Econ_Sep_22

30 The Americas

The Economist

September 22nd 2018

ITH its long bulk of purple volcanic

stone, the National Palace is not just

any building. It looks out onto the Zócalo,

the teemingheart ofMexicoCity, peopled

by the dark-skinned Mexico that travels

by bus or metro rather than in big

SUV

with darkened windows. Tourists file in

to the palace to see the murals by Diego

Rivera. A less-visited corner houses the

modest set of rooms where Benito Juárez,

a 19th-century president, lived and died,

having tackled the power of the Catholic

church and defeated a French invasion.

So when Andrés Manuel López Obra-

dor declared that he would be the first

Mexican president since 1910 to use the

palace as his workplace, he was making a

statement that was both political and his-

torical. Mr López Obrador (known as

AMLO

toMexicans), whowon a landslide

victory in a presidential election on July

1st, promises a “fourth transformation”,

after those of political independence, Juá-

rez’s assertion of national sovereignty

and the revolution in 1910-17. “This is a

change of regime, not just of govern-

ment,” says Lorenzo Meyer, a historian

sympathetic to

AMLO

Although he does not take office until

December1st, some of the contours of this

change are already clear. Thosewho com-

pare

AMLO

either to Venezuela’s late

Hugo Chávez, an authoritarian populist,

or Brazil’s Lula, a corporatist social demo-

crat, aremissing

thepoint.Mr

LópezObra-

dor is steeped in a particular version of

Mexican history (about which he has

written several books), fromwhich he de-

rives his inspirations andworld-view.

His first hero is Juárez, a liberal but one

in whom the new president sees a leader

who “proposed a new Mexico based on

honesty and republican values”, accord-

ing to José Agustín Ortiz Pinchetti,

AMLO

’s authorised biographer. Second is

Lázaro Cárdenas, who in the 1930s nation-

alised the oil industry and carried out a

state-controlled agrarian reform. He

stands, as Mr Meyer puts it, “for bringing

social justice to a society that still has colo-

nial characteristics”, of racismfor example.

Much as the new president hates Mexico’s

democratising “neoliberal” governments

since the 1980s, which he (questionably)

equates with the pre-revolutionary dicta-

torship of Porfirio Díaz, his nationalism

has a strong streakof pragmatism.

What all this means is that

AMLO

will

be economically moderate, socially bold

and politically centralising— but not neces-

sarily democratic. On the economy, he is

committed to fiscal responsibility and has

promised not to raise taxes for three years.

He seems to be backing away from cam-

paign promises to reverse private invest-

ment in energy and halt a new airport for

Mexico City.

He thinks he can fund a big increase in

public investment, mainly for transport

projects in the poorer south, by eliminat-

ing waste. The first law approved by the

new congress (in which

AMLO

has a ma-

jority) involves a swingeing cut in the sala-

ries of senior officials. Federal “delegates”

will police spending by state governors.

He plans a shake-up of social pro-

grammes. “We think we can re-direct

$15bn-17.5bn” to a universal non-contribu-

tory pension and a scheme to help 2.6m

unemployed young people back into

school or into jobs, saysGerardoEsquivel,

whowill be a deputy financeminister.

Much of this is laudable in principle.

In practice, there is a risk that the salary

cuts deprive

AMLO

of the necessary ex-

pertise to run a complex state. The infra-

structure plans have not been properly

costed. The same air of improvisation

hangs over plans for public security, a cru-

cial issue.

Like Juárez,

AMLO

is personally aus-

tere. His recipe for fighting corruption and

crime seems to be to restore the authority

of the federal government. That maywell

be popular. Historically, Mexico has

floundered when power is dispersed. But

the president’s “delegates” look to some

like a device to turn his Morena move-

ment into a party of the state.

AMLO

mis-

trusts “civil society”, the pressure groups

that call for stronger checks and balances.

Even some of his supporters worry that

his aim may be to strengthen the state

rather than democracy.

No Mexican politician knows his peo-

ple, or at least the poorer part of it, better.

As a young man he spent six years living

in a hut with the Chontal Indians. During

his campaigns he has visited each of the

2,500 municipalities in Mexico twice, ac-

cording to Mr Ortiz. He is an effective po-

litical communicator. But his visionofhis-

tory may not accord with a country

whichmanyMexicans do not think is still

“colonial”, but who voted for him out of

despair at crime and corruption. It is still

unclear whether Mexico wants a change

of regime, or just of government.

The history man

Bello

Mexico’s newpresident sets out to transformhis country

further contraction of 0.5% and inflation

averaging 23%. With interest rates set to re-

main at 60% until at least December, out-

put could fall evenmore than forecast.

Aworsening economy may prompt so-

cial unrest. The General Confederation of

Labour, Argentina’s largest trade-union

group, has called a general strike for Sep-

tember 25th in protest at the government’s

austeritymeasures. Itmayprove the first of

many. “Much depends on how much pa-

tience Argentines are willing to show the

government,” says JuanCruz Díaz ofCefei-

das Group, a consultancy.

Mr Macri can take some comfort from

the travails of his predecessor. Ms Fernán-

dez was elected to the Senate last year but

faces a number of serious corruption char-

ges related to her time in office. She is likely

to seek the presidency again next year un-

less congress votes to stripher of the parlia-

mentary privileges which currently pre-

clude her arrest. Her return might suit Mr

Macri. Although she retains a loyal band of

supporters, polls suggest that two-thirds of

Argentines dislike her, making her re-elec-

tion far-fetched. Her candidacy would

probably take votes fromamoderate, more

appealing Peronist candidate.

A more electable Peronist would offer

Mr Macri a sterner test, but the party has

yet to coalesce around anyone. There is still

time. Néstor Kirchner, Ms Fernández’s late

husband and presidential predecessor,

emerged as a competitive candidate only a

few months before his election in 2003.

Should Mr Macri’s ratings continue to de-

cline, he could decide to stand down to

make room for one of his protégés, per-

haps María Eugenia Vidal, the charismatic

governor of Buenos Aires province, or Ho-

racio Rodríguez Larreta, the mayor of Bue-

nos Aires. Aides to Mr Macri discount that

prospect. But, as Mr Macri knows, his ca-

reer can change course suddenly.