Willy nilly Morena rattling nerves and markets

The presidency of Andrés Manuel López Obrador (AMLO) is already starting to feel like a slog, and it hasn’t even begun yet.  López Obrador  was elected in July and is set to begin his six-year term on December 1, but it certainly feels like he’s president already and an embattled one at that.  Memory can be hazy but it seems to us that in prior transition years, the president-elect maintained a far lower profile during the five-month period between election and inauguration and took care not to overshadow the sitting president.  That may be because in the past the transitions were largely between PRI administrations, or between the PRI and the PAN, which aren’t much different anyway.

Against this backdrop, the new López Obrador administration and his leftist Morena party are anticipated, for better or worse, to mark a historic departure from the norms of post-Revolutionary Mexican public administration.  Furthermore, AMLO has made a career out of attention-grabbing stunts and polemical statements, so it’s understandable that he would break the mold now that he’s got the spotlight.  But it’s, uh, not going so great.  Opponents of the president-elect spent the campaign issuing dire warnings about Mexico turning into Venezuela under an AMLO government, so the president-elect went to great lengths to calm the captains of industry and reassure public opinion that his government would not lead the country into Socialist collapse.  Then in October he and his followers in Morena mounted a “citizen consultation” regarding the fate of the heretofore under-construction new airport in Mexico City, which unsurprisingly ratified his preference for canceling the half-built mega-project.  Regardless of which side of the airport debate you support, the “consultation” was a flimsy charade mounted to make it look like “the people” had spoken and the incoming president was merely a humble vessel into which a monolithic demos poured the fruits of their deliberations, to paraphrase Sir Humphrey Appleby.  Following the consultation AMLO announced without further ado that the airport project would be canceled, sending shockwaves through the private sector and prompting international ratings agency Fitch to downgrade Mexico’s credit rating outlook.

Just when the Mexican business community was starting to relax a bit, the airport cancellation stuck its tail in the light socket.  But Morena was just getting warmed up.  On November 8, Morena’s Senate Coordinator Ricardo Monreal presented an initiative in Congress that would slash the commissions banks are permitted to charge for a range of services.  The banks fainted dead away and the stock market plunged, sending more red alerts through the private sector.  It didn’t help that AMLO himself appeared to be taken by surprise by the ambush-like move on the banks, and Morena party President Yeidckol Polevnsky publicly scolded Monreal for presenting initiatives without the backing of the party.  Days later Monreal was in the headlines again, when his political allies in the Mexico City assembly were accused of attempted bribery to rig a vote in his favor.  Days after that, Morena proposed yet another legislative reform that threatened to cancel the concessions of mining companies that fail to protect local communities from negative social impact in the mining areas.  The private sector was once again stricken with the vapors and Venezuelan imagery began appearing in local political cartoons.  And on the heels of his handy triumph in the airport “consultation,” López Obrador has now proposed a series of additional consultations on topics ranging from a passenger train in the Yucatan peninsula to a new oil refinery, port modernization and whether or not to prosecute past presidents for corruption (!).

Life under Morena began with the seating of the new Congress on September 1, and so far the experience has been like something out of The Merry Frolics of Satan.  Andrés Manuel López Obrador faces a number of fearsome challenges as he takes office, and as we presaged in a prior post, the most fearsome of these may well be his ambitious subordinate Ricardo Monreal.  As things stand now, El Peje might find himself reaching for the Tums rather than the champagne at the inaugural gala.

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