Why you should care

Ahead of his inauguration, Andrés Manuel López Obrador’s populist moves are rattling markets — and resembling Donald Trump’s.

New Mexican President Andrés Manuel López Obrador, AMLO to friends and detractors alike, sits at a curious place in an even more curious time on both sides of the border. Replacing the widely and wildly reviled Enrique Peña Nieto with his inauguration Saturday, AMLO — also affectionately called La Piedra (The Rock), El Comandante (The Commander) or El Peje, after a fish — is delivering a kind of realpolitik that recalls no one if not his north-of-the-border neighbor, Donald Trump. Not in tone and timbre but in substance as his gut-level convictions spring from a willingness to ask: Why should we?

Obrador, in catering to a hard-core base from both ends of a very different political spectrum under the rubric of the National Regeneration Movement (MORENA), and composed of members of Mao-influenced and social-conservative parties, is laying out a program like a man with nothing to lose. Closing a year of economic volatility driven by political uncertainties, Mexico’s fortunes as the 15th largest economy in the world are facing some fairly significant stressors.

Few of the stressors have to do with caravans of Honduran migrants. Many have to do with systemic corruption, crime, 43 percent of the population living in poverty and the ever-shifting relationship with its well-muscled neighbor to the north.

We will see if AMLO will live up to expectations or if he will become the classic imperial president.

Gabriel Osorio Vargas, attorney

“AMLO is the culmination of a need for the political openness that Mexican politics and society has been claiming since the October ’68 protests when students were massacred,” says attorney, South American scholar and socialist Gabriel Osorio Vargas. “But Mexico also remains deeply contaminated by corruption, from the central executive to the municipal presidencies.”

So in the spirit of countering those forces that have bedeviled past Mexican presidents, and with the wind at his back and parliamentary majorities in his pocket to start his six-year term, Obrador, 65, is pushing reforms both structural and singular. By lowering the constitutional bar for when referenda can be called and spreading his own delegates among the states to report to him on all federal programs, Obrador is stepping, none too gingerly, around governors — with real and practical outcomes. Most recently, that meant shutting down Mexico City’s partially built $13 billion international airport, the standard municipal cash sop.

Supported by 70 percent of the 1 million Mexicans who voted to cancel the two-year-old project, the move not only breaks the massive undertaking into more manageable improvements to existing airports, but it also starts to tighten the spigot on corruption fuel, also known as cash. It’s a turn that concerned markets — there was an immediate sell-off of the peso — but doesn’t concern Obrador at all.

“Corruption is what had done the most damage,” Obrador said in a campaign stump speech in Veracruz.

Osorio Vargas seconds the sentiment. “Seventy years of PRI and PAN governments, which dominated the political space between the 1930s and 2018, didn’t just usher in AMLO,” says Osorio Vargas. “It ushered in a public willingness to have MORENA make the changes the people are demanding.”

Obrador is the vehicle for change, but he’s hardly a fresh face. The Tabasco native is a decades-long veteran of progressive politics who served as mayor of Mexico City from 2000 to 2005 and twice lost presidential races before breaking through with his romp in June — claiming 53 percent of the vote in a five-candidate race, more than 30 percentage points better than the next closest candidate.

While people might be demanding them, his changes are confusing economists and a few critics. “He mocks critics as being part of this rich class,” says Miguel Ferrigno, who just finished his term as a member of the city council of San Pedro Garza García, part of the Monterrey metropolitan area and the municipality with the highest GDP in Mexico. “But giving monthly subsidies to all high school students, some college undergrads, young adults that neither work or study and doubling the pensions for all citizens that are 65+ years of age? How’s he going to do that?”

This populism, popular with the aforementioned “people,” even as muddled as they may be about the “hows” of paying for it all, signals that Obrador is much less market-friendly than his predecessors. Manufacturing and construction economic indicators are improving post-election, but stocks have been skittish and Fitch Ratings has revised its credit rating outlook for Mexico to negative, Honduran migrants are being tear-gassed at the border and homicides jumped 27 percent last year to 31,174 — making it Mexico’s most murderous year on record.

“We will see if AMLO will live up to expectations,” Osorio Vargas said. “Or if he will become the classic imperial president of the PRI Mexican political system.”

As Obrador’s website rocks a picture of him gripping and grinning next to Trump son-in-law Jared Kushner, Secretary of State Mike Pompeo, Department of Homeland Security Secretary Kirstjen Nielsen and Secretary of the Treasury Steven Mnuchin, the new president clearly comes to deal, with migration and a massive trade deal critical in the weeks and months ahead. In a book he published pre-presidency — Oye, Trump, or Listen, Trump — culled from past speeches and written in the form of an open letter, AMLO ends with “I send you a warm hug.”

Time, though, will tell if honey is more useful than vinegar and if an increasingly beleaguered Trump will return the embrace.

Read more: Why Mexico’s ‘first lady of the disappeared’ is ready to forgive.

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