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A Bad Omen

Veronica Ortiz Ortega

Since Andres Manuel announced the cancelation of the Mexico City Airport in Texcoco, the negative consequences of the decision have been in plain view, writes Veronica Ortiz.

A Bad Omen

The last time a Mexican president tried to manipulate the economy, it ended in disaster. Luis Echeverria tried to do just this to get around the budgetary restrictions that hindered his goals and political promises.

However, reality is merciless and it is not wise to mess with it. We have a President-Elect that revolted against the free movement of the market and credit rating agencies, as if they were plotting a financial conspiracy against him. Since Andres Manuel announced the cancelation of the Mexico City Airport in Texcoco, the negative consequences of the decision have been in plain view.

The economic consequences include the depreciation of the peso, the dip of the stock exchange, the decrease in investment grades, and the alerts among financial groups and their national and foreign clients. All of this has already had a negative impact on the national economy. Even worse, Mexican credibility abroad has been put into question, which will have significant effects on key sectors such as tourism and energy.

AMLO and his team seem to be the only ones trying to deny reality. In legal terms, the unilateral cancellation of the Mexico City Airport will bring innumerable lawsuits. Obviously, the results of a nation-wide consultation alone do not constitute a legal basis for an official government decision and even less for the termination of official contracts.

However, the most serious consequence is the damage that has been disguised as political gain. López Obrador may say that the people made the decision, but such a view undermines the principles of representative democracy. From the planning of a consultation, an action that falls outside of current legal parameters, to claiming that the opinion of 747 thousand people (less than 1% of the electorate) should determine the outcome for the rest of the country is completely absurd and undemocratic.

Flirting with illegal measures is the route to authoritarianism. Neither coups d'état, nor armed uprisings are needed. The democracies can die in the hands of leaders that manipulate democratic mechanisms and erode them slowly and quietly (Levitsky and Ziblatt).

If what Timothy Snyder says is true, which is that history does not repeat itself but it does provide lessons, it is hard to understand why the incoming government is creating a potential financial crisis where there was not one before. It is especially confusing given several initial positive actions, such as the designation of the incoming economic team, the participation in the renegotiation of NAFTA, and the selection of the next deputy governor of Mexico’s Central Bank.

Returning to President Echeverria, it is important to remember that he not only created an economic crisis, but also a social one. He confronted the government with the private sector and his classist and polarizing rhetoric unleashed the kidnappings and assassinations of businesspersons.

Meanwhile in the United States, the midterm elections of November 6th could change the composition of the House of Representatives, a third of the Senate, and bring 30 new governors. Donald Trump has doubled his anti-immigrant rhetoric, a platform that brought him the victory two years ago. If the Republican Party remains in the majority in Congress, it could be a green light for his reelection in 2020.

The views expressed in this article are solely those of the author.

This article was originally published on El Heraldo de Mexico...
 

About the Author

Veronica Ortiz Ortega

Verónica Ortiz-Ortega

Political Analyst, El Heraldo de México and Canal del Congreso
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Mexico Institute

The Mexico Institute seeks to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship. A binational Advisory Board, chaired by Luis Téllez and Earl Anthony Wayne, oversees the work of the Mexico Institute.   Read more