During the third week of September, President Elect Andrés Manuel López Obrador continued his “thank you tour”, doubling down on the idea that he has to implement swift changes in many different areas in order to correct all the problems that the market-oriented (“neoliberal” as he calls them) policies created. Despite many opposition figures (particularly from the still incumbent PRI party) in Congress arguing that Mexico is not bankrupt, AMLO suggested that over the last 35 years “Mexico has not grown, poverty has increased and the government’s debt is tenfold what it was with (President) Fox (2000)” among other things. In addition he said during a visit to the state of Baja California Sur that all new mining projects would be reviewed by the people through a referendum, in order to know if the firm responsible for it would receive permission to operate.
The week started with the continuing debate regarding if Mexico is bankrupt. Opposition figures in Congress and more right-wing leaning political pundits argued that the President Elect is misguiding Mexicans by telling them that the country is bankrupt. They indicated that public debt is stable and has been recuperating over the last two years and Mexico has had macroeconomic stability during most of the years AMLO referred to (1982 – 2018). Recognizing that the country still has a lot to do (average growth has been only 1.3% and poverty rates have decreased only a couple of percentages still ranging in the 40 to 50 percent), the country is in much better shape than what AMLO suggests. The proof is that financial institutions and credit rating agencies are optimistic and confident on the country’s economy as a whole, as Mexico’s country risk measure and credit rating are in good levels. Meanwhile, Morena party leaders seconded President Elect López Obrador indicating that there are no resources to pay for many of AMLO’s proposals thanks to how the current and past administrations have acquired debt (over the last 18 years it has increased tenfold over President Fox, Calderon and Peña Nieto administrations). Let’s remember that AMLO has been going around the country thanking people for their vote and promising different social programs that will aide them that all are government spending. He has planned to pay for much of this by slashing the salaries of all officials in the Mexican government (starting with the Executive branch but through Congress making it extensive to other branches and government institutions) and eliminating corruption. However, it is still unclear if they will be able to liberate all the resources they think they can with these measures increasing tensions in Congress during the crafting process of the budget (where majority party Morena is trying to accommodate sufficient resources for all of the things they promised they would do). On another note, during AMLO’s “thank you tour” he has been meeting with the different governors (and governors elect) of the different states of the country. In particular, in a visit to the Baja California peninsula, he first reiterated to the people of Ensenada, Baja California, the creation of a “free trade zone” in the Mexican border (that has been detailed before), but when visiting La Paz, Baja California Sur, he told supporters at a rally that it would be the people deciding on the approval of new mining projects. He said that from now on his government would only give permission to operate to new mining projects if the people decided to do so through a referendum.
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In the second week of September, President Elect Andrés Manuel López Obrador, met with most of the governors in the country, with the families of victims of Mexico’s criminal struggles, further explained his ‘Mayan train’ infrastructure project and his ‘young people for the future’ program (that addresses the needs of young Mexicans that are not studying and don’t have a job, the so called ‘ninis’) and signaled that he would do his best to fulfill all his promises despite receiving a ‘bankrupt’ country.
The week started with AMLO giving more details on the ‘Mayan train’ infrastructure project he will build. It will have a little bit more than 1,500 kms (~937 miles) of railways crossing the 5 states of the Yucatán peninsula and 17 stops. During the presentation, his team further discussed the connecting infrastructure the train will have linking it to airports and transportation systems in those cities as to maximize tourism attraction. Afterwards on Tuesday and Wednesday, López Obrador met with the 6 governors from the Mexican side of the U.S. border to outline his policy of creating a free-trade zone within 30 kms (~19 miles) of the entire Mexico – U.S. border where value added taxes will be half of what they are nationally, income tax will be reduced and fuel and electricity prices will be subsidized in order to compensate firms for the costs of increasing workers’ wages. One of his campaign promises was to increase wages for many of the workers in Mexico while still remaining competitive vis-à-vis our trading partners. Later on, he met with another 7 governors to discuss his plans on different social development programs and particular policies that may be relevant to their specific states. On Thursday September 13th, on the 171st anniversary of the Battle of the Chapultepec Castle where young Mexican soldiers tried to repel the American invasion in the outskirts of then Mexico City during the Mexican American War of 1846 – 1847, the President Elect explained some of the details of his main program targeting young people. To address the issue of the unemployment of ‘ninis’, he said his government will grant $2,400 pesos (~$126 USD) monthly scholarships to help pay for college tuitions and $3,600 pesos (~$190 USD) monthly stipends to young Mexicans that are receiving training programs within firms. He then explained more details on the eligibility process for this program and its phases. Finally, after the Mexican Independence celebration, and as part of his “thank you” tour around the country, AMLO promised that he would attempt to fulfill all of his promises despite the fact that the previous administrations are leaving the country in ‘shambles and bankrupt’. Despite this claim being false, he said that during the era of the market-oriented policies (what he and critics of this time call the ‘neoliberal era’) the country stagnated and that if there were issues with rising interest rates and inflation during his government it would not be his fault but rather the guilt of Mexico’s Central Bank (one of the only real autonomous institutions in the country). In the first week of September, President Elect Andrés Manuel López Obrador, met with business chambers in the state of Nuevo León, a group of governors and appointed several new officials.
On Monday September 3rd, 2018 he announced that former Electoral Crimes Prosecutor Santiago Nieto would become the next head of the Financial Intelligence Unit at the Finance Secretary. This unit is in charge of investigating tax evasion and related crimes. Mr. Nieto received ample support from civil society organizations a year ago when he was strangely fired from his office (within the Attorney General’s Office) because he was investigating electoral crimes related to the Odebrecht scandal, where Brazilian firm supposedly bribed then Pemex head Emilio Lozoya to gain favors in the Peña Nieto administration. Then, the President Elect announced the three Undersecretaries for the Secretary of the Economy (the Mexican equivalent to the Department of Commerce). First, trade expert Luz María de la Mora was appointed Undersecretary of Foreign Trade, while Mr. Francisco Quiroga will be in charge of the Undersecretary of Mining and Mr. Ernesto Acevedo will be the new Undersecretary of Industry and Commerce. By midweek, AMLO traveled north to the border state of Nuevo León where he met with former presidential candidate, Governor Jaime Rodríguez ‘The Bronco’ and business chambers from that state to discuss how he plans to redirect resources towards investment projects (mainly infrastructure) and not to current expenses. He also met with the federal deputies from the Morena party (that control slightly over 50% of the Lower Chamber) to outline his policy priorities for the upcoming legislative period. Afterwards, he met with business chambers from the southern states of the country to discuss how he plans to highly invest in oil exploration infrastructure for Pemex to ‘rescue’ the energy sector from its current state. On Friday September 7th, the office of the President Elect informed that a young political scientist, Carlos Martínez, would become the head of the National Institute for Worker’s Housing, the biggest real-estate player in the country. It must be noted that the President Elect had previously informed that Juan Carlos Zentella was going to hold this position but his office gave no reason for the change. By the weekend, AMLO held a meeting with the governors (and some governor-elect) of the southeastern states of the country (Campeche, Chiapas, Quintana Roo, Tabasco and Yucatán) to discuss his plans of creating the ‘Maya train’ –that will cross the entire Yucatán peninsula attempting to bring tourism from Cancun and the Mayan Riviera to other nearby states. |
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December 2018
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