Economics: History, promises and expectations
The parts of President Andrés Manuel López Obrador’s inaugural address before Congress and speech later that same day before a mass public event in the Zocalo square facing the National Palace were centered around a peculiar retelling of economic history in which all the country’s ills are traced to a period of “neoliberal” policies he curiously dates back to 1982. While repeating his most popular campaign promises, the speeches failed to deliver any semblance of a coherent growth and economic development strategy. As several analysts have noted, rather than projecting policies relevant for current and future challenges, his words describe a tendency to try to turn back the clock to the years of the Mexican Economic Miracle with its stabilizing development policies.
AMLO’s retelling of history gets no better as we move forward in time as he blames the energy reform for the country’s declining oil output and the higher prices being charged for fuels and electric power, when in fact these are mainly the result of the natural depletion or decline of oil fields, especially Cantarell, and the short-sightedness of officials of past administrations who debilitated Pemex by treating it as a source of federal government funding.
While energy reform advocates exaggerated how much in private investment and production it would lead to, paradoxically AMLO falls into the same trap by claiming that “traditional exploration” and secondary recovery will suffice to boost crude oil production to 2.48 billion barrels daily by 2024, and that Mexico will become gasoline self-sufficient in just three years while banning fracking. He conveys a similarly exaggerated optimism in promising gasoline prices will be adjusted only in line with inflation, and in that he will make good on greatly expanded social programs and price controls on the basic basket all while assuring public finance will remain balanced with no additional debt.
Such optimism is mirrored in the latest polling, which shows that support for the new president and his promises has continued to grow, with 83% saying they are optimistic about the new administration’s prospects. However, such unprecedented enthusiasm could set the stage for bitter disappointment to come.
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