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Why Mexico's L贸pez Obrador Is Playing With Fire

The new president is uniquely positioned to fix the country's long-ignored economic shortcomings. But he should work with the system, not brush it aside, writes economist Luis Rubio.

Mexico City
Mexico City
Luis Rubio


MEXICO CITY 鈥 Some years back, as China prepared to receive the heads of the intergovernmental Asia-Pacific forum APEC, the city government of Beijing shut down factories and banned millions of cars from circulating. The idea was to cut pollution and give a cleaner impression of the city.

And yet, a phone application was enough to show the Chinese capital's alarming pollution levels, in spite of the curbs. So what did the government do? It immediately set about resolving this outstanding pollution problem 鈥 by blocking the application!

Mexico's new president, Andr茅s Manuel L贸pez Obrador, seems to be taking a similar approach. Instead of solving problems, he insists on destroying what was already working in Mexico, and in some cases working very well. Despite some tremendous shortcomings and unresolved issues, the country was actually on the right track in recent times, and clearly doing much better than it was in the 1970s and 80s.

The strategy of labeling everything from before as bad and corrupt is having a negative impact: The jobless rate is rising, the economy diving, and a total lack of investments is exacerbating the first two indicators. The president, however, is not prepared to recognize that his strategy is the cause of these phenomena. Nor will he acknowledge that should things continue, his approach will duly plunge the country into a vast crisis. Markets are already sending signals of distrust regarding Mexican debt, and starting to anticipate risks that may, if unchecked, provoke just the crisis the president says he hopes to avoid.

Our core problem isn't that the finances of Pemex, the state oil firm, are out of wack. Yes, that's a major concern. What's really threatening the economy is the government's idea that it should do away with the existing system. Rather than start anew, the government needs to identify the country's problems 鈥 some of them recent, some of them long-standing 鈥 and take steps to fix them. These are problems that have been ignored for decades. And it was to fix these problems that voters chose L贸pez Obrador as president. He has a unique mandate to do so.

Andr猫s Manule L貌pez Obrador, Mexico's president 鈥 Photo: Arturo Monroy/Notimex/Newscom/ZUMA

The economic strategy that Mexico has followed in recent decades is the only viable one. But it has to be done properly. It is no coincidence that all nations, literally, have followed a similar path, because there is simply no other way. The exceptions are Venezuela or North Korea, examples that speak for themselves. Even Cuba has, in its own modest way, entered the logic of globalization.

L贸pez Obrador's starting point is that everything done since 1982 was wrong. This is mistaken for two reasons: First, it does not acknowledge that the 1982 crisis was the result of an excessively prolonged strategy of developmental stabilization that helped provoke a decades-long debt crisis. Second, it ignores the fact that the inward-looking, pre-1982 approach ran its course because it could no longer meet the needs of an increasingly demanding population and because the world, its technologies, production and communication modes were changing.

Simply put, the economic strategy Mexico followed after 1982 may have been flawed 鈥 and all efforts should be made not to repeat mistakes 鈥 but it was the only plausible way.

L贸pez Obrador has the legitimacy and necessary leadership to do what previous governments could or would not do: remove enduring obstacles to development that are today the bases for the low growth rates that have dogged Mexico for so long. Our problems are related to outdated social and political structures that favor what one local writer has called the "extortion economy." It is an economy where the authorities, trade unions, monopolies, bureaucratic systems and criminals extort money from citizens, consumers, traders, businessmen or students, impeding nationwide growth.

If the president really wants economic liftoff and to give poorer Mexicans new opportunities, his strategy should be to end this endemic, and rampant unaccountability. But by consolidating sectoral fiefdoms, rewarding obstructive unions and cultivating firms that block competition, he is doing the opposite.

Provoking union disputes, attacking energy firms or stoking tensions can only dampen growth and curb investments. If the president insists on destroying what has been established here, expect a crisis as big as 1995, or worse.

If there is no progress in the southern, rural state of Oaxaca, it is because publicity-seeking unions and political structures block it. One only need observe successful parts of the country like Aguascalientes or Quer茅taro to see what favorable political and business settings can create.

Now, does the president want to turn the entire country into something like the state of Oaxaca? What is the path he has chosen to ensure that those below, people with fewer privileges and less money, have the same rights and opportunities as those above them? Is it to lift them up, or push everyone else down to their level?

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Life On "Mars": With The Teams Simulating Space Missions Under A Dome

A niche research community plays out what existence might be like on, or en route to, another planet.

Photo of a person in a space suit walking toward the 鈥婱ars Desert Research Station near Hanksville, Utah

At the Mars Desert Research Station near Hanksville, Utah

Sarah Scoles

In November 2022, Tara Sweeney鈥檚 plane landed on Thwaites Glacier, a 74,000-square-mile mass of frozen water in West Antarctica. She arrived with an international research team to study the glacier鈥檚 geology and ice fabric, and how its ice melt might contribute to sea level rise. But while near Earth鈥檚 southernmost point, Sweeney kept thinking about the moon.

鈥淚t felt every bit of what I think it will feel like being a space explorer,鈥 said Sweeney, a former Air Force officer who鈥檚 now working on a doctorate in lunar geology at the University of Texas at El Paso. 鈥淵ou have all of these resources, and you get to be the one to go out and do the exploring and do the science. And that was really spectacular.鈥

That similarity is why space scientists study the physiology and psychology of people living in Antarctic and other remote outposts: For around 25 years, people have played out what existence might be like on, or en route to, another world. Polar explorers are, in a way, analogous to astronauts who land on alien planets. And while Sweeney wasn鈥檛 technically on an 鈥渁nalog astronaut鈥 mission 鈥 her primary objective being the geological exploration of Earth 鈥 her days played out much the same as a space explorer鈥檚 might.

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