international analysis and commentary

Mexico: a President’s legacy

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Andres Manuel López Obrador (AMLO) was elected President in a landslide in 2018 as Mexicans were drawn to his vision of a dramatic overhaul of Mexico’s politics and economics (the so-called Fourth Transformation). A review of politics, the economy, social welfare and the environment, justice and the rule of law, as well as relations with the United States suggests that his legacy will be complicated: not as good as his supporters would like, not as horrible as his detractors scream.

Three major antecedents should be kept in mind when considering AMLO’s legacy prospects. They depend on a combination of actual results and the perceptions Mexicans have of their political, economic and social structures. In addition, his legacy will depend on the upcoming political combination among various scenarios: the Morena party’s candidate, Claudia Sheinbaum, wins in 2024 and the party continues to control Congress; Sheinbaum wins but Morena loses control of Congress; or Sheinbaum loses. Finally, as the experiences of Luis Echeverria Alvarez (1970-1976), Jose López Portillo (1976-1982) and Carlos Salinas de Gortari (1988-1994) demonstrate, a popular president can lose it all if his/her policies suddenly fail to deal with challenges arising in his final year.

AMLO

 

Politics

There is significant concern inside Mexico and internationally that AMLO is weakening democracy, though no serious analyses accuse him of seeking its overthrow. He labels opposition as illegitimate, criticizes the press, and does not take precedent legislation as legitimate, so his reforms wind up being challenged in court. He also verbally attacks opponents and journalists who oppose his policies, as well as Sheinbaum’s rival for the presidency, Xóchitl Gálvez, despite the electoral authorities ruling that he is violating the electoral laws which prohibit the government from involvement in the campaign. Even long-time ally and former Foreign Minister Marcelo Ebrard, after losing the Morena party primary competition to Sheinbaum, denounced the process and accused AMLO of following the Partido Revolucionario Institucional’s (PRI) presidential practice of naming one’s successor during the seventy years that it dominated the nation’s political life.

Nevertheless, appointing judges who favor your policies in federal courts and passing legislation to support your agenda are common practices in democracies characterized by majoritarian parties. The institutional structures addressing checks and balances among the Executive, Legislative and Judicial branches of government vary widely across democracies, so altering that balance within a country via legislative or executive measures is not necessarily a threat to democracy. The President has not suppressed opposition candidates or protests, nor has he cancelled elections, or decreed laws against press freedom; and he has accepted electoral losses.

While we might abhor the idea of a political leader verbally attacking the opposition, this behavior has become commonplace and is no longer perceived as beyond democratic norms. AMLO has also said that he will retire completely from politics next year. Undoubtedly, there will be pressures for him to weigh in if, as many expect, Sheinbaum were to find major aspects of the Fourth Transition unsustainable or if Gálvez were to win. Only if he were to pursue extra-legal paths to influence the new government would his behavior itself constitute a threat to democracy.

An important medium- to long-term legacy from AMLO on the political system is bringing the military back into Mexico’s political and economic realms via non-security positions in the government, control over key infrastructure and access to their budgets. It may be difficult for future leaders to avoid the old Latin American pattern in which a politically and financially secure military became an arbiter for the political contestations that created economic, political and social instability.

 

Economy

AMLO is famously frugal, for himself and the country. His moral and ethical standards convince him that one does not need excess consumption and his understanding of the roots of Mexico’s inequalities and poverty lie in the elites and their government allies channeling the country’s wealth into policies and programs for their own benefit. Severe budget cuts to the bureaucracy and to government agencies, which do not address the needs of the nationalist and average Mexican, makes sense to him, as does not indebting the country to foreigners just to improve national economic growth.

Austerity, along with control of Congress, permits AMLO to channel funds to the poor and projects he considers fundamental to the Fourth Transition – meaning state control over strategic assets, direct payments to the poor, etc. – without creating large budget deficits, depleting foreign reserves, or weakening the national currency. It also enables him to strengthen institutions he likes while weakening ones he does not.

By many traditional standards, AMLO’s approach has been quite successful in the short term. He has never attempted to undermine the delicate trade negotiations in the context of USCMA – since 2020 the successor to NAFTA. The economy grew by an average of 3.9% in 2021-2022 and recovered to pre-COVID levels in the 3rd quarter of 2022; after a brief fall in growth rates at the beginning of 2023, by the end of the summer projected GDP growth rates had been adjusted upward twice to 2.8%. The inflation rate has experienced a steady decline and there has been a steady increase in consumer confidence this year to date. International reserves are quite healthy at US$200 billion, and the peso has appreciated. After falling in 2019, net inflows of foreign direct investment increased to their second highest level (current US$38.9 billion) in 2022, largely driven by the US promotion of nearshoring supply chains. Remittances from Mexicans working abroad are at record levels.

Nevertheless, there is a reckoning that will have to be confronted by the next government. The fat will have been trimmed from the bureaucracy and there will no longer be agencies and programs to be eliminated and their budgets allocated to favored ones. State companies (especially PEMEX and CFE) and white elephant projects (Olmeca refinery is 100% over budget at US$16 billion; Maya train is 70% over budget at perhaps US$20 billion; the new Mexico City airport is at least 50% over budget at US$6.2 billion) will continue to require huge subsidies. Subsidies to keep gasoline prices stable in the face of rising oil prices internationally have increased. Considering political costs, the social programs will not be adjustable to reflect a tighter federal budget. Comparisons with the impact of nearshoring in Asia indicate that Mexico is not benefitting as much as it should, given its location on the border of the US market.

 

Social welfare and the environment

Significant progress has been achieved in improving social welfare. INEGI reports that the poverty rate declined from 49.9% of the population in 2018 to 43.5% in 2022. The value of the minimum wage has more than doubled since 2018, due to increases in its official level and the appreciation of the Mexican peso against the dollar. In addition, remittances from Mexicans working abroad have also almost doubled in the same period.

But there are indications of limits to this improvement. Extreme poverty rates rose slightly. 60% of Mexicans work in the informal economy and are not eligible for a pension. The number of people indicating financial problems accessing healthcare rose from 16.2% of the population in 2018 to 39.1% in 2022. The administration chose to leave a tax reform to future governments and as a result made little impact on economic inequality. World Bank figures show that increases in life expectancy in Mexico stagnated between 2000-2015 and fell between 2015 and 2019 before COVID-19; the pandemic hit Mexico particularly hard given the government’s soft response to it, and life expectancy fell from 74 years in 2019 to 71 in 2021. Though Mexico has the second largest economy in Latin America, the 2021 figure put Mexico below Chile (81), Argentina (79), Colombia (73), Peru (72), and on a par with Venezuela.

The environment is where AMLO will have a big and negative legacy. His infatuation with hydrocarbons undermined the progress of previous administrations in attracting capital for cleaner energy. The construction of the Maya train is causing irreparable harm to the Yucatan’s flora and fauna.

 

Justice and the rule of law

Mexico’s criminal justice system has historically been abusive, inadequate and incapable; the AMLO administration has not improved the situation and in some cases the situation has worsened. Human Rights Watch documented these failures in its review of events in 2022: “Around 90 percent of crimes are never reported, a third of reported crimes are never investigated, and just under 16 percent of investigations are ‘resolved’, (either in court, through mediation, or through some form of compensation), meaning authorities resolved just over 1 percent of all crimes committed in 2021, according to the national statistics agency.” Mandatory pre-trial detention is a standard tool in the legal system and in 2019 AMLO’s Congress expanded the list of crimes requiring such detention.

Torture is a common means used to obtain confessions; in 2017 Congress required the Attorney General to track accusations in a national registry, but as of September 2022 it had not been created. To deal with a corrupt and inadequate Federal police system, AMLO created a National Guard (staffed by people from the military), gave the military increased tasks and powers to deal with crime, and the Morena party-controlled Congress legislated that they be subject to military justice rather than civilian law when carrying out these tasks. The result has been increased numbers of human rights complaints against the National Guard and the military since 2018 and the development of a spy network within the military that has targeted human rights defenders, journalists and opposition politicians. Despite concerns raised by these events, AMLO attempted to transfer control of the National Guard from the civilian Public Safety Department to the Ministry of Defense but the Supreme Court blocked the transfer since it was constitutionally mandated to be under civilian control. The President has expressed his desire that the Morena party win a 2/3 majority in the next Congress and make the Constitutional reform to enable the transfer.

AMLO’s approach to corruption emphasizes morality, not incentives (pay and benefits) or capacity to sanction; it has proven inadequate to the challenge. In general, transparency institutions and legislation, part of the important reforms pursued by democratic governments after 2000, have been significantly weakened. He issued a decree in 2021 permitting national security exceptions in the permitting process for infrastructure projects, which serves to conceal important information, but the Supreme Court rejected it. No-bid contracting continues to be the overwhelming mechanism by which the government procures goods and services. Transparency International indicates that perceptions of corruption during the current President’s four years in office (2019-2022) reversed declines that had occurred in the prior four years, 2015-2018. Nevertheless, there were no improvements in these perceptions after 2020 and the figures remain significantly below what Mexico had achieved in 2014.

Homicides in Mexico declined slightly from the peak high reached in 2018 in the first two years of the AMLO government, then significantly in 2022 (from 28/100,000 to 25/100,000). The president attributed the decline to the impact of his “hugs not bullets” strategy. However, the 2023 numbers to date suggest no further improvement, the 2022 figure is still significantly above the figures before 2017, and many critics suggest the decline results from a government decision not to confront the illegal drug trade. Other statistics on violence are not as positive. Mexico experienced the most killings of environmental activists in the world in 2021 (54) and though the number declined to 31, Mexico only fell to third on the global list, behind Brazil at 34. In 2022, the murder of 11 journalists made Mexico the most dangerous country in the world for reporters. There has been no progress on dealing with femicide.

 

Relations with the US

AMLO’s pragmatic behavior towards the US  – meaning, not confronting the Trump administration, accepting the USMCA and its dispute settlement procedures, collaborating on migration, raising US responsibilities for guns and drugs but not delivering ultimatums – recognizes the vulnerabilities Mexico has vis-à-vis its Northern neighbor Mexico is becoming more dependent on the US via nearshoring, remittances and tourism. His legacy here is to reinforce the long-standing tradition embodied in Porfirio Diaz’ oft-quoted “Poor Mexico, So Far From God, So Close to the United States.”

 

Read also: US-Mexico relations: potential progress and stumbling blocks

 

Whither the legacy?

Political leadership requires making trade-offs to advance one’s agenda and recognizing the dangers of pushing too far, too fast. The Fourth Transformation is ambitious and Mexican citizens have been demanding significant changes that will have a real impact on their lives.

Examining AMLO’s tenure carefully reveals significant and risky trade-offs: fewer checks and balances on a democratically elected president, but more legitimacy of the system in the eyes of the citizenry; more dependence on the US, but development of new mechanisms to reduce poverty in the south of the country. AMLO’s greatest legacy may be having presided over this treacherous moment in Mexican history.