Economic Planet | Strange Approach to Mexico

Since the renewal of the North American Free Trade Agreement in 2020, the relationship between the three Amigos that have signed the treaty has not been much disturbed. There was an American election and a pandemic, which hurt the intimate relationship of the top. But now Russia’s invasion of Ukraine is throwing a wedge between Mexico and its Canadian and American partners.

Posted at 8am

Helen Barril

Helen Barril

Mexico is one of the few countries that refuses to impose sanctions on Moscow. Members of the party of President Andres Manuel Lopez Obrador have been in power since 2018 and have just formed a friendship group between Mexico and Russia that infuriates Americans, the newspaper reported last week. world..

“Mexico is a free and independent sovereign state. We are not a colony of Russia, China or the United States,” said the Mexican president, who was accused of hosting Russian spies.

AMLO is, in some respects, a special head of state, as it is called the President. He turned his back on the reforms carried out by his neoliberal predecessors and promised to return power to the people.

He set an example with a radical change in presidential customs. He has a simple lifestyle and never travels abroad. His presidential aircraft, the Boeing 787 Dreamliner, went on sale shortly after his inauguration. No buyer was found, so it’s now available to Mexicans who want to hold a wedding or party there.

At the same time, the president launched a pharaoh investment project that is bleeding the national treasury. A train connecting the ruins of Yucatan is under construction and is estimated to cost at least $ 1.4 billion for a 1500-kilometer project. This project raises a lot of opposition as it seems to have no purpose other than transporting tourists interested in the Maya civilization.

As soon as he came to power, AMLO stopped building a new airport in Mexico City, one-third of which was completed and forced the military to build another airport elsewhere. The new terminal was launched a few weeks ago and the state has absorbed the loss of this plan change.

But the most disgusting of Mexico’s trading partners, including Canada and the United States, is the energy sector reforms implemented by AMLO. The Mexican government has set out to regain control of oil and electricity production, which has begun to be open to foreign investment.

Private companies designing in Mexico’s energy sector feel no longer welcome. Remedies are being considered by some of them who have ongoing projects.

An example of this change of direction: The Mexican president wants to increase production of the state-owned oil company Pemex, but not exports. He wants to keep oil in the country where the price is subsidized.

The president does not trust private companies that have shown a willingness to invest in renewable energy. But the royal company Hydro-Quebec was in favor of his eyes. In a video posted on YouTube in 2019, he shyly praised a Quebec company that wanted to participate in the modernization of Mexico’s power grid. The partnership was announced, but there was no follow-up.

Recovery is slow

Meanwhile, the Mexican economy has lost its wings. The country is one of the few countries that does not provide financial support to pandemic-affected businesses and workers. Bankruptcy and loss in employment are significant. No restrictions are imposed on travelers, and the country is one of the highest COVID-19 deaths per million people in the world.

The Canadian and US economies have recovered steadily, but Mexico’s recovery has been slow and the 2022 growth forecast has just been revised downwards by the Treasury. Government figures also show that investment levels are 15% lower than in 2018.

Despite all, the Mexican people are still behind AMLO. According to the results of a referendum on April 10, the dire management of the pandemic, increased violence, and economic stagnation have helped nothing, and the president remains popular.

Two years after the end of his mission, the strange president officially asked whether he would stay or leave the voter without obligation. He had low turnout, but told him that 90% of those who voted would stay in AMLO.

“Everyone remembers that it’s the people who command,” he launched on Voting Day. Checked within two years to find out what people order in elections.

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  • 130.1 million
    Mexican people

    Source: International Monetary Fund