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Currently in the final stage of my doctoral work on the political economy of national oil companies. Here you'll find some of my findings--as well as other musings on oil-related topics. All comments -- civil, civilized or barbarian -- are welcome

Mexico’s president-elect: How the radical candidate became the mainstream choice

Mexico’s president-elect: How the radical candidate became the mainstream choice

 

The landslide winner of Mexico’s 2018 presidential elections ends a decades-long tradition of centre-right, business-friendly; in comes an anti-establishment, economic populist amid a wave of violence and corruption.

July 2018 -- S.C. McKnight

Mexico is by a ‘mafia of power’—or at least that was the central claim of Andrés Manuel López Obrador, the charismatic left-of-centre candidate who won Mexico’s 2018 presidential elections. That the man commonly known as AMLO (pronounced ahm-low) won the election wasn’t surprising—pollsters were predicting it for months; that he won by such a wide margin, however—trouncing the two establishment parties of PRI and PAN that have dominated power since the 1930s—should dispel any doubts about whether ordinary Mexicans share his view of Mexico’s powers-that-be.

So how should we understand how this well-known iconoclast of Mexico’s political scene, known for his desire for change and economic redress, ultimately won the presidency after losing attempts in 2006 and 2012? The purpose of this analysis is to situate AMLO’s victory amid much deeper trends of Mexico’s political economy: unfulfilled promises of political and economic opening, popular impatience with technocratic rule, and the country’s near genetic condition of corruption and violence.

Why AMLO won: the proximate causes

Corruption and insecurity in recent years have reached stomach-turning levels and punctured the otherwise titanium tolerance levels of Mexicans. For the former, corruption during the sexenio (six-year presidential term) of Enrique Peña Nieto (2012-18) was beset by an unending wave of corruption scandals—more than one that included he, his wife or a half-dozen of his senior government officials and cabinet members. A 2015 study found that corruption costs Mexico as much as 10% of its GDP (gross domestic product), and eliminates nearly half a million jobs from small- and medium-sized businesses. As for violence—the latter proximate cause of AMLO’s electoral success—Mexico’s drug war has spiraled out-of-control, a decade-long tragedy caused by appalling decision-making and corruption, featuring grisly violence between the military and cartels as well as the cartels themselves, and the civilians unfortunate enough to be caught in the middle. Mexico is on pace for 32,000 murders this year, its highest ever and double the number in 2014, putting Mexico among the most murder-prone countries in the world.

Corruption and insecurity help explain the Mexican electorate’s shin-kicking attitude toward the country’s political class. But AMLO’s loose platform of economic populism and personal virtue was always pretty attractive on its own. His promises of universal pensions for the elderly and disabled, scholarships for poor students, food self-sufficiency, massive infrastructure investment on everything from roads to rail to oil refineries—all without either raising taxes or the debt, or so he says anyway—may seem fiscally impossible, but in a country of gaping socioeconomic inequality, a platform like this is long overdue.

So how does AMLO’s victory fit in among Mexico’s longer struggles with corruption, violence and economic development?

The Macro: from the perfect dictatorship to democracy … and back again?

For much of the 20th century, Mexico lived under a shockingly resilient and flexible one-party rule. Under the seven-decade-long hegemony of the PRI (Partido Revolucionario Institutional), Mexico was seemingly immune from the political mayhem of other Latin American countries that suffered through coups, civil wars, and dictatorships of the left and right. But this isn’t to say Mexico’s political history as a sovereign state didn’t have its fair share of bloodshed before that.

Upon gaining independence from Spain, Mexico in the 19th century was an especially bloody and unstable place. Violence, instability, territorial fragmentation and presidential musical chairs largely ceased under Porfírio Díaz and his team of technocrats (known as los científicos). Some three decades under his investment-friendly dictatorship (a period known as the ‘Porfiriato’, 1876-1910) brought infrastructure-building and mostly export-oriented high-speed growth, including turning Mexico into the world’s second-largest oil producer for a decade or so (1910-20).

But the Porfiriato also brought rampant corruption, shameless nepotism and very little benefit to ordinary Mexicans. This set the stage for another bout of instability, government collapse and territorial breakdown—this time far bloodier and more widespread in the form of the Mexican Revolution (c. 1910-20). It was the umbrella-nature of the PRI that recentralized power and incorporated social forces, ultimately culminating in what came to be (not necessarily graciously) known as ‘perfect dictatorship’. Under the PRI’s political monopoly, Mexico returned to stability, the state became a central economic player (see below), and even yielded an economic ‘miracle’ (loosely defined from 1940-70).

But this state-centric model also stifled private business and squashed political dissent—ruthlessly at times, as seen during student protests in 1968 and for years of low-level guerrilla struggle in the south. When Mexico’s oil- and debt-driven growth hit serious snags in the early 1980s, the PRI faced the unenviable choice of limited democratization or revolt-from-within (it ended up having to deal with both). Mexico would need to open up—politically and economically—if it wanted to preserve its power and the gains of decades before, and more ominously, to avoid a return to Mexico’s darker past of chaos and economic calamity.

AMLO’s pragmatic search for a broad—and sometimes contradictory—alliance of classes may be seen as an attempt to resurrect this big-tent party structure, but this time under the four-year-old party he founded, Morena—not the PRI—as the spinal column of political power in Mexico.

The Macro: Addressing the undelivered goods of economic opening

From roughly the Great Depression till the ruinous debt crisis of the 1980s (aptly named the ‘Lost Decade’), Mexico’s economic model was state-led, inwardly-oriented industrialization (commonly known as ‘import-substitution industrialization’ or ISI). During this period, the Mexican state—and countless state-owned enterprises birthed by it—played vital economic roles as major investors, providers and recipients of credit, tax contributors, and job-givers. Under this vast corporatist structure, business, labour and the state more or less moved in unison, coordinating their attention and investment to politically and economically strategic sectors—often heavy industry and almost never agriculture. The results, most notably the decades-long economic ‘miracle’, weren’t insignificant.

This closed, state-led model eventually yielded uncompetitive, loss-making, and so debt-generating entities that looked more like government agencies than companies focused on profits and losses. Opening Mexico to global trade then was as much meant to escape the crippling debt crisis (Mexico defaulted in 1982) as to find an alternative path to growth and development. The most important component of this opening was Mexico’s joining with the United States and Canada in the North American Free-Trade Agreement (NAFTA) in 1994.

That takes us to today. Over two decades of economic opening and integration hasn’t turned Mexico into the high-growth, high-income country that was widely (but unrealistically) expected. Instead, parts of the Mexican economy were converted into virtual branch plants of mostly American multinationals who were looking to take advantage of Mexico’s natural resource base and low-cost labour. Trade liberalization thus benefited areas in the north that bordered the United States, where they were incorporated into industrial value chains of multinational corporations (and so, the term maquiladora entered the English dictionary). Along with this (often light-) manufacturing were a cluster of vibrant Mexican firms whose businesses thrived on the export of agriculture, livestock and food processing to its NAFTA partners. Meanwhile, Mexico’s southern regions continued to stagnate, destitute, neglected, and suffering human-rights abuses—state-sanctioned or otherwise.

AMLO never had trouble getting support in the south; it was convincing northerners that was his real challenge—and his ultimate route to victory after two failed attempts at the presidency in 2006 and 2012. In speech after speech, AMLO has promised not to scrap NAFTA (but renegotiate, yes) or to provoke the Americans—however much they provoked him. Eventually he was believed, by that section of electorate as well as by the markets, which barely flinched to the announcement of his victory.

Conclusion: Where does AMLO fit in?

Mexico’s transition from the ‘perfect dictatorship’ of the PRI to genuine multi-party democracy has rightfully been cheered by democracy advocates—and grudgingly accepted by democracy skeptics who question the viability of democracy surviving in countries without a strong democratic tradition. AMLO’s victory needs to be placed in this broader context of a country that hasn’t fully escaped its authoritarian and bloody past—AMLO himself features some thin-skinned authoritarian tendencies—nor has Mexico entered the world of wealthy, stable democracies, no matter how much it associates with them. Likewise, AMLO’s thrashing of Mexico’s established political parties shows a populace fed up with rampant violence, corruption and persistent inequality—all goods that decades of technocratic leaders, whether under PRI (in power till 2000, then again from 2012-18) or the conservative PAN (in power from 2000-12)—failed to deliver consistently or inclusively. For that reason, the more radical solution of AMLO, despite his almost messianic self-image and utopian economic schemes, was the most appealing choice. While AMLO’s victory was never really in question, it was the margin of his win that shows just how hungry for change most Mexicans are.

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