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López Obrador, A Chance To Bring Mexico's Democracy To Life

The leftist president-elect has an opportunity to end shoddy political practices and turn the county — finally — into a lawful, thriving democracy.

New president-elect of Mexico Andres Manuel Lopez Obrador and new Minister of Foreign Affairs Marcelo Ebrard during a press conference on July 10 in Cidade Do Mexico
New president-elect of Mexico Andres Manuel Lopez Obrador and new Minister of Foreign Affairs Marcelo Ebrard during a press conference on July 10 in Cidade Do Mexico
Luis Rubio

-Analysis-

MEXICO CITY — Mexico has chosen a new president, and it's now time for reconciliation. The incoming government, with its focus on changing dominant paradigms, has an exceptional opportunity to transform the country, bridge our divisions, and forge a different future. To do so, it must build on existing bases to tackle the three issues the president-elect, Andrés Manuel López Obrador, cited as priorities in his campaign: economic growth, poverty and inequality.

In the past three decades we have moved from an authoritarian system that sought to control the population and tolerated no competition, to a competitive electoral regime that lacks, nevertheless, the institutions needed to generate certainty and protect citizens. But both systems have a shared denominator: the absolutely crucial nature of elections, where everything is at stake every six years. No country can live with this permanent, intermittent threat to its political and economic stability.

In the Mexican polity that emerged from the 1910 revolution, the central figure was always a president whose effective powers greatly exceeded his constitutional prerogatives. Concentration of powers combined with the long-governing Institutional Revolutionary Party (PRI)"s control mechanisms, superseded legal frameworks and effectively bestowed supra-constitutional powers. Those powers were not only expressed through decisions, but also gave the president a central role in a web of personal and political loyalties paid for with corruption and impunity.

The ability to contain risks is simply absent.

This is the regime we have lived in for almost a century, and which did not change a jot with the election of the conservative PAN (National Action Party) governments (2000-2012). It has impeded real development and made the country vulnerable to recurring crises.

The president is so important here that a mistaken election or decision may provoke schisms. The problem is not in the person but in the vast powers he wields, which can affect all aspects of people's lives. When the PRI ruled, its succession mechanism — until 1970, at least — was intended to prevent the next president from breaking established cannons and norms, or jeopardizing the country's viability. The opportunity today is to end that regime without sacrificing what it built so as to generate unprecedented wealth and jobs.

Things changed in 2000 when the president's intrinsic powers diminished (for "divorcing" the PRI) while new, almost autonomous powers emerged in the form of state governors and candidates who did not share previously laid-down paradigms. The combination of vast powers and absence of shared paradigms intensified this dislocation process, provoking fears, imbalance and crisis.

Mexico is no longer a marginal country in international relations. When its economy was closed and the government controlled (almost) all the variables, the inevitable risks in a succession process could be contained. Today, with an open financial system, an export-oriented economy, and fierce competition to attract investment (both domestic and foreign) so crucial to people's welfare, the ability to contain risks is simply absent. No country can avoid a battering from the markets now, when key financial and political balances are broken.

Mexico has changed dramatically since the mid-20th century. And yet, its political regime is essentially the same, though now, instead of generating certainty, it has become a source of uncertainties if not an outright threat to stability. The president's vast powers used to permit government to act in concert as happened in the years of "stabilizing development" (1950s and 60s), but also allowed bureaucratic and political abuses that have become intolerable in the age of social networking. Universal access to information has today robbed the system of its very essence, namely the power to control.

There is a chance now to implement the political reforms the former system eschewed, and create effective checks and balances to give the country political and economical viability for a century. Only a strong president could achieve this real, and revolutionary transformation. For a future without poverty and with equity, Mexico needs a change of regime. It needs a state built on the rule of law, which means only one thing: checks and balances to protect the citizen. That would realize the development we have sought for so long, and end our climate of hate and confrontation.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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