If Mexican President Andrés Manuel López Obrador was punished by his losses in the midterm elections this month, he has not shown it.
The morning after the June 6 vote, the government issued a law to extend the term of Supreme Court President Arturo Zaldívar, who is close to the president, in what critics fear could provide a model for López Obrador to extend his own term beyond 2024.
In a few days, the president promised to pursue constitutional reforms in the fields of energy, elections and security, despite the fact that it lost a two-thirds majority necessary for such changes in Congress. He accused the “perverse, slanderous, immoral” media of poisoning voters against him and attacked the middle class as selfish social climbers.
Despite the burning rhetoric, for some this seemed more like the usual business for López Obrador rather than a step towards a more radical agenda after his Morena party lost about a fifth of its seats in Congress and more. of half of the districts in Mexico City.
“Clearly Amlo will continue to be Amlo, and this is something that businesses and society will have to learn to live with – we are not going to change him,” said Antonio del Valle, head of the Mexican Business Council which represents the largest companies in the country, using the president’s nickname.
“But after three years, we can now understand that, as it will not change politically, it will not change its economic policy either… And that reassures me a lot.”
Leading business leaders have learned to look beyond the incendiary message of the populist veteran and applaud how he has resisted pressure to take out many loans for a larger spending spree, like others left in Latin America.
An chief executive, who asked not to be named, said “the bark is worse than its bite”.
While his rhetoric remains confrontational, many observers expect little deviation from a plan he drew up some time ago to achieve his booming “transformation” of Mexico: social programs to address deep-income inequality, infrastructure projects in the poor southeast to create jobs and self-sufficiency energy based on fossil fuels.
After a mayoral briefing on Mexico City in 2000-05, where López Obrador revealed a pragmatic streak, “I expected it to be more moderate, and it wasn’t,” said Porfirio Muñoz Ledo, figure. totemic of the Mexican Left and one of the few of the Morena party to the government that criticizes the president.
López Obrador’s willingness to extend Zaldívar’s mandate to ensure a potentially more compliant judiciary and his attacks on INE-respected electoral authorities, as well as independent regulators, have made him dream.
“I hope he will not strengthen the presidency to oppose the institutions,” Muñoz Ledo said. “Mexico’s presidency is already very powerful.”
Claudia Sheinbaum, the protégé of López Obrador and the mayor of Mexico City, ridiculed what she said were opposition efforts to portray the election as a pool of water for democracy. Mexican with “this idea that would be the last time we voted because we were in the direction of dictatorship”.
Graham Stock, a colleague of BlueBay Asset Management, saw “a limited opportunity” for López Obrador to radicalize without a congressional majority and rejected comparisons with Venezuela’s late authoritarian leader Hugo Chávez.
“He’s a tax conservative, so he won’t spend money on a coup for growth,” he said. “The narrative of chaos and destruction that his opponents have always tried to tell would happen – I don’t buy it…. He’s not the next Chávez, he’s pretty unique.”
After experiencing a land collapse in 2018, López Obrador has maintained loyal supporters with transfers, higher pensions and large minimum wage increases. His stubborn refusal to take on more debt meant there was no Covid-19 stimulus program, triggering a deeper recession last year than in many Latin American peers.
Jorge Castañeda, former foreign minister of the conservative PAN party, said he believed López Obrador had missed the opportunity to use his “enormous legitimacy” to implement far-reaching reforms.
“What you need to do is do what it didn’t do, even if it could have: a serious tax reform,” he said. López Obrador promised to close the gaps rather than raise taxes.
“It might seem short-term, but it’s a pragmatic logic,” said Gerardo Esquivel, deputy director of the Bank of Mexico. “All past attempts at tax reform have been political failures… In his view, it is more transformative to make people pay what they have to do and get wages where they should be.”
Mexico’s economy is over on the rebound after contracting 8.5 percent in 2020 and heading toward growth of 6 percent or more this year, helped by President Joe Biden’s $ 1.9 billion stimulus package in the United States.
But a climate of uncertainty persists, fueled by López Obrador’s cancellation of partially built airport and brewery projects, weighing on the investment Mexico needs to get out of its traditionally weak growth rates. .
López Obrador’s uninterrupted attacks on political enemies, including the rich, the media and the business class, have also fueled concerns about the risks of further dividing a society that is already fractured and violent.
“The most important thing is to stop the polarization of the country: rich versus poor, north to south,” said the head of a Mexican bank. “We all need to row in the same direction for the boat to move forward.”