MCALLEN, RGV – There was a fascinating off-stage conversation between South Texas College economics professor Kevin Peek and Mexico Institute Director Duncan Wood after Wood had given his analysis on Mexico’s President-elect Andrés Manuel López Obrador.
The analysis came at a luncheon hosted by IBC Bank, the City of McAllen and Rio Grande Valley Partnership and was held at the McAllen Performing Arts Center.
After Wood gave an absorbing presentation on what could happen with the López Obrador administration, Peek asked Wood to react to his own concerns. Peek, who has lived in Mexico City and spoken at a Rio Grande Guardian LIVE at Bob’s show about the incoming Mexico president, argued that AMLO, as López Obrador is known, cannot possibly deliver on all the campaign promises he has made. As a result, Peek said, Mexico could turn back to the PRI, or Partido Revolucionario Institucional, a political party that ran the country for many decades. Wood doubted this.
If López Obrador’s administration fails, a far right populist president could be the next option for Mexico, Wood said. He noted that Brazil had just elected one.
“Mexicans haven’t tried that yet and they are fed up with everything that they have tried so far. Andrés Manuel is the last best hope. If he lets them down, they are going to go with something that maybe the exact opposite,” Wood opined.
He said that at the local level a right-wing movement has already been developing and mentioned Nuevo León Governor Jaime Rodríguez Calderón, alias El Bronco, who was an independent candidate in the last presidential elections in Mexico.
López Obrador, leader and founder of the MORENA Party, takes office on Dec. 1. Wood gave his analysis on the incoming president in talks in McAllen, Houston, Brownsville and San Antonio, on a tour hosted by IBC Bank.
The Mexico Institute is part of the Wilson Center in Washington, D.C. The Center is considered the nation’s key non-partisan policy forum for tackling global issues through independent research and open dialogue to inform actionable ideas for the policy community.
In his remarks, Wood said López Obrador’s policies and Cabinet appointments could affect international trade, the energy sector and life on the U.S.-Mexico border.
Wood argued that López Obrador’s recent decision to cancel construction of a new airport in Mexico City and legislation that seeks to cut the collection of bank fees sends a very negative signal to the markets.
“With the decision of the airport and with the decision of the banks, this sends a negative message and yes, it will impact the national and international confidence of Mexico,” Wood said, after he was presented by Adrian Villarreal, president and CEO of IBC Bank Mcallen.
About the new airport, Wood said there could be an option for investors to make it private.
“It is not a disaster or an economic crisis, but there is a lot of nervousness right now in Mexico and outside of Mexico in the capital markets, but there is still time not to change your mind. Maybe to say we are going to cancel it as a public project and then the rest can take control of it as a private project. Why not?” Wood asked.
Wood is widely published in the United States, Mexico and Canada on intercontinental issues and relations, with a primary focus on U.S.-Mexico relations. He described the move to cut the fees banks collect as populist.
“It is obviously a very populist public policy. It is directed towards the customers of the banks. The public could obviously celebrate that they do not have to pay these costs in the bank,” Wood said.
“The problem that I see is that they see one side of the coin. The other side is that the banks have to make money and if they do not make money they will not offer the services and they will not employ people and that has a very strong impact on the economy.
Banks in Mexico are very strong, employ many people and obviously play a fundamental role in financing economic projects or development projects. If we attack the banks, we will attack the prosperity in Mexico. That is why it is urgent to have a national conversation on this issue and I hope that this government of Andrés Manuel López Obrador. will withdraw this legislation or that it will not approve it or sign it because it can have a very strong and negative impact on the economy.”
Wood said he was surprised how the decisions of both López Obrador and the Congress he will soon control have affected the markets, because his message after the elections was very conciliatory.
“At the beginning of the transition, he issued a very orthodox message saying that his economy was going to have stability,” Wood said.
“His finance secretary, Carlos Urzua, issued a message to investors and the private sector that they did not have to worry because they wanted more prosperity in the country, because they wanted the private sector to make money and attract foreign direct investment.”
Wood is a regular participant in the World Economic Forum’s Global Future Council on Energy, an editorial advisor to El Universal newspaper, and is a member of the editorial board of Foreign Affairs Latinoamerica.
Editor’s Note: This is the first of a two-part series on the presentation made by Mexico Institute Director Duncan Wood in McAllen. Part Two, penned by Rio Grande Guardian editor Steve Taylor, will be posted later this week. Click here to read a preview of the presentation.