Understanding The Challenges and Potential of Mexican President Elect AMLO

With the conclusion of Mexico’s presidential elections this past Sunday, Andres Manuel Lopez Obrador is poised to govern one of Latin America’s most populous and diverse countries with challenges unique to both its geographic proximity to the United States and historic relationship to the region’s turbulent political and economic history. While the Western press has frequently bemoaned the rise of another Latin American socialist/populist in the mold of Venezuela’s late Hugo Chavez, the reality is much more nuanced.

To understand the more centrist and pragmatic position that Lopez Obrador – AMLO – has adopted and is likely to pursue in government, we need to understand some basic realities about Mexico’s current political, economic and financial circumstances. Politically, AMLO made a rational choice in his efforts to secure victory in this election cycle by pursuing a broad-front style political coalition after having lost in fraudulently manipulated presidential elections on two previous occasions. His approach is comparable to that of Lula in Brazil who, after having lost in previous attempts to achieve the presidency, eventually adopted a broader and more pragmatic approach that was ultimately successful. In the case of AMLO, his calculation obviously worked and was crucial in generating the overwhelming electoral support necessary to invalidate any attempts at fraud and manipulation that have plagued previous elections. AMLO achieved this support not just by force of his own base of supporters built up from years of campaigning, but by also recruiting traditional supporters and operatives from the P-R-I, Mexico’s historic political party of the revolution which became severely discredited after years of neoliberal reforms and corruption. AMLO in fact got his political start in his native oil-producing state of Tabasco under the old PRI, and understands both its historical importance in creating a state managed economy under the original post revolutionary governments leading to the golden years of Mexico’s economy and social development, as well as it’s subsequent corruption and bastardization by international finance capital which implemented neoliberalism and ultimately led to NAFTA.  AMLO pragmatically appealed to segments of this traditional political structure by both arguing for a more nationalist economic development program that would benefit these elites and their constituents, as well as placating some entrenched interests by promising to not pursue radical expropriations of foreign owned investments.

 

 

Economically and financially, Mexico is extremely dependent officially on both remittance payments from migrants and the maquiladora industries for revenue, with the unofficial inflow of money from international drug cartels actually being greater than either of these two sources. Mexico’s position overall has been weakened significantly by the privatization reforms of the national oil company PEMEX undertaken a few years ago by the current government, and also by the extreme penetration of finance capital including the position of the mega hedge fund BlackRock with its multi billion dollar investment in Citibanamex, originally a Mexican banking group purchased by Citigroup in 2001. AMLO actually held a meeting a few months ago with Larry Fink, the head of BlackRock, in order to placate BlackRock’s concerns, a necessary step in order to prevent capital flight and currency fluctuations. As explained by Mexican international relations expert Alfredo Jalife-Rahme, the choice of Poncho Romo, a known investor from the financial center of Monterrey in northern Mexico, as chief of staff, along with others designated for the Department of Finance and Revenue (Hacienda), are important signals to the markets that Mexico’s new government will not radically challenge key interests.  In this light, while AMLO promises to increase the national oil refinery capacity and return to self-sufficiency in fuel and energy production, the strategic control of oil and gas investments– including the development of shale gas reserves in northern Mexico and offshore deposits – will remain a thorny topic in US-Mexico relations.

Nonetheless, we can expect  AMLO’s government to pursue significant improvements for the Mexican economy, particularly for the poorer states of the south with the lowest levels of economic growth. AMLO cleverly argued for delaying negotiations on NAFTA during the campaign, and now will have the opportunity to influence the outcome of any trade talks with the US. The NAFTA talks will provide AMLO the forum to propose development and trade arrangements that will create stability and employment in areas of Mexico that most need it, and thereby appeal to Trump’s interest in deterring migration of Mexican nationals to the US.

 

 

In this vein, the cabinet position of Foreign Minister deserves discussion, especially given the abrupt switch announced days ago by AMLO substituting former Mexico City mayor Marcelo Ebrard for the previously designated nominee, Hector Vasconcelos.  The original choice – Vasconcelos – was simultaneously elected to the Senate and now plans to coordinate foreign policy initiatives with the executive from the legislative branch. While no longer in line to be Foreign Minister, he will be involved with the transition team in conjunction with newly designated Foreign Minister Ebrard, and so his background and statements given prior to the election are important to consider. Vasconcelos is a well known former diplomat and son of Jose Vasconcelos, famous intellectual from early 20th century Mexico, who became Secretary of Education and Culture after the 1910 Revolution. The Vasconcelos name is nostalgically linked with the Revolutionary ideal of a unique national identity – a Raza Cosmica or Cosmic Race – that exalted the mixture of different ethnicities as a source of pride in juxtaposition to historically racist Euro-centric nationalisms. During the campaign, Vasconcelos had strongly advocated for the dignity and rights of Mexican nationals abroad, speaking out forcefully against the US’s earlier policy of separating children from their migrant parents who unlawfully enter the US, and suggesting that Mexico’s network of consular representatives throughout the US be repurposed in order to better defend the rights of immigrants.

In broader terms regarding foreign policy, Vasconcelos indicated during the campaign that Mexico has been exceedingly focused on its relationship with the US in recent years, and so the goal will be to diversify relationships with a variety of foreign partners specifically in the area of trade and reciprocal investments. The European Union, Asia-Pacific region, some African countries and Latin America of course will all be reassessed for opportunities, but the two ‘giants’ of the 21st century – China and India – will merit special attention. Under the current government, promising efforts were made to secure China’s investment in a high speed train project between Mexico city and the neighboring state of Querretaro. While the project was ultimately abandoned due to corruption accusations, we can expect the new government under AMLO to explore these and other foreign investment opportunities in infrastructure and China will most certainly be courted.

In terms of an overall international relations philosophy, AMLO has consistently argued that Mexico should return to a policy of non intervention in the affairs of other states, stating that it is hypocritical to defend human rights in other countries when such severe problems exist in Mexico, and that under the new government the priority will be to put the Mexican ‘house in order’ instead of supporting interventionist rhetoric towards other countries. This is a return to Mexico’s historic post revolutionary neutral stance and bodes well for regional states such as Venezuela or Nicaragua, which have recently been targeted by Western media and officials under the pretext of human rights violations.

 

 

Returning finally to the newly designated Foreign Minister, Marcelo Ebrard is well known by many in the US including by former New York City mayor and current confidant and legal adviser to the US President, Rudolph Giuliani.  During AMLO’s term as Mexico City mayor, Ebrard served as head of the Department of Public Safety and contracted with then former mayor Giuliani’s consulting firm. Well known during his term as NYC’s mayor for dramatically reducing crime – and also for his previous work as a federal prosecutor in attacking notoriously invincible organized crime families – Giuliani’s services coincided with the transformation of Mexico City into a relative oasis of calm and stability that would attract thousands more to the already crowded mega city as many areas of the country descended into violence during the subsequent drug war launched after 2006 by former President Calderon. As mayor of Mexico City, Ebrard continued to develop high level US contacts with Obama administration officials, and even worked with the Clinton Foundation on an air quality initiative. During the 2016 US presidential election, Ebrard actively supported get-out-the-vote efforts aimed at the Latino population in the US, and expressed similar concerns as did most Latin American political figures with the eventual Republican nominee. Nonetheless, it would appear that his old ties with Giuliani may have factored into his positioning as head of the Foreign Ministry, perhaps attempting to replicate the informal relationship developed between current Foreign Minister Videgaray and the US President’s son-in-law Jared Kushner. Interestingly, AMLO announced his invitation for the US President to attend his inauguration in December after promoting Ebrard to head the foreign ministry.

The result, therefore, may be in effect a hybrid team which seeks to capitalize on the personal US oriented relationships of Ebrard while maintaining the broader vision and scope elaborated by Vasconcelos. Whatever the case, the team will shortly make known more details of their substance and style: next week AMLO will speak with Mike Pompeo – the US Secretary of State – on July 13th as the US official travels to Mexico to meet with both representatives of the current government and the president-elect; later in July, AMLO will attend the Pacific Alliance meeting of regional trading partners Colombia, Chile, Peru and Mexico, an entity that he has criticized in the past as ineffective.

 

 

In conclusion, we can expect a pragmatic approach from AMLO, both in regards to US relations as  well as in terms of overall foreign policy and trade relations.  The president-elect has clearly indicated his goal of creating stability and employment in the impoverished rural regions of Mexico as an alternative to migration, and will seek to attract the US administration’s support on development projects and trade arrangements that will facilitate this objective. Simultaneously, AMLO intends to pursue trade and development opportunities with partners from the emerging multi-polar world such as India and China, renewed relationships with all Latin American partners and a principled return to neutral non-interventionism, all while trying not to upend the apple cart in its relationship to the US given the outsized influence that BlackRock and other interests including the oil and gas sector have over Mexico’s economy.

 

 

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