AMLO’s Gamble

AMLO’s Gamble

Mexico’s decidedly leftist new president, Andrés Manuel López Obrador, is taking on the business-political-criminal elite that has dominated his nation, and drenched it in bloodshed, for the past 40 years.

March 21, 2019

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In early January, one month into his six-year term, Mexico’s new president, Andrés Manuel López Obrador (AMLO), went to war against the vast network of criminal gangs, politicians, and businesses that had been looting the national oil company Pemex at the rate of more than 60,000 barrels of gasoline a day. He shut down illegally tapped pipelines, sent in the army to stop gas trucks from delivering to the black market, sent auditors to seize the fraudulent books, and began bringing criminal charges against corrupt managers.

It was a risky move. Gas supplies suddenly dropped across the country, frustrated motorists could not fill their tanks, freight shipments were delayed, and tourism plunged. The Mexican and international media screamed that AMLO was destroying the economy.

Yet the polls showed that 75 to 80 percent of the country was behind him. “The gas shortage is killing my business,” a taxi driver in the conservative state of Guanajuato, who had not voted for AMLO, told me. “But he’s doing the right thing. They’ve been stealing gas that belongs to the people.”

Within two weeks, supplies were restored, and the gas thieves were on the run—for now.

This is just the first battle of a long war. “War” is not just a metaphor: When the head of the association of gasoline retailers was asked why he had not complained before AMLO confronted the Pemex mobsters, he replied that if he went to the authorities, they would say, “‘I don’t own a pistol’ … They tell you, ‘If you complain, you disappear.’”

At a time when most of Latin America—indeed, much of the world—is moving to the right, with Trump-like plutocrats winning elections as “populists,” the 65-year-old López Obrador is an unabashed man of the left. The son of a grocer from the southern state of Tabasco, he has spent his life organizing for social-justice causes, especially the plight of the indigenous poor. The name of his party is Morena—a reference to the complexion of the ordinary Mexican, which is darker than that of the typical member of the ruling class.

He is also a smart and practical politician. As mayor of Mexico City from 2000 to 2005, he initiated programs for poor, aid for the elderly, and major projects to ease the city’s monstrous traffic problems. He left office with an 85 percent approval rating and a reputation for honesty, both of which are extremely rare among Mexican politicians. The author of several books on Mexican politics and economics, he has thought long and hard about how to succeed against the enormous power of the neoliberal system.

Despite the free-market rhetoric of its champions, neoliberalism has never been about separating government from business. Rather, it is about capturing the public sector to promote private profits. The result is a double win for the rich and powerful: They get richer and the citizenry gets more cynical about the capacity of government to improve their lives.

Neoliberalism also destroys democracy. In Mexico, the despoiling of government by the governing classes has created a disrespect for the law that permeates the culture. Police protection, applying for public day care, registering a deed, shipping goods across the border, or getting a job as a teacher typically require bribes or the hiring of a “fixer.” It turns virtually everyone in need of basic services into an accomplice. And if you think government is run by crooks, you are unlikely to feel guilty about selling your vote for a chicken.

Mexico has always had its share of people on the take. But in the 1930s, after two decades of revolution and civil war, a single party of national unity was established that pursued policies that shared the wealth. Over the next 50 years, inequality and poverty decreased and rapid economic growth increased opportunities for the poor and working classes.

In the 1980s, a new generation of politicians, inspired by the Thatcher-Reagan glorification of greed, came to power. Corruption became no longer just an aspectof Mexican political life; corruption became its purpose. The result was slower growth, decreasing equality, and increasing criminal violence. 

Only 5 percent of the crimes in Mexico are ever reported, largely because people never know which side of the law the police are on. (Several years ago, when a Mexican friend whose niece was kidnapped called a high-level government official for help, his first response was: “Don’t call the police.”) Of those crimes that are reported, only 4 percent result in convictions.

Violence now reaches into every corner of Mexican life. During last year’s election campaign, some 145 candidates and campaign workers were assassinated. In 2017, Mexico was third only to Syria and Iraq in the number of journalists killed. In one infamous incident, 43 students from a teachers college in Ayotzinapa, Guerrero, were stopped by police, handed over to a narco gang, and disappeared. Five years later, no one has been convicted.


IN THE LANDSLIDE ELECTION of AMLO, which also gave him a majority of the nation’s Congress, Mexican voters decided that they’d had enough.

The media pundits of Mexico’s governing class—echoing the jeremiads from Wall Street and Davos—warned voters that AMLO was a dangerous radical who would drive Mexico into a Venezuela-like economic catastrophe. But after several decades, the credibility of such hysterics had crumbled. These were the same people who had hailed each of the last five neoliberal presidents—Carlos Salinas, Ernesto Zedillo, Vicente Fox, Felipe Calderón, and Enrique Peña Nieto—as “honest reformers.”

As it turned out, Salinas and his family were closely tied to drug cartels, Zedillo and Calderón profited from companies they privatized, and Fox, like the others, left the presidency far richer than when he’d arrived. At the U.S. trial of Mexican drug lord El Chapo Guzmán, witnesses testified that narco traffickers had paid $100 million in bribes to Peña Nieto’s office. Peña Nieto denied it. But wherever the truth lies in that particular charge, there is no denying that under all of these leaders the drug cartels flourished, criminal gangs expanded, and the systematic looting of public assets was tolerated, if not encouraged, from the president’s office down. Transparency International’s 2017 ranking of counties by open and honest government put Mexico 135th out of 180.

The hostility of the elite to AMLO is understandable. His explicit goal is a sweeping, historic “Fourth Transformation” of Mexican society—the earlier ones being the war of independence from Spain, the 19th-century reforms against the power of the church, and the 1910 revolution.

His vision includes economic justice for the poor; green infrastructure development; rebuilding the police, the courts, and much of the civil service from the ground up; and a revitalization of long-suppressed democracy within labor unions. Franklin Roosevelt is one of AMLO’s heroes. And like the New Deal’s first 100 days, AMLO’s have been a political whirlwind.

He holds press conferences every morning at 7:00, jolting awake bleary-eyed staff and journalists with new programs, pronouncements, or ideas. In his first two months, among other initiatives, he doubled the minimum wage on the Mexican side of the U.S. border, increased pensions for the elderly, initiated a massive infrastructure plan for the impoverished south, announced a goal of establishing 100 new public universities, and launched a campaign to get Mexicans to read more by lowering the cost of books.

His critics complain that he is a one-man show; he doesn’t consult enough with his cabinet and outside experts, nor think through all of the necessary details. His answer is that in order to accomplish what he was elected to do, he has to cram 12 years of work into the one six-year term a Mexican president has.

Marco Ugarte/AP Images

Though the elite press throughout much of the world is critical of AMLO and skeptical about his popularity, polls show his approval rating is between 75 and 80 percent. 

His urgency makes strategic sense. There will be no Fourth Transformation unless he can restore and maintain Mexicans’ confidence in the power of democracy to liberate their government from corruption. Thus, his high-profile move against the Pemex racketeers, which he has called a “rescue.”

Pemex was created in 1938 when a left-wing government nationalized the U.S.-controlled oil industry. The goal was to use Mexico’s oil to fuel its economic modernization.

It worked. Thanks to Pemex, Mexico became self-sufficient in oil and a major exporter, bringing in foreign funds for further development. The company also became a model employer, providing pensions, health care, and other benefits.

The neoliberals who came to power in the 1980s began systematically selling off the country’s natural resources and major public enterprises to their friends, both foreign and domestic. When public resistance prevented them from privatizing Pemex as part of the 1994 North American Free Trade Agreement (NAFTA), they launched a campaign to make the case for selling it off. They starved Pemex for investment by diverting its revenues to spending programs that would normally have been paid for with taxes. As a result, Pemex has not built a gasoline refinery in 40 years, nor a major storage facility in 17 years. Mexico, one of the world’s major oil producers, now imports two-thirds of its gasoline from American refineries in Texas.

The crippled Pemex became a poster child for government “inefficiency.” Over time, slices of its business were outsourced, privatized—and then vandalized.

Pemex has some 10,500 miles of pipeline, mostly in isolated rural areas. For years, small-time thieves—huachicoleros—have tapped them, largely to use the gas themselves. Gradually, the narco gangs—flush with drug profits—moved in with sophisticated equipment, national networks for distribution, and money to bribe Pemex employees to help them, and the police and politicians to protect them. Pipelines were tapped much more efficiently, tanker truck deliveries were diverted, and contracts made with phantom vendors.

The black-market gas was then sold to retailers at a price that undercut Pemex’s. Not surprisingly, politically connected people rushed to open gas stations. The Mexican newsweekly Procesoreported that between 2015 and 2018 some thousands of permits to open gas stations were given to families of officials, political leaders, and other well-connected elites. Losses to Pemex last year are estimated at well over $3 billion. At many gas stations in Mexico, people work for nothing but tips.

Rescuing Pemex—replacing managers, democratizing the union, and instilling the lost sense of mission—is by itself an enormous job. But it is a warm-up for the larger battle AMLO must inevitably face cleaning out the corruption that infects the police, the courts, and the military.

The previous Mexican governments’ answer to the spread of drug cartels was an alliance with the Pentagon that provided the Mexican military with training, equipment, and money for a War on Drugs. After 11 years, it is clear that drugs have won. The narco cartels have expanded, spawning criminal gangs that kidnap, extort, and steal. Low-level thugs are killed and arrested. Occasionally a capo like Guzmán gets enough media notoriety to be an embarrassment and is brought down. But the drug business has boomed, and the carnage has escalated. Since the War on Drugs began, some 250,000 people are estimated to have been killed and another 40,000 “disappeared”—presumed dead with their bodies not yet found.

During his campaign, AMLO spoke against using the military to fight criminals. The military has its own record of corruption, and, as he argued, it is not trained to do police work. Moreover, he insisted, the root cause of violence was a lack of jobs and opportunities, which made crime the only option for many young people. AMLO promised to track down the gang leaders and their political patrons. But for the poor who were driven to the gangs for want of any other work, he promised there would be “abrazos,” not “balazos” (hugs, not bullets). He would create jobs, reform and strengthen the civilianpolice, and return the army to its barracks.

Unfortunately, these are long-term solutions. To keep the public from sliding back into cynicism and indifference, AMLO has to demonstrate progress in breaking the power of organized criminal gangs and their political patrons. According to an account that one insider gave me, AMLO first asked his civilian cabinet for a strategy for Pemex. They argued among themselves for a week and couldn’t agree. He then asked the military. They promptly responded with a detailed plan, which he accepted.

Both AMLO and the military claim that the use of soldiers is just temporary, until the police and judicial system are rebuilt. But this has made human-rights activists nervous. “I trust AMLO,” one said to me. “But what about the next president?”

His supporters reply that it is naïve to think that AMLOcan take on all the powerful forces against him at once. He must keep them divided and deal with them one by one. To succeed, he will need more than just the authority of the presidency or a majority in the Congress. He will need the active support of the people.

This is AMLO’s biggest gamble: He is betting that he can create a safe space for independent forces of reform that can continue to battle for social democracy outside, and beyond the term, of his presidency.

Rebecca Blackwell/AP Images

AMLO at one of his daily morning press conferences in Mexico City

People are slowly, gingerly, beginning to fill that space. Thus, AMLO’s creation of a truth commission to reopen the case of the missing 43 students of Ayotzinapa has inspired families of others murdered and disappeared to demand their cases be reopened, too. In many cases, the trail of evidence will lead to people in the military.

There are also signs of a reawakening in the judiciary. One judge has ruled that courts had to recognize the evidence gathered by scientific forensic teams that the previous government had rejected. Another court has instructed the government that it must extend social security to domestic workers.

Encouraged by AMLO’s call for union democracy, dissident trade unionists—suppressed by previous governments—have come forward to denounce the system of “protection contracts” through which corrupt union bosses defend the interests of employers rather than workers. In Matamoros, some 50,000 auto parts workers walked off the job after the mostly U.S.-based employers changed their wage calculation to avoid paying the increased minimum wage. After two weeks, workers won substantial increases in roughly 50 factories. Since then, strikes have spread to other sectors—including bottlers and supermarkets—where labor has been exploited for decades.

Keeping the public’s trust also requires some theater. So, as president, AMLO continues to live in his old house with his family, opening up “Los Pinos,” the lavish presidential residence, to the public for the first time in history. He is selling the presidential plane and flies around Mexico on commercial airlines. When a dispute between Netflix and the firms that control film distribution in Mexico City kept the film Romaout of the movie houses, he showed it in Los Pinos for free.

He holds well-publicized town meetings and conducts polls to get citizen feedback on a wide variety of proposals, ranging from a new train system in the Yucatán to the creation of a new national guard. Critics scoff that these “consultas” are biased in favor of his supporters. But it is the first time people outside the governing class have been asked. And, given his present popularity—which depending on the poll ranges from a 70 percent to an 86 percent favorable rating—a pro-AMLO “bias” is unavoidable.

Despite death threats, he has disbanded the military security guard every previous president has had (although he does have some plainclothes protection), declaring that “the people will protect me.” Asked if he was afraid, he answered yes, “but I am not a coward.”

So far, his popularity has kept his establishment enemies at bay and divided. Big business fears for their privileges, but their profits depend on a friendly government. His reassertion of national sovereignty appeals to professional soldiers, but opening investigations into past atrocities is likely to lead to the military’s doorstep.

And then there is the United States, which no Mexican president can ignore. AMLO has wisely avoided personally antagonizing the ego-driven adolescent in the White House. So far, despite his refusal to join the U.S.-led coalition threatening Venezuela, the Bolton-Abrams hard-liners running U.S. foreign policy have pretty much left him alone. AMLO invited both Venezuelan president Nicolás Maduro and Mike Pence and Ivanka Trump to his inaugural lunch.

But there are potential land mines ahead. If the Democratic House of Representatives amends the changes in NAFTA agreed to by Trump, Peña Nieto, and the Canadians last fall, AMLO will have to go back to the negotiating table, facing a wounded and belligerent Trump likely bellowing threats to close the border if he doesn’t get his way.

And the Central American immigrants keep piling up at the U.S. border. Given the snail’s pace at which the Trump government is processing refugee applicants, immigrant camps are expanding. Mexicans in the border cities already are complaining about being overwhelmed. If the recent experience of immigrants in Europe is any guide, sooner or later such camps could explode with frustration, which would damage AMLO in Mexico and at the same time feed into Trump’s fear-mongering strategy for his re-election.

López Obrador’s attitude toward the several thousand Central American immigrants coming into Mexico has been the opposite of Trump’s. He has treated them with respect and provided work permits for those who want to stay in Mexico. But there is a limit to the numbers Mexico can absorb, and in any event, most want to come to the United States. Consequently, Mexico has started to tighten up its porous border to the south, which has made some immigrant advocacy groups unhappy.

On the other hand, AMLO does have a solution to the fundamental problem—a Marshall Plan for Central America, which a post-Trump Democrat in the White House could embrace.

The existence of a genuinely progressive government in Mexico could change these political equations. There is sentiment in the Democratic-controlled House of Representatives to make NAFTA’s labor rights protections stronger. Reversing the policies of previous Mexican governments, AMLO’s labor minister and the head of the Mexican Senate’s labor committee both champion a range of progressive labor reforms, setting up the possibility of genuine cross-border cooperation in the struggle to make rising wages a part of trade law.

In ways such as this, AMLO’s presidency could be a game changer, not only for Mexico, but in helping the U.S. recover from the catastrophe of Trump. Yes, the risks of having so much depend on one man are real. An assassin’s bullet or a heart attack (he’s already had one) could suddenly throw Mexico—with 130 million people on our southern border—into chaos and, some even fear, a civil war. There is no wall high enough to keep that from spilling over.

As one left-wing activist told me, “Sure, he is going to make compromises that we won’t like. But we have to make this work. If he goes down, we all go down.”  

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