Politics: Governors could act as a counterweight
Last Saturday, López Obrador finally assumed the position of President of the Republic after a long transition period of actual government decisions. The two speeches delivered - one in front of Congress and the other before followers in the Mexico City Zocalo central square - were, in essence, the sum of all campaign promises and the ratification of the decisions made during the transition period. In that sense there was no news, nor specific announcements in economic matters that could have further increased the uncertainty or the distrust of the markets with respect to the economic policy of the new government, since AMLO also reiterated that the 2019 budget will be balanced, without increasing the debt or the public sector deficit.
The speeches expressed a vision of the country divided into the “good” (the new government and the people) and the “evil” (the conservatives, the businessmen, the political opposition), which anticipates that the development of the “Fourth Transformation project” will occur in the midst of a permanent conflict between both sides of society.
Although the AMLO speeches will be analyzed in more detail in our reports next week, in the present Political Outlook we analyze the expected confrontational interaction that the federal government will have with the governors from opposition parties.
In this regard, we have recently seen signs of conflict emerging between the incoming administration of President-elect Andrés Manuel López Obrador and state governments led by opposition politicians. The most outspoken have been PAN sitting governors and Jalisco Governor-elect Enrique Alfaro from the Citizens Movement Party (MC), who have protested what they regard as efforts by the incoming administration to subject their states to forms of direct federal control in managing local development projects, in the discretionary way federal funds may be parsed out, and how public security is to be managed. Alfaro also openly demanded López Obrador back off from his call to “forgive and forget” politicians suspected of corruption.
These initial signs of resistance are not terribly surprising given that governorships and state houses are the only significant institutional space in which the new governing coalition is in a distinct minority, but they are significant given the sort of counterweight these state governments might exert.
But in many respects they will be operating at a considerable disadvantage. They can complain about how their states are being dealt with in the federal spending budget, but most are totally dependent on federal transfers, especially ones the administration has considerable discretion in managing. The new "super delegates" the AMLO administration is sending to the states to oversee management of federally supported programs may also be in a position to limit funding, and the vast majority of those delegates happen to be local politicians belonging to the new governing party, potentially with gubernatorial ambitions of their own. And whereas state governors previously played a direct role in security matters, so far they are being reduced to serving as simple observers of the day-to-day meetings in which federal officials and representatives of the armed forces are to decide security policy.
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