An overview of President López Obrador’s first 6 months in office

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Andrés Manuel López Obrador

’s first six months as president of Mexico have been characterized by a quite particular style and a series of major decisions that have gained the approval of many of his supporters. However, some of his strategies regarding infrastructure and development have worried financial analysts.

In half a year, the President has had to face a series of litmus tests both at national and international levels, starting with discontent on the part of investors and businessmen after he decided to cancel a part-built USD$13 billion Mexico City airport on the capital’s eastern flank on October 29, as well as the Mexico-Toluca Train. Moreover, López Obrador had to deal with the tragic deaths of Puebla governor Martha Erika Alonso and her husband, senator Rafael Moreno Valle in a helicopter crash on December 24, for which there is an ongoing investigation.

On January 21 of the present year, Mexico’s executive branch implemented a strategy to fight fuel theft that left Mexico City, Mexico State, Guanajuato, Guadalajara, and Nuevo León with fuel shortages for one week.

The result of López Obrador’s fuel theft crackdown were mostly positive. According to data from the Federal Government, while criminal groups used to steal 80,000 barrels a day in 2018, the number has now dropped to 4,000 barrels a day, which represented a 95% decrease. Nevertheless, the attacks to Pemex pipelines continue and government authorities have not been able to identify fuel theft cartels or arrest any dealers involved in this illegal activity.

However, the most painful point of the operation, according to López Obrador himself, was a pipeline explosion in Tlahuelilpan, Hidalgo which claimed the lives of 135 people , including some minors, who had been collecting fuel in buckets and plastic drums from a leak left behind by criminal groups.

On the other hand, there were several protests surrounding a decision from Mexico’s new administration to cut direct funding for government-run and concessionary child care centers at the beginning of February, which was a low point for López Obrador’s administration.

Another problem was the enactment of the Remunerations Law for Public Servants , which established that no public servant could earn more than the President, who also cut his salary to MXN$108,000 a month (USD$5,505) . Now, there is an ongoing legal process with the judicial system and other autonomous bodies over the wage cuts.

There is also an ongoing issue in the purchase of medicine on the part of the Mexican government. Aiming to change the way in which medicines are bought to avoid corruption, the government withheld MXN$2.3 billion worth of resources for verification, which stalled activities in several public healthcare institutions throughout the country

In this context, former IMSS director Germán Martínez Cázares complained that government officials from the Ministry of Finance had meddled in the process and decided to resign. Less than a week later, Josefa González-Blanco, head of the Ministry of the Environment and Natural Resources (SEMARNAT) also decided to resign following complaints that she had purposefully delayed a commercial flight.

International conflict

U.S. President Donald Trump

has continuously threatened Mexico with tariffs and border closure for failing to stop Central American migrants from crossing over the U.S.-Mexico border. This has caused damage to Mexico’s credit rating and affected the Mexican peso on several occasions.

On another front, President López Obrador decided to request a formal apology from the king of Spain through a letter in which the leftist veteran mentioned abuses committed during the conquest on the part of the Spanish government. A similar letter was sent to the Vatican .

In the legislative area, and though he assured that he would not modify the Mexican constitution during his first years in office, President Obrador proposed to create a National Guard to deal with the ongoing drug war and violence that has plagued the country for more than a decade. Though the move was criticized by the Human Rights Commission and other international agencies, both the Chamber of Deputies and the Mexican Senate — both with a majority of MORENA legislators—approved the reform.

On May 5 , several groups protested against López Obrador in some parts of the country, though the content of their protests was inconsistent in most cases.

Fitch downgrades Pemex debt to 'junk' in fresh blow to Mexico

Expert opinions

Analysts and political scientists agree that the first six months of López Obrador’s administration have elapsed with ups and downs. Though they saw the relentless fight against poverty and corruption as beneficial, most are worried about the 4th transformation’s economic and security policies.

Mauricio Merino Huerta, an academic at the Mexican Center for Research and Teaching in Economics (CIDE)

, claimed that the executive branch has been consistent in changing Mexico’s forms of government. However, some of the observed changes have raised fears and further divided Mexican society.

“López Obrador has taken most of his decisions upon himself instead of working to strengthen Mexican institutions and promote a functional democratic system to encourage a truly positive change. The government’s decision-making should not depend on the goodness of those in power,” he stated.

Merino Huerta claimed that the past six months had elapsed in a similar way to López Obrador’s daily press conferences: The President is shown as a supreme leader, other institutions are hardly visible, and every decision depends on the head of the executive branch and not on Mexico’s democratic institutions that are set to be renewed in a few years.

“I am delighted that the president has decided to root out all of the corrupt dealings that were made between public officials, such as fuel and medicine theft. I very much applaud that. However, rooting out corruption is not the same as modifying regulations and institutions so that these kinds of problems can be fought on the long term,” he stated.

José Antonio Crespo, Doctor in History

, claimed that although López Obrador’s objectives to end inequality, corruption, and insecurity were desirable and shared by most of the Mexican people, the problem lies in how he plans to achieve those goals.

“I think his methods have been inadequate, to say the least. He pays no mind to experts and every response he gives is purely ideological. He has even disqualified some of his critics by saying that they are conservative or part of the so-called ‘ Mafia of Power ’ when he should instead work to promote a rational debate to work through some of these problems,” he commented.

Crespo, who is also a CIDE investigator, pointed out that the 4th transformation—López Obrador’s government—had implemented a series of arbitrary budget cuts that have affected government efficiency and public projects, which has had a negative impact on the general public’s confidence, thus affecting investment.

Integralia consultant Carlos Ramírez Fuentes

added that the president would have to commit himself to promote a healthy financial environment one way or the other. “We may discuss the hows and whens, but López Obrador must commit to free trade and the autonomy of Mexico’s Central Bank ,” he said.

Carlos Ramírez claimed that, although the President had committed to maintaining public finances, many of his programs and projects did not have budgetary restraints. Furthermore, he saw a lack of clarity in his infrastructure projects.