Last Saturday December 1st, Andres Manuel Lopez Obrador was finally sworn in as President of Mexico. After a very active 5 months of transition period, the left-wing politician became the 63rd person to hold Mexico’s highest political office in its history promising a radical transformation of the country. During his inaugural address at the Mexican Chamber of Deputies, Lopez Obrador reiterated that the policies implemented during the “neoliberal” period (1983 – 2018) were the causes of most of Mexico’s problems –from poverty and crime, to diabetes –and that his government would dedicate itself to restoring Mexico’s greatness by focusing on policies dedicated to improve people’s lives and not only make the elites better off.
Lopez Obrador starts his presidency with huge popular support as he won 53% of the vote in the presidential race but also obtained a majority in the Senate and a super majority in the Chamber of Deputies (after a negotiation with the criticized Green Party, in which he allowed former Chiapas Green Party governor Manuel Velasco who had been elected as a senator to return to finish his governor term without losing his senate position and returning to the upper house of Congress once his governorship ended this December, in exchange for a handful of deputies that resigned from the Green Party and joined the ranks of the Morena party), as well as a simple majority in 19 of the 32 state legislatures. Essentially, Lopez Obrador is just a handful of senators away from being able to modify the Constitution as he sees fit.
Understanding his strength, AMLO did not shy away from starting to “govern” since after his election, being the most active a President-Elect has been in recent history. His envoy, Ambassador Jesus Seade, participated in the last stages of the United States-Mexico-Canada Agreement, he cancelled the new Mexico City airport project after he organized a citizen referendum (that was not legally binding) in which the majority of the people rejected the project, despite how it affected markets and the way they see him, and decided to continue a punitive security strategy –after heavily criticizing it as an opposition figure and candidate –doubling down on the militarization of the country. He modified the bureaucratic structure of the government, having his congressmen and women pass a bill in which all government employees’ salaries were cut around 20% - 40%, also eliminating many undersecretaries and creating new ones. He has also promised to move most of the Federal Government Departments outside of Mexico City, relocating them to other areas hoping to decentralize the country and further development by moving government offices there. This last move, has not been finalized and has faced important opposition from government employees who would be greatly affected (even though the government has promised to compensate them for it). It is still unclear, if he will be able to pull it through.
With regards to the markets, investors have not been very happy with most of AMLO’s economic policies. As it was mentioned above, the cancellation of the Mexico City airport project had a significant impact on investor confidence, who believe AMLO will also derail other market-oriented reforms such as the 2013 Energy Reform that opened up investment in oil and gas and electricity and renewables to private firms. This last one is a little bit harder to topple, as it implies changing the Constitution, something he cannot do just with his coalition and would need support from some of the other political parties. However, it is not farfetched to believe he could get the support of left-wing party PRD in doing so. On a similar note, Morena Senate party leader, Ricardo Monreal’s bill to reduce bank fees and commissions, spooked most commercials banks, as they have been living off those types of fees and it would represent an important blow to their revenue streams. AMLO’s Finance Secretary, Carlos Urzua, has indicated that they are not in favor of that proposal but they are respectful of the independence of powers that exist between the Executive and Congress.
These things, along with other elements regarding other smaller economic policies, have had an effect on the exchange rate, as it has depreciated around 10% over the last two months and the Mexican Central Bank has had to raise its interest rate 25 basis points (a quarter of a percent). This does not bode well for the Mexican economy, as several international institutions have decreased their growth expectations for Mexico’s GDP in 2019 to be lower than 2%, something that would place AMLO’s first year in the same bag as the governments before, that he has so emphatically criticized for this same point.
With regards to the other two main issues that got him elected –and are major concerns for citizens –security and corruption, AMLO has been wishy-washy with his policies. On the one hand, he has said that corruption will end with his government, but he has not taken any steps to further institutional strength in order to hold politicians accountable for their actions. On the other hand, AMLO’s security and peace strategy does include many of the things he said would deter people from crime (i.e. addressing their social problems through scholarships for young people; trying to rehabilitate prisons to generate a greater number of prisoners that finishing their sentence can return to a normal life; legalize certain drugs like marihuana, etc.), but the main component is a continuation of the punitive strategy, but this time creating a militarized police under the supervision of the Mexican army. This proposal was outrageous to many of the human rights groups that had supported his party and also, a very similar law known as the Internal Security Law, had just been deemed unconstitutional by the Supreme Court just two days before AMLO released his strategy. To address these issues, his party indicated they will seek to modify the Constitution, but certainly shows a backtracking of a popular position while in campaign that is unfeasible while governing.
In the end, President Lopez Obrador has arrived with great support, beginning his period in office with a 69% approval rating and with a pulverized opposition that is still in the midst of rebuilding. He has the political legitimacy to confront many of the obstacles that have chained Mexico back, but it is unclear if he will fulfill his promises. Furthermore, he will be restrained by the markets and the capacity his Finance Secretary has of obtaining resources to fund his many projects and policies, but also by his own popularity. Governing is hard and it generates frictions with many interest groups that can get affected by his policies. The end result may differ significantly from what was promised.
The second week of November was dominated by the release of the new government’s security and peace plan. On Wednesday November 14th, President Elect Andres Manuel Lopez Obrador gave a news conference in which he and the upcoming Public Security Secretary, Alfonso Durazo, explained some of the details of their pacifying plan. Among the 8 points there is a combination of things such as trying to attack the causes of insecurity by improving economic conditions through education and healthcare, but also the idea of creating a National Guard which would be a militarized police under the supervision of the Mexican army. This last point has caused ample controversy because it has been criticized by many human rights support groups and people who are against the punitive strategy of public security that started 12 years ago with former President Felipe Calderon. It must be noted, that AMLO himself criticized this approach during the Presidential campaign and now has had to backtrack and make this point the central part of his pacifying plan, even though it includes other things such as trying to rehabilitate prisons in order to reintegrate prisoners into normal lives or legalize marihuana. AMLO’s security plan will be based on the following 8 main drivers:
1. Eradicate corruption and reactivate law enforcement;
2. Guarantee employment, education, health and welfare;
3. Complete respect of human rights;
4. Ethical regeneration of society;
5. Reformulate the ways of fighting drug use;
6. Build peace solutions through disarmament and reintegration process as well as creating the Peace Construction Council;
7. Rehabilitation and dignifying of prisons;
8. The creation of the National Guard in order to reassess the public security strategy.
On a different topic, the President Elect announced that he would continue to do citizen referendums to gauge how much public support there is for different infrastructure and government programs he wishes to implement. This new citizen referendum includes his top 10 priority programs and the voting ballots are worded in such a way that citizens only have the main description of each project without any other information regarding a cost-benefit analysis. The top 10 priority programs are:
1. The construction of the Mayan tourism train that would connect the states of Campeche, Chiapas, Quintana Roo, Tabasco and Yucatan;
2. The construction of a freight railway train to connect the Atlantic and the Pacific Oceans (and the ports on each side) through the Tehuantepec Isthmus;
3. Build a refinery in Dos Bocas, Tabasco to process gasoline from Pemex;
4. Plant fruit trees in a million acres to create 400 thousand (permanent) jobs;
5. Duplicate old people pensions (68 years or older and 65 in indigenous areas);
6. Grant scholarships and internships to 2.6 million young people who currently do not work nor study;
7. Give a scholarship to all students attending public high schools;
8. Give a pension to a million people with disabilities;
9. Guarantee medical attention and medicines to all the people that lack healthcare services;
10. Provide free internet coverage on highways, public squares and public schools and hospitals of the country.
As any reader can see, this is an ambitious list of projects that all involve substantial government investments and for which there are not many details. Furthermore, the results of the citizen referendum are actually irrelevant –and AMLO will decide the course of action –as this new citizen referendum that asks about the Mayan train construction will be held on November 24th and 25th and the beginning of the construction of the railway has been scheduled for December 16th (regardless of the result). This just adds fuel to the fire of the arguments that say that these referendums are just a way of trying to manipulate the people and justify a decision that has already been taken by the upcoming government, as it happened with the cancellation of the new Mexico City airport project.
In that regard, it has been leaked that many of the bondholders of the new Mexico City airport project will collectively sue the upcoming administration on December 1st due to their decision of cancelling the airport. It must be noted that many of these investors are foreign investors and institutions that can’t be negotiated as easily as they have negotiated with the Mexican construction firms making the airport. This could proof to be a heavy toll to pay for the Finance Secretary who will have to address these costs in the 2019 budget.
The first week of November was another where the markets were shaken by something done by the AMLO's majority party in Congress. On Thursday November 8th, Senate majority leader, Ricardo Monreal, presented a bill in which the Morena party proposes to regulate the way commercials banks charge fees for cash withdrawals at ATMs and for other bank services. Even though, the bill is not something that strays too much from international standards in this regard, it caught everyone by surprise and had the greatest negative effect in a day for the Mexican Stock Exchange since the election of Donald Trump. This happened because the banks’ stocks plummeted as a result of the fact that most of the biggest banks in Mexico would be hit very hard with these measures. It must be noted, that these banks are financial institutions that derive a bigger share of their revenues from fees contrary to what happens in other countries. The bill presented was condemned by the banks and it had such an effect that the incoming Secretary of Finance had to release a statement “chastising” the senators from their party for presenting bills that have not been properly negotiated with unforeseen consequences. Let’s remember that this came on the heels of AMLO’s decision to cancel the $13 billion dollar new Mexico City airport and is undermining trust in this new government from investors. In a couple of two weeks, the Mexican peso has fallen around 1.3 pesos against the U.S. dollar surpassing the $20 pesos per dollar threshold again.
On another note, incoming Secretary of Foreign Relations, Marcelo Ebrard, finished his trip to China where he met with Chinese officials seeking to deepen relations between both countries. He said that the new government plans to further relations with the Asian superpower seeking to attract more Chinese foreign direct investment in an attempt to diversify Mexico’s sources of income and reduce the risk of an overdependence on the United States economy. Marcelo Ebrard (and even the President Elect) had also previously met with officials from other Asian countries and visited Japan in the incoming government’s effort to boost economic ties with that region.
Returning to the domestic issues, incoming Secretary of Urban and Land Development, Roman Meyer, said that the new government’s National Housing Plan will be a cornerstone of the peacekeeping strategy they plan to implement. He said that AMLO’s government will focus on building new homes in adequate environments. In his opinion, the current housing strategy has built too many homes in places where they should not, as those locations lack the appropriate services, difficult transportation and inhibit social capital development. The new government will focus their efforts in marginalized municipalities as part of their security strategy.
by Miguel Toro
Last week was dominated by the citizen referendum on the construction of the new Mexico City airport. During 4 days, people had the opportunity to vote in everything-but-trustworthy voting booths, where they could decide if they wanted to keep building the new Mexico City airport in Texcoco (already around 35% of it was finished by the day of the vote) or turn the military base in Santa Lucia into a second small airport for Mexico City and continue using the current one. As it was obvious, due to the strong push done by President Elect Andres Manuel Lopez Obrador and Communications and Transportation Secretary, Javier Jimenez Espriu, the Santa Lucia option won with about 70% of the vote.
In a citizen referendum that had only about 1 million votes (in Mexico there are registered to vote more than 70 million people), that the National Electoral Institute did not organize, but rather was organized by the Morena (AMLO’s) party –consequently having voting booths that did not use special paper (or even serialized), where the ink used to cover the thumbs of people that voted was not permanent, where there were no controls regarding how many times people could vote, that were located in strange places in a selected sample of municipalities in what seemed like gerrymandering –those that “voted” opted to cancel the construction of the currently being built new Mexico City airport and substitute it with an unfeasible project of turning the Santa Lucia military base into a second small airport for Mexico City.
Lopez Obrador had promised to cancel the new Mexico City airport during his presidential campaign, as the Texcoco project was full of accusations of corrupt activities and favoring specific investors by the current Peña Nieto government. However, as with many of his proposals, he was very wishy-washy in terms of the details and swung back and forth on what to do with the airport: he talked about cancelling it; about licensing it to billionaire Carlos Slim (who was the main constructor of the new airport); about reviewing all the contracts and punishing the corrupt ones but staying on course with its construction; about putting it to a vote so the people could decide what to do with it. In the end, this last course of action was what he did and the decision affected the markets.
Mexico had a poor showing on international markets on Monday October 29th when the peso lost its greatest amount since the Donald Trump election in November 2016, returning to the 20 pesos per US dollar level and where Mexican stocks lost $17.5 billion US dollars in value (1.25 times the total worth of the new Mexico City airport project). Additionally, JP Morgan Chase & Co analysts slashed Mexico’s growth forecast from 2.4% to 1.9% citing the airport decision as one that would force the Central Bank to raise interest rates to reduce the risk of capital flight and decreasing growth potential. Furthermore, AMLO’s decision showed a glimpse of how he may govern, using citizen referendum that just validate his policies and with that excuse, backtrack on previously contracted government decisions. It evidenced that the more market-oriented advisors he has, Office of the President Chief of Staff, businessman Alfonso Romo and Secretary of Finance, Carlos Urzua, hold little convincing power over the left-wing President Elect.
In a nutshell, the cancellation of the new Mexico City airport being built in Texcoco resurfaced investors’ worst fears on AMLO of being a populist that cares little for the market or even for institutions.
The third week of October was dominated by three main topics: the announcement of where the citizen survey on the new Mexico City airport would take place; the fact that rating agencies like Moody’s and Fitch (who actually downgraded State-owned enterprise Pemex’s credit future perspective to negative); and the migrant crisis on the Mexico – Guatemala border. Each of these three events presents important challenges for the upcoming government who is starting to feel the heat of what may come.
On Monday October 15th, the President Elect’s Press Secretary, Jesús Ramirez announced further details regarding the citizen survey that will decide the fate of the new Mexico City airport. He said that the survey would take place on 538 municipalities (out of almost 2,500) between October 25th and October 28th, having voting booths on the plazas outside the Municipal Palace of each of those municipalities. He also indicated, that even though the survey is not done according to the laws guiding referendums (must be concurrent to a Federal level election, organized by the National Electoral Institute and more than 40% of the entire Mexican voter base must participate in order for it to be legal), the result would be binding. Throughout the week it was questioned by many different pundits because the incoming government left many details unclear.
First of all, the overall selection of the 538 municipalities has been questioned by many political analysts and pollsters who can’t understand why those particular municipalities where chosen and why not others. Furthermore, in order to not present a cost to taxpayers, the survey would be paid by pooling resources of the Morena party Congresspeople, situation that did not fare well with them as hours later Speaker of the Chamber Deputies, Deputy Porfirio Muñoz Ledo (Morena) and Morena party leader in the Senate, Senator Ricardo Monreal, said they would not be paying that survey from their income. A week later, it is still unclear how the survey is going to be paid. Additionally, the possibility that the Santa Lucía military base option –to replace the construction of the new Mexico City airport –wins the survey has started to make uneasy several investors. It must be noted that around 35% of the construction of the new Mexico City airport has already been completed and abandoning the project would cost around $120 billion pesos (~$6.3 billion dollars) in different sunk costs and legal problems from investors who would sue.
The week continued in not the best of terms regarding the markets’ trust on AMLO’s administration as both Moody’s and Fitch rating agencies warned the upcoming administration about their new policies with State-owned oil firm Pemex. On Thursday October 18th, Moody’s warned that placing the financial burden on Pemex of building a new refinery (a flagship policy from AMLO) could be devastating to its debt and would potentially imply a reduction to a negative grade that could affect Mexico’s overall credit rating as the government has said it would be the lender of last resort for Pemex. On Friday October 19th, Fitch downgraded Pemex’s future credit perspective to negative precisely because of this issue. These warnings were undermined by future Secretary of Energy, Rocío Nahle, and even President Elect, Andrés Manuel López Obrador, who said Mexico has nothing to worry about and that what Fitch did was absurd as they don’t understand what data they have.
But the most relevant issue of the week was the migrant crisis happening on the Mexico – Guatemala border, as thousands of Central American migrants clashed with Mexican federal police forces who tried to prevent them from entering illegally into the country. A couple thousand Central American citizens have made another migrant caravan walking from Honduras all the way to the Mexico – Guatemala border where they are attempting to get across and get all the way to the United States fleeing from the never-ending violence and poverty situations that plague their home countries. They are seeking asylum in the United States as political refugees, something that has been denied by the U.S. government and has infuriated President Trump who is pressuring Mexico with this issue. The Mexican government has been caught between the dire needs of Central Americans who need a human response to the crisis and the respect of the legal processes through which one can enter other countries, particularly in times where this issue is salient and there is open hostility towards them within the United States and also Mexico. The Mexican government asked the Office of the United Nations High Commissioner for Refugees (UNHCR) for help dealing with the situation in order to process their requests for political asylum, and has been granting some of them the possibility to enter the country and stay in Hidalgo City, Chiapas while their applications are processed. Nevertheless, the Mexican government officials are overwhelmed by the number of applications and the process is going very slowly.
Meanwhile, after the current Mexican government faced social media backlash (particularly from liberal voters) for its response to the crisis, the President Elect flew to Chiapas and said that Mexico would try to help the Central American citizens looking for asylum. With him, Mexico would grant work visas to everyone who wanted to work, while his administration would continue to cooperate with the United States seeking to further social development policies and economic aid for the Central American region to truly address the migration causes. It must be noted that on Friday, U.S. Secretary of State, Mike Pompeo, met with upcoming Secretary of Foreign Relations, Marcelo Ebrard, where it was said that the United States government offered 20 million dollars to its Mexican counterpart to massively deport Central American citizens from Mexico that would be sent over from the United States border, but the future Mexican government refused.
by Miguel Toro
During the second week of October, the President Elect, Andrés Manuel López Obrador continued his thank you tour meeting with citizens all over the country talking about how his policies will help their lives. Part of the week he traveled through the southern states where he met once again with the governors of those states to discuss the project of the Mayan train. It was there that he continued to discuss the potential benefits but dismissed criticisms that people that question the project have raised regarding to the fact that the new Mexico City’s airport project (which is 30% already built) will have to be approved by a citizen referendum while this one will not. In a move very similar to the current administration, he complained about how people complain too much about his policies when he has not even taken office.
On the Mexico City airport matter, part of his cabinet members released a report showcasing the potential benefits of the Santa Lucía military base option that has been presented as an alternative to the new one being built in Texcoco. They indicated that on Monday October 15th, the information about the citizen referendum and its question would be revealed.
Meanwhile, during the other part of the week, AMLO exposed several ideas that sparked debate among political pundits in news analysis programs and op-eds. First of all, he said that it is more important to transform the country than to simulate fighting corruption by pursuing corrupt political figures. He indicated that his spending-cuts policies and furthering an honest way of managing the government will do more to fight corruption than the former option. This made opposing figures question the authenticity of his fight against corruption and the promises he did during his campaign (and since many years ago). Second of all, the President Elect said that starting with his administration no wage increase would be able to be below the official inflation levels for the year. This would be done through a new law that would prohibit employers from raising their worker’s salaries below inflation levels, raising eyebrows among the more orthodox economic pundits that believe this could potentially increase inflation.
It must be noted that despite some controversy that may originate around abnormal behavior by members of Congress (i.e. last week a Federal Deputy from the Morena party was involved in a late night crash and an explosion that killed the taxi driver with which the Congressman crashed into), matters in Congress have little importance in Mexican politics unless directed by the Executive power. In Mexico, most policies and new bills are presented by the Executive power (introduced through some member of Congress from the President’s party) and rarely are initiated by members of Congress, specially opposition party members. The huge attention that the President centers ‘distracts’ Congress from being more proactive in setting the political agenda, despite the number of bills that can be presented in Congress. So even though the Chamber of Deputies is discussing AMLO’s first budget bill, this rarely makes headlines or sparks debates in op-eds. Nevertheless, the contents of this bill will be very relevant to see what kind of government AMLO may have and the things he wants to pursue during his first year in office.
The first part of the first week of the month of October centered around the signing of the new trade agreement between Mexico, the United States and Canada known as the United States-Mexico-Canada Agreement (USMCA). The three countries were able to strike a deal in time (auto-imposed deadline of September 30th) in order to have President Peña Nieto sign the agreement before his departure November 30th. On behalf of the new Mexican government, future Foreign Relations Secretary, Marcelo Ebrard, released a statement in which he said that the new administration was happy with the outcome as it would allow the Mexican economy to face much less uncertainty. Later that week, President Elect Andres Manuel Lopez Obrador indicated that he especially liked that the USMCA had mechanisms that would allow Mexican workers salaries to grow in the manufacturing sector, especially in the automobile industry where the U.S. and Canada had made an important point to produce 40% of vehicles where wages were $16 USD/hour. Additionally, he said that the new agreement did not interfere with Mexico’s sovereignty and rights to determine what to do with its natural resources (i.e. oil and gas) thanks to what his chief negotiator, Jesus Seade, had negotiated with the other countries. In reality, this is much more of a talking point to appease his electoral base as there was never an intention from Mexico’s northern neighbors to limit the country’s right to do so. But since the 2013 Energy Reform opened the sector to private investment, there are many Mexicans that thought that the USMCA would strip Mexico of its resources or make it easier for U.S. and Canadian firms to secure our oil fields thanks to the rhetoric spread by some left-wing politicians during the election process.
Continuing with the topic of oil and gas, during a visit to the state of Guanajuato, AMLO announced an investment of $4 billion pesos (~$210 million USD) to rehabilitate the Salamanca refinery located within the state. This is part of a broader strategy his government plans to implement regarding Mexican refineries. During his campaign, the President Elect criticized the amount of fuel that Mexico imports from U.S. refineries located in Texas and Louisiana as it has driven fuel prices in Mexico upwards due to the rise in the exchange rate since Trump became a candidate (the Mexican peso – U.S. dollar exchange rate passed from about 15.5 pesos/dollar to around 19 pesos/dollar with a high of 22 pesos/dollar just before Trump took office). One of his proposals was to rehabilitate and build new refineries in the country to avoid importing fuel –a proposal battered by critics saying that building new refineries is very costly and with their low margins, they require very efficient operations, something Pemex and its labor union have never been good at. Furthermore, in a visit to the state of San Luis Potosi, he said that his government would not allow new fracking activities to protect the environment.
On another topic, celebrating the 50th anniversary of the Tlatelolco Square massacre from October 2nd, 1968 (where the President ordered the military and police forces to open fire on students protesting the Mexican government’s lack of democratic processes right before the 1968 Mexico City Olympic Games), President Elect Lopez Obrador swore he would never use law-enforcement officials to hurt civilians as well as promising that all people in jail for political reasons would be liberated the first day of his government.
However, the topic that created more controversy during the week came in the later days when the future head of the Science and Technology National Council (CONACYT for its initials in Spanish), Maria Elena Alvarez, ordered the current government officials to halt any new scholarships and grants that would be given to people in 2019, as the cuts in government spending ordered by the new administration demanded so. She sent a letter to the current head Enrique Cabrero saying so that got leaked to the press resulting in a social media backlash. Many of the Mexican students abroad (doing graduate programs) and the non-profit organizations that research science related topics could be left without funding if what Mrs. Alvarez ordered was true, so the future Mexican government faced an outcry that was fueled by opposition figures that found it easy to pile on the bad idea of cutting spending on science and technology. In a statement released later by Mrs. Alvarez, she explained that her letter only meant for the cutting of funds for scholarships or grants not previously assigned, but the hostile tone of it did not help her cause as the damage was done.
The month of October has arrived with a new North America Free Trade Agreement deal being agreed to by Mexico, the United States and Canada that will be henceforth known as the United States-Mexico-Canada Agreement (USMCA). Both the current and upcoming governments in Mexico wanted to strike a deal with its northern neighbors because the elimination of NAFTA would have been a catastrophic outcome for the Mexican economy. The details of the agreement have just been released so more information will be included in next week’s transition recap.
Meanwhile, in domestic affairs, the week revolved around the announcement of who would chair each of the different committees in both houses of Congress. Social media outcry appeared once it was announced that legislators from the disappeared ultra-conservative Social Encounter Party (PES) would preside over particular committees like health, education, culture and sports. To many liberals, having Evangelists control these committees was outrageous and to many of Lopez Obrador’s critics, it was just another example of how incongruent his government could be. This situation, forced the governing coalition to shift who received these committees, putting Morena legislators as the chairs of them replacing the PES legislators. This in turn, made people like former telenovela star and stripper Deputy Sergio Mayer (Morena) the head of the culture committee, situation he announced in a misspelled tweet.
Regarding AMLO’s agenda, he continues visiting different cities on his “thank you tour”, stopping by the state of Tlaxcala and indicating that the first department to relocate will be the Culture Department. During the election campaign, AMLO promised he would aid Mexican decentralization by moving the different departments that compose the Executive branch to other states rather than all of them being in Mexico City. This is one of his most criticized proposals as it implies a ton of hidden costs that his team seems to not be considering, to the point that criticisms had made the future government silent on the issue for several weeks, but reigniting debate once he announced in Tlaxcala that the Culture Department would be the first to move in 2019.
During the week, AMLO promised to parents of the disappeared student-teachers from Ayotzinapa that his government would create a special committee to get to the truth of what happened four years ago with them. On the anniversary of their abduction, President Elect Andres Manuel Lopez Obrador, said that institutions must be strengthened to prevent this situation from happening again and suggested that he would invite international human rights organizations to aid in the clarification of the disappearance of those 43 student-teachers. He promised that from now on, the Government Department (of the Interior) would be an institution tasked with governance and furthering human rights and not spying on people as it happened during Peña Nieto’s administration (according to the New York Times).
On other stops of his tour, AMLO reiterated his proposal to give scholarships to young people without a job as part of training programs while also emphasizing the role that sports could play in receiving those grants while visiting the Mexican Olympic Committee. He said his government would allocate 5 billion pesos (~263 million USD) to give 2.6 million sports related scholarships. Later on, when visiting the state of Hidalgo, he spoke once again about reinvigorating Mexico’s energy sector (mainly speaking about Pemex rather than the entire energy sector) by investing 70 billion pesos (~3.7 billion USD) in the reconfiguration of the Tula refinery in that state.
 Note: The Social Encounter Party lost its ability to compete in federal level elections last July 1st as it did not reach the 3% of the vote threshold so legislators that won single member plurality districts have a seat in Congress but are independent. However, as the PES was part of AMLO’s coalition, those legislators are acting in tandem with Morena and its allies in the different legislative negotiations.
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.
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).