change and all-out war on the free market “neoliberal” policies of the past four decades he blames for allowing graft to flourish. The latest casualty is his longtime friend and respected finance minister, Carlos Urzúa, who quit this week, writing a scathing letter lashing out at the unsound policy decisions and unqualified officials foisted upon him.
López Obrador speedily dismissed Urzúa as insufficiently committed to his fourth transformation — the new era in history he says he is ushering in that will prove as pivotal to Latin America’s second-biggest economy as independence and reforms in the 19th century and the Mexican Revolution.
While Guzmán approves, investors fret. “In the tension between man on a mission and pragmatist, so far the man on a mission is winning out,” says Alfonso Zárate, a political analyst. “He’s taking intuitive, ideological decisions that fly in the face of technical and political reason.”
López Obrador’s reputation for fiscal prudence while mayor of Mexico City from 2000 to 2005 initially reassured opponents spooked both by his populist agenda, which they worried would turn the clock back to the 1970s, and by his monthslong sit-in and self-investiture after the 2006 election he claims was stolen from him.
But López Obrador appears increasingly radical, more inclined to overrule opponents and less pragmatic than many had hoped as he shrinks bureaucracy to the bone to free up cash for direct social transfers. The reform, he says, is more effective, but it has antagonized the country’s technocracy on which Mexico’s government has long relied.
The Mexican president’s populist turn is hardly a surprise but rather a trademark of his doctrine, outlined in numerous books. Even before taking office, for instance, he angered investors by scrapping a partially built $13 billion airport. López Obrador’s hallmark is “I believe in this and I’ve believed in this for years and I’m going to pursue it every day,” according to Antonio Ocaranza, a former presidential spokesman.
“In some circles in Mexico there is this feeling that the president acts irrationally, but he has been very rational and congruent in his administration — he’s a man with a message and he’s sticking to it,” Ocaranza says.
“In the campaign, there was a certain fear that López Obrador would be this dogmatic candidate of the previous two elections. He wanted to present himself as pragmatic.… Now it’s different. His [daily] morning news conference is a constant opportunity to educate and persuade people about the [economic] model he wants to reject,” says Ocaranza.
The 65-year-old president’s ascent to the top after 18 years of trying has reinforced his convictions. “Urzúa was a friend of the other López Obrador, when he didn’t sit on the Eagle’s Throne,” says Zárate, referring to the presidential chair that revolutionary hero Emiliano Zapata refused to sit on, believing it to be jinxed.
While investors worry about the country’s finances, López Obrador’s supporters await more social change. “I’ve had a welfare card for two months that I haven’t been able to activate yet,” says Alejandra Díaz, 42, a housewife. Although she had picked up the secondary school grants for one of her three children, another, who has special needs, has not received the president’s promised extra benefits.
Nor has Ofelia López, 80, seen any sign of the promised doubling of old-age pensions. “I feel he has a lot to resolve, so he’s behind in some things,” she says. “Sorry, I only wanted to say good things about the president, but that’s the truth.”
Nevertheless, the president’s charisma and mastery of direct communication with ordinary Mexicans — he spends every weekend traveling the country — have ensured approval ratings of 70 percent, according to a poll of polls by Oraculus.
“He listens to the people because he’s close to them,” says José Díaz, 39, who is out of work. ”He can talk to the upper classes, the middle classes and the lower classes. He’s what we need now.”
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