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 Business News | May 2006 
Mexico's Leftist Candidate Walks Fine Line
 E. Eduardo Castillo - Associated Press
| | Andres Manuel Lopez Obrador, presidential candidate of the leftist Democratic Revolution Party, PRD, spaeks during a rally in the town of Emiliano Zapata, Mexico. The son of shopkeepers, Lopez Obrador is a leftist who promises 'the poor come first' but at the same time has sought to distance himself from the growing tide of leftist in Latin America. (AP/Marco Ugarte) |
In public, Mexico's leftist presidential candidate Andres Manuel Lopez Obrador calls bankers parasites and says they have forgotten the common man.
In private, his economic advisers — led by Cambridge-educated Rogelio Ramirez de la O — assure members of the private sector that Lopez Obrador is not their enemy and won't try to bring a new economic model to Mexico.
The conflicting messages in advance of the July 2 vote seem to have hurt Lopez Obrador, who had easily led the campaign until recent weeks. Polls now show that he has been overtaken by conservative Felipe Calderon of the ruling National Action Party, a candidate who is seen as business-friendly and focused on continuing President Vicente Fox's austere macroeconomic policies.
"It's not clear who to believe," said Jonathan Heath, chief economist at HSBC bank in Mexico.
He said Lopez Obrador has divided the business sector into three groups: those who are really worried, those who aren't, and "the majority, who are really confused."
In a telephone interview with The Associated Press, Ramirez de la O said Lopez Obrador's economic strategy isn't about changing the current economic system, which rescued Mexico from its once seemingly endless boom-to-bust cycles.
"It's about building on those objectives to increase growth and begin attacking the problem of extreme poverty," he said.
He stressed that Lopez Obrador wants to maintain fiscal discipline and low inflation levels, while increasing investment in infrastructure and energy projects.
As Mexico City mayor, Lopez Obrador instituted a government pension program for the elderly and racked up debt on huge public works projects, causing some to worry that he would do the same as president.
Some even compare him to Venezuelan President Hugo Chavez, a firebrand socialist and self-declared enemy of the United States. But most seem to believe Lopez Obrador is more moderate.
"The markets outside of Mexico, especially in the United States, see that Lopez Obrador's proposal isn't that bad and that he doesn't represent a risk to the free-market model," said Alfredo Coutino, a Mexico and Latin America analyst for Moody's Economy.
That is largely due to Ramirez de la O, an independent consultant who is well respected throughout international business circles.
"Lopez Obrador's economic team, led by Ramirez de la O, tells the market that the real proposal — despite the political rhetoric — is focused on two things: the preservation of the free-market model but with greater social responsibility," Coutino said.
As the candidate for the Democratic Revolution Party, Lopez Obrador has promised to review the agriculture section of the North American Free Trade Agreement between Mexico, Canada and the United States to limit corn and bean imports.
And he wants to increase investment in the state-run oil company Petroleos Mexicanos, or Pemex, by cutting the salaries of the monopoly's workers.
Ramirez de la O also said Lopez Obrador plans to make major investments in social programs, including expanding Mexico City's monthly pension for the elderly nationwide. He plans to pay for the programs by trimming other parts of the federal budget, although it isn't clear which ones.
Coutino said Lopez Obrador's proposal is similar to those of leftist governments in Chile, Brazil, Argentina and Uruguay that have been applauded for being both fiscally and socially responsible.
"Far from being scary or representing a risk, it is an opportunity," he said. |
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