Mexico is Condemned to Stagnation with the Victory of AMLO in the Presidential Elections
AMLO's brand of populism and nationalism represents a threat for the Mexican economy.
This Sunday, July 1, the Mexicans went to the polls to elect a new president who will lead the country for the next six years, and as consistenly predicted by the polls, the victor was leftist Andres Manuel Lopez Obrador (AMLO).
With 42% of the vote reported, AMLO is currently leading by a substantial margin, with 53.7% of the vote. His centrist and center-right competitors trail far behind, with Ricardo Anaya of Partido de Accion Nacional at 22.7%, and Jose Antonio Meade of the longstanding establishment party PRI a distant third with 15.2%. This is a stunning electoral triumph for the left-wing outsider, and an embarrassment for current president Enrique Pena Nieto and his PRI party.
Even though the National Electoral Institute (INE) of Mexico has not announced the official figures for this race, Meade and Anaya have already publicly conceded their defeat.
The electoral results demonstrate that Mexico has not learned its lessons from the rest of the region: the style of populism and protectionism that Lopez Obrador has been advocating bears close resemblance to the economic models pursued in countries like Venezuela, Nicaragua, Bolivia, and Ecuador, and the results of such policies have been markedly disastrous.
With AMLO in power Mexico “faces a period of economic regression; now, this setback might be catastrophic, as in the case of Venezuela, or it could be a much more moderate setback,” political analyst Gerardo Garibay argued in an interview with the PanAm Post.
There were many economists, political scientists, and human rights defenders who tried to warn the population about the “bleak outlook” they see with Lopez Obrador in power, but despite their best efforts, the Mexican people have spoken. Thus, from December 1 of this year, when Lopez Obrador will take office, the country will embark upon a new direction.
Now the opposition will have to work to keep the economy on track “and try to work to achieve positive results amidst a political landscape that is very complicated,” said Garibay.
He is also editor of Wellington.mx, a columnist in various media outlets, and the author of several books. He noted that the presidential campaign made it “very clear” that there is a need to build an alternative political movement that is more effective, and that such an effort should begin immediately.
“It is necessary to build a political alternative that is truly free market, morally sound, liberal, something different…it is necessary to build, of course, on the political level, but first of all with respect to the national dialogue,” he said.
Lopez Obrador’s last political office was head of the government of Mexico City, and he has been a leading national political figure for the better part of two decades. Often characterized as a nationalist and a populist, he mounted two previous presidential bids, in 2006 and 2012, both times winning second place.
During one of the campaigns he alleged massive electoral fraud in the wake of his defeat, which led to his supporters taking over Mexico City’s iconic Paseo de la Reforma for several weeks.
Investors and the business community are likely to be substantially dissatisfied with AMLO’s overwhelming victory. Look for the Mexican peso to further weaken with the dollar. The AMLO victory also means that all bets are off as Canada, Mexico, and the United States consider the future of NAFTA, and its renegotiation. AMLO had pledged to delay the process until after the election.
Critics contend that despite AMLO’s pledge that he will not raise the national debt, that he has yet to explain how he is going to pay for his multiple populist proposals for increased spending, which includes new outlays for students, seniors, the agricultural sector, and oil refineries. He has additionally, pledged to cut the salaries of political office holders.
AMLO’s victory is something of a counter-trend in relation to the rest of the region where center-right candidates have swept elections throughout Latin America, including Ivan Duque in Colombia, Sebastian Pinera in Chile, and Mauricio Macri in Argentina.
Further troubling for those opposed to AMLO was his impressive showing in Congressional elections, where his MORENA party dominated results in the Chamber of Deputies, winning 213 of 300 seats. In the Senate, however, his party’s showing was less impressive, and opposition parties will have a slight majority, meaning that AMLO will have to work with the opposition, to some degree, to implement his agenda.