AMLO will be the most powerful Mexican president in decades

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The scrappers and dreamers on Mexico’s political left have waited more than three decades for national power.

The inauguration on December 1st of Andrés Manuel López Obrador as Mexico’s president ends the wait. The 65-year-old former mayor of Mexico City will be sworn in before a crowd that will include dignitaries from 28 countries. Mr López Obrador, or amlo, as he is known, will don a tricolour presidential sash for a second time. The first was in 2006, when he refused to accept defeat in that year’s presidential election.


This time the sash is the real one. Voters gave amlo the biggest democratic mandate in Mexico’s history. He won with 53% of the vote, defeating his nearest rival by 30 percentage points. Angered by corruption, violence and economic torpor, they accepted his argument that the political system needs renewal, not technocratic tweaks.

As AMLO prepares for what he calls the “fourth transformation” of Mexico, a term suggesting that his election is as important as the revolution of 1910-20, his power and popularity have grown. He controls Morena, the party he founded in 2014. Along with its allies it has majorities in both houses of congress. Critics have gone quiet. Emboldened, he has dropped a promise not to change the constitution in the first half of his six-year term. Polls suggest that two-thirds of Mexicans support him.

In recent weeks, AMLO has retreated from the pragmatism he sometimes espoused in the campaign, which had reassured some middle-class Mexicans and investors. Instead, he has pursued a populist agenda that has shocked markets even as it consolidates his power. In October he said he would cancel a $13bn airport for Mexico City that is already one-third built. That decision came after 1% of Mexican voters took part in a consulta organised by Morena to answer a question amlo himself wrote: do they prefer the airport now being built or his alternative scheme? The president-elect’s allies in the new congress, which began in September, have introduced bills regulating banking, mining and pensions. The stockmarket has lost nearly a fifth of its value since early October.

AMLO sceptics had hoped that, in the absence of strong political checks and balances, financial markets would constrain him. That could happen. The central bank raised interest rates after the airport vote, which will slow the economy and oblige the government to pay more to bondholders. After November 26th, when the stockmarket fell by 4%, the government calmed investors somewhat by promoting two respected officials. The budget, due to be presented to congress by December 15th, will give the new government a chance to show that it is serious about fiscal stability, says Gabriel Lozano of J.P. Morgan, a bank.

But many of AMLO’s allies see stability as the continuation of an unjust status quo. Ricardo Monreal, the leader of Morena in the senate, says that many firms’ profits are too high and that regulations are needed to “disturb their accumulation of wealth”. Markets will change their minds when they see how well AMLO governs, he says.

AMLO’s crimebusting army
The new president is certainly energetic. He has assented to an updated version of the North American Free Trade Agreement with Canada and the United States. He has put forward 50 ideas for curbing corruption and promoting thrift in the public sector and is beginning to implement them. He will cut his own salary by 60% and cut the pay of senior civil servants to that level. He has unveiled a crime-fighting plan that includes creating a 50,000-strong National Guard under military command. Morena has proposed a bill to legalise cannabis. AMLO intends to give apprenticeships to jobless youths and higher pensions to the aged. His many projects include a tourist train through the south and a refinery in his home state of Tabasco.

AMLO is pursuing his goals through an unconventional combination of congressional deliberation and direct democracy. Congress passed the law that caps bureaucrats’ pay. But AMLO plans to put most big decisions and many small ones directly to the people. The tourist train and refinery were approved in a vote on November 24th-25th, which attracted the same tiny fraction of the electorate that the airport consulta did. Voters approved eight other schemes, including a ballot proposal to “plant fruit and wood trees across 1m hectares, creating 400,000 permanent jobs”.

In a third consulta next March, voters will probably approve the National Guard, which is contentious. Human-rights activists and the supreme court do not think the army should be involved in policing. amlo agreed with them until recently. He plans to let people vote on whether to prosecute former presidents for corruption but says, confusingly, that he is against it. Midway through his term, voters are promised a chance to recall him from office.

What looks like extra accountability is, in fact, a way of amassing power. The referendums marginalise congress. But AMLO is prepared to go through the legislature, especially if he fears the people’s verdict. A bill to undo education reforms, one of the few popular achievements of the outgoing government, will be introduced in mid-December. Congress passed a law that allows AMLO to name “super-delegates” to supervise each state’s spending. That will tame governors who might oppose him.

Mexico is about to have “a strong president, like there hasn’t been in the past 30 years”, says Mr Monreal approvingly. AMLO will have no excuses for failure.

 Source: economist.com