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.
1 Comment
Manuel Franco
4/24/2023 10:38:44 am
Reply
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. Archives
December 2018
Categories |